Co-Ownership Flashcards
Joint tenancy (JT)
- Legal title must be held as JT
- Right of survivorship applies (Re Caines)
- Cannot sever the legal JT
- All shares are equal as there is no identifiable own share
Tenancy In Common (TIC)
- TIC can exist for ET and LT
- No right of survivorship
- Can be held unequally
- Identifiable own share
S1 TLATA 1996
Converted all trusts for sale into trusts of land
Preliminary issues;
- A trust of land separates the legal and equitable title, so must be dealt with separately
- Rough structure;
- Initial acquisition
- Subsequent events
- Endings
AG Securities v Vaughan
4 unities (PITT) Possession Interest Title Time
Re Caines
- Right of survivorship under a JT
- Survivorship takes preecdence over a will
S1(6) LPA 1925
- Legal title must be held as a joint tenancy
- Legal title cannot be held by an infant (under 18)
S34(2) TA 1925
- Legal title can only be held by 4 legal owners
- Only first 4 named on the title deed shall be legal title holders
S22 LPA 1925
Must be of full mental capacity
If the equitable title can be held as either a JT or TIC how is it decided?
U - unities
S - words of severance
P - presumptions
E - express declaration
Pink v lawrence
Express intention prevails over presumption
What are words of sevarance?
In equal shares – Payne v Webb
Share and share alike – Heathe v Heathe
To be divided between – Fisher v Wigg
Equally – Re Klivert deceased
Bull v Bull
- Where contributions unequal there is a strong presumption of a TIC
Stack v Dowden
In domestic context even where there are different contributions it is still presumed to be held as a JT
Lake v Craddock
Commercial context TIC presumed
Legal title cannot be severed
- S36(2) LPA 1925 - as can only be held as a JT
Severance must occur whilst still alive
Re Caines
Severance can only go from JT to TIC not vice versa
AG v Vaughan
Goodman v Gallant
Where JT is severed the resulting TIC is always an equal share, regardless of unequal contributions
Singla v Brown
TIC from severance is equal, unless specifically stated not to be
Re Dennis
Where severance has not occurred the right of survivorship applies under a JT
Wright v Gibbons
One party can hold equitable title as both a TIC and JT
Methods of sevarance
- Written notice
- Act operating on own share
- Mutual agreement
- Mutual conduct
- Homicide
Requirements for written notice
- No formalities other than in writing S36(2) LPA 1925
- Re Drapers - no signature
- Given to all tenants
- Content
S196 (3) LPA 1925
- Valid on arrival at last known abode
Kinch v Bullard
- Severance occurs at point of arrival of letter
S196(4) LPA 1925
- Postal rule operates in relation to severance
Harris v Goddard
Content;
Unequivocal
Irrevocable
Immediate intentionq
Severance can be express or implied
- Re Draper’s Conveyance - Implied severance as intention to sever was immediate fromthe treating as separate shares
- Harris v Goddard - No immediate intention so implied severance not effectiveq
S36(2) - Severance by other acts or things
William v Hensman
- Act operating on own share
- Mutual agreement
- Mutual conduct
Total alienation of interest
Generally through sale. As this is a disposition of an existing equitable interest must be made in signed writing S53(1)(c)
Ahmed v Kendrick
Effective severance through forging of signature
Penn v Bristol and West
No severance where sale was attempted through forging of wife’s signature. Failed as collusion between purchaser and husband
Partial alienation
Where JT in property is mortgaged it becomes severed
First National Securities v Hegerty
Husband mortgaged house. Severed interest from JT to TIC. A mortgage is a charge on the TIC.
Involuntary association
Where the bankrupt party’s assets become the property of te bank this severs the interest, becoming a TIC
Re Gorman
Husband went bankrupt. Bank took Husbands share of house, severing interest to become TIC. As only 1 share left, other share becomes a TIC too.
Contract to alienate
Where there is a contract to sever equity sees what will be done as done, so share already severed
Brown v Raindle
Contract to alienate severs interest when entered into
Commencement of litigation
- This can sever an interest though is a much criticised method
- Severance by litigation must be unilateral and irrevocable
Re Drapers Conveyance
Commencement of litigation was held to sever
Nielson-Jones v Fedden
- Memo and agreement to sell not enough to sever by mutual agreement as sale is not treason the property in separate shares
- Criticised sevrance by litigation as proceedings can be revoked, so are not irrevocable
Gore and Snell v Carpenter
- Ongoing negotiations no sufficient to sever an interest.
- No severance by mutual conduct as no long term assumptions
Burgess v Rawnsley
Parties agreed at a moment in time a price for the shares. Therefore this was mutual agreement. Subsequent revocation was irrelevant.
Re Woolnough Deceased
Severance by mutual conduct through mutual wills allocating separate shares. Treated shares as separate in wills, therefore there is mutual conduct of separate shares
Carr v Isard
- No severance by mutual conduct as will did not require the property to be held as TIC. Therefore not treating as separate shares
- Severance by conduct requires the conduct to be as treating the shares as a TIC
Burges v Rawnsley
Obiter that negotiations show intention to and conduct to have separate shares, so this is sufficient to sever!!!! Good discursive point
- Where agreement is not found, negotiations regarding agreement could be used as evidence for conduct
Davis v Smith (2011)
Severance by mutual conduct as had treated shares separately in receiving legal advise as to how their 50/50 split of shares should be allocated
Greenfield v Greenfield
Physical division does not amount to severance as it still shows an intention for rules of survivorship to apply
Homicide
Has effect of severance but policy states that the person shall not benefit from wrong doing
S2 & S27 LPA 1925
Overreaching in purchasing of a co-owned property
S2(1)(iv)LPA 1925
Court ordered sale will automatically overreach the interest
Disputed sale of co-owned property - TLATA provisions
a. S6 TLATA – Trustees have all the power of an absolute owner
i. However must obtain best possible sale price S1 TA 2000
b. S8 & 10 – Must obtain consent of trustees (legal title)
i. S10(1) states that the purchaser is not at fault if only 2 consents are achieved, however trustee is required to obtain consent from all beneficiaries
ii. S10(3) – Must obtain consent of parent of minor if not 18
c. S11 – Must consult (but not necessarily obey) the beneficiaries (equitable title) who are;
i. Of full age
ii. Majority of share view will be obeyed
iii. Can only sell property if it is in general interest of trust
1. And then give effect to these wishes if possible
d. S11 can be excluded S11(2)(a)
i. And will not apply to trusts created pre TLATA (1/1/1997)
Beneficiary rights of occupancy
e. S12 + 13 – Beneficiaries right to occupy property
i. If trust set up for beneficiaries occupation, or land subsequently bought for that purpose
ii. S13(3) TLATA – Beneficiary may be excluded from property (but not all beneficiaries) if living with other beneficiaries is incompatible
iii. S13(4) TLATA – allows trustee to impose terms of occupancy of the beneficiary
iv. S13(6) TLATA – Trustee can obligate compensation from occupying benficiry to non-occupying
v. S13(7) TLATA – any beneficiaries in actual occupation are protected. Sale cannot occur without their consent or the courts
Court application for sale
S14 - Court application for sale
S18 - Anyone with an interest in the trust can make an application if there is a disputed sale
- Court can rule on; Exercise of powers, ned to obtain consent, declaration of beneficiary’s interest
What provision sets out the factors the court takes into consideration in obligating a sale?
S15;
- Intention - Of persons who created trust (just trustees)
- Purpose - For which the trust property is held (beneficiaries and trustees)
- Welfare of minors in occupation of trust property
- Interests of secured creditor
- Wishes of beneficiary. If disputed then weight is given to the majority of ownership wishes
Jones v Challenger
court will not obligate sale where land is stable matrimonial home. In this case the court did obligate the sale as the property was bought to be a matrimonial home but that purpose was no longer in operation as husband dead.
Re Evers trust
court will not obligate where purpose is still continuing. Was bought as a family home and there were still children living there
Re Buchana-Wallastons
Property bought for purpose of sea view. This was a continuing purpose so sale could not be obligated
Mortgage Corporation v Shaire
- Pre-TLATA case law should be treated with caution as Parliament obviously wanted to change how the law worked, so to apply old case law too closely is erroneous
- Demonstrates pre-TLATA lack of consideration for family etc, and emphasis of sale of property
Bank of Ireland v Bell
Creditors interests are first among equals
FNB v Achampong
Sale ordered to appease creditors even though wife, children and grandchildren all living at the property. Creditors afforded high status in consideration
Putnman v Taylor
Secured creditor given precedence over health of husband. However court did allow 5 month delay for sale to occur before enforced
Ali v Hussein
Obligate a buyout by co-owners who do not want sale, of the party who does want to sell
Dennis v McDonald
Obligate parties who do not wish to move to pay rent
S306 IA 1986
When beneficiary becomes bankrupt the share vests in the bankruptcy trustee
S305(2) IA 1986
Obligation of trustee to realise asset
What section sets out the relevant factors in the obligation of a sale in a bankruptcy situation?
S335A IA 1986
S335A IA 1986
Factors which are relevant in the obligation of a sale where beneficiary is bankrupt;
o 2(a) – creditors interests (most important)
o 2(b)(i) – Conduct of other party in contributing to bankruptcy
Partners –consider conduct
o 2(b)(ii) – Needs and financial resources of other parties
Partners – consider needs and resources
o 2(b)(iii) – the needs of any children (minors)
o 2(c) – All other circumstances of the case other than needs of bankrupt party (all other except bankrupt)
o S3 – Application made pre/post 1 year
Before 1 year then likely that the courts will allow more time to recover money, called a moratorium
After 1 year the creditors wishes become paramount unless there are exceptional circumstances;
Re Mott
Elderly lady who was v.ill no obligated sale till after her death. Son was bankrupt party not her.
Re Raval
Short postponement where paranoid schizophrenic would be adversely affected by the obligated sale
Re Bremner
Sale postponed till 3 months after bankrupt party’s death, so elderly spouse could care for him in home. Only had 6 months to live
Nicholls v Lan
Where spouse of bankrupt party had long-term schizophrenia an order for sale was postponed for 18 months
Re Haghighat
– Sale delayed for three years as child had cerebral palsy and required constant care
Barca v Mears
Says article 8 of the Convention is engaged when an order for sale is made, but that this was not a breach. The child living in the home was not ‘exceptional’ enough (education not exceptional)
Donohoe v Ingram
(Courts will give time to let the bankrupt person to find an alternative home, but the debtors take priority, even with children in the home and education disrupted
Ford v Alexander
Depression not exceptional circumstances. Sale obligated
Re Citro
- Schooling of children interrupted. Not exceptional
- Harman LJ described as ‘the melancholy consequence of debt’
Barca v mears
Human right infringed of art 8 right to private and home life by S335(a) IA 1986 as kicked out of home
Introduction - history
- Land originally held outright by the man
- Then held as trust for sale s34 LPA 1925 as land regarded as investment
- Trusts for sale subject to right to occupy - bull v bull
- TLATA 1996 S1 coverts all trusts for sale to trusts of land
- s6(1) TLATA - trustees have rights of absolute owner
Structure of intro
- Trusts of land
- LT and ET
- JT and TIC
- Survivorship
- Severance
- Statement of intent and structure
Re drapers
No need for written notice to be signed
Kinch v Bullard
Severance occurs at point of arrival of letter.
Letter arrived and then husband died. Deemed severed.
Ford v Alexander
No conflict between 335(a) and art 8 if properly applied and analysed
Consent in bankrputcy
- S14(2)(a) TLATA 1996 – Under a sale for bankruptcy there is no need to obtain the consent of other trustees, or to consult with others for the exercise of their sale powers
Co-ownership in relation to marriage
- S14 TLATA does not really apply to husbands and wives as they are covered under the Matrimonial Causes Act 1973
- MCA gives court wide discretion to obligate sales etc to divide up property
Re K
Homicide severs
Mortgage v Shaire(2)
- Neuberger s15 ‘tips balance in favour of families and against banks and other charges’
- Court ordered a loan to be granted to mrs Shaire so she could pay off the mortgage over time (kids in residence)
Re Chiswick
- Bankruptcy severs joint tenancy
Re somers
For mutual agreement no writing is required
Hunter v Babbage
- Divorcing couple. Wife suggested in affidavit that couple should be sold and she would use her proceeds to buy a small house
- Held to sever, as though no agreement finalised there was evidence of treating the property in separate shares
- Criticised in Nielson-Jones as not irrevocable and intention to get 50% share could be withdrawn
Wilson v bell
- Long term assumptions about how property held can sever through conduct
