Co-ownership

Question 1

What happens whenever land is jointly owned?

Answer 1

A trust of land is imposed (TOLATA 1996, s1). This has the effect of separating the legal title to the land, which is held by the trustees, from the equitable title, which is held by the beneficiaries.

Question 2

What formalities are required to create an express trust of land?

Answer 2

LPA 1925, s53(1)(b): the trust must be evidenced in writing and signed by the declarant(s).

Question 3

What formalities are required to create an implied trust of land?

Answer 3

There are no formalities for the creation of such trusts (LPA 1925, s53(2)).

Question 4

What are the two types of co-ownership?

Answer 4

Joint tenancy and tenancy in common.

Question 5

What is a joint tenancy?

Answer 5

Where there is a joint tenancy all co-owners are deemed to constitute one single entity, and own the whole property as one collective entity.

Question 6

Outline the four unities of title for a joint tenancy to exist.

Answer 6

-Unity of possession-no co-owner can be excluded from any part of the land

-Unity of title-all co-owners must acquire their title from the same document

-Unity of interest-the interest in land held by each co-owner must be of the same nature and duration

-Unity of time-the interest of each co-owner must take effect at the same time

Question 7

What is the right of survivorship?

Answer 7

This means when one joint tenant dies, the notional interest of the deceased joint tenant accrues to the surviving joint tenants.

Question 8

When does the right of survivorship operate?

Answer 8

This operates automatically as soon as the joint tenant dies and is unaffected by any provisions in a will or the intestacy rules: Re Caines deceased (1978).

Question 9

Does the right of survivorship apply to joint tenancies?

Answer 9

Yes!

Question 10

What is a tenancy in common and what does it require?

Answer 10

A tenancy in common requires only unity of possession. This is because tenants in common are not viewed as a single entity, but as each having a distinct but undivided share in the land.

Each has a clearly quantified share, say 25%, but cannot point to any particular part and say that is my 25%.

Question 11

Does the right of survivorship apply to tenancy in common?

Answer 11

No, the deceased tenant in common’s share passes under their will or by the intestacy rules.

Question 12

What are the concepts/rules that apply to holding legal title for a trust of land?

Answer 12

-Maximum of four trustees

-All trustees must be sui juris (18+ and sound mind)

-Must hold as joint tenants (four unities present)

-Right of survivorship applies

-Joint tenancy cannot be severed into a tenancy in common

Question 13

Can the legal joint tenancy be severed to make a tenancy in common?

Answer 13

No, this is not possible as per LPA 1925, s36(2).

Question 14

What are the concepts/rules that apply to holding equitable title for a trust of land?

Answer 14

-Unlimited number of people can hold

-No requirement to be sui juris

• Can be held as joint tenancy or tenancy in common

-Equitable joint tenancy can be severed into tenancy in common

-Right of survivorship only applies to equitable joint tenancy, not to an equitable tenancy in common

Question 15

What is severance?

Answer 15

The process by which a joint tenant can convert an interest into a separate share held as tenant in common.

Question 16

What is the usual reason why an equitable joint tenancy is severed?

Answer 16

The usual reason an equitable joint tenant will want to sever is to exclude the operation of survivorship, so that a distinct share in the property can be left to someone other than the surviving joint tenant(s) on death.

Question 17

When must severance take place?

Answer 17

During the joint tenant’s lifetime.

Making a will does not sever a joint tenancy as it takes place after death, whereas survivorship takes place immediately on death: re Caines deceased (1978).

Question 18

Describe the form and intention of a notice of severance in writing.

Answer 18

The writing can be in any form and need not be signed.

It must however demonstrate an unequivocal and irrevocable intention to sever the equitable joint tenancy immediately.

Question 19

How is valid service of a notice of severance in writing effected?

Answer 19

-It must be given to all of the other equitable joint tenants

-It can be handed over or left at the last known place of abode/business of the equitable joint tenants

-It does not have to be read

Question 20

When does severance take place?

Answer 20

Severance takes place the moment the notice is served.

Question 21

What are the three ways in which an equitable joint tenancy can be severed by other acts or things?

Answer 21

1. A unilateral act by a joint tenant operating on its own share
2. Mutual agreement
3. Mutual conduct

Question 22

Outline the three forms of alienation that a joint tenant can carry out to sever an equitable joint tenancy.

Answer 22

-Total alienation, where the severing owner disposes of the interest permanently.

-Partial alienation, where the severing owner temporarily disposes of the interest, by way of mortgage or lease.

-Involuntary alienation, when the joint tenant is declared bankrupt by the Court against their will.

Question 23

Outline how equitable joint tenants can sever one person’s interest via mutual agreement.

Answer 23

This occurs when all equitable joint tenants agree that one person’s interest is severed, thereby creating a tenancy in common.

The agreement need not go as far as being a specifically enforceable contract.

Question 24

Define mutual conduct in the context of severing an equitable joint tenancy.

Answer 24

This can be defined as any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common.

Question 25

Do mirror wills show a course of conduct that is consistent with severing an equitable joint tenancy?

Answer 25

Yes, as per Dunbabin v Dunbabin (2002), where it was concluded that mirror wills do show a course of conduct which showed that the parties made clear to one another that they desired the property should no longer be held jointly but in common.

Question 26

What does S14 TOLATA 1996 gives the Court jurisdiction to do?

Answer 26

To hear applications regarding disputes which involve co-owned land.

Question 27

Who can apply to the Court for an order relating to S14 TOLATA 1996?

Answer 27

Anyone with an interest in the land can apply to the court for an order relating to it.

Applicants could be trustees, beneficiaries, mortgagees, trustees in bankruptcy or people who hold charging orders

Question 28

What orders can the Court make in relation to S14 TOLATA 1996 applications?

Answer 28

Orders which may be made include orders for sale, orders as to who occupies and orders as to the nature and extent of a beneficiary’s interest.

It cannot order one beneficiary to buy out another.

Question 29

What are the factors a Court must consider equally under S15 TOLATA 1996 when hearing S14 applications?

Answer 29

(a) The intentions of the person or persons who created the trust;

(b) The purposes for which the property subject to the trust is being held;

(c) The welfare of any minor who occupies or might reasonably be expected to occupy any land subject to trust as his home; and

(d) The interests of the secured creditor of any beneficiary.

The Court must also have regard to the beneficiaries who are over 18.

Question 30

If the purpose for which the property subject to the trust is continuing, will the Court make an order for sale after a S14 TOLATA 1996 application?

Answer 30

If the purpose is still continuing, the Court will weigh against an order for sale being made.

A valid purpose may be a matrimonial home.

Question 31

Do commercial or personal interests take precedence when considering an order for sale under S14 TOLATA 1996, refer to Fred Perry v Genis (2015)?

Answer 31

Fred Perry v Genis (2015): a sale was ordered even though the children’s education would be disrupted. The Court stated that commercial interests should take precedence however it postponed the order for a year to give the family time to relocate.