Proprietary estoppel – When a property inheritance promise is not reflected in a Will

Coodes Solicitors is handling more proprietary estoppel cases, when someone has allegedly been promised they will inherit a house, as a thank you from the property owner. Mel Grose, Partner in the Personal Disputes team comments on these cases and outlines the issues.

When relatives administer a loved one’s estate, there are sometimes surprises in the Will. If that relates to property – the most valuable asset most of us will ever own – emotions can run high and it can result in a serious dispute.

If someone claims they had been promised they will inherit all or part of a property, but that is not reflected in the Will, I sometimes find myself dealing with a legal issue called ‘proprietary estoppel.’

What is proprietary estoppel?

Proprietary estoppel is a legal term. It relates to someone’s rights to live in a house that they do not own, and can come into play when dealing with disputes over who should inherit the property.

A familiar scenario is when a farm hand lives in one of the landowner’s buildings and has worked for less than the living wage, on the understanding that they will inherit all or part of the property. In some cases, the person has also invested their own time or money in improving or maintaining the property, again on the understanding that it will become theirs. Another common situation is when someone moves in to care for a relative and is promised the inheritance of the house in return for the sacrifices they have made.

What is the relevance of proprietary estoppel after someone has died?

These are often verbal agreements. When the property owner dies, it sometimes comes to light that their promise has not been reflected in their Will. Proprietary estoppel is relevant because these claims involve assessing whether or not someone has earned the right to the inheritance, by investing time and money on the understanding they will inherit.

An increase in property disputes

Here at Coodes Solicitors, we are handling more and more of these cases. One of the reasons is undoubtedly the surge in property value over the last few decades. Old farm buildings in Cornwall and Devon are now highly sought after. I think people are also more aware of their rights and have higher expectations. In addition, there is greater awareness that legal expenses insurance will often cover these claims.

A balancing act to get a fair result

As lawyers, we have to carry out a balancing act to get a fair result. Whichever side I am representing, I calculate the time and money the claimant has spent on the property or in working or caring for the deceased. The key is to quantify the sacrifices the person has made, on the understanding they will inherit the property. In particular, I look for whether or not the individual has worked for nothing or for below the living wage. In law this is called the ‘detriment’. This process is often very time consuming and can be challenging. It may involve going through farm records and bank statements, or interviewing district nurses and family members and finding care records. There is usually a paper trail of sorts, but it takes time to gather all the information.

I then weigh this up against any benefits the individual may have received as a result of the arrangement. For example, in these situations many people enjoy living rent free, or very cheaply, sometimes for many years.

When I have all this information, I seek to get a fair deal. This may mean the claimant inheriting a significant proportion of the property’s value. In one case, which went to the Court of Appeal, I supported a claimant to win a property inheritance worth over £1million after proving she had cared for the owner, whose wish was for her to inherit the home.

Proving that a promise has been made

The most difficult part of the process is usually evidencing the promise that the deceased made. If there is nothing in writing – and sadly this is often the case – I try to find an independent witness who can verify that the promise was made.

How do the courts deal with proprietary estoppel claims?

There is often evidence of a clear understanding between the parties, but the understanding falls short of an actual contract. In these cases the Court’s natural response is to fulfil the claimant’s expectations. However, often the expectations are unclear, or out of proportion to the detriment that was suffered. The Court should recognise this and limit the remedy accordingly.

The Court is looking to achieve justice, having regard to facts of the case. However, ultimately if the claim does not settle before a trial the Court will hear the evidence, and makes a judgment which it considers to be the minimum to do justice for the claimant.

I want to leave my property to someone who is working for me

What if you would like to leave your property – or a proportion of its value – to someone who is working for or caring for you? It is important to record this in writing as soon as possible. The best way to do this is through your Will. If you do not have a Will, contact a solicitor to get one drawn up. If you already have a Will, check it regularly to ensure it reflects your current wishes. If you need to, get it updated by a professional lawyer. Ensure other family members and any beneficiaries named in your Will are also aware of your wishes.

I have been told I will inherit a property – what should I do?

What if you have been promised you will inherit the property you are currently living in? It is important to get a written record of this agreement. Of course, this is a difficult conversation to have and it may well seem rude and inappropriate to ask someone to change their Will. If you do not feel able to ask them to record their wishes with a solicitor, you could ask them for a written agreement, signed by you both. If you are unsure what to do, and whether you are at risk, you should contact a lawyer and get advice.

You should also keep records of money you spend on the property, as well as any time you spend working or caring for the owner.

My family is dealing with a claim on our estate – how should we handle it?

At Coodes, we also advise family members, who want to protect an estate and are faced with someone claiming a right to the property. This is clearly a very stressful and difficult situation. The legal process remains the same – I would look for evidence to assess whether or not the promise was made and would also examine the sacrifices the claimant made and any benefits they received as a result of the situation. Again, this will help to get a fair result.

These are complex cases, often with strong emotions. They often take 12 to 18 months to resolve. Whichever side I am representing, my role is to be objective and establish all the facts to help my client get a fair deal.

For any queries about these issues, please contact Mel Grose, Partner in the Personal Disputes team at Coodes Solicitors on 01872 246200 or melanie.grose@coodes.co.uk