Mortgage brokers in court over inheritance spat
Until 1882, married women couldn’t actually own their own property, and the idea that the oldest son got everything in the will was commonplace. That state of affairs is long gone in the UK now, but in a recent court case, the idea came to the forefront in a battle between a family over their father’s property portfolio – and critical evidence in the decision was based on mortgages – and mortgage intermediary testimony.
The case, Khan & Ors v Khan [2024] EWHC 2491 (Ch), the High Court dealt with a heated dispute within the Khan family over ownership and control of several properties in London. The judgment, delivered by Deputy High Court Judge Saira Salimi on October 4, 2024, revolved around six siblings—the children of the late Abdul Mubin Khan (who died suddenly without leaving a will) and Fatima Khan—who argued over what they claimed were family assets meant to be shared among them.
Key Testimony from the Mortgage Broker
A critical piece of evidence in this case was the testimony of Robert Harley, the mortgage broker who worked with the defendant, Muhammed Iftekhar Khan. Harley confirmed that Muhammed had raised mortgage finance against several properties, such as 7 Essex Grove and 14 Stapleton Road. The funds from these mortgages were then used for other purchases, which the claimants argued were not in line with their father’s intentions or the family’s best interests.
This testimony was crucial because it highlighted that Muhammed had leveraged his control over these properties for his own gain. It supported the claimants' argument that Muhammed’s actions were inconsistent with the idea that the properties were meant for the whole family. The broker’s records provided concrete proof that Muhammed had taken financial actions that benefitted him, potentially at the expense of his siblings.
The Family Dispute
The properties in dispute included:
- 14 Stapleton Road, Tooting Bec: Initially bought by Mr. and Mrs. Khan and converted into rental flats.
- 7 Essex Grove, Upper Norwood: Originally purchased in Farhana Khan’s name, later managed and transferred by Muhammed.
- 53 Norbury Crescent, Norbury: Acquired with mortgage finance, supposedly for a nursery business.
- 5 Ullswater Road, West Norwood: Another property purchased using mortgage finance, with leaseholds granted to Muhammed.
The family, originally from Bangladesh, had built a successful restaurant business before moving into property investments. The claimants (Ahmed, Sarwar, Shalima, Farhana, and Jennifer) argued that their father had intended for the properties to be shared between them equally. They presented evidence suggesting that despite the legal titles being in Muhammed's name, there was an understanding that the properties would benefit the whole family.
What the Claimants Argued
The claimants relied on various forms of evidence, including an email from 2013 where Muhammed seemed to acknowledge that the properties were for the sisters.
"I want Essex Grove out of my name by 2014. This belongs to three sisters as stated clearly. I never wanted this property in my NAME....You are not even grateful to the fact that between myself and Ahmed We have maintained, argued with neighbours, improved, fought against tenants, blood, sweat and tears, cleaned toilets. So you guys have a block of flats that have at least 40-50% equity not to mention a valuable home should you need it."
They argued that their brother's actions—such as taking out mortgages without consulting them—violated the trust their father had intended. They also claimed that they had worked on and managed these properties based on the belief they were working for the family’s benefit, not just Muhammed’s.
Muhammed’s Defence
Muhammed argued that, as the eldest son, he was the rightful owner, in line with cultural expectations. He insisted that his father had always intended for him to have full control of the properties and denied that his siblings had any beneficial interest. He further claimed that any help his siblings provided was either voluntary or paid for, and thus did not entitle them to any stake in the properties.
The Court’s Ruling
The court ruled in favour of the claimants. The judge found that the evidence—including emails, the mortgage broker’s testimony, and the conduct of the parties—supported the claimants’ view of a shared family understanding about the properties. The court decided that the properties should be distributed according to the claimants’ beneficial interests. Muhammed was ordered to account for rental income and any funds he raised through mortgages.
This case shows how crucial it is to document family agreements, especially when large assets like property are involved. The judge’s decision highlighted that even informal family understandings could be legally enforced if supported by consistent evidence, like financial records and written communications.
primogeniture
noun
the right of succession belonging to the firstborn child, especially the feudal rule by which the whole real estate of an intestate passed to the eldest son.
Primogeniture, the practice of passing titles and estates to the eldest son, has long been central to English inheritance laws, and its history is filled with conflicts and changes. This system, dominant for centuries, ensured that wealth, power, and property were concentrated within families, preserving their status and influence.
The origins of primogeniture in England can be traced back to medieval times. The Statute of Westminster (1285) helped formalise this practice, emphasising that property and titles should be passed down to the eldest male heir. This law aimed to keep family estates intact, preventing them from being split among multiple heirs, which was common in places like France.
However, primogeniture wasn’t without its controversies. Historical events like the 12th-century conflict between Empress Matilda and King Stephen revolved around questions of inheritance rights. Another major event, the Hundred Years’ War, stemmed from disputes over whether the French crown could be inherited through the female line, as claimed by England’s Edward III.
Despite its long history, the system of male-preference inheritance began to shift. The Act of Settlement of 1701 reinforced male primogeniture for the British throne, ensuring that the monarchy would be passed through the male line, provided the heir was Protestant. However, this approach was reformed by the Succession to the Crown Act of 2013, which eliminated male primogeniture for those born after October 28, 2011, allowing both sons and daughters equal rights to inherit.
In society beyond the monarchy, daughters often received little compared to their brothers. This imbalance was somewhat corrected by the Married Women’s Property Act of 1882, which allowed married women to own and manage property independently of their husbands for the first time. Before this, women’s property rights were severely limited—married women lost their property to their husbands, while unmarried women had more freedom to retain ownership.
Throughout history, tools like trusts, entails, and life estates were used to manage inheritance and ensure that property remained within the family. Trusts were often set up to provide for children, while entails restricted the transfer of property to specific descendants, often excluding daughters. Life estates allowed a person to own property for their lifetime before it passed to another heir.
In summary, the history of primogeniture in England reflects broader societal values and legal structures that aimed to maintain family wealth and status. Although the system initially excluded women and younger sons, reforms over the centuries have gradually introduced more gender equity and flexibility in inheritance practices, moving away from rigid male preference towards a more inclusive approach.
