No independent legal advice

In the case of Saranovic v Saranovic (2017), 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 the 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 upon 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 his brother 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, rent free, indefinitely 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 and the judge gave the man and his family one month to move out before the flat would be put on the market.

--Rex Cowell Solicitors