Failure to Take Advice Proves Costly in Family Arrangement

No matter how much you may trust relatives or close friends, you should never sign important documents without independent legal advice. In one case that proves the point, a man put his name to a deed that was put before him by his brother but which eventually led to the forced sale of his £750,000 home.

The man and his brother had used money given to them by their mother to buy a flat. He believed that it would provide a home for him and his family indefinitely, but his brother considered it a development opportunity. Following a conversation in a coffee shop, the man signed a deed that enabled him to live in the flat rent-free and capped his brother’s interest in the property at £367,500.

However, unbeknown to the man, the deed included a provision that either of them could require a sale of the property, without the other’s consent, a year after it was purchased. They subsequently fell out and the brother sought to force a sale.

After the brother launched proceedings, a judge commented on the man’s naivety. He was not good with details and had relied on his brother to explain to him the meaning and effect of the deed. However, his brother had not breached the duty of candour that he owed to him and had not brought undue influence to bear.

The brother was entitled to expect that he would take independent advice before signing such a document. Had the mutual power to force a sale not been included, the brother would have been obliged to allow the man to live in the flat indefinitely without paying rent and would not have been entitled to share in any increase in its capital value. In the circumstances, the effect of the deed was fair and reasonable.

The judge gave the man and his family one month to move out before the flat would be put on the market.