A claim for proprietary estoppel can be brought where a person has relied upon a promise to their detriment, and if proven, the court can intervene and enforce the promise. This often arises on the death of the landowner but not always.

Four key elements

For a successful proprietary estoppel claim, a party typically has to prove four main grounds:

1. Promise – a property owner has made a clear promise or created an expectation that the party will inherit, or own an interest in the property.
2. Reliance – the party must have relied on that promise, on the understanding the property would one day be theirs.
3. Detriment – in relying on the promise, the party is disadvantaged.
4. Unconscionability – it would be unfair or unjust for the promisor to renege on the promise.

Proprietary estoppel and rural property

The nature of farming businesses and land ownership means they can be prone to proprietary estoppel claims. This is because farms are typically inherited – and the party planning to inherit often works on the farm for most of their life, at low wages.

If they do not then inherit as they thought and expected, they could have relied on a promise to their detriment, for example: by working for low wages, investing in the business or land and forgoing other opportunities. This can be exacerbated where there is more than one potential beneficiary of an estate.

What should property owners consider?

Since the November 2024 budget, we have seen an increase in the number of farming families and businesses planning for inheritance and, as such, considering the implications of proprietary estoppel. This can be a positive as communication is key.

Property owners should think carefully about what is said and indeed promised when discussing the future of the family farm. Ideally, there would be clearly minuted meetings so the potential for dispute over plans is reduced.

Open communication is a vital tool in minimising the risk of future claims. Landowners should also take good estate planning advice to consider all relevant factors.

Further information

Contact Matt Brown