Co-ownership & Trusts of Land

Question 1

Nature AND use of trust for a co-ownership

Answer 1

When 2 or more people have an interest in ownership of the same property at the same time

s.34-36 LPA 1925 –> Requires the use of a trust in all cases of co-owned property

Co-owners = trust

SO at law = trustees while at equity = beneficiaries

Question 2

Trustees

Answer 2

S.34 Trustees Act 1925 –> maximum of 4 owners and they have to be 18 or over

So an owner who is under the age of 18 would not be a trustee at law but rather a beneficiary at equity

Question 3

Joint Tenancy

Answer 3

Specific shares?
> Together own the whole interest in the property (no shares) (A B)
> Joint owners don’t have specific shares  so they own the whole interest in the property

Impact on death?
> Right of survivorship applies
> If B dies A becomes outright owner

Question 4

Tenancy in Common

Answer 4

Specific shares?
> Each has a specific undivided share (A) (B)
> & they can decide relative value of their shares

Impact on death?
> There is no right of survivorship
> If B dies then A can leave that share to another person of B’s choice e.g. C –> AND so C would now become a tenant in common but would NOT be a trustee

Question 5

Joint Tenancy & Tenancy in Common - WITHIN IN A TRUST

Answer 5

s.1(6) shows us that trustees can only be joint tenants

Beneficiaries can be both joint tenants and tenants in common

JT examples:
A & B = trustees at law and beneficiaries at equity
On B’s death, A remains trustee at law and sole beneficials

TiC example:
A & B are trustees at law and beneficiaries at equity
On B’s death his share goes to C, and A remains trustee at law while at equity A and C are both beneficiaries

Question 6

JT and TiC - The Unities

Answer 6

JOINT TENANCY - the 4 unities MUST be present:
> Possession (of the whole of the property)
> Interest (both have identical rights in the estate and NOT EQUAL SHARES)
> Title (same transferred document)
> Time (interest in property is at the same time)

TENANCY IN COMMON - only 1 unity is required (possession)
> Possession (of the whole property hence why its an ‘undivided share’)

Question 7

Working out if beneficiaries are JT or TiC

Answer 7

If the 4 unities are not present or only some of them are = Tenancy in Common (as long as unity of possession is there)

Have to check if there is a an express declaration of trust in the TR1 (will show if its a JT or TiC)

If there is a express declaration of trust, then it is final unless fraud - Goodman v Gallant 1986

If there is no declaration of trust, then there is equitable presumptions to assume whether its a JT or TiC
HOWEVER equity will rebuttably presume its a TiC in some cases where:
> purchase price is paid in unequal shares unless its a family home - Stack v Down
OR
> Its a business partnership