Head 15: Co-Ownership Flashcards
It is possible for the same piece of property to be owned by more than one person. What is property owned in this way called? How is it divided?
Co-ownership:
Each co- owner has a pro indiviso (undivided) share. On the land register, both names will appear on the proprietorship section of the title sheet. The same can be true of moveable property. Co-ownership is not limited to two people.
Co-ownership is also called pro indiviso ownership and it is of two different kinds: Common ownership is the standard case of co-ownership and joint ownership is the special case.
What are the main examples of co-ownership in practice?
Main examples in practice are
(1) co-ownership by spouses of matrimonial home and contents
(2) in flatted property, co-ownership of certain common parts (for which see Semester 2).
Shares may be uneven[ Typically if there are 20 people co-owning, each will have a 1/20 share. However, for example, one person may have 1/2 and the other 19 have one 19th of the remaining half.]. No limit to the number of co-owners.
(3) Patrimonial rights can also be co-owned.
What is the presumption of co-ownership?
The law presumes that the shares of co-owners are equal. This is only a presumption. The shares can be unequal. That will be stated in the disposition and on the title sheet. There is no legal requirement that the size of the share and size of the contribution match.
Possession is shared and each co-owner has a right to make use of ‘every inch’ of the property. The rights to exclusive use of certain rooms are based in contract law or a non-binding understanding, not in property law.
What is the usual rule of alteration and repairs?
The case law is somewhat incomplete however, Bell’s rules have been accepted by the courts as being authoritative.
The usual rule is that for alterations and repairs consent of all is required. So one owner cannot alter the property without the consent of all the other owners — unanimous agreement is required
Is the usual rule of alteration and repairs practical? How has this been resolved?
This rule is so impractical that there is a separate rule for necessary repairs which may be carried out by any one proprietor without the full consent of all co-owners. Accordingly, any one owner can carry out necessary repairs and recover pro rata costs from all the other owners.
[What is a ‘necessary repair’? Hard to say. Therefore there is a danger that if you carry out a repair, the other owners will claim that it was not necessary.].
And for tenements there is a completely separate regime in the Tenements (S) Act 2004.
Where co-owners are strangers how much are they allowed to use and who is allowed to use?
There is a difference between cases where the owners have agreed amongst themselves and cases where there is no agreement:
1) With agreement
⁃ The owners can agree[ E.g. by contract.] whatever they want concerning use of the property.
⁃ Such an agreement would not bind successors since it is purely personal rights.
⁃ One of the uncertainties is how many co-owners are needed for a valid agreement in relation to use. KR thinks that as far as use is concerned, a majority is probably[ It is uncertain and has never been decided in a case.] enough.
2) Without agreement
⁃ A) In the absence of agreement, each co-owner is allowed to use the entire property (this stems from the nature of pro-indiviso ownership).
⁃ Therefore it is unlawful for one party to annex part of the property and us it exclusively.
⁃ B) Only ‘ordinary uses are permitted
⁃ C) No excessive benefit
[Can holder of 99/100 share make greater use that holder of 1/100 share? How much use is each co-owner allowed? The law is that your use has to take into account that there are other co-owners. So you cannot use it excessively in a way that makes it difficult for other co-owners also to exercise their right of ownership.
⁃ Also, if the shares are uneven (e.g. 99/100 : 1/100) the person with the bigger share is entitled to proportionately greater use.
⁃ The right of use that a co-owner has can be communicated to third parties[ I.e. if you lease your property out then the tenant would be allowed to use the common property which you, as owner, are allowed to use.
Similarly, guests can use the common property.].
⁃ However, the right of use can only be communicated to the extent that the holder has it - you can’t communicate a better right:
[An ordinary use in this context depends on the nature of the property in question.
It may also depend on the past history of the property - if it has been used for a particular purpose for a long time, even though this is not its natural purpose this purpose may come to be regarded as ordinary use.]’
- So drying green must not be used as a market garden.
What happened in the case of Carmichael v Simpson?
- the dispute concerned a shared entrance passageway to a tenement. Under tenement law, the entrance passageway and the stairs are common property. The owner of one of the ground floor properties was disabled and used a wheelchair, and took to keeping the wheelchair in the entrance passageway. The other owners objected and sued. The question was whether this was an ordinary use. It was held that the ordinary use of an entrance passageway was for entrance and exit and therefore not for storing large obstructive objects - so the defender was not allowed to use the passageway for that purpose because it was not an ordinary use.
What happened in the case of Rafique v Amin?
?
What happened in the case of Black v Duncan?
- shared back garden. One of the owners built a dog-run in the back garden. The dog was noisy and prone to toilet accidents. The other owner objected. The question was whether this was an ‘ordinary’ use of the back garden? The court held this was not an ordinary use so the owner could not use it for his dog.
What happened in the case of Bailey’s Exs v Upper Crathes Fishing Ltd?
- there was a co-owned right to fish salmon from a river between two parties, each with a 1/2 share. The parties agreed to fish on alternate weeks for the coming season. Having reached the agreement, one owner then advertised for sale a right to use the river on those alternate weeks indefinitely. The other party litigated because the defendants had attempted to sell a right for the future (which was better than the right that they had for the coming season). The action was successful because the defendants had tried to communicate a greater right than they had.
What if one party takes exclusive possession? Can you get him/her out? Can you recover a notional rent for the period of unlawful possession? What about ordinary profits?
⁃ Price v Watson 1951 - this happened and one co-owner raised an action of ejection against the other co-owner. The court held that ejection was not the appropriate remedy because you can only use ejection where the defender has no right to occupy the property at all.
⁃ So it is thought that the correct remedy is interdict (although there is no authority on this point.)
⁃ If the land has produced a profit in this period then you are entitled to a proportionate share of that profit.
⁃ In addition if the other owner has been living in the property himself, then it is thought there is a remedy in U/E for a notional rent for that period.
What are juridicial acts?
Juridical acts are acts with legal consequences. Juridical acts affecting the whole property (e.g. sale, rights in security, leases, servitudes) require the participation of all co-owners. If the share can be dealt with separately from the other shares the co-owner can transfer his or her share or grant a subordinate real right. Otherwise the answer is no. A co-owner can dispense the share without the consent of the others. However a servitude must be granted by all the owners.
What happened in the case of Grant v Heriot’s Trust (1906)?
one co-owner purported to grant a servitude over a property. This was held not to be competent because the participation of all co-owners was necessary.
What happened in the case of Clydesdale Bank Plc v Davidson?
- a farm was owned by various people who contracted that one would have the right to use the farm who would pay rent to all the others. The question was whether this was a lease? This is important because if it is a real right it will bind successive owners. HL held that it cannot count as a lease because one person cannot have both a real right of ownership and a real right of lease.
Can a co-owner transfer his own share?
Co-owner can transfer or burden his own share where this can be done without affecting the shares of others. Share may be subdivided and then transferred to an unlimited number of other people.
[ So when you sell a flat you not only sell the flat but also the pro indiviso share to the common parts of the building.]
[So you can transfer half your share for example and keep the other half for yourself.]
