Co-ownership Flashcards
Trusts of land
s1(1)(a) TLATA 1996 - applies to all trusts of land, whenever created
- if express - s53(1)(b) LPA formalities; if implied no formalities - s53(2) LPA
Joint Tenancy
4 unities must be present (AG Securities v Vaughan)
- unity of possession
- unity of interest
- unity of title
- unity of time
Right of survivorship
Operates in JT - where one tenant dies, his interest passes automatically and immediately to the surviving joint tenant, not under his will as right of survivorship operate on death, will immediately after death - In Re Caines deceased
Tenancy in common
Only unity of possession required, though others may be present
Each co-owner regarded as having a distinct undivided share in the land
No right of survivorship
Legal Title
- must be held as JT - s1(6) LPA 1925
- there can be no severance of a legal JT to create a TIC - s36(2) LPA 1925
Maximum number of legal owners
4 - s34(2) TA 1925 - trustees will be the first four names and willing and able to be trustees (18 years and over and of sound mind)
Equitable interest - JT or TIC?
If any unity missing, it will be a TIC.
If all 4 unities present:
- express declaration
- no express declaration, but words of severance in grant
- no express declaration or words of severance, presumption of a JT unless there is an equitable presumption against a JT
Express declaration will prevail (inc over equitable presumptions)
Pink v Lawrence
“share and share alike” - TIC
Heathe v Heathe
Equitable presumption against JT - purchase monies provided in unequal shares, presumed to be TIC in proportion to contributions
Bull v Bull
BUT Stack v Dowden - presumption of a TIC arising from unequal cares will not apply in the context of family properties unless one of the parties can provide evidence to the contract.
Confirmed in Jones v Kernott - presumption that family home will be JT will only be displaced if common intention could justify it in light of their whole course of conduct.
Equitable presumption against JT - right of survivorship has no place in business - presumes TIC
Lake v Craddock
Severance of beneficial JT - in absence of agreement between co-owners, shares arising from severance are equal, irrespective of the proportions in which the joint tenants intially contributed towards the purchase price
Goodman v Gallant
Severance must occur during tenant’s lifetime; a JT cannot be severed by will
Re Caines deceased
Severance - written notice
- s36(2) LPA
- must be given to all the other JT stating the unequivocal and irrevocable intention to sever immediately, either by implication or expressly
Divorce proceedings coupled with wife’s summons and affidavit demonstrated intention to sever immediately even though not signed
Re Draper’s Conveyance
Divorce petition seeking property adjustment order in the future was not immediate enough to sever JT. Divorce petition alone insufficient
Harris v Goddard
Notice must be served on the other JTs
Sufficient to leave notice at last known place of abode or place of business - s196(3) LPA
Registered post is ‘left’ at the point it is given to the post master - s196(4) LPA
If left at last known abode, it does not matter that the other tenants did not see the letter
Kinch v Bullard
Notice sent by registered post but letter signed for by person wishing to sever; the other JT knew nothing about the notice until after the death of the other co-owner - severance was effective
In Re 88 Berkeley Road
Agreement between JTs could not oust statutory rule that notice complying with s36(2) did effect severance
Grindal v Hooper
Other acts that sever the tenancy in equity - s36(2) LPA
Williams v Hensman:
- act operating on own share
- mutual agreement
- course of dealing
Act operating on own share - total alienation
Outright disposal of the interest in favour of a 3rd party - must comply with s53(1)(c)
severance when H forged W’s signature
Ahmed v Kendrick
no severance when H forged W’s signature in collusion with purchaser
Penn v Bristol and West
Act operating on own share - partial alienation
Where JT charges/mortgages his equitable interest in the property - First National Securities v Hegerty
Act operating on own share - involuntary alienation
Bankruptcy automatically transfers bankrupt’s assets to trustee in bankruptcy, severing the JT - Re Gorman
Act operating on own share - contract to alienate
If JT enters into SP contract to dispose of his interest that will be alienation as equity looks upon that as done which ought to be done - Brown v Raindle
Commencement of litigation - issuing of proceedings maybe sufficiently unilateral and unequivocal act to constitute severance
But criticised in Nielson-Jones v Fedden as not sufficiently irrevocable
Mutual agreement or course of conduct - no agreement had been concluded and negotiations were ongoing - no agreement to sever
Nielson-Jones v Fedden
Orally agreed to sell share for £750, but then changed mind and wanted £1000. JT died before anything was decided - intention to sever was shown; agreement at any point was sufficient; intention shown through course of dealing
Burgess v Rawnsley
Unfinalised draft consent order had no effect in itself, but the making of the agreement amounted to severance
Hunter v Babbage
Had only agreed in principle but not in detail - insufficient; negotiations were not far enough along to constitute a course of dealing
Gore and Snell v Carpenter
Correspondence between parties’ solicitors went beyond mere agreement to put on the market, by indicating when house would be sold, how money would be split, both sought legal advice = severance
Davis v Smith
Property being partitioned did not sever the JR as both parties happy for right of survivorship to continue
Greenfield v Greenfield
Wife left husband her ‘share’ in her will; husband left her whole property - differences in wills did not suggest common intention to sever
Corr v Isard
Brother and sister both left ‘share’ in will - agreement to hold distinct share = severance
Re Woolnough (deceased)
Termination of co-ownership
Sale
Partition - trustees have power to partition land, but must have beneficiaries’ consent - s(3) TLATA
Merger - for legal estate, deed; for beneficial interest, s53(1)(c)
Sole surviving JT
Overreaching - Registered land
If some/all of the beneficiaries are TIC, restriction should be entered on proprietorship section of the register - s40, 42(1)(b) and 44(1) LRA 2002. If no restriction and overreaching does not take place, may be overriding interest if in actual occupation
If JT at equity and in law, nothing is put on proprietorship register.
Overreaching - Unregistered land
Beneficial interests not registrable at Central Land Charges Registry as they can be overreached
If not overreached, enforceability depends on doctrine of notice
s16 TLATA - where trustees exceed powers, purchaser will obtain land free of equitable interests if he overreaches, provided he did not have notice of the limits of the trustees powers
If there is only one trustee, beneficiary can obtain an injunction to restrain the sale until another trustee is appointed
Waller v Waller
Class F registration
Does not protect the interest under the trust, but blocks any dealings on the property by the legally owning spouse
Appointment of new trustees
Can be appointed:
- by person in trust deed as being able to appoint (s36(a) TA 1925)
- by existing trustees (s36(b) TA 1925)
- by personal representatives of last surviving trustee (ss36(1) + (6) TA)
- by court in difficult cases (s41 TA)
Trust of land is valid with only one trustee but need two for overreaching -s27 LPA
Appointment of new trustee should be made by deed
Automatically contains implied vesting declaration, no need for separate declaration - s40 TA
Beneficiaries role in new trustees?
s19 TLATA - can select, but not appoint, trustees and require existing trustees to retire.
Beneficiaries may only give such a direction if there is no one nominated in the trust instrument for the purpose of appointing trustees AND are all sui juris and absolutely entitled to the property - s19(1)(b) TLATA. They must be unanimous - s19(2)
Retirement of trustees
Should be by deed; no need for separate conveyance - s40 TA
Trustee cannot retire without simultaneous new appointment without consent of co-trustees - s40 TA
OR
if this will leave just one trustee - s39 TA
A trustee who is also a beneficiary can assign his beneficial interest (s53(1)(c) LPA) but will remain a trustee of the legal estate
Functions of Trustees
- trustees have powers of an absolute owner - s6(1) TLATA
- powers set out in s6 and 7 TLATA
- must get best possible return from trust property and exercise reasonable care and skill - s1 TA 2000
- s6(2) TLATA - trustees can convey land to beneficiaries, where they are of full age and capacity and absolutely entitled; even if beneficiaries do not require the trustees to do so
- s6(3) TLATA - trustees have power to acquire land under s8 TA 2000 as investment/ for occupation by a beneficiary
Restriction of trustee’s powers
Can be restricted under s8 TLATA by settlor or testator in document giving rise to the trust of land
Consent
s8(2) - trustees’ powers may be subject to consent of beneficiaries, if so stated by settlor in trust instrument.
- purchaser need only be concerned that consents of any two of them have been obtained - s10(1) TLATA but trustees will be in breach if they fail to obtain consent of all beneficiaries required
Where beneficiary is a minot, consent must be obtained from parent/guardian - s10(3) TLATA
Consultation
s11(1) - Trustees have a duty to consult beneficiaries of full age ; they must give effect to those wishes, or in case of dispute, to the wishes of the majority by value, but only so far as consistent with the general interest of the trust as decided by the trustees
Duty to consult does not apply if:
- excluded - s11(2)(a) TLATA
- trust created/arose under will made before 1 Jan 1997 - s11(2)(b) TLATA
- to trustees’ power under s6(2) to transfer land to beneficiaries - s11(2)(c) TLATA
s16(1) - purchaser need not be concerned whether there has been compliance with consultation rules
Delegation of trustees’ powers
s9 TLATA - all trustees may jointly delegate any of their functions to any beneficiary of full age
Beneficiaries to whom powers have been delegated have same duties and liabilities as trustees, but only trustees can validly receive purchase monies for overreaching.
Delegation must be made by all trustees but may be revoked by any one or more - s9(3) TLATA
Duties of trustees who delegate set out in s9 TLATA - duty of care (s1 TA 2000) applies in deciding whether to delegate - s9A(1) TLATA; trustees must keep delegation under review whilst it continues - s9A(3)
Trustees not liable for acts or defaults of beneficiary unless trustees fails in their duty of care in deciding to delegate/reviewing it - s9A(6)
Right to occupy trust land
s12+13 TLATA:
Beneficiaries have right to occupy trust land if:
- trust set up to provide land for their occupation
- subsequent to creation of trust, trustees acquired land for their occupation
BUT right not available if land is occupied already or unsuitable for occupation
s13 - where 2 or more beneficiaries have right to occupy, trustees may exlcude or restrict entitlement of any but not all of them; trustees can impose reasonable conditions on the occupying beneficiary and require them to compensate any other beneficiary - Dennis v Mcdonald.
Beneficiaries already in occupation cannot be forced to leave without their consent or court approval
(Rodway v Landy)
s14 TLATA - trustee or anyone with interest in property can apply to court:
- exercise of trustees’ powers
- need to obtain consent/consult
- making declaration as to extent of beneficiaries’ interests
Court must have regard to matters set out in s15 TLATA:
- intention to person creating trust (only for wills - Barclay v Barclay
- purpose of trust
- welfare of any minors who occupy trust land as home
- interests of any secured creditor of any beneficiary
- circumstances and wishes of beneficiaries of full age and entitled to interest in possession/wishes of majority by value.
4 people bought land between houses to ensure sea view and covenanted not to deal with it without unanimous agreement; one owner wanted land to be sold. Court refused as sale would go against underlying purpose of contract they entered
Re Buchanan-Wollaston’s Conveyance
Family home held as JT; court refused to order sale as purpose was to provide home for children. Could reapply when children older
Re Ever’s Trust
Court granted order for sale of matrimonial home as marriage had ended
Jones v Challenger
Neuberger J said s15 TLATA changed the law and court now has more flexibility, old case law should be treated with caution
The Mortgage Corporation v Shaire
Factors now considered beyond mere purpose e.g. interest of secured creditor contributed to sale order
Bank of Ireland Home v Bell
First National Bank v Achampong - sale ordered even though wife, children and grandchildren lived there
Secured creditor given precedence over factors such as poor health of husband
Putnam v Taylor
Court may make other orders rather than sale
Dennis v Mcdonald - ordered to pay occupation rent
Ali v Hussein - court made order postponing sale to allow other co-owner to try to buy the other out
Bankruptcy
s306 IA 1986 - assets automatically vest in TIB, who administers assets to pay of creditors - s305(2) duty IA
Severs an equitable JT
In bankruptcy creditors’ interests ought ot prevail
In Re Citro
For bankruptcy, court looks at factors in s335A IA:
- interests of bankrupt’s creditors
- conduct of spouse in contributing to the bankruptcy
- needs and financial resources of the spouse
- needs of any children
- all circumstances of the case other than the needs of the bankrupt
BUT - after one year from bankruptcy, interests of the creditors outweigh all other factors, unless there are exceptional circumstances (s335A(a))
Elderly lady allowed to stay despite son’s bankruptcy as sale would be extremely detrimental to her health - sale postponed until her death
Re Mott
Short postponement for order of sale where paranoid schizophrenic could have been seriously affected by move
Re Raval
Bankrupt suffering from terminal cancer and had 6 months to live, sale postponed to allow elderly spouse to care for him in their home during the late stages of his life
Re Bremner
Spoud of bankrupt was paranoid shizophrenic = postponement of sale
Nicholls v Lan
Postponement for 3 years as eldest child was seriously disabled and required constant care
Re Haghighat
Human Rights - ss335A (2) + (3) provide necessary balance between rights of creditors and respect for privacy and home of debtor
Ford v Alexander - mild depression of all co-owners not exceptional
Matrimonal Causes Act 1973
Court has wide discretion to order transfer of property from one spouse to another on breakdown of marriage.
Usual order is a Mesher order where house is transfered to joint names on trust of land for both spouse in shares as court stipulates, with no sale under all children of marriage are at least 17 or stop full-time education, whichever is later
Court can dispense with any requisite consent to a sale or to consult parties
s14(2) TLATA
Interruption to school is not exceptional
Re Citro
Postponement allowed due to school needs as creditor could wait and would not be unduly affected by postponement
Re Holiday
“in equal shares” - TIC
Payne v Webb
‘to be divided between’ - TIC
Fisher v Wigg
‘equally’ - TIC
Re Kilvert deceased
Can be TIC and JT in equity at the same time
Wright v Gibbons
