A recent trend in Bermuda that has seen homeowners invite family members or friends to live with them has raised the issue of whether those invited guests have any legal right to shared ownership in the home.

In some instances, a homeowner is joined in their property by children, grandchildren, and possibly even great grandchildren, many of whom may be adults. In other cases, elderly siblings or friends live together for comfort and companionship, or adult children move in with their elderly parents to provide day-to-day care and support.

These arrangements are often characterised by informality; there may be no discussion at all about the potential legal implications of what is happening, or there may be some conversation, but no formal agreement is entered into.

Over a period of some years, the invited person may make very substantial contributions towards the home - assisting with the mortgage payments, paying towards or even physically building an extension onto the home, or dealing with the household bills so that the homeowner can pay the mortgage.

Let?s consider an example of this current trend. A and B have paid off the mortgage on their property, which they own as joint tenants. They have three children, and their daughter returns to live with them due to the escalating costs of purchasing a home. Eventually, the daughter assists with the mortgage payments relating to an extension built onto the home specifically to accommodate her and her family and which may have increased the value of the home.

As a part of their estate planning, however, it was the parents? intention that the legal title to their home, upon the death of the survivor of them, was to be divided equally between all three of their children. They have drawn up Wills expressing their intention.

Eventually the question may arise whether the daughter has obtained a further legal interest in the home, in addition to her one-third legal share under the Will, resulting in a greater share in the home being apportioned to her than to the other two siblings.

At present, a person who is not a legal owner of a shared home will only be able to claim such an interest in a home in certain, limited circumstances. It is widely accepted that the present law is unduly complex, arbitrary and uncertain in application. It is ill suited to determine the property rights of those who, because of the informal nature of their relationship, may not have considered their respective entitlements. The uncertainties in the present law can cause lengthy and costly litigation in order to resolve these issues.

There are other circumstances in which the determination of the ownership of a shared home, other than on the breakdown of the marriage, is highly relevant. They are as follows:

Two or more persons who share a home cease to live together in the home. The question arises whether the person who leaves is entitled to receive payment of a capital sum representing their share of the property, or indeed, in the event of no satisfaction being obtained, whether that person can force a sale of the home.

One of the persons who has been sharing the home dies. Will that person have obtained an interest in the property, and, if so, what is to happen to it (particularly if the person dies without leaving a Will)?

The home is subject to a mortgage securing a loan negotiated by its owner or owners to acquire property or to provide funds for other purposes. The borrower defaults on the mortgage, and the bank seeks possession in order to realise its security by sale of the property. Can any of those living in the home assert an interest in that property against the bank or successfully defend the proceedings for repossession?

lA creditor (whose debt is not secured over the property by a mortgage) seeks to have the property sold so that the debt can be satisfied. Will any person who has been sharing with the debtor be able to successfully hold out against the creditor?s claim?

The inadequacy of the current law means that anyone who is sharing living quarters is wise to investigate the legal consequences of doing so. Moreover, they are advised to make express written arrangements, either by deed or will, setting out their rights or intentions.

Clearly identifying rights over property and other assets may assist in avoiding lengthy and costly litigation upon the death of a homeowner.