What is a Proprietary Estoppel?
If someone promised you ownership rights over a property and failed to deliver on that promise, you may have a legal means of enforcing that promise known as ‘proprietary estoppel’.
The term ‘estoppel’ refers to a legal doctrine which holds a party (the ‘Representor’) to a promise they made to another party (the ‘Relier’). In the context of property, proprietary estoppel can be used by those who have acted to their detriment by relying on a promise that at some point they will receive an interest in the whole or part of the property.
For example, say Lisa and Mike move into a house together. Lisa owns the house, but Mike pays for a renovation on the basis that Lisa says he can have part ownership of the house. If the relationship ends and Lisa tells Mike to move out, Mike may be able to claim a share of the property value on the basis of Lisa’s premise.
The principle can also be used against a deceased’s estate. For example, Mike’s father, Chris, owns a farm and Mike has worked on the farm for years. He has accepted minimal pay and long hours because Chris told him he would inherit the farm one day. However, when Chris dies, his Will gifts the entire farm to Mike’s younger sister Sally and Mike inherits nothing. Mike may be able to use proprietary estoppel to bring a claim for ownership of part of all of the farm.
Requirements for a Claim
The three elements required for a property estoppel claim are (a) a clear promise by the Representor; (b) reliance by the Relier on that promise; and (C) detriment to the Relier in consequence of relying on the promise.
(a) Clear promise
The Representor must have allowed the Relier to believe that they have some right or benefit over the property.
The promise can be in writing, be given verbally or inferred through conduct.
The effect of the words or actions will be considered in their context. For instance, if Lisa had told Mike his payment for renovations went ‘towards the house’ while they were cohabiting, it would be reasonable for Mike to interpret that as ‘towards ownership of the house’.
(b) Reliance
For the reliance condition to be fulfilled, the Relier must show that they behaved differently because of the assurance given.
If the Relier would have acted that was regardless of the promise, no reliance will be found. If being a farm labourer was the only job Mike was qualified to do and the pay and hours he received at Chris’ farm were typical of the industry, it could be argues he would have worked there regardless of Chris’ promise.
(c) Detriment
The Relier must show that by relying on the Representor’s promise, the Relier acted to his detriment.
Detriment can include financial expenditure, but it also covers labour, time and giving up education or career opportunities. For example, if Mike had benefited from free accommodation on the farm for several years while he worked for Chris, this would be factored in.
Possible Remedies
The Court will look to do what is necessary to avoid an unfair result.
This may include the grant of a proprietary right (i.e. to transfer the farm, or part of the farm, to Mike), the grant of a personal right (i.e. for Mike to be granted an interest in the property), the payment of a particular amount (i.e. for Lisa to pay Mike the cost of the renovation) or a combination of the above.
Pippa Davies is a trainee solicitor in the Dispute Resolution Team at Barker Gotelee Solicitors in Suffolk.
If you believe you might have a claim for a proprietary estoppel you are interested in pursuing it, please contact our Dispute Resolution Team on 01473 611211, or fill out our enquiry form below.
