Property and Inheritance

Property Ownership: Contesting ownership of property

Areas of Concern
Property Ownership: Contesting ownership of property

Types of ownership

There are two types of ownership: (a) legal ownership; and (b) beneficial ownership.

Legal ownership is usually vested in the original legal owner of the asset. In the case of a property, the person whose name is on the title deed as the legal owner has legal ownership over the property. The legal owner of an asset will not only be officially recognized as the owner, but will also be entitled to the benefits of the asset (e.g. the use of a car, being entitled to the sale proceeds of a property).

On the other hand, beneficial ownership is usually vested in the person intended to benefit from the property. For example, whilst beneficial interest does not exist on any legal title, it can be shown through the financial contributions made by the beneficial owner, the existence of a special relationship between parties, or through the beneficial owner acting to their own detriment or significantly altering their position in reliance to an agreement.

Can a person be the beneficial owner of a property even though he is not the legal owner?

The beneficial owner of a property may not necessarily be the legal owner himself. Beneficial interest can be pleaded by anybody who can prove that they intended to benefit from the property.

In other words, anyone who points at a property and says “it belongs to me actually”.

For anyone to claim beneficial interest in the property, they must establish that the legal owner holds the property on trust for them, for their benefit.

How can a beneficial owner of a property prove ownership?

A beneficial owner can prove that a trust relationship arises where he has beneficial interest. Beneficial interest can be implied by circumstance and exists on a case-by-case basis. One way is for the beneficial owner to prove that a presumed resulting trust exists. This can be proven through:

sufficient evidence of parties’ respective financial contributions to the purchase price; and/or
sufficient evidence of a common intention that parties should hold beneficial interests in a different proportion from their financial contributions.

For instance, Person A buys a property for person B in person B’s name with express intention that the property is to be held for Person A’s benefit. Whilst, Person B is deemed to be the legal owner, Person A would be, subject to applicable exceptions, the actual owner.

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