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SQE1 - Land Law > co-ownership (workbook) > Flashcards

co-ownership (workbook) Flashcards

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1
Q

what is concurrent co-ownership?

A

arises where 2 or more people together own the same estate (freehold or leasehold) in the same piece of land at the same
time.

e.g., when a couple buy a house together, both people share the ownership of
the freehold and are said to own the freehold concurrently.

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2
Q

which act governs co-ownership?

A

Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996), effective 1 Jan 1997

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3
Q

when is a trust of land imposed?

A

whenever land is owned jointly (s1)

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4
Q

what is legal title

A
  • held by trustees
  • registered owner(s) at the Land Registry
  • powers and duties of management (e.g., admin - signing docs such as mortgage and transfer deeds)
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5
Q

what is beneficial/equitable title

A
  • held by the beneficiaries
  • names kept private
  • arrangements re: equitable title do not appear on the registers
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6
Q

can a person be a trustee and beneficiary

A

yes

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7
Q

does a beneficiary in a trust of land have a proprietary right in the land?

A

yes, they have an equitable interest

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8
Q

formalities for express trust of land

A
  • declaration of trust must be in writing
  • signed by the declarant(s)
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9
Q

example of express trust of land

A

A grandparent made a will in which they left their house on trust for their six grandchildren in
equal shares. They appointed A and B as trustees.
After the grandparent’s death, the executors of the estate transferred the legal title of the house
to A and B. As the will set out the declaration of trust in writing which was signed (LPA 1925, s53(1)(b)), the trust is properly declared in favour of the grandchildren. The grandchildren hold the
equitable interest.
The trustees have the power to sell the house, but they cannot keep the proceeds: they are bound as trustees to account to the beneficiaries or reinvest for them.

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10
Q

another example of express trust of land

A

A brother and sister, X and Y, bought a home together. X paid 75% of the price and Y paid 25%.

The transfer deed transferred the legal title to them both. In the transfer deed X and Y made an
express declaration that they hold the property for themselves beneficially in proportion to their
contributions (75% for X and 25% for Y).
Here, X and Y hold both the legal and equitable title. The flexible rules relating to the equitable
title enable them to reflect their individual contributions.

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11
Q

are there any formalities for implied trusts?

A

no

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12
Q

what are the two types of implied trust

A
  1. resulting
  2. constructive
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13
Q

example of implied resulting trust

A

a property is bought in A’s name, but B makes a financial contribution. So if B paid 25% of the price, A will hold the property on trust for A and B in a 75%:25% ratio.

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14
Q

which type of trust will be used in the context of a family home?

A

common intention constructive trust

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15
Q

what are constructive trusts a response to?

A

where it is unconscionable for the legal owner of the land to deny the interest of another person

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16
Q

example of an implied trust

A
  • V and W decided to buy a home together. Although they both contributed to the purchase price,
    the property was transferred to V as sole legal owner.
  • As the property was bought as a family home, and W paid part of the price, they may be able to
    establish an interest under a common intention constructive trust. No formalities are required for
    this to happen: LPA 1925, s 53(2). V will hold the property as trustee for V and W in shares quantified by the court.
  • If the property is mortgaged or sold, V as trustee will be the person who has the power to execute
    the mortgage or transfer deed.
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17
Q

what are the two types of co-ownership?

A
  • joint tenancy
  • tenancy in common
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18
Q

what is ‘unity of possession’

A

No co-owner is entitled to exclusive possession of any part.

Applies to both joint tenancies and tenancies in common

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19
Q

joint tenancy characteristics

A
  1. must have 4 unities
  2. level of contribution irrelevant
  3. no shares: composite ownership
  4. single entity
  5. survivorship applies
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20
Q

summary of a tenancy in common

A
  1. unity of possession (others optional)
  2. no survivorship share passes with will
  3. each person has own share
  4. individual but ‘undivided’ shares
  5. share can be proportionate to contribution
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21
Q

four unities of title

A
  1. unity of possession
  2. unity of title
  3. unity of interest
  4. unity of time
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22
Q

unity of possession

A

Each co-owner is as much entitled to possession of any part of the land as the others. No co-owner can be excluded from any part of the land.

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23
Q

unity of title

A

All co-owners must acquire their title from the same document. This will be satisfied if they all obtain title from the same transfer deed or lease.

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24
Q

unity of interest

A

The interest in land held by each co-owner must be of the same nature and duration. For example, in a leasehold context, all owners must hold the lease for the same length of time, with joint obligations.

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25
Q

unity of time

A

The interest of each co-owner must vest at the same time. This does not mean that they must all sign the document at the same time or move into the property at the same time.
To have unity of time, the interest of each co-owner must take effect at the same time.

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26
Q

what is the right of survivorship / ius acccrescendi

A

the notional interest of the deceased joint tenant accrues to the surviving joint
tenants, who become the sole owner(s)

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27
Q

does survivorship operate automatically?

A

yes, as soon as the joint tenant dies.

the interest in unaffected by provisions in a will, or intestacy

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28
Q

why do will provisions have no effect on survivorship?

A

a will is of no effect until after death, by which time
survivorship has already operated

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29
Q

when does the right of survivorship not apply?

A

when an interest is held as a tenancy in common

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30
Q

what happens to an interest held as tenancy in common

A

the deceased’s share passes under their will or, if no will, by the intestacy rules

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31
Q

how many trustees can hold the legal title

A

maximum of four legal owners

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32
Q

the trustees must be sui juris - what does this mean?

A

of full age (18yo) and sound mind

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33
Q

how must the legal owners own the property?

A

as joint tenants

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34
Q

what happens if the land is transferred to more than 4 people?

A

the first four named who are sui juris will be the legal title holders

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35
Q

do the legal title holders need to have the four unities?

A

yes, because the legal title must be held as a joint tenancy

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36
Q

can the legal joint tenancy be severed to make a tenancy in common?

A

no

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37
Q

equitable title characteristics (more flexible)

A
  • no limit on number of people who can hold an equitable interest
  • no requirement to be sui juris (property often held on trust for under 18s)
  • equitable owners can choose whether to hold the title as joint tenants or tenants in common
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38
Q

to have an equitable joint tenancy, what is needed?

A

the four unities

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39
Q

what happens if one of the unities is missing?

A

it will be a tenancy in common, providing that unity of possession exists

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40
Q

what happens if there is an express declaration that the owners hold as tenants in
common

A

tenancy in common will prevail (Pink v Lawrence [1978])

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41
Q

what if words such as ‘in equal shares’ or ‘equally’ are present?

A

this would again suggest tenancy in common

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42
Q

when else would a tenancy in common apply?

A

if there is a rebuttable presumption of a tenancy in common:

  • land is a business asset (Bull v Bull); and
  • the purchase price of a non-domestic property has been paid in unequal shares (Lake v Craddock)
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43
Q

in commercial situations where there is no express declaration of trust or words of severance, equity is likely to presume what?

A

a tenancy in common:

see:
[Lake v Craddock] [Stack v Dowden] and [Jones v Kernott] - CHECK THESE

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44
Q

summary of the rules of legal and equitable titles

A
45
Q

what is severance?

A

the process of converting an equitable interest held as a joint tenancy into an interest held as a tenancy in common. It is important to understand that severance does not bring co-ownership to an end: it simply changes the basis on which the equitable
co-owners continue to hold the equitable title.

46
Q

why would an equitable joint tenant wish to sever a joint tenancy to create a tenancy in common?

A

to exclude the operation of
survivorship, so that a distinct share in the property can be left to someone other than the surviving joint tenant(s) on death

(e.g., breakdown in
the relationship between the joint tenants)

47
Q

can you sever a legal joint tenancy?

A

no, only an equitable joint tenancy

48
Q

what document is required on the death of a joint tenant?

A

a copy of that person’s death certificate

49
Q

when must the severance take place?

A

during the joint tenant’s lifetime

50
Q

would making a will sever a joint tenancy?

A

no, since it takes effect after death (whereas severance takes place immediately on
death: Re Caines deceased [1978])

51
Q

formalities for severance of an equitable joint tenancy

A

(a) notice in writing; or

(b) ‘other acts or things’

52
Q

what is meant by ‘other acts or things’?

A

it is intended that the modes of severance
recognised by Williams v Hensman (1861) would continue to apply:

  1. unilateral act by one joint tenant
  2. mutual agreement
  3. mutual conduct
53
Q

what happens if a joint tenant successfully severs the equitable joint tenancy?

A

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.

54
Q

what impact does severance have on the remaining equitable joint tenants?

A

no impact (unless there are only two joint tenants, then it will affect both)

55
Q

example of severance with multiple equitable joint tenants

A
  • A and B are the legal owners of property, they hold on trust for themselves and C and D as joint tenants in equity.
  • B wishes to sever the joint tenancy so that they can leave their share of the property to E in their will.
  • It is not possible to sever the legal joint tenancy, so B will continue to be a joint tenant of the legal
    title.
  • The equitable joint tenancy can be severed, and if B does this by one of the methods recognised
    in LPA s 36(2), B will have a 25% separate equitable share as tenant in common.
56
Q

example of severance with only two equitable joint tenants

A
  • A and B are the legal owners of property, which they hold on trust for themselves as joint tenants
    in equity.
  • B wishes to sever the joint tenancy so that they can leave their share of the property to C in their will.
  • It is not possible to sever the legal joint tenancy, B will continue as a legal joint tenant.
  • The equitable joint tenancy can be severed, and if B does this by one of the methods recognised
    in LPA s 36(2), A and B will each have a 50% equitable share as tenants in common. It is not possible for A to continue as a joint tenant by themselves.
57
Q

valid severance by notice in writing must be given to who?

A

all of the other equitable joint tenants

58
Q

does a notice need to be signed?

A

no!

59
Q

what type of intention must the notice demonstrate?

A

unequivocal and irrevocable intention to sever the equitable joint tenancy immediately

60
Q

facts in Re Draper’s Conveyance [1969]

A

In this case, severance by notice in writing was successful, the requisite intention could be inferred
in the circumstances.
The writing was a divorce petition issued by the wife, which included a request for an order that
the matrimonial home be sold immediately and the proceeds of sale split equally. The husband died before the house was sold.
The wife argued that he died as a joint tenant and that she took the house by survivorship.

61
Q

principle in Re Draper’s Conveyance [1969]

A

The court disagreed. The divorce papers showed that she had a clear intention for the joint tenancy to
be severed immediately. Therefore, the husband had a 50% share as tenant in common at the
date of his death.

62
Q

facts in Harris v Goddard [1983]

A

In this case there was no severance, the requisite intention could not be inferred in the
circumstances.
This case also involved a divorce petition issued by the wife. The petition included a request for
such order ‘as may be just’ relating to the matrimonial home. The husband died as a result of a
car accident before the divorce hearing.
The children from the husband’s first marriage argued that he died as a tenant in common as his
wife had severed the joint tenancy.

63
Q

principle in Harris v Goddard [1983]

A

The court disagreed. Unlike the papers in Re Draper’s Conveyance, the divorce petition request did not show a sufficient desire to sever immediately as
it may have been ‘just’ to order a sale in the future and not immediately.

64
Q

how should notice be served?

A
  • personally; or
  • by post - at the last known place of abode or business of the joint tenants
65
Q

when is notice deemed served?

A

when it has been delivered

66
Q

does the notice have to be read?

A

no

67
Q

Kinch v Bullard

A

the notice in writing had been ‘given’ or served on Mr Johnson when it had been delivered to
his home. Severance took place at that moment so that destruction of the letter by Mrs Johnson after it had been delivered had no effect.

68
Q

Re 88 Berkeley Road [1971]

A

there is no distinction between ‘giving’ and ‘serving’ notice.

Although Mrs Rickman was not physically given the notice of severance, it was effectively served under LPA 1925, s 196(4) by registered post as it had been signed for and had not been returned undelivered.

69
Q

severance by other acts or things

A
  1. unilateral act by one joint tenant
  2. mutual agreement
  3. mutual conduct
70
Q

subdivisions of unilateral acts by one joint tenant

A
  1. total alienation
  2. partial alienation
  3. involuntary alienation
71
Q

total alienation

A

occur when the severing owner disposes of the interest permanently, by way of sale or gift of the interest

72
Q

partial alienation

A

occur where the severing owner temporarily disposes of the interest, by way of mortgage or lease.

when the loan is repair or the lease expires, the holder will take the interest back unencumbered

73
Q

involuntary alienation

A

occurs when the joint tenant is declared bankrupt by the court (obviously against their will!)

74
Q

example of total alienation

A

A, B, C and D own property as beneficial joint tenants. B has been offered a job in another city
and sells their equitable interest to C.

Position before the sale: the usual rules on co-ownership operate and A, B, C & D are legal joint
tenants holding the property on trust for themselves as equitable joint tenants.

Position after the sale: A, B, C & D continue as legal joint tenants as the legal title cannot be
severed. B’s equitable interest is severed on sale to C, who holds it as a tenant in common (25% share). C remains a joint tenant with A & D as to the remaining 75% of the equitable title.

75
Q

If an equitable joint tenant mortgages their legal interest, will this be an act of severance?

A

no, because the joint tenants are charging the legal estate

76
Q

If an equitable joint tenant mortgages their equitable interest, will this be an act of severance?

A

yes. it will result in a tenancy in common.

77
Q

what happens when one joint tenant fraudulently tries to mortgage/sell the entire property?

A

the
disposition is deemed to be a mortgage/sale of their equitable interest

78
Q

First National Security v Hegarty [1985] QB 850

A

a couple owned a house as beneficial joint tenants. They separated and the husband left. He mortgaged the house by forging his wife’s
signature on the mortgage deed, and took the loan money. It was held that a sole act by one joint
tenant will have no effect at law. Therefore the legal mortgage was ineffective. However, the purported legal mortgage was held to be a mortgage on the husband’s equitable interest, which
severed the joint tenancy.

79
Q

when will severance by mutual agreement occur?

A

only when all equitable joint tenants agree that one person’s interest is severed, thereby creating a tenancy in common

80
Q

facts in Burgess v Rawnsley [1975] Ch 429

A

Mr Honick and Mrs Rawnsley bought a house as beneficial joint tenants, each paying half
of the purchase price. In 1968, after their relationship broke down, Mrs Rawnsley orally agreed to
sell her share to Mr Honick for £750, but subsequently changed her mind and wanted £1,000. Mr Honick died before anything was resolved. Mr Honick’s daughter argued that the beneficial joint
tenancy had been severed, and as he had died as a tenant in common, she took his share on his death. The court looked at whether and when there had been severance by mutual agreement.

81
Q

principle in Burgess v Rawnsley [1975] Ch 429

A

The equitable joint tenancy was severed by mutual oral agreement when the parties had informally agreed a price of £750. This did not amount to a specifically enforceable contract for sale of the interest, but it was enough to show that the parties agreed to sever the joint tenancy. It
did not matter that the agreement was never acted upon, nor that Mr Honick never actually bought Mrs Burgess’ interest.

82
Q

facts in Hunter v Babbage (1995) 69 P&CR 548

A

a divorcing couple had agreed the terms of a financial
settlement which had been embodied in a draft consent order. The husband died before the court
approved the order, which therefore had no legal effect. The wife argued that as the draft consent
order had not been rubber-stamped, it had no effect on the joint tenancy; therefore she took the
property by survivorship.

83
Q

principle in Hunter v Babbage (1995) 69 P&CR 548

A

The court disagreed: it was not necessary to show that the order had been finalised. The terms of the agreed draft showed that the parties considered the shares to be
separate and therefore, in agreeing the draft, the parties had agreed to sever the joint tenancy by
mutual agreement.

84
Q

when does severance by mutual conduct arise?

A

Where the parties have not reached a point where there can be said to be ‘mutual agreement’ to
sever the joint tenancy

85
Q

obiter in Burgess v Rawnsley

A

severance could be inferred from
negotiations

86
Q

how easy is it to show that there has been severance by mutual conduct

A

difficult because the fact that negotiations are ongoing suggests that it is unlikely that there is any mutuality

87
Q

Gore and Snell [1990] 60 P&CR 456 - the question was whether prolonged negotiations amounted
to severance by mutual conduct. What was the outcome?

A

there was never a point at which both parties considered that either of them had a
separate share (this concerned negotiations between a husband and wife)

88
Q

by contrast, Davis v Smith [2011] EWCA Civ 1603:

A

The parties started off, and continued, on the understanding that the house and other
assets would be split in some way. Mrs Smith died before a ‘mutual agreement’ had been reached, but the manner in which the negotiations had been conducted made it clear that both parties were behaving in such a way as to recognise that they had separate shares.

89
Q

facts in Dunbabin v Dunbabin [2022] EWHC 38

A

the court considered whether the
making of mirror wills, which included provisions for the property that were inconsistent with the
law of survivorship, amounted to a mutual agreement or course of mutual conduct sufficient to
sever the joint tenancy.

90
Q

conclusion in Dunbabin v Dunbabin [2022] EWHC 38

A

HHJ Matthews concluded that:
[…] the evidence satisfies me that there was a course of conduct (in particular, the making of
the mirror wills) which showed that one party (indeed, each party) made clear to the other that
that one desired that their property should no longer be held jointly but be held in common.

91
Q

where the trustees and the beneficiaries are different people, and the land is owned as a commercial venture or as an investment, how are disputes dealt with?

A

trustees use their discretion

92
Q

where the property has been purchased as a home, and the trustees and the
beneficiaries being the same people whose relationship has ended, how are disputes dealt with?

A

TOLATA 1996, s 14 gives courts jurisdiction to hear applications regarding disputes which involve
co-owned land.

Anyone with an interest in the land can apply to the court for an order relating
to it.

93
Q

who might apply under s14 TOLATA?

A
  • Applicants could be trustees; beneficiaries; mortgagees of the legal or equitable title; trustees in bankruptcy orders.
94
Q

what might a court order involve under s14 TOLATA?

A

The court may order trustees to do something eg: sell; or allow a beneficiary into occupation. It
cannot order one beneficiary to ‘buy out’ the another.

  • orders for sale (which may be postponed);
  • orders as to
    who occupies; and
  • orders as to the nature or extent of a beneficiary’s interest
95
Q

what factors must be considered in a s14 TOLATA application?

A

s15 factors:
(a) The intentions of the person or persons (if any) who created the trust;
(b) The purposes for which the property subject to the trust is held;
(c) The welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as his home; and
(d) The interests of the secured creditor of any beneficiary

PLUS s15(3) - combined value of interests

96
Q

do all s15 factors need to be considered?

A

yes, all of them

97
Q

in relation to Section 15(1)(a): The intentions of the person or persons (if any) who created the trust, do we need to consider this in a co-ownership context?

A

no. this relates to expressly created lifetime trusts, or will trusts, and not to everyday
co-ownership.

98
Q

in relation to Section 15(1)(b): The purposes for which the property subject to the trust is held, what does the court look at?

A
  • purpose of the property
  • is that purpose continuing (if so, an order for sale less likely to be made!)
99
Q

facts in Re Ever’s Trust [1980] 1 WLR 1327

A

couple bought a house as a family home where they, their
own child, and the woman’s two children from her marriage lived. On the breakdown of their
relationship, the father left and applied for an order for sale

100
Q

outcome in Re Ever’s Trust [1980] 1 WLR 1327

A

the father’s order for sale was refused as the property had
been bought as a family home. That purpose was still capable of continuing, despite the absence
of the father. The father was told he could make a further application when the children were
older.

101
Q

facts in Jones v Challenger [1961] 1 QB 176

A

In contrast, in Jones v Challenger [1961] 1 QB 176 a husband and wife bought a property together as beneficial joint tenants, and it became their matrimonial home. They had no children. The wife left the husband for another man, and the husband continued to live in the property for a further
three years. The wife applied for an order for sale.

102
Q

outcome in Jones v Challenger [1961] 1 QB 176

A

At first instance the order was refused on the basis that it was unreasonable to turn the husband out of his home.

On appeal, the order was granted. The correct test was not one of reasonableness, but whether the purpose for which the property was bought still continued, which it no longer did for the wife: ‘a joint purpose cannot be carried out unilaterally’.

103
Q

in relation to Section 15 (1)(c): The welfare of any minor who occupies or might reasonably be
expected to occupy any land subject to the trust as his home, what does the court consider?

A

for example, children aged six and seven may well have
great weight attached to their welfare, with the continuity of their living arrangements being given
priority over the interests of the applicant who wants a sale. On the other hand, less weight may
be given to a young person who is seventeen and relatively independent.

104
Q

in relation to Section 15 (1)(d): The interests of the secured creditor of any beneficiary, what does the court consider?

A

Post-TOLATA 1996 the interests of secured creditors are just
one factor to be considered (Mortgage Corporation v Shaire [2001] Ch 743).

However, recent cases have given greater weight to the creditor…

105
Q

In Bank of Ireland Home Mortgages v Bell [2001] 2 FLR 809 the Court of Appeal ordered a sale.

A

The purpose of a family home, and the interests of a minor were not material factors, as Mr and
Mrs Bell had divorced and their son was almost 18. The bank was owed £300,000 and no payment
had been made for almost eight years. The level of debt was rising daily. Without a sale the bank
had no real prospect of recovering anything.

106
Q

In Putnam and Sons v Taylor [2009] EWCH 317 (Ch) the secured creditor of a husband was
granted an order for sale of a jointly owned property when his debts became unmanageable.

A

Although the purpose of a family home was still continuing, the court ordered the sale as the wife
held enough equity in the property to enable her to buy a smaller property outright.

107
Q

In Fred Perry v Genis [2015] 1 P&CR DG5 a sale was ordered even though the children’s education
at a specialist school would be disrupted.

A

The court specifically stated that commercial interests
should take precedence over the residential security of the family. However, it postponed the order
for a year to give the family time to relocate.

108
Q

finally, what is the general sweeper in 15(3)?

A

Section 15(3): The circumstances and wishes of any beneficiaries of full age […] or (in
the case of dispute) of the majority (according to value of their combined interests)

The court must have regard to the wishes of the beneficiaries who are over 18. If there is a dispute, the court shall have regard to the majority (in respect of value of interest held)

SQE1 - Land Law (16 decks)

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