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Equitable Estoppel

We recently have received various enquiries where they have put money and work into a property, owned by a family member, where their contributions have not been protected by noting their interest on the Title of the property.

Often, people do not formally protect their financial contributions, because they are contributions made to family members. No-one expects problems to happen between family members, but more often than not, these are the sort of disputes we see on a regular basis.

Even where your interest is not formally recorded on the Title, it does not mean that you do not have any options to protect your financial interest if a dispute arises.

A Caveat is a document that you can lodge on Title to protect your interest, and it stops the landowner from placing any further charge on the property without your knowledge and consent.

These Caveats will lapse within 3 months, or within a shorter time if a proper notice has been given to you, unless you commence Court proceedings to protect your interest and preserve the Caveat. Once those Court proceedings have been started, a Notice of Action will also need to be lodged with the Titles Office to reflect that the Court proceedings have started.

The Court will then consider all the contributions that were made by you, and by the other interested parties such as the owner/s of the property, or any other people who have made contributions to the property that are also not reflected on the Title.

If you have not formalised your contributions to the property, at the time your contributions were made, then it is very important that you keep records of all your financial contributions so there is evidence of same. This evidence could include bank statements, invoices, receipts and cheque details. If payments were made in cash, an Acknowledgement of Receipt from the person receiving the cash will be good evidence also.

It is also important that you put something in writing to the effect that your contributions were not a gift at any stage. Even if transfers were made to your family members, putting a reference in a transfer as ‘loan’ instead of gift will be helpful.

Protecting your interests by lodging a Caveat and commencing Court proceedings is not cheap, particularly where your family members are disputing your financial interest in the property.

Essentially what a Court will look at is what would be fair and just in the circumstances considering an agreement of some sort was entered into between the parties at the start, and statements were made by the landowner/s over a period of time, that you would have relied on, causing you not to enter into a formal agreement with your family members. As a result, you now suffered detriment (“harm or damage”).

The Court will then consider that a percentage of the property is held by the landowner/s on your behalf “on Trust”.

This area of law can be quite tricky and if you find yourself in a position that you need to protect your financial interest in a property, because your family member is disputing that you have made any financial contribution, or a lower contribution than what you actually have made, then we can help guide you through these procedures.

The best way forward, if you are still in a position to do so, is to enter into a formal agreement with your family members that protect your financial interest from the moment that you have made them. If you wish for a formal agreement to be entered into, please do not hesitate to contact us also.

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