Co-ownership

Question 1

Joint tenants - Right of survivorship

Answer 1

If either tenant dies the survivor becomes the sole owner of the land.
If a joint tenant makes a gift in his will of his interest to a third party, that gift will not be effective, neither will the intestacy rules apply if the joint tenant did not leave a will. This is the same of legal and equity position.

Question 2

Ascertaining the original trust position - Legal estate

Answer 2

Can only be held as joint tenants. It is not possible to sever a joint tenancy of the legal estate in order to turn it into a tenancy in common. Max. of 4 trustees - you can have one on their own. Must be 18 and older.

Question 3

Ascertaining the original trust position - Legal estate - Minors

Answer 3

A minor cannot be a trustee and they are not automatically appointed as a trustee when they reach the age of 18

Question 4

Ascertaining the original trust position - Equitable estate

Answer 4

Can be held as joint tenants or tenants in common.

Question 5

Ascertaining the original trust position - Equitable estate - First test 4 Unities

Answer 5

1) Unity of interest - all co-owners have exactly the same interest
2) Unity of title - must receive their interest under the same document
3) Unity of time - must vest at the same time
4) Unity of possession - must be entitled to possession
All 4 must be present to take the form of an equitable joint tenancy. Only possession needed for tenancy in common

Question 6

Ascertaining the original trust position - Equitable estate - 2nd test - Does the deed transferring the land to the co-owners contain an express declaration?

Answer 6

Where the deed in favour of the co-owners contains an express declaration of how the co-owners should hold the equitable interest in the land, that declaration is conclusive

Question 7

Ascertaining the original trust position - Equitable estate - 3rd test - Does the deed transferring the land to the co-owners contain words of severance?

Answer 7

Words of severance are words indicating that the co-owners intend to own separate and distinct shares in the property. Where the conveyance or transfer contains words of severance, the co-owners take the equitable interest in the land as tenants in common in equity.

Question 8

Ascertaining the original trust position - Equitable estate - 4th test - Does equity presume a tenancy in common?

Answer 8

The three situations where equity will presume a tenancy in common are: where co-owners buy the land as partnership property; lend money on mortgage; or make unequal contributions towards the purchase price.
-Partnership property - Where the co-owners are business partners and they buy the land as a partnership asset, equity presumes that they buy the land as tenants in common in equity
-Lenders - Where more than one person lends money to a borrower, the relationship between the lenders is that of tenants in common (rare in practice).
-Unequal contributions towards the purchase price - Where two or more people buy land together and make unequal contributions towards the purchase price, equity presumes that they buy as tenants in common in equity. The size of each tenant in common’s share is in proportion to his or her contribution

Question 9

Severance - By notice

Answer 9

3 requirements for a valid notice:
1) The notice must be given in writing
2) The notice must show the correct intention
3) The notice must be correctly severed - must be served on all the other joint tenants, by post is possible.

Question 10

Severance - Alienation

Answer 10

This may occur when the joint tenant sells, gives or mortgages his equitable interest to a third party. To be effective, the gift, sale or mortgage must be in signed writing. Bankruptcy of a co-owner also has the effect of automatically severing his equitable joint tenancy, as it results in involuntary alienation of the equitable interest to vest in his trustee in bankruptcy.

Question 11

Severance - Alienation - Mortgage

Answer 11

If you mortgage your interest this severs the joint tenancy even if you pay it off it’s still in tenancy in common

Question 12

Severance - By mutual agreement or a course of dealing

Answer 12

Where the co-owners expressly agree to sever the joint tenancy in equity, or where the parties agree to deal with the land in a certain way and that method of dealing would have the effect of severing. The agreement between the parties need not be one that is binding on the parties; it is sufficient for it to show a common intention to sever. If there are more than two equitable joint tenants who all agree to sever, then all of them will become tenants in common with equal shares by this method. Severance by a course of dealing is any course of dealing by the joint tenants showing that their interests should be treated as a tenancy in common rather than a joint tenancy.

Question 13

Severance - Homicide

Answer 13

Where one of two joint tenants murders the other, this has the effect of severing the joint tenancy in equity.

Question 14

Severance - Effect

Answer 14

When equitable joint tenants sever the joint tenancy in equity, the result is that the severing joint tenant takes a share in the property as a tenant in common. The legal estate remains unaffected.

Question 15

Resolving disputes - Court order

Answer 15

Where there is a dispute between the trustees or between the trustees and beneficiaries about whether or not the trustees should sell the trust land, the parties can resolve this by making an application to the court under s 14 of the 1996 Act. Beneficiaries can make this court order.

Question 16

Resolving disputes - Consent

Answer 16

An application could also be made under s 14 where the trustees are required to obtain the consent of a named person before selling if, when the trustees try to sell the land, they discover that the named person either cannot be found or refuses to give permission for the sale. Again the trustees could apply to court under s 14 for an order under s 14(2)(a), relieving the trustees of their obligation to obtain these consents.

Question 17

The rights of beneficiaries - S. 11

Answer 17

The right to be consulted

Question 18

The rights of beneficiaries - S. 8

Answer 18

The right to give permission before the trustees exercise their powers

Question 19

The rights of beneficiaries - S. 12 and S. 13

Answer 19

The right to occupy the trust land. The beneficiaries must be entitled to an interest in possession under the trust, the purposes of the trust must include making the land available for the beneficiaries to occupy, or the trustees must hold the land so that it is available for them to occupy.

Question 20

Trustees of land and their powers - S. 6

Answer 20

Circumstances in which the trustees are authorised to sell the trust land. They have all the powers of owners. Also gives trustees the authority to exercise the power to dispose of the legal estate in a specified way, ie by transferring it to a beneficiary who is of full age and capacity and absolutely entitled to the land and thus to end the trust. Gives trustees the authority to exercise the power to dispose of the legal estate in a specified way, ie by transferring it to a beneficiary who is of full age and capacity and absolutely entitled to the land and thus to end the trust. Also requires the trustees to ‘have regard to the rights of the beneficiaries’ when exercising their powers. However, the trustees already had to comply with this rule under the general law.

Question 21

Trustees of land and power - Restrictions on trustees

Answer 21

1) The duty to consult with beneficiaries (who are of full age an who have an interest in possession - immediate interest, before exercising their powers
2) The duty to comply with restrictions imposed on the trustees by the settlor

Question 22

Enforceability - Sale by two or more co-owners

Answer 22

The buyer pays the purchase price to both legal owners to get the whole legal estate, and because he has bought from at least two trustees, the purchaser overreaches any equitable interests arising under the trust of land.

Question 23

Enforceability - Sale by sole surviving co-owner - Tenants in common

Answer 23

The last tenant will hold the land on trust for himself and the beneficiaries under the deceased’s will or intestacy and the purchaser needs to overreach by insisting that the tenant appoints a second trustee.

Question 24

Evidence of death

Answer 24

Evidence of death will be needed to prove who is the sole surviving legal and beneficial owner

Question 25

What if there is a restriction?

Answer 25

If there is a restriction then the co owners hold the property as tenants in common