Ever bought a £60,000 sofa?

We hope you’ve never bought a sofa for £60,000. Or if you did, we hope it came with a free Mercedes.

Clearly £60k is too much money to spend on a sofa. But that’s what one particular sofa cost a client. And nope, it wasn’t even an antique.

Are you sitting comfortably?

The client was in a committed relationship at the time. He could have paid to protect his greater contribution towards the shared property. Instead, he chose to buy the sofa.

The relationship broke down. That’s when a dispute arose with his partner on the greater-contribution issue. He sought legal advice.

We asked the client why he hadn’t taken legal steps to protect his greater contribution. He said that, at the time, money had been a bit tight. He didn’t think it would matter about paying to get the documents that would reflect his greater financial contribution.

Instead, he bought that new sofa. The decision cost him £60,000.

Here’s why taking those legal steps does matter and why choosing the sofa over the correct legal advice proved to be a very expensive decision.

Common errors

1 Beneficial ownership

The client didn’t understand that, where property is owned jointly, it’s owned either as ‘joint tenants’ or ‘tenants in common’. Ownership of land in England and Wales is dealt with in two ways: the legal ownership and the economic benefit, also commonly referred to as the ‘beneficial ownership’.

The legal ownership is separate from the beneficial ownership. This means the legal owner or owners won’t necessarily be the same as the beneficial owner or owners.

All individuals named on the Register of Title at HM Land Registry are legal owners. Beneficial ownership is different. It’s an interest in the economic benefit of the property.

The ‘beneficial owner’ of the land will have a right to the income from the property or a share in it, and a right to the proceeds of sale of the property or part of the proceeds.

That’s why it’s vital to specify the extent of your share at the point of purchase, if you want to protect your greater contribution.

2 You have a choice

The client didn’t realise that buyers can choose how they own the property. Or that those options have different legal and financial consequences if the relationship breaks down or one party dies.

Sadly, he’s typical of many people who buy property when everything seems sunny.

Legal facts and consequences

Joint tenants own property equally and, on the death of one, their share will automatically pass to the other owner.

Tenants in common, however, own the property either in equal shares or different shares. As tenants in common, shares in the property will not automatically pass to the other owner(s) in the event of death.

Instead, property ownership passes in a will or, if there is no will, by way of the intestacy rules.

Our six top tips

1 Protect your contribution

If one of you is making a greater financial contribution, protect this by recording that the person who has contributed more owns a greater share.

2 Agree a payment on sale

Alternatively, agree that the party who’s paid £X receives £X on the sale of the property, with the remainder of the net sale proceeds shared equally.

3 Agree a formula

What about if improvements are made to the property, or one party pays a greater share of the mortgage? You might want to agree a formula setting out how your respective shares will be calculated on sale. This isn’t as complicated as it sounds.

4 Complete form TR1

Complete form TR1. This is the form that conveyancing solicitors use to transfer ownership of the property. It includes a very simple Declaration of Trust, in the form of ‘tick boxes’ to record ownership as:

  • Joint tenants
  • Tenants in common in equal shares
  • Tenants in common in different shares. There’s a small amount of space to record ownership in different but fixed shares (for example, 60:40).

5 Agreement on sale

If things are more complicated, you might prefer to have your solicitor prepare a separate document. As well as recording owners’ shares in a property, a Declaration of Trust can also record agreement on what happens on sale or if one buys the other out.

6 Cohabitation agreement

A cohabitation agreement can go a step further and include provision for joint bank accounts and other properties and assets. These will be bespoke documents.

Property is likely to be the biggest investment in your life. You can and should protect that investment. Even if it means temporarily settling for a beanbag rather than a sofa.

For an initial FREE consultation on any aspect of family law, call Manders Law on 01245 895 105 or email us here.

Note: this blog is intended to give an overview (rather than comprehensive guidance and advice) on your legal position.

We are using cookies to give you the best experience. You can find out more about which cookies we are using or switch them off in privacy settings.
AcceptPrivacy Settings


  • Google Analytics

Google Analytics

We use Google Analytics to collect and store certain anonymous information when you use, access, or interact with this website. This information is only used by us to help improve our digital services and user experience.