5. Co-Ownership of Land

Question 1

What will the court do where, e.g. two parties buy a property, each contributing to the purchase price, but legal estate is conveyed to only one?

Answer 1

Infer a resulting trust, with the legal owner holding the estate on trust for both

Question 2

What are the options where contributions are (1) equal and (2) unequal?

Answer 2

1. Equal: Joint tenancy
2. Unequal: Tenancy in common

Question 3

What way must the legal estate be held, and why?

Answer 3

As joint tenants, because tenancy in common cannot exist at law

Question 4

What does the doctrine of survivorship provide?

Answer 4

If a joint tenant dies, their interest automatically passes to the surviving tenant(s)

Question 5

How is a joint tenant’s ownership described?

Answer 5

They do not have a share in the land, but are each entitled to possess the whole

Question 6

What is the impact of the doctrine of survivorship?

Answer 6

Any attempt to gift or leave a joint tenancy upon death will fail, and it will revert automatically in the surviving joint tenants

Question 7

What is the maximum number of trustees that can hold the legal estate in land?

Answer 7

Four

Question 8

What is the limit on the amount of people that can hold the behind-the-scenes equitable interest?

Answer 8

No limit

Question 9

What are the two ways an equitable interest can be held?

Answer 9

1. Joint tenancy
2. Tenancy in common

Question 10

Does the doctrine of survivorship apply to joint tenancies in equity?

Answer 10

Yes

Question 11

Does the doctrine of survivorship apply to tenancies in common in law or equity?

Answer 11

No

Question 12

When will a tenancy in common be appropriate?

Answer 12

When the parties:

1. Do not wish for survivorship to apply
2. Contributed unequally to the purchase
3. Enter into a commercial transaction where a joint tenancy would be inappropriate

Question 13

What is a declaration of trust?

Answer 13

A conclusive agreement between co-owners as to how their beneficial interest is to be held

Question 14

What is severance in the context of a beneficial interest?

Answer 14

Bringing the equitable joint tenancy to an end and converting it to a tenancy in common

Question 15

What are the seven ways a equitable joint tenancy can be severed?

Answer 15

1. Written notice
2. Treating a share as separate
3. Disposal of equitable interest
4. Mutual agreement
5. Course of dealings
6. Forfeiture
7. Bankruptcy

Question 16

What are the two requirements for severance by written notice?

Answer 16

1. Show clear intention to sever
2. Be sufficiently served

Question 17

One of what two things will cause a written notice of severance to be sufficiently served?

Answer 17

1. Left at last known home or business address, or
2. Sent there by registered post

Question 18

How might a party treat their share as separate?

Answer 18

By attempting to sell it in spite of the doctrine of survivorship and the fact that joint tenants all enjoy the whole

Question 19

After a party disposes of or treats their share as separate, are they completely out of the picture?

Answer 19

No, they still hold the legal estate on trust for the purchaser of their share, because severance only concerns the equitable interest

Question 20

Can course of dealings, e.g. agreement between the parties to dispose of share, effect severance even if the agreement is not enforceable?

Answer 20

Yes

Question 21

When does severance by forfeiture occur?

Answer 21

If one tenant kills the other, the right of survivorship will not apply

Question 22

Why does the bankruptcy of one joint tenant sever an equitable joint tenancy?

Answer 22

Because the bankrupt’s equitable share is transferred to the trustee

Question 23

What is the starting point in determining whether an equitable joint tenancy or tenancy in common has been created?

Answer 23

Intention of the parties

Question 24

If the intention of the parties cannot be determined, what will the court assume?

Answer 24

That equity follows the law, and the beneficial interests reflect the legal interests, i.e. joint tenancy, because tenancies in common cannot exist at law

Question 25

What is overreaching?

Answer 25

A process under which a buyer may take property free of a beneficiary’s interest under a trust

Question 26

How many trustees should purchase money be paid to and how does this allow overreaching?

Answer 26

When purchase money is paid to all trustees (minimum of two or one if a trust corporation). The payment transfers the equitable interest of the beneficiary from the land and attaches it to the purchase money.

Question 27

What should a buyer do if there is only one trustee, to ensure they take property free of the interest?

Answer 27

Ensure that a second trustee is appointed to receive the money, or obtain a written release from the beneficiary regarding this requirement

Question 28

In the registered system, how will behind the scenes beneficial interest typically be evidenced?

Answer 28

By a Form A restriction on the proprietorship register

Question 29

What considerations must a solicitor give to a trustee’s duty to consult beneficiaries?

Answer 29

A solicitor acting on sale of trust property where adult beneficiaries are involved must have regard to the trustee’s duty to consult and take into account the wishes of at least a minority of them

Question 30

When will sections 14 and 15 of the Trusts of Law & Appointment of Trustees Act 1996 help co-owners?

Answer 30

If they cannot decide how or when to dispose of property

Question 31

What does section 14 allow?

Answer 31

It allows a trustee or any other person with an interest in property subject to a trust to apply to the courts for an order relating to the trustee’s duties to sell, obtain consent, or declare the nature of a party’s interest

Question 32

What does section 14 not give the court the power to do?

Answer 32

Appoint or remove a trustee

Question 33

What does section 15 provide?

Answer 33

Factors for the court to consider in determining an application under section 14

Question 34

What are the four factors under section 15?

Answer 34

1. Intentions of those who created the trust
2. Purpose for which the property subject to the trust is held
3. Welfare of any minor who occupies or might reasonably be expected to occupy
4. Interests of any secured creditor or beneficiary

Question 35

If property is transferred to parties jointly, what is the presumption as to how it is held upon breakdown of the relationship, and who bears the burden of displacing that presumption?

Answer 35

Legal and equitable joint tenancy is presumed, and it is for the party claiming otherwise to prove this

Question 36

If the court does have to make a split upon the breakdown of a relationship, what proportion will each receive and what will the court consider?

Answer 36

Each party will receive the proportion the court considers fair, considering all the circumstances and not just those surrounding the purchase

Question 37

What are the four unities that a joint tenancy must display?

Answer 37

unities of possession, interest, title, and time.