Over a period of time, it is creating problems over the ownership of the house when the sharer dies or leaves the shared home for another place (Sharing Homes, The problem).
The discussion paper sources these problems to the ambiguity of the current law guiding these shared homes. The present law is not very clear on payments made by the sharer on behalf of the owner. For instance, mortgage payments made by the sharer are enough for staking a claim on the home. But, sometimes, the sharer regularly pays the household bills enabling the owner to pay the mortgage instalments. Sometimes, the sharer may look after the household work like
As per the law detailed in the discussion paper, a person who is not a legal owner but sharing the shelter in a home can claim an interest on it only when there is an equity arising by proprietary estoppel, when a resulting or constructive trust has arisen in his / her favour or when the sharer becomes a beneficiary under an express declaration of trust. In any of these circumstances, the sharer has to prove his / her right with sufficient proof. Because of these limited options available to the sharer, the law is termed as complex, arbitrary and uncertain in application. It is also ill suited to determining the proprietary rights of the home sharers. The discussion paper is of the opinion that the rules of implied trusts and proprietary estoppel are not as clear as they should be (Sharing Homes, Part I, introduction).
Trusts and proprietary estoppel
An express trust arises when a person expressly declares that he or she holds property on trust for another or transfers property to another expressly subject to a trust. A resulting trust or constructive trust is part of an implied trust. A resulting trust arises when a person purchases property in somebody's name or makes direct financial contribution to the acquisition of property in somebody's name. A constructive trust arises with an agreement, arrangement or
understanding between two people with a common intention that a property should be shared beneficially through which one person relies to his or her detriment. Proprietary estoppel arises when a person is encouraged or allowed to believe by an owner of land that he or she has certain rights in or over it and the former acts in that belief to his or her detriment (Sharing Homes, Part II, the current law).
Several case studies relating to the shared homes highlight the ambiguity in the law. For example, let us discuss the case, Burns Vs Burns in which the plaintiff's claim to stake a beneficial interest in the house on grounds of constructive trust was dismissed by the court. The facts of the case are as follows (Facts and 2.75). Valerie Burns, the plaintiff and Patrick Burns, the defendant lived together for 19 years , 17 years in the disputed home, without a marriage. Defendant bought the house in his