Co Ownership

Question 1

What is co-ownership?

Answer 1

Co ownership is where any 2 or more persons each simultaneously owns a given estate in land and are thus entitled to an interest or interests in that estate.

Question 2

Types of co ownership

Answer 2

1) joint tenancies

2) tenancies in common

Question 3

What is a joint tenancy?

Answer 3

A type of co ownership of land under which each tenant is equally and wholly entitled to the whole of the estate. (Burton v Camden LBC)

Question 4

Joint tenancy legal or equitable interest?

Answer 4

Can exist as both or legal or equitable

Question 5

Joint tenants and ownership

Answer 5

No joint tenants is said to hold a share in the land, instead each is invested with the whole interest in the land. (Wright v gibbons )

Question 6

2 characteristics of joint tenancies

Answer 6

1) right of survivorship

2) four unities

Question 7

What is Right of survivorship?

Answer 7

This right also known as ius accrescendi, provides that upon the death of any of the joint tenants, the co owned estate is said to survive to living joint tenants. Therefore they cannot pass on their share in the co owned property as their right is extinguished upon death.

Question 8

The four unities

Answer 8

The four unities are unities of possession, interest, title and time.

A joint tenancy necessarily requires the presence of the so-called “four unities” in order to exist (AG Securities v Vaughan [1990]1 A.C. 417 per Fox LJ). Likewise, where all four unities are present, the type of co-ownership is necessarily a joint tenancy (Corin v Patton(1990) 169 CLR 540 (HC of Australia) per Deane J).

Question 9

The four unities: Possession

Answer 9

The unity of possession pertains to the right of each joint tenant to possession of the land; the right of each tenant to the land applies to each and every part of the land. Therefore, no joint tenant may take possession of any portion of the land, such as by sectioning off that portion of land, to the exclusion of the other joint tenants (Meyer v Riddick(1990)

There cannot therefore be a trespass by any joint tenant against another, except where one joint tenant has wrongfully ousted another.

For statute, there are exceptions where a joint tenant may legally oust another, such as where the other joint tenant has been the perpetrator of domestic violence against the joint tenant applying or some other occupant of the land (Davis v Johnson [1979] AC 264, HL).

Question 10

The four unities: Interest

Answer 10

This form of unity derives from the idea that each joint tenant is ‘wholly entitled to the whole.’ The interest of each and every joint tenant is exactly the same in terms of extent, nature, and duration. No joint tenancy therefore can exist between a freeholder and leaseholder, because the nature (and durations) of their interests differ. The same can be said for owners in possession and owners in remainder, and for owners of a fee simple interest and those who own merely a life interest.

Question 11

The four unities: Title

Answer 11

The unity of title holds that each of the joint tenants derives their title to the land from the same act or document, such as an act of adverse possession, or a document such as a grant. For a co-owned legal estate, this type of unity also means that when a purchaser is looking to purchase the title to a portion of co-owned land, the purchaser need only purchase one title. Coupled with the fact that the number of trustees of any given legal estate is capped at four (Trustee Act 1925, s.34(2)), the purchaser will have no difficulty in investigating the title rights of the trustees, because a) there are relatively few trustees needed to sign the relevant documentation, and b) their interest is equal.

Question 12

The four unities: Time

Answer 12

Put simply, this unity requires that the interests of all joint tenants must have been vested in them at the same time.

A.G. Securities v Vaughan

The case concerned four occupants who had each entered into separate agreements with their landlords. The occupants had agreed to submit a monthly payment in exchange for the exclusive right to use a four-bedroom flat in common with the other occupants. The agreements were for a six-month term. The landlord sought a declaration from the county court that the occupants were mere licensees rather than tenants. When the matter reached the Court of Appeal, the court held they were joint tenants of the flat. In order for the occupants to be declared joint tenants, they would have to satisfy the four unities, according to Fox LJ. His Lordship summarised (at 432) the four unities. His Lordship summarised the four unities with a sentence each: every co-owner will be as much entitled to any part of the land as every other co-owner (unity of possession); every joint tenant’s title to the land derives from the same act or document (unity of title); each tenant’s interest must be vested at the same time (unity of time); and every co-owner’s interest must be the same ‘in extent, interest and duration’, meaning no one tenant can act by himself to, for example, surrender a lease or give a notice (unity of interest).

Question 13

Severing

Answer 13

In each case there were differing bases on which the court determined the joint tenancy was actually a tenancy in common. In Stack v Dowden, the court found the following factors to be relevant: a meticulous separation of the finances of each party, an unequal contribution between them towards the purchase price, and unequal financial contributions to the householdafter the purchase. In Jones v Kernott, the parties accepted that a joint tenancy had existed initially; they disagreed on whether it continued or whether it had been severed by conduct into a tenancy in common. Among the relevant factors were the following: a long period of separation during which Mr Jones made no contributions at all towards the maintenance or purchase of the house, and the parties’ joint decision to cash an insurance policy so that Mr Jones could purchase a house.

It is unclear in these cases at what point the joint tenancies were severed into tenancies in common. That said, there is precedent in statute for severing to occur in this manner for joint tenancies: when property is owned by one or both spouses, and one spouse makes, or contributes to making, a substantial improvement to the property, then the spouse responsible for the improvements will acquire a share, or a larger share (unequal to that of the other spouse) in the improved property (Matrimonial Proceedings and Property Act 1970, s.37). The problem is that this section seems to assume that the property was held under shares before the improvements were made, and the concept of shares is inimical to joint tenancies. Therefore, applying that statute in accordance with the case law, it appears that the statute will act to sever a joint tenancy where one of the spouses/civil partners makes a greater contribution to improving the land.

Question 14

What is Tenancies in common?

Answer 14

in tenancies in common the co-ownership arrangements are such that each of the co-owners holds a distinct share, or proportions of entitlement. Tenancies in common take effect only in equity. The Law of Property Act 1925 s.1(6) describes tenants in common as holding land in ‘undivided shares’; the word undivided is said to mean that the co-owned land has not been divided physically.

Question 15

2 Characteristics of tenancies in common

Answer 15

There are two defining characteristics to tenancies in common, both of which set tenancies in common apart from joint tenancies:

1) There is no right of survivorship between tenants in common, and
2) The only unity which exists between the tenants in common is the unity of possession.

Question 16

No right of survivorship

Answer 16

There is, unlike joint tenancies, no right of survivorship between tenants in common. The size of each tenant in common’s share is defined, finite and fixed; it is unaffected by the death of any tenant in common. Upon the death of any tenant in common, their share passes on to whomever is named in their will or intestacy as the person to receive the tenancy in common.

Question 17

Only unity in possession is required

Answer 17

Again, unlike with joint tenancies, tenancies in common do not require that all of the four unities be fulfilled. Instead, there is only one requirement: that each of the tenants in common has a right to possession of the land. If there was no unity of possession, meaning an equal shared right to possess the land, there would not be co-ownership. Without co-ownership, the arrangement would amount to separate ownership of physically distinct areas of land with boundaries between them.

Question 18

Occupation and enjoyment

Answer 18

As with joint tenancies, given the unified right of possession between tenancies in common, no tenant in common is permitted to physically demarcate or erect boundaries on any part of the co-owned land for their own use at the exclusion of all other co-owners.

The tenants in common each have the right to exercise other acts attributable to owners of land, so long as he does not interfere with the equivalent rights of the other co-owners. This applies, regardless of the size of the share of each tenant in common, meaning that a tenant in common with a much greater share of the property cannot act in ways that exclude the right of possession of any other tenant in common with a smaller share.

These views have backing in the case law: each and every tenant in common has a right to the ‘use and enjoyment of it [the land] in a proper manner (Bull v Bull [1955] 1 QB 234, CA per Denning LJ). This right of possession also has statutory backing (TOLATA 1996, s.12(1)). Except where a tenant in common acts to physically oust another tenant in common, or acts to unlawfully interfere with mutual rights of enjoyment, the notion of trespass between tenants in common has no meaning at common law (Jacobs v Seward(1872) LR 5 HL 464, HL). That being said, courts have the means to regulate the occupation rights between the tenants in common (TOLATA 1996, s.14(2); Family Law Act 1996, ss. 33(3) and 36(5)).

Question 19

Liability of occupation rent

Answer 19

Between the tenants in common, it is usually the case that no one tenant in common can require the other tenant(s) in common to pay rent, even where one of the tenants in common effectively enjoys sole occupation of the land. In this case of sole occupancy, what occurs is not an abrogation of the right to possession on the part of the tenant in common who is not in occupation. Their non-occupation is a matter of voluntary choice, and does not give rise to a relationship of landlord and tenant (Henderson v Eason(1851) 17 QB 701). This is relevant to the notion of trustees of land having the power to exclude some (but not all) of the beneficial co-owners from occupation where the trust instrument grants the power (TOLATA 1996, s.13(1)). Where a tenant in common is so excluded, the trustee can require the payment of ‘compensation’ to any beneficiary whose enjoyment of the land has been precluded or restricted (TOLATA 1996, s.13(6)(a)).

Where rent is received from a letting of co-owned land, paid by a stranger occupying the land that has been let out, the paid rent is divisible between the tenants in common in exact proportion to the value of their respective share (Job v Potton (1875) LR 20 Eq 84).

Question 20

Liability for repairs and improvements

Answer 20

When one tenant in common offers to pay for or make repairs or improvements to the co-owned land at their own expense, they generally have no right of immediate recovery of his costs from the tenant(s) in common. (This principle applies also for joint tenants.) That being said, the tenant in common can endeavour to impose a lien on the co-owned property, or its proceeds of sale, at such time when the land’s value is realised and distributed amongst the tenants in common (Leigh v Dickeson(1884) 15 QBD 60, CA). By imposing a lien, the cost of the improvements will be equally deducted from the share of each tenant in common at the time of sale (Re Pavlou (A Bankrupt) [1993] 1 WLR 1046, ChD per Millett J). Alternatively, where the trustees are acting for the beneficiary tenants in common, the trustee may impose ‘expenses in respect of the land’ (TOLATA 1996 s.13(5)) and such expenses may reasonably include maintenance and improvement works.