Trusts of Land: Implied Co-ownership Flashcards
What is the difference between express and implied co-ownership of land?
Express co-ownership occurs when the legal estate is conveyed or transferred into the joint names of the co-owners, making the co-ownership visible on the title.
Implied co-ownership arises through trusts, such as when one party is the legal owner but both parties contribute financially, potentially leading to an equitable interest for both under a trust.
What formalities must be complied with to establish an express trust of land?
To establish an express trust of land, it must be evidenced in writing as required by Section 53(1)(b) of the Law of Property Act 1925.
This often becomes problematic in relationships where parties do not formalize their intentions regarding ownership until a dispute arises.
How can someone establish an implied trust to claim a share in the equitable interest of a property?
If an express trust cannot be established, an implied trust may be claimed under Section 53(2) of the Law of Property Act 1925, which does not require formalities.
This includes resulting trusts, which are based on the financial contributions of the parties, and constructive trusts, which are based on the parties’ intentions and actions.
Disputes under these trusts are governed by TOLATA 1996.
When does a resulting trust commonly arise in the context of property ownership?
A resulting trust arises when two or more people contribute to the purchase price of property, but the legal title is registered in the name of only one of them.
How are contributions to property considered under a resulting trust?
Contributions directly towards the purchase price of a property can lead to a resulting trust in favor of the contributors.
The equitable interest held is proportional to the size of each contributor’s direct financial input, excluding payments intended as gifts or loans (Bull v Bull[1955]).
Can non-direct financial contributions to a property lead to an equitable interest under a resulting trust?
Non-direct contributions may not establish a resulting trust unless they can be seen as direct contributions to the purchase of the property (Curley v Parkes[2004]).
Legal fees, mortgage payments, and other ancillary expenses typically do not give rise to an interest under a resulting trust.
How do mortgage payments influence the establishment of a resulting trust?
Mortgage payments made after the purchase of a property do not count towards establishing a resulting trust.
The trust is considered to arise at the time of purchase, with the mortgage borrower deemed to have provided their share of the purchase price at that time.
What impact does mortgage financing have on the application of resulting trusts?
The reliance on mortgage finance has diminished the importance of resulting trusts in property disputes.
Instead, constructive trusts, which can consider a broader range of contributions and intentions, are more commonly applied to determine equitable interests in properties financed through mortgages.
What is a constructive trust and how is it imposed in the context of co-ownership of land?
A constructive trust is imposed by the court to recognise the equitable interest of individuals in property due to their contributions or agreements, despite not being legal owners.
It addresses situations where, based on the parties’ actions or agreements, equity demands recognition of a beneficial interest in property.
According to Lord Bridge in Lloyds Bank plc v Rosset, what must be shown to establish a constructive trust?
Lord Bridge stated that a constructive trust is established by evidence of an agreement between the partners to share the property beneficially and action to their detriment based on that agreement.
Direct contributions to the purchase price or mortgage payments can justify a constructive trust.
How do direct contributions affect the imposition of a constructive trust?
Direct contributions to the purchase price or mortgage payments by a non-legal owner are crucial for inferring a common intention to share the equitable interest in property, forming the basis for imposing a constructive trust.
How do mortgage payments influence the establishment of resulting versus constructive trusts?
While mortgage payments do not lead to a resulting trust as they’re seen as repaying a debt for a purchase that already occurred, they can be used as evidence of conduct inferring a common intention to establish a constructive trust.
What role does detriment play in establishing a constructive trust?
In establishing a constructive trust, the non-legal owner must act to their detriment or significantly alter their position based on the agreement or understanding that they would share the equitable interest, showcasing the reliance on this shared intention.
What are the two situations outlined by Lord Bridge in Lloyds Bank plc vRosset[1991] where a court could impose a constructive trust?
Lord Bridge identified two scenarios for imposing a constructive trust:
- There is clear evidence of an agreement, arrangement, or understanding to share the equitable interest, coupled with action to the detriment based on that agreement.
- Absence of an explicit agreement, where conduct of the parties leads to an inference of a common intention to share the equitable interest, with direct contributions towards the purchase price or mortgage payments being pivotal for such inference.
How do the cases of Eves v Eves [1975] and Grant v Edwards [1986] illustrate the establishment of a constructive trust through deceitful statements?
In Eves v Eves [1975] and Grant v Edwards [1986], constructive trusts were established through deceitful statements made by the legal owners.
In Eves v Eves, the legal owner falsely stated that the property would have been in joint names if not for the partner being under 21.
In Grant v Edwards, the excuse was that joint ownership could negatively affect divorce proceedings.
Despite the deceit, these statements, relied upon by the non-legal owners, led to the establishment of a constructive trust, demonstrating the courts’ willingness to recognize equitable interests based on the reliance and detriment principle.
