The recent case of Nguyen v Nguyen demonstrates the importance of written agreements when investing with family members. The case involved two siblings who agreed to purchase a residential property solely in the brother’s name, however with both of them being borrowers under the mortgage. The sister was involved in negotiating the sale price with the seller, and made payments in relation to agent’s fees and stamp duty. The sister also lived on the property with her family, during which time, she made renovations and repairs. After the sister moved out of the property, a tenant moved in.

Following the vacation of the property by the tenant, the brother changed the locks of the property. Subsequently, a matter was brought before the court with the brother arguing the he was the sole registered owner, and that his sister only occupied the property as a tenant. The sister claimed that the siblings were joint owners. Due to the absence of a written agreement, the Court was required to infer what was contained in the agreement made a number of years prior. The Court ultimately held that despite the fact that the brother was the sole registered owner, 40% of the property was held on constructive trust for the sister. In its decision, the Court found that neither party’s claim was correct, instead deciding that a combination of the two arguments was more suitable. This case demonstrates the importance of written agreements, as the proceedings could have been avoided if both party’s intentions had been expressly documented from the beginning.

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