Land III Trusts of Land and Co-ownership Flashcards
In an unregistered system, What must the seller show to the buyer
A seller must deduce title to the buyer. The seller must prove that they have a good root title and demonstrate an unbroken chain of ownership of the land
The meaning of a defective title
for example; if a document is not properly signed, or does not have the correct amount of stamp duty (property tax) paid
What is a conveyance on sale
A conveyance on sale documents the transfer of ownership from the seller to buyer in exchange for money ( known as ‘valuable consideration’)
if there is no consideration involved, a deed of gift must be shown.
What is a mortgage deed?
A mortgage deed evidences the fact that a lender has lent money to the current owner and has taken a charge over the land as security for the loan.
What is an assent?
Am assent is the document that transfers the land from the personal representative (the person who takes control of a deceased owner’s estate) to the correct beneficiary of the land
What is the root of title and its requirements?
The root is often a conveyance. The be a good root the document must:
Be at least 15 years old at the date of the contract;
Deal with the whole legal and equitable interest in the property;
Contain an adequate description of the property
Do nothing to cast doubt on the title
What is the epitome of title (same as disclosure)
it is a chronological list of the title deeds with a copy of each title deed attached to the epitome. on completion, the original will be passed to the buyers
Meaning of requisitions
Any queries about the title are known as requisitions. The buyer’s solicitor should not proceed to exchange of contracts until all requisitions on title have been answered to their satisfaction.
Deadline of registration of title
within two months of completion
Describe joint tenancy
Co-owners have identical interests in the property, their interests being of non–defined portions.
Under a joint tenancy, if one of the co-owners dies, their interest in the property passes to the survivor/s automatically by virtue of the doctrine of survivorship.
The share cannot be disposed of on death. the survivor of joint tenants automatically acquires the deceased’s interest.
Maximum number of trustees in land
The legal estate may be held by a maximum of 4 trustees.
Describe tenancy in common
Friends who buy an investment property together, or partner in a trade or business, may not want their interest in a property to vest automatically in their co-owners, and instead might want to have their interest pass to their spouse family.
A tenant in common is entitled to a specific share of the property which can be disposed of or left by will or on the intestacy.
When would a tenancy in common be appropriate
Clearly intend to hold as tenants in common and do not wish survivorship to apply;
Contributed in unequal portions to the purchase prices; or
Entered into a commercial transaction where a joint tenancy would be inappropriate.
What is a declaration of trust for the purpose of tenancy in common
A declaration of trust sets out the agreement between co-owners as to how their beneficial interest is to be held. A declaration of trust is conclusive as to the agreement between co-owners.
Martin and Daphne bought a house together and they contributed in unequal shares to the purchase price. As a result of this they held the beneficial interest as tenants in common and a Form A restriction was placed on the register. Daphne died.
What will happen and what must Martin do if he wants to dispose of the assets?
A Form A restriction does not allow a sole proprietor (unless a trust corporation) to dispose of the asset.
Martin will inherit the whole of the asset from Daphne through survivorship. However, the From A restriction will remain on the proprietorship register. The buyer from Martin will need to ensure that a second trustee is appointed to overreach the beneficial interest. The appointment of the second trustee can either be by a separate trust deed or, more typically in a conveyancing transaction, the second trustee will be appointed by adding an extra clause to that effect.
hints pointing to tenants in common
4
Unmarried couple
Business enterprise
Unequal contribution to purchase price
Desire to leave share to someone other than co-owners
Section 14 of Trusts of Land & Appointment of Trustees Act 1996 (TLATA 1996)
Section 14 of TLATA 1996 is widely drawn in allowing a trustee or any other person with an interest in property subject to trust to apply to the courts for an order relating to:
an order to sell;
an order to relieve the trustee of the duty to obtain the beneficiaries’ consent;
an order to consult with beneficiaries regarding the exercise of the trustee’s functions;
declaring the nature or extent of a person’s interest in the property
Factors considered by the court when applying section 14 of Trusts of Land & Appointment of Trustees Act 1996 (TLATA 1996)
the criteria for determining an application for an order under section 14:
The intentions of the person or persons who created the trust;
The purposes for which the property subject to the trust is held;
The welfare of any minor who occupies or might reasonably be expected to occupy any land subject to trust as his home;
The interests of any secured creditor of any beneficiary
How may the court order the division of property when a relationship breaks down
1) the court will check if there is an express declaration of trust. This will be a piece of conclusive evidence. ex: if the property was transferred to the parties jointly, it will be presumed that a legal and equitable joint tenancy was intended
2) different common intentions can be shown to have existed, it can be inferred from the conduct of the parties.
ex: if the parties did not initially set out their relative interests: party a paid 75% of the purchase price and most of the expenses of the upkeep, the court may decide that party A is entitled to 80% value of the home
First four-part threshold test to determine whether the equitable interest is held as joint tenancy or tenancy in common
four unities test
unity of time - did the co-owners acquire the interests at the same time
of title - under the same document
of interest - of the same nature and duration
of possession - are the co-owners each equally entitled to use and occupy the whole premises
if all the unities are present - the equitable interest may be held as a joint tenancy after passing further tests
Explain express statement test, severance test and equity test.
does the transfer document contain an express statement as to how the equitable interest is held (Goodman v Gallant)? this will be conclusive
Are there any world of severance in the transfer document (equally/in equal shares) if so, tenancy in common (Robertson v Fraser)
Can equity assist? if buyers each contributed different amounts to the purchase price (Lake v Gibson) or
the property was bought on behalf of a business.
if still unclear - JOINT TENANCY (equity follows the law)
Can there be severance on a legal title?
Legal title must be held as a joint tenancy and severance is prohibited (s.36(2) LPA 1925)
Under the right of survivorship, on the death of a trustee, legal title passes to the other co-trustees.
Can there be severance on an equitable interest? if yes, how?
Yes
by notice
by alienation (sale, gift, mortgage or bankruptcy).
by mutual agreement/course of dealings
by Homicide (Re K)
Describes the requirements for notice to be correctly served for severance to take effect
s.36(2) LPA
must be in writing, showing correct intention and be correctly served.
Service will be deemed correct if only notice is sent at the last known abode/place of business of person to be served. The address does not actually have to receive the notice for it to take effect (Kinch v Bullard)
notice is sent by registered post to person to be served, provided the letter is not sent back undelivered. (Re 88 Berkeley Road NW9)
for it to take effect, the notice must be served to all joint tenants
