Lawyers crack down on warring buy to let owners

Warring couples arguing over who owns buy to let properties in divorce settlements are causing headaches for solicitors and the Land Registry.

Two recent court cases have underlined the need for landlords to make a written record of exactly what percentage share of rental property they jointly own.

Disagreements about ownership spurred the Land Registry and the Law Society to come up with a way to end any confusion.

Both advise lawyers to urge joint owners to make an express declaration of trust detailing their percentage ownership of a property on a Land Registry form JO when they buy the home.

This form is then witnessed by the solicitor and filed at the Land Registry.

The aim is to cut out disputes between property owners if their relationship breaks down or heads to the divorce courts.

Conveyancers will also ask couples to sign the form when buying their home.

The Law Society’s conveyancing and land law committee chairman Jonathan Smithers said: “The note will direct solicitors to the practical implications of statements made in recent cases so that their clients can continue to receive the best advice possible.”

In both court cases – Stack v Dowden [2007] UKHL 17 and Jones v Kernott [2011] UKSC 53 – joint owners disagreed on the details of property ownership .

Landlords should also take tax advice before making the declaration, as rental profits and losses will have to be apportioned between owners according to their shareholding in the property.

This could create problems for higher and top rate taxpayers who generally hand a larger share of an investment property to their partner or spouse to minimise their income tax and capital gains tax.

No doubt HM Revenue & Customs will call for any Form JO via their datalink with the Land Registry to check against tax returns.

“In addition to the joint practice note, we have recently introduced a new voluntary form as an alternative means for joint owners to declare their interests, or to provide details of an existing separate declaration of trust, at the time when they acquire the property,” said Land Registry director of legal services Alasdair Lewis.


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