.png){kind=icon}
Constructive trusts and informal trusts of land
Problem question
Mr and Mrs Brown bought a house for their daughter Jenny to live in during her time as a student at university. The house cost £200,000 and for tax reasons was conveyed into Jenny’s sole name. Mr and Mrs Brown paid £100,000 in cash and Jenny took out a mortgage to cover the balance of £100,000. It was understood that Mr and Mrs Brown would make payments into her account each month to cover the mortgage instalments as they fell due. Jenny’s only financial outlay was £3,000 to cover stamp duty, the expenses of the purchase, removals and home insurance, but it was understood she would not have to pay a penny thereafter apart from the usual bills for gas, electricity and so forth. After one year of her university course Jenny invited Pete to live with her in the house. Pete is Jenny’s long-term boyfriend and he has a steady job. From the moment he moved in, he started to pay the mortgage instalments instead of Mr and Mrs Brown. However, the house remained in Jenny’s sole name. Jenny explained that her parents had paid a lot of money towards the house and wouldn’t let her put the house in the joint names of her and Pete.
A year later Jenny and Pete split up. Advise the parties as to their likely interests in the house.