A constructive trust is created and the extent of the right determined by court
There are people who, because of their relationship, choose to live together without getting married and share their daily possessions. The phenomenon is frequent, it occurs especially among people from other countries or foreigners with Cypriots, but also Cypriots.
As a couple living together, they can buy an immovable property, a house or an apartment to live in, with money coming from one of them, while agreeing that the property is bought in the name of both, so the one who does not contribute does not feel disadvantaged. They verbally agree that if they separate, then the one who acquired a share in the property without contribution should return it by assigning or transferring their share to the one who paid the purchase price.
As is the case with married couples, the relationship may not end amicably, which leads them to court to resolve the dispute between them, to determine who owns the property and the one who acquired it without contribution is obliged to return it to the other.
Constructive trust
The above circumstances create a constructive trust by virtue of which the person who received the property without contribution, agrees to hold and/or manage it for the benefit of the other who paid the price. Therefore, when they separate, they are not entitled to keep the property or refuse to return it, since they hold it as a trustee for the other. It is considered unfair and the circumstances do not allow them to appropriate the property according to the law of equity and good conscience.
Article 65IE of the Immovable Property Law, Cap.224, states that no trust concerning real property is considered valid unless it is established through an agreement signed by the person entitled to it or through a will. However, the Supreme Court in its case law recognises the constructive trust in relation to real property.
Recent decision
In the decision issued by Judge Chr. G. Ppekri, dated February 16, she referred to the legal aspect of the case, the legal principles and jurisprudence regarding the creation of trusts, whereby the issue of resolving disputes between persons living together without marriage is regulated.
Analysing the matter, she decided in favour of the lady applicant who bought a house in Cyprus with her own money, after selling her house in England. Because of the relationship she maintained with her partner and the feelings she had towards him, who had shown that he would feel better if he too appeared as a buyer of the house, she agreed to register him on the contract of sale of the house, by express agreement between them, by which in case of separation this right to be returned to her.
Her partner refused to assign to her his right on the contract of sale which was filed at the land registry, even though he stated to the court that she actually bought the house and denied that he promised to return the half a share to her in the case of separation and that it was her fault that his name was included in the contract.
Decision of the court
The court emphasised, as the case law states, that the existence of the constructive trust presupposes (a) the common intention for a beneficial interest and (b) that the applicant based on the beneficial interest has acted to the detriment of their own interests. With regard to common intent, this depends on the facts of each case and the evidence presented. If and when it is shown that the parties had a common intention to have a beneficial interest and one party has acted against their interests, the court should consider determining the extent of the right.
The judge referred to case law and stated in her decision that when it is proven that a person has a beneficial interest in the property acquired, any act done to the detriment of that person and referring to the common life of both, can be considered damage, without this damage necessarily referring to the house where they live together. There should also be some kind of connection between the common intention and the acts that can be called harmful.
Consequently, the court issued an order by which the partner was ordered to assign his right, as it appeared on the sale contract to the lady applicant.
George Coucounis is a lawyer specialising in Immovable Property Law, based in Larnaca. E-mail: [EMAIL PROTECTED], tel: 24818288
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