Amidst ever-rising property prices, it can make good sense for friends or relatives to club together to buy a home where they can all live together. As a High Court ruling showed, however, the continuing harmony in human relationships upon which such arrangements rely can sadly never be guaranteed.

The case concerned a 14-bedroom urban property, worth about £1.9 million, which was acquired by five brothers. The house, which was at one point occupied by no fewer than 23 members of the family, was owned by the brothers in equal shares under the terms of a trust deed.

The trust, which was entered into by the brothers some years after they acquired the house, stated that it had been bought as a home for themselves and their families. Crucially, it included a declaration that, save by unanimous agreement between all surviving brothers, the property could not be sold whilst any of them remained alive.

After the family was afflicted by a serious breakdown in personal relations, the two younger brothers moved out. With a view to realising their shares in the property, they sought an order requiring its sale. However, their application was successfully resisted by their two surviving brothers and the heirs of the deceased fifth brother, who relied on the terms of the deed.

In allowing the younger brothers’ appeal against that outcome, the Court noted their testimony that the rift within the family was irreconcilable and that they could never envisage returning to the property. On that basis, one of the purposes of the trust – to provide a home for all surviving brothers and their families – could no longer be achieved. The express prohibition on sale of the property without the unanimous consent of all the surviving brothers was not intended to apply to a situation where relations within the family had irretrievably broken down.

The Court acknowledged that an enforced sale of the property was bound to disrupt the lives of the defendants, some of them elderly, who had for many years called it home. There was, however, nothing unjust or inequitable about such an outcome, which offered the prospect of a clean break and which would reduce the risk of further litigation.

The Court ordered the property’s sale under Section 14 of the Trusts of Land and Appointment of Trustees Act 1996. It directed, however, that the defendants be afforded a reasonable opportunity to buy out the younger brothers’ shares prior to the house being placed on the open market.

Source: Private Client Library Content