Co-Ownership

Question 1

what is co-ownership?

Answer 1

where more than one person owns land at the same time (concurrently).

Question 2

according to s1 of TOLATA 1996, in what situations does a trust of land arise:

Answer 2

1) landowner intentionally sets up a trust of their land by transferring legal title to trustees for the benefit of others (ie express trust complying with s53 LPA 1925 formalities).
2) person acquires interest in land owned by another due to their conduct (ie an implied trust).
3) land is acquired by more than one owner jointly (co-ownership)

Question 3

according to s16 of LPA 1925, a legal estate must be:

Answer 3

1) held as a joint tenancy; and
2) joint tenancy relating to that legal estate cannot be severed

Question 4

if land is conveyed to an adult and a minor…

Answer 4

the land is vested in the adult on trust for the minor.

Question 5

two forms of co-ownership…

Answer 5

1) joint tenancy
2) tenancy in common

Question 6

two key characteristics of Joint tenancy…

Answer 6

1) right of survivorship (survivorship rule);
2) undifferentiated ownership (both jointly own the whole rather than having interest in specific section).

Question 7

what is the right of survivorship?

Answer 7

on death of a joint tenant their interest in the property passes (automatically and immediately) to the surviving joint tenant (or tenant). it DOES NOT pass under the deceased’s will/ intestacy.

Question 8

two key characteristics of a tenancy in common?

Answer 8

1) no right of survivorship - right passes under will or intestacy;
2) undivided shares - each owner is regarded as having distinct share in the land. this may be equal or unequal but effectively means tenants can point to their share (eg I own half).

Question 9

what are the four unities?

Answer 9

Used to determine whether joint tenancy or tenancy in common. unities are:
1) unity of possession;
2) Unity of interest;
3) Unity of title;
4) Unity of time

Question 10

explain unity of possession

Answer 10

each co-owner has the right to possession of all of the land. required for both joint tenancy and tenancy in common (in equity).

Question 11

explain unity of title

Answer 11

co-owners must all have acquired interesting the property from same document (wg same transfer/ conveyance).

Question 12

explain unity of time

Answer 12

co-owners must have obtained their interests at the same time.

Question 13

explain unity of interest

Answer 13

each co-owner must have identical rights over the land. hallmark of a joint tenancy as a tenancy in common could have unequal shares meaning there would be no unity of interest.

Question 14

if all four unities are present does that mean equitable interest is definitely a joint tenancy?

Answer 14

No. other tests need to be considered.

Question 15

what is the second test following the test for four unities?
what is the effect of this test?

Answer 15

Does the deed transferring the land to the co-owners create an express declaration of trust?
The effect of an express declaration of trust is conclusive if wording such as ‘transferred into their joint names as express beneficial joint tenants in equity’ is used.

Question 16

what is the third test for whether land is held by JT or TiC?

Answer 16

does the deed transferring the land to the co-owners contain words of severance? if it does, it is a JT, if it does not, fourth test is then applied.

Question 17

fourth test for JT or TIC?

Answer 17

does equity presume a tenancy in common?

this means there is a presumption under law that co-owners will be joint tenants in equity on the basis that equity follows the law. NOTE THIS CAN B REBUTTED

Question 18

how can the presumption that co-ownership in equity will be a JT be rebutted?

Answer 18

1) when property is acquired for business use (person of business would usually want interest to go to their estate on death).
2) unequal contributions to purchase price - equity presumes tenancy in common (however where property is a home, unequal contributions don’t necessarily mean TIC).
3) post -acquisition money management - if one of co-owners provided a much greater share of the finance/ paid all mortgage payments etc, then the presumption may be rebutted.

in the absence of any of these presumptions, the equitable interest will be held as joint tenants, as ‘equity follows the law’.

Question 19

what are the four tests to determine whether property is held as JT or TiC?

Answer 19

1) four unities (possession, interest, time and title)
2) does deed of transfer contain express declaration indicating a JT?
3) does the deed of transfer contain words of severance (if not fourth test is applied)?
4) does equity presume a TIC (ie is the presumption of JT rebutted by property was acquired for business use/ unequal contributions to purchase price or mortgage payments)?

Question 20

when does a TiC arise?

Answer 20

Where:
a) Expressly declared;
b) presumed on acquisition (eg business acquisition);
c) subsequent acts of severance (JT into TiC).

Question 21

can a JT be severed through provisions in a will?

Answer 21

no

Question 22

two types of severance of a JT?

Answer 22

1) informal severance;
2) formal severance

Question 23

two things needed for written severance of JT to be effective :

Answer 23

1) use of appropriate wording. must express desire to end JT immediately. Expressing a future intent or desire is insufficient;
b) be received by all other JTs or be deemed to have been received. Notice can be handed to recipient or posted.

Question 24

explain severance by registered post

Answer 24

severance by registered post (ie recorded devilry) is deemed served on the recipient provided the letter is not returned undelivered back to sender (ie post office).

Question 25

Explain severance of a JT by ordinary post.

Answer 25

severance occurs if written notice left at last known place of abode of the JT in question.

Question 26

5 friends buy a property together (all over 18). transfer deed states the property conveyed to them all jointly. How would you describe how the property is owned?

Answer 26

four of the friends hod the legal estate (as the Trustee Act 1924 tells us maximum of 4 people can own a legal estate). They hold the equitable interest on trust for themselves and the fifth friend.

Question 27

in co-ownership situations, in the absence of a restriction on the proprietorship register, the…

Answer 27

beneficial interest is held as JTs and the rule of survivorship applies. as a result where one dies and the property is being sold, evidence of death of the deceased jt will be required when registering the property at the land registry.

Question 28

aside from being deemed conveyed to JT, what else does a notice of intention to sever need to have?

Answer 28

immediacy (ie severance in the future will not be sufficient to fulfil the immediacy requirement).

Question 29

Williams v Lensman indicated three informal severance methods of JTs. What are they?

Answer 29

1) acts operating on the joint tenant’s share;
2) mutual agreement;
3) course of dealings.

Question 30

explain the acts operating on Jt’s share method of informal severance.

Answer 30

this is a unilateral act, where a JT in equity disposes of their equitable interest by sale, gift, lease or mortgage. it relates to an equitable interest and therefore must follow s53 LPA 1925 (ie be in wiring and signed).

Question 31

will a contract sever a JT? If so, are there any requirements?

Answer 31

Yes.

Two requirements:
1) must comply with LPMPA 1989; and
2) must be capable of being legally enforceable.

Question 32

explain severance by mutual agreement.

Answer 32

requires JTs to act together (express or impliedly) to sever JT. it must be supported by some valuable consideration (ie some money).

Question 33

explain severance by mutual conduct/ course of dealing.

Answer 33

where JTs show through their actions they own distinct shares in the property. There is no binding case law and therefore left to judicial discretion.

important to note the conduct does not need to amount to an express or implied agreement. sufficient that one party makes it clear to the other their shares are and should no longer be held jointly.

Question 34

Explain severance by homicide

Answer 34

when one JT unlawfully kills the other. as suriviroship applies to JTs, it is a matter of public policy one who kills the other should not absorb their share.

Question 35

where severance occurs and there are two joint tenants…

Answer 35

they become tenants in common holdings equal shares.

Question 36

where severance occurs and there are three or more joint tenants…

Answer 36

only the co-owner severing their JT becomes a TiC. the other joint co-owners continue to hold a JT in equity of the remaining interest.

(eg if one of three severs, that one will hold a third as a TiC and the remaining two will jointly hold the other two thirds as JTs).

Question 37

do the initial financial contributions hold any weight upon severance of a JT?

Answer 37

No. it is irrelevant.

Question 38

name the three requirements for a resulting trust over land

Answer 38

1) a person not holding legal title to property makes a contribution to purchase price of the property;
2) there is no evidence the contribution was intended as a gift/ loan;
the contribution must be all or part of the purchase price at the date of purchase (not subsequently).

Question 39

what equitable interest does one have after contributing towards the purchase price of a property (resulting trust)?

Answer 39

they have an equitable interest in the share of the purchase price they paid (eg if paid 10% deposit they have equitable interest in 10% of the property).

Question 40

name the two ways a constructive trust over land can be found?

Answer 40

1) an agreement and detrimental reliance; or
2) conduct and a direct financial contribution.

Question 41

in relation to forming constructive trust over land, what consists an agreement for the agreement stage?

Answer 41

any agreement, arrangement or understanding reached between the parties as to how the property is to be shared beneficially.

Question 42

True or false: for the purposes of forming a constructive trust over land, agreements based on deceit undermine the agreement.

Answer 42

false.

deceit or trickery will not undermine the agreement as to how it is shared.

Question 43

what must a non-legal owner show to find they have an interest (via constructive trust) over property what constitutes detrimental reliance regarding constructive trusts?

Answer 43

examples of detrimental reliance:
- paying for house improvements out of their own money;
- paying all of the household bills to allow the legal owner to pay mortgage;
working unpaid in the legal owners business.

important to note detrimental reliance must be linked to the agreement (and not related to other motives such as love and affection).

Question 44

explain the way a constructive trust can be found through conduct and direct financial contribution.

Answer 44

• no evidence of agreement necessary;
• required conduct is either contribution to the purchase price initially or towards mortgage payments, by the non-owning party.
• anything less than financial contribution will be insufficient.

Question 45

What is the effect of Trusts of Land & Appointment of Trustees Act 1996 s15(1)(c)?

Answer 45

This provides the court must have welfare of any minor in occupation of a property as a paramount consideration when determining whether to order the sale of a co-owned property (ie one owner wants to sell and another does not).