2. Co-Ownership and Trusts Flashcards
DEF: Co-Ownership
Co- ownership is where more than one person owns land at the same time (ie concurrently).
When does a ‘trust of land’ arise?
A trust of land will
arise in the following situations:
1. a landowner intentionally sets up a trust of their land by transferring title to the land to trustees for the benefit of others (an express trust following the formalities in s 53 LPA 1925);
2. a person acquires an interest in land owned by another due to their conduct (an implied trust – see 2.4); or
3. land is acquired by more than one owner jointly (co- ownership).
How must the legal estate be held?
The legal estate must be held as a joint tenancy
Can the joint tenancy of the legal estate be severed?
No
Who can be a trustee of land?
Anyone over the age of 18 (s 1(6) LPA 1925)
If someone tried to convey a legal estate to a minor, what would happen?
This would be a declaration of trust that the land is HELD for the minor. If the land was conveyed to a minor AND adult, the land would be vested in the adult and in trust for the minor.
How many trustees can there be (min/max) for a trust of land?
Maximum of four trustees. If there are more than 4, first 4 named adults will be the trustees. There is no minimum (best to have atleast 2 for overreaching purposes)
As a trustee over land, what can trustees do with the land?
- Anything an absolute owner could (ie sell or mortgage or purchase)
- This is limited by their duty to consult beneficiaries who are of full age with an interest in possession
- Must comply as far as is practicable
- If beneficiaries not in agreement, must comply with the majority wishes
Two forms of Co-Ownership
(1) Joint tenancy
(2) Tenancy in common
How can the equitable interest of a property be held?
Either joint tenancy or tenancy in common
If one joint tenant dies, what will happen to their interest in the property?
The right of survivorship: their interest passes to surviving joint tenant(s)
DEF: Undifferentiated Ownership
Joint tenants are jointly entitled to the whole of the property (no such things as shares)
DEF: Severance
Converting a joint tenancy in equity to a tenancy in common (can never be done for legal estate)
If one tenant in common dies, what will happen to their interest in the property?
There is no right of survivorship, their share passes with their estate by their will or the intestacy rules
- # of beneficial tenants in common can increase
- their shares can be unequal
DEF: Undivided Shares
Each owner of the property (as tenants in common) has a distinct share in the land, but there is no physical division of the land to this effect
- share can be equal or unequal
How can we determine whether the property is held by joint tenancy or tenancy in common in equity?
Four Tests:
1) Are all four unities present?
(2) does the deed transferring the land to the co-owners contain an express declaration
(3) does the deed transferring the land to the co-owners contain words of severance?
(4) Does equity presume a tenancy in common?
DEF: Four unities test
If all four unities are present, it is likely there is a joint tenancy in equity:
(1) Unity of Possession
(2) Unity of Interest
(3) Unity of Title
(4) Unity of Time
DEF: Unity of Possession (four unities test)
There will be unity of possession if each co-owner has the RIGHT to possession of all the land.
- Actual possession not required
- This unity required for both joint tenancy and tenancy in common in equity
DEF: Unity of Interest
each co- owner must have identical rights over the land. This is the hallmark of a joint tenancy. A tenancy in common can have unequal shares and,
therefore, no unity of interest.
DEF: Unity of Title
each co- owner must have acquired their interest from the same document. For example, the same transfer or conveyance.
