Resolving of disputes between persons living together

"A constructive trust is created and the extent of the right is determined by the Court”

There are people who, because of their relationship, choose to live together without getting married and share their daily possessions. The phenomenon is frequent, it occurs especially among people from other countries or foreigners with Cypriots, but also Cypriots. As a couple living together, they can buy an immovable property, a house or an apartment to live in, with money coming from one of them, while agreeing that the property is bought in the name of both, so that the one who does not contribute not to feel disadvantaged. They verbally agree that if they separate, then the one who acquired a share in the property without contribution should return it by assigning or transferring his share to the other who paid the purchase price. As is the case with married couples, their relationship can be broken even under not normal circumstances, which leads them to the Court to resolve the dispute between them, who owns the property and that the one who acquired it without contribution is obliged to return it to the other who paid its price.

Constructive trust

The above circumstances create a constructive trust by virtue of which the person who received the property without contribution, agrees to hold and/or manage it for the benefit of the other who paid the price. Therefore, when they separate, he/she is not entitled to keep the property or refuse to return it, since he/she holds it as a trustee for the other. It is considered unfair and the circumstances do not allow him/her to appropriate the property according to the law of equity and good conscience.

Article 65IE of the Immovable Property Law, Cap.224, states that no trust concerning real property is considered valid unless it is established through an agreement signed by the person entitled to it or through a will. However, the Supreme Court through its case law recognizes the constructive trust in relation to real property.

Recent decision

In the decision issued by Judge Ms Chr. G. Ppekri, dated 16.02.2024, she referred to the legal aspect of the case, the legal principles and jurisprudence regarding the creation of trusts, whereby the issue of resolving of disputes between persons living together without marriage is regulated. Analyzing the matter, she decided in favour of the lady applicant who bough a house in Cyprus with her own money, after selling her house in England. Because of the relationship she maintained with her partner and the feelings she had towards his person, who by his actions showed that he would feel better if he too appeared as a buyer of the house, she agreed to register him on the contract of sale of the house, by express agreement between them, such as in case of separation, this right to be returned to her.

Her partner refused to assign to her his right on the contract of sale which was filed in the Land Registry, even though he stated to the Court that she actually bought the house and denied that he promised to return the ? share to her in case of separation and that it was her fault that included his name in the contract.

Decision of the Court

The Court emphasized, as the case law states, that the existence of the constructive trust presupposes (a) the common intention for a beneficial interest and (b) that the applicant based on the beneficial interest has acted to the detriment of her own interests. With regard to common intent, this depends on the facts of each case and the evidence presented. If and when it is shown that the parties had a common intention to have a beneficial interest and one party has acted against his interests, the Court should consider determining the extent of the right.

The Court referred to case law and stated in her decision, when it is proven that a person has a beneficial interest in the property acquired, any act done to the detriment of that person and referring to the common life of both, can be considered as damage, without necessarily this damage to refer to the house where they live together. There should also be some kind of connection between the common intention and the acts that can be called harmful.

Consequently, as it follows from the above, the Court issued an order by which the partner was ordered to assign his right, as it appears from the sale contract to the lady applicant.