Co-ownership

Question 1

What happens whenever land is jointly owned?

Answer 1

A trust of land is imposed

Question 2

What is the effect of the imposition of a trust where there is co-ownership?

Answer 2

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)

Question 3

How can a trust of land be created expressly?

Answer 3

The person who sets up the trust must evidence it in writing and sign

Question 4

When will a resulting trust in land be implied?

Answer 4

Where someone make a financial contribution to the purchase of the house but does not hold legal title in the land

Question 5

When will there be a constructive trust over land?

Answer 5

Where it would be unconscionable for the legal owner of the land to deny the interest of another person

Question 6

What is unity of possession in relation to co-ownership?

Answer 6

No co-owner is entitled to exclusive possession of any part - all co-owners are simultaneously entitled to possession of it

Question 7

What is joint tenancy?

Answer 7

All co-owners are deemed to constitute one single entity and own the whole property as one collective entity

Right of survivorship applies

Question 8

What is tenancy in common?

Answer 8

Each co-owner has their own distinct but undivided share in the land

Right of survivorship does not apply

Question 9

What are the four unities of title?

Answer 9

• unity of possession
• unity of title
• unity of interest
• unity of time

Question 10

What is unity of title?

Answer 10

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

Question 11

What is unity of interest?

Answer 11

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

Question 12

What is unity of time?

Answer 12

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

Question 13

What is the right of survivorship?

Answer 13

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

Question 14

Does survivorship apply to tenants in common?

Answer 14

No - on death their share passes under their Will or intestacy rules

Question 15

What title appears on the register of title at the Land registry?

Answer 15

Legal title but not equitable title

Question 16

What rules apply to who can hold legal title?

Answer 16

• can only be a maximum of four
• must be of full age and sound mind
• legal title must hold as joint tenants

Question 17

What rules are there in relation to equitable title?

Answer 17

• 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

Question 18

If the four unities of title are not present how will equitable title be held?

Answer 18

As a tenancy in common providing unity of possession exists

Question 19

If there is an express declaration that equitable title will be held as joint tenants is that enough?

Answer 19

No - must also be four unities of title

Question 20

If the four unities of title are present, how will title be held?

Answer 20

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

Question 21

When will there be a rebuttable presumption that equitable title is to be held as tenants in common?

Answer 21

• where land is business asset

AND

• the purchase price of a non-domestic property has been paid in unequal shares

Question 22

What is severance?

Answer 22

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

Question 23

Why will a joint tenant want to sever the tenancy?

Answer 23

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

Question 24

What title can be severed?

Answer 24

Only a equitable joint tenancy not a legal joint tenancy

Question 25

When must severance happen?

Answer 25

In the joint tenant’s lifetime. Will purporting to sever joint tenancy on death will be of no effect

Question 26

What two ways can an equitable joint tenancy be severed?

Answer 26

• notice in writing
• other acts or things:

a) unilateral act by one joint tenant

b) mutual agreement

c) mutual conduct

Question 27

What is the effect of severance?

Answer 27

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

Question 28

If there are two joint tenants and one severs their title, how is equitable title then held?

Answer 28

Both tenants have tenancies in common - 50% share each

Question 29

If there are four joint tenants and one severs their title, how is equitable title then held?

Answer 29

• 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

Question 30

How can severance happen by notice in writing?

Answer 30

• 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

Question 31

How can notice to sever a joint tenancy be served correctly?

Answer 31

• 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

Question 32

If notice to sever a joint tenancy is sent by registered post when will it be deemed served?

Answer 32

If not returned undelivered, deemed served at the time a registered item would in ordinary course of events be delivered

Question 33

When a joint tenancy is severed by a unilateral act, is there a requirement for the other joint tenants to know or consent?

Answer 33

No - neither is needed

Question 34

What three ways can a unilateral act happen?

Answer 34

Total alienation, partial alienation and involuntary alienation

Question 35

What is an act of total alienation for severing a joint tenancy?

Answer 35

Acts whereby the severing owner disposes of their interest permanently by way of sale or gift of the interest

Question 36

What is an act of partial alienation for severing a joint tenancy?

Answer 36

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

Question 37

What is an act of involuntary alienation for severing a joint tenancy?

Answer 37

Occurs when joint tenant is declared bankrupt by court

Question 38

When will there be severance by mutual agreement?

Answer 38

When all the equitable joint tenants agree that one person’s interest is severed thereby creating a tenancy in common

Question 39

When will there be severance by mutual conduct?

Answer 39

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

Question 40

Who can apply to the court for an order in relation to disputes in relation to co-owned land?

Answer 40

Application can be made by anyone with an interest in the land so

• trustees, beneficiaries, mortgagees, trustees in bankruptcy

Question 41

What can the court order in relation to disputes of co-owned land?

Answer 41

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

Question 42

What factors must the court consider in relation to making its decision?

Answer 42

• 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

Question 43

What weight are the statutory factors to be given in relation to resolving the dispute?

Answer 43

Equal weighting although historically and some more recent case law seem to favour the interests of secured creditors

Question 44

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?

Answer 44

Will weigh against any order for sale

Question 45

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?

Answer 45

The circumstances. Younger children are more likely to have greater weight attached to their welfare than older, independent children