Co-ownership

Question 1

What is the concept of co-ownership?

Answer 1

Where more than one person owns land at the same time (concurrent).

When there is concurrent sharing a trust of land is created.

Question 2

When can trusts of land arise?

Answer 2

When a landowner intentionally sets up a trust of their land by transferring the title of the land to trustees for the benefit of others.

Where a person acquires an interest of land owned by another due to conduct.

The land is acquired by more than one owner jointly.

Question 3

Who are trustees and who are beneficiaries?

Answer 3

Trustees are the legal owners of the property.

Beneficiaries are the equitable owners of the property.

Question 4

Can a legal estate be held as both joint tenants and tenants in common.

Answer 4

No - the legal estate cannot be severed and must be held as joint tenants.

Question 5

What happens if a legal estate is conveyed to a minor?

Answer 5

This operates as a declaration of trust where the land is held in trust for the minor.

Question 6

What happens if a legal estate is conveyed to a minor and an adult?

Answer 6

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

Question 7

If a minor is appointed as a trustee, what happens when they turn 18?

Answer 7

They do not automatically become trustees when they reach the age of 18.

Question 8

What are the minimum and maximum requirements for the number of trustees?

Answer 8

Maximum = 4.

There is no minimum.

Question 9

What are the powers of the trustees?

Answer 9

They have all the powers of an absolute owner.

They must consult the beneficiaries (where practicable).

Question 10

What are the two types of co-ownership?

Answer 10

Joint tenancy
Tenancy in common

Question 11

What are the key characteristics of a legal joint tenancy?

Answer 11

The right of survivorship

They are jointly entitled to the whole of the property (i.e. no shares).

Question 12

What is the right of survivorship?

Answer 12

On the death of a joint tenant, their interest passes automatically and immediately to the surviving joint tenant.

Question 13

What are the key characteristics of a legal tenancy in common?

Answer 13

No right of survivorship

Each owner is regarded as having a distinct share in the land - this can be equal or unequal.

Question 14

How can you determine whether it is a joint tenancy or a tenancy in common in equity?

Answer 14

1. Are all four unities present?
2. Is there an express declaration of trust within the deed?
3. Are there are words of severance within the deed?
4. Does equity presume a tenancy in common?

Question 15

What are the four unities?

Answer 15

Unity of possession - each co-owner has a right to possess all of the land.

Unity of interest - each owner must have identical rights over the land

Unity of title - each co-owner must have acquired their interest from the same document

Unity of time - the co-owners must receive their interests at the same time

Question 16

How do you know if there is an express declaration of trust within the deed?

Answer 16

It would contain wording such as ‘Transferred into their joint names as express joint tenants in equity’.

Question 17

What words of severance can indicate that co-owners should have distinct shares?

Answer 17

To A and B in equal shares’ or ‘Half to A and half to B’ both indicate tenancies in common.

The mention of distinct shares is usually the tell tale sign.

Question 18

Does equity presume a tenancy in common?

Answer 18

There is a presumption that the co-owners will be joint tenants in equity on the basis that equity follows the law.

This can be rebutted.

Question 19

How can the presumption that co-owners will be joint tenants in equity be rebutted?

Answer 19

When the property is acquired for business use

Unequal contributions to the purchase price

Post-acquisition money management

Question 20

How can a joint tenancy in equity be severed?

Answer 20

Formal severance with written notice

OR

Informal severance

Question 21

In terms of severing an equitable joint tenancy, how should the written notice be served?

Answer 21

It must use appropriate wording to state they wish to end the joint tenancy immediately

It must be received by all the other joint tenants or deemed to have been received.

Question 22

Can a written notice to sever an equitable joint tenancy be sent by post?

Answer 22

For registered post - it is deemed sufficiently served if the letter is not returned.

For ordinary post - it is deemed sufficiently served if it is left at the last known place of abode or business in the UK of the person to be served.

Question 23

How can informal severance of an equitable joint tenancy be effected?

Answer 23

Where one tenant disposes of their equitable interest by sale, gift, lease or mortgage (must be in writing and signed)

Mutual agreement (oral agreements can suffice)

By mutual conduct (a common intention)

Bankruptcy - involuntary assignment of the equitable interest to the joint tenant’s trustee in bankruptcy

Homicide - where one joint tenant kills another

Post-acquisition money management

Question 24

What is the effect of severance on an equitable joint tenancy?

Answer 24

Where there are two joint tenants in equity, they both become tenants in common of equal shares.

Where there are three or more joint tenants in equity, only the co-owner who severs their joint tenancy becomes a tenant in common.

The share is proportionate to the number of joint tenants.

Question 25

What types of implied trusts can arise due to the parties’ conduct?

Answer 25

A resulting trust

A constructive trust

Question 26

How can a resulting trust of land be implied?

Answer 26

1. When a person who does not hold legal title makes a contribution to the purchase of the property
2. There is no evidence that the contribution was intended as a gift or loan
3. The contribution must be all of part of the purchase price at the date of acquisition

If all are present, the person holds a beneficial interest in the property proportionate to the contribution made.

Question 27

How can a constructive trust of land be implied?

Answer 27

An agreement + detrimental reliance

OR

Conduct + direct financial contribution

Question 28

In terms of implied constructive trusts of land, how can the test of ‘an agreement + detrimental reliance’ be set out?

Answer 28

The agreement can be at any time of the purchase or subsequent to it. It is irrelevant if the agreement is based on a trick or is deceitful.

The non-legal owner must have shown they relied upon the agreement to their detriment or significantly altered their position e.g. paying for improvements, paying all of the household bills, working unpaid in the legal owner’s business.

Question 29

In terms of implied constructive trusts of land, how can the test of ‘conduct + direct financial contribution’ be set out?

Answer 29

The court looks at the conduct of the parties where they infer a common intention to share the property beneficially

Payment towards the mortgage payments or the initial purchase price can be seen as a direct financial contribution.

Question 30

How are disputes settled between co-owners (i.e. between married/divorcing couples)?

Answer 30

Section 14 TLATA
Section 15 TLATA

Question 31

What types of applications may fall under section 14 TLATA in terms of disputes between co-owners?

Answer 31

Disputes as to whether the land should be sold

Authorising transactions without the consent of all the trustees

Disputes regarding the occupation of trust land

Disputes regarding size of co-ownership interests

Question 32

What are the types of circumstances that a court should consider when exercising its powers under section 14 of TLATA in terms of disputes between co-owners?

Answer 32

The welfare of any resident children

The interests of secured creditors

The intention(s) of the parties

The purpose(s) of the trust of land

The circumstances and wishes of any beneficiaries of full age and entitled to an interest in possession in property