Beneficial ownership of Property is not always straightforward. It is common, for example, for family members to come to informal agreements or give assurances about property interests. The risk is that if relationships break down, disputes can escalate quickly.
The fact that one or more people are the registered legal owners does not necessarily mean they are solely entitled to the beneficial interest in the property. A recent ruling (Uddin v Uddin [2026] EWHC 150) highlights the doctrine of constructive trusts of a Property, where there were declarations of trust and subsequent verbal agreements between the registered legal owners.
Property disputes can be complex and challenging, particularly if agreements have not been formalised in writing. If you are involved in a dispute, please contact the specialist property litigation team at mfg Solicitors for expert advice.
What is a constructive trust?
A constructive trust arises where the legal owner holds property on trust for the benefit of another individual (in whole or in part); and it would be unfair or ‘inequitable’ to deprive the other of a beneficial interest.
There is an important legal requirement that a disposition of an interest in land is only valid if it is made in writing and signed by person transferring it (section 53(1)(c) Law of Property Act 1925).
The principle of constructive trusts creates an important exception to this rule. A ‘common intention’ constructive trust requires some form of detrimental reliance on that common intention by the party seeking to establish such a trust exists. In practice, proving a trust exists can be harder than you might think.
What’s the background?
In Uddin, Jamal and Fakar Uddin were brothers involved in a dispute concerning the ownership of a semi-detached property in Hayes, Middlesex. The Property was purchased in 1999 in Jamal’s sole name (for the sake of convenience), with the intention they would jointly own it in equal shares.
It wasn’t until 2002 that this agreement was formalised by Jamal, who transferred the Property from his sole name into the brothers' joint names at the same time as a remortgage. The transfer deed included an express declaration of trust for themselves as beneficial joint tenants.
Later, at a family meeting in 2007, Jamal purportedly agreed verbally to vary the trust, making Fakar the sole beneficial owner of the Property. In exchange, Farak would give up his claims for financial contributions made to the property.
In December 2024, the trial judge ruled that Fakar was indeed solely entitled to the property, on the basis that a new constructive trust was created at the 2007 meeting- and nothing since had altered that position.
The Court of Appeal has overturned that decision, deciding that the brothers were joint beneficial owners.
Constructive trust
The appeal court found no enforceable constructive trust existed. The judge was wrong to find a common intention constructive trust without some detrimental reliance by Fakar after the 2007 family meeting. All the judge did was find an agreement had been reached, without finding out whether Fakar had actually relied on it since.
The Court of Appeal emphasised that evidence of “substantial post‑agreement detrimental reliance” was necessary. While detriment need not be financial, or even quantifiable, the detriment must be sufficiently substantial to make it unjust not to enforce the trust.
In this case, Fakar’s abandonment of his claims for contributions to the Property was no more than consideration in exchange for the purported transfer of the Property. It did not amount to detriment - least of all substantial detriment. The case has now been sent back to the High Court for a decision on whether there had been some actual form of detriment on Fakar’s part.
How can we help?
Any agreements between the legal owner and others involving the beneficial interests in property must be carefully recorded and, preferably, formalised in writing to minimise any risk of a future dispute.
For expert help, contact the property litigation team at mfg Solicitors as early as you can. Get in touch with Stephanie Rushfirth on 01527 831691; or you can email her on stephanie.rushfirth@mfgsolicitors.com