In the broadest of terms; the laws in the UK define two types of interest in a property. The first is the strict interpretation of ‘on the deeds’ and is referred to as Legal Ownership. This means that your name is recorded by the Land Registry and you have the power to sell, mortgage, lease or otherwise deal with the property.
The second is called Beneficial (or Equitable) Ownership and represents, (usually), a financial share in the property. It is possible to be the legal owner without having a beneficial share, (which makes you a Trustee looking after the property in the interest of and for the benefit of beneficiaries). It is equally possible to have a beneficial share without being a legal owner, (making you a Beneficiary). Or you could be both, which is the most common situation.
Equally, it is possible to be one of the borrowers on a mortgage without being on the deeds and still have a beneficial share in the property. Or not. And this is where the wheels fall off.
While legal ownership requires registration on the Land Registry register (title deeds) of the property, there is no requirement to register beneficial interests. You don’t even need to write them down. They can spring up based on verbal or written agreements between the parties involved, or simply based on expectation and conduct. Where there are disputes over the beneficial shares, it is not uncommon for it to fall to the Courts to have to make a final ruling.
Of course; Gray Hooper Holt will always bring the question of beneficial ownership up when you are buying or remortgaging your property, but not all solicitors do so. In the majority of situations, our legal advice on the subject is included within our fixed fees and in those more complex arrangements, such as when third parties are investing money into a property as pure beneficiaries without any legal interest in the land, we offer very reasonably priced advice and production of documents to support the trusts being created.