Co-ownership: Severance Flashcards
What is severance in property?
Process of separating off the share of a joint tenant; the concurrent ownership will continue, but the right of survivorship will no longer apply.
The parties will hold separate shares as tenants in common.
PS! not possible to sever a legal joint tenancy; only an equitable one during the joint tenant’s lifetime.
What are the effects if severance?
If a joint tenant completes severance, they will hold a tenancy in common which is an equal share, based on the number of former joint tenants not on the proportion of contributions made to the initial price.
PS! when its <2 ppl it ONLY affects the owner who instigated it.
How can we sever an equitable joint tenancy?
1) notice in writing; or
2) ‘other acts or things’
Method 1: how do you sever an equitable tenancy by notice in writing?
a) A notice in writing must go to all of the other equitable JOINT tenants; by handing it over personally or posting it.
It takes place the moment it is served.
c) Does not even need to be signed.
BUT must demonstrate an unequivocal and irrevocable intention to sever the equitable joint tenancy immediately (i.e could also be divorce papers).
Method 2: how do you sever an equitable tenancy by ‘other acts and things’?
- A unilateral act by a joint tenant operating on its own share
- Mutual agreement of the joint tenant
- Mutual conduct: Any course of dealing indicating that the interests were mutually treated as a tenancy in common.
Other acts and things: what is a ‘unilateral act’?
a) Total alienation:
when the severing owner disposes of the interest permanently, by way of sale or gift of the interest.
b) Partial alienation:
the severing owner temporarily disposes of the interest, by way of mortgage or lease.
c) Involuntary alienation:
when the joint tenant is declared bankrupt by the court.
Other acts and things: what is ‘mutual agreement’?
when all equitable joint tenants agree that one person’s interest is severed, thereby creating a tenancy in common.
Other acts and things: what is a ‘mutual conduct’?
Where the parties have not reached a point of ‘mutual agreement’ to sever the joint tenancy, there may still be severance by ‘mutual conduct’.
