Co-ownership Flashcards
What happens whenever land is jointly owned?
A trust of land is imposed
What is the effect of the imposition of a trust where there is co-ownership?
Title is separated so
- legal title is held by the trustees (they have no right of enjoyment over the land but have powers and duties of management)
- equitable title is held by the beneficiaries (they have the benefit of the land)
How can a trust of land be created expressly?
The person who sets up the trust must evidence it in writing and sign
When will a resulting trust in land be implied?
Where someone make a financial contribution to the purchase of the house but does not hold legal title in the land
When will there be a constructive trust over land?
Where it would be unconscionable for the legal owner of the land to deny the interest of another person
What is unity of possession in relation to co-ownership?
No co-owner is entitled to exclusive possession of any part - all co-owners are simultaneously entitled to possession of it
What is joint tenancy?
All co-owners are deemed to constitute one single entity and own the whole property as one collective entity
Right of survivorship applies
What is tenancy in common?
Each co-owner has their own distinct but undivided share in the land
Right of survivorship does not apply
What are the four unities of title?
- unity of possession
- unity of title
- unity of interest
- unity of time
What is unity of title?
All co-owners must acquire their title from the same document - will be satisfied when they all obtain title from one transfer deed or lease
What is unity of interest?
The interest in the land held by each co-owner must be of the same nature and duration eg in a leasehold context, all owners must hold the lease for the same length of time, with joint obligations
What is unity of time?
The interest of each co-owner must vest at the same time. This does not mean that they must all sign the document at the same time or move into the property at the same time
To have unity of time, the interest of each co-owner must take effect at the same time
What is the right of survivorship?
On death of one joint tenant their notional interest in the land accrues to the surviving joint tenants
It operates automatically on death and is unaffected by any provision in Wills or by intestacy law
Does survivorship apply to tenants in common?
No - on death their share passes under their Will or intestacy rules
What title appears on the register of title at the Land registry?
Legal title but not equitable title
What rules apply to who can hold legal title?
- can only be a maximum of four
- must be of full age and sound mind
- legal title must hold as joint tenants
What rules are there in relation to equitable title?
- no limit on the number of people who can hold an equitable interest
- no requirement to be of age or sound mind
- can be held as either joint tenants or tenants in common
If the four unities of title are not present how will equitable title be held?
As a tenancy in common providing unity of possession exists
If there is an express declaration that equitable title will be held as joint tenants is that enough?
No - must also be four unities of title
If the four unities of title are present, how will title be held?
Depends on intention of parties
If express declaration that the parties are to hold as tenants in common then that will prevail
If no express declaration or implied intention then equitable title will be held as joint tenants
When will there be a rebuttable presumption that equitable title is to be held as tenants in common?
- where land is business asset
AND
- the purchase price of a non-domestic property has been paid in unequal shares
What is severance?
Severance is the process of converting an equitable interest held as a joint tenancy into an interest held as a tenancy in common
Does not end co-ownership just changes the basis on which it is held
Why will a joint tenant want to sever the tenancy?
To create a tenancy in common and prevent survivorship from operating
ie they will gain a distinct share in the property which they can then pass onto their heirs
What title can be severed?
Only a equitable joint tenancy not a legal joint tenancy
When must severance happen?
In the joint tenant’s lifetime. Will purporting to sever joint tenancy on death will be of no effect
What two ways can an equitable joint tenancy be severed?
- notice in writing
- other acts or things:
a) unilateral act by one joint tenant
b) mutual agreement
c) mutual conduct
What is the effect of severance?
The joint tenant will then hold a tenancy in common which is an equal share based on the number of former joint tenants not on the proportion of contribution made to the initial price
If there are two joint tenants and one severs their title, how is equitable title then held?
Both tenants have tenancies in common - 50% share each
If there are four joint tenants and one severs their title, how is equitable title then held?
- the one who severs holds as a tenant in common with a 25% share
- the others still hold the remain 75% of equitable title as joint tenants
How can severance happen by notice in writing?
- can be in any form and need not be signed
- must demonstrate an unequivocal and irrevocable intention to sever the equitable joint tenancy immediately
- must be served correctly
How can notice to sever a joint tenancy be served correctly?
- must be served on all other equitable joint tenants
- can be handed over or left at the last known place of abode or business of the equitable joint tenants
- it does not have to be read
If notice to sever a joint tenancy is sent by registered post when will it be deemed served?
If not returned undelivered, deemed served at the time a registered item would in ordinary course of events be delivered
When a joint tenancy is severed by a unilateral act, is there a requirement for the other joint tenants to know or consent?
No - neither is needed
What three ways can a unilateral act happen?
Total alienation, partial alienation and involuntary alienation
What is an act of total alienation for severing a joint tenancy?
Acts whereby the severing owner disposes of their interest permanently by way of sale or gift of the interest
What is an act of partial alienation for severing a joint tenancy?
Happens where the severing owner temporarily disposes of their interest by way of mortgage or lease.
Partial because they will eventually take back the interest unencumbered
What is an act of involuntary alienation for severing a joint tenancy?
Occurs when joint tenant is declared bankrupt by court
When will there be severance by mutual agreement?
When all the equitable joint tenants agree that one person’s interest is severed thereby creating a tenancy in common
When will there be severance by mutual conduct?
Where the parties have not reached a point where there can be said to be ‘mutual agreement’ to sever the joint tenancy, but there may still be severance by ‘mutual conduct’
Will happen where negotiation which are not concluded but are going on in such a way that recognises that each party had separate shares
Mirror wills can be evidence of mutual conduct to sever
Who can apply to the court for an order in relation to disputes in relation to co-owned land?
Application can be made by anyone with an interest in the land so
- trustees, beneficiaries, mortgagees, trustees in bankruptcy
What can the court order in relation to disputes of co-owned land?
May order trustees to do something eg sell, or allow beneficiary into occupation
Cannot order one beneficiary to buy out another
- Orders for sale
- orders as to who occupies
- orders as to the nature or extent of a beneficiary’s interest
What factors must the court consider in relation to making its decision?
- the intentions of the person or persons who created the trust
- the purpose for which the property subject to the trust is held
- the welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as his home
- the interests of the secured creditor
- the circumstance and wishes of any beneficiaries of full age or of the majority
What weight are the statutory factors to be given in relation to resolving the dispute?
Equal weighting although historically and some more recent case law seem to favour the interests of secured creditors
What effect will the purpose for which the property subject to the trust is held still continuing have on the court outcome on any dispute?
Will weigh against any order for sale
What will be relevant in considering the welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as his home in relation to a dispute?
The circumstances. Younger children are more likely to have greater weight attached to their welfare than older, independent children
