Co-ownership Flashcards
How is legal estate held
Has to be held as joint tenants.
The joint tenancy (relating to the legal estate) cannot be severed.
Max of 4 trustees. Have to be 18.
Any attempt to convey a legal estate to a minor operates as a declaration of trust that the land is held in trust for the minor.
Trustees powers
Trustees have all the powers of an absolute owner. This includes the power to sell or mortgage the trust land, or purchase land for the occupation of a beneficiary.
Trustees’ powers are limited by their duty to consult the beneficiaries. The duty applies only to beneficiaries of full age and who have an interest in possession (entitled to an immediate interest in the land).
The trustees must comply (as far as is consistent with the general interests of the trust) with the wishes of the beneficiaries or (in the case of a dispute) with the majority of them (according to the value of their combined interests). The duty to consult is only in so far as it is practicable to do so.
Joint Tenancy vs Tenants in Common
JT:
Right of survivorship
Undifferentiated ownership
TiC:
No right of survivorship
Undivided shares
Test to determine how equitable interest held
- Are all four unities present?
* Unity of possession – right to possession of all of the land. Required for both.
* Unity of interest – identical rights over the land. Hallmark of a joint tenancy.
* Unity of title – each co- owner must have acquired their interest from the same document e.g. transfer
* Unity of time – the co- owners receive their interests at the same time.
The absence of the unity of interest, title or time may indicate a tenancy in common.
- Does the deed transferring the land to the co- owners contain an express declaration?
- Does the deed transferring the land to the co- owners contain words of severance?
If no then 4th test… - Does equity presume a tenancy in common?
Presumption of joint tenants in equity on the basis that equity follows the law.
Presumption can be rebutted as follows:
* When the property is acquired for business use
* Unequal contributions to the purchase price
* Post- acquisition money management
What is severance?
Method by which a joint tenancy in equity can be converted into a tenancy in common.
Must be during the lifetime of the co- owner. A will cannot effect severance.
Severance can be effected by:
* formal severance by written notice; and
* informal severance
Severance - written notice
Does not require consent of other JTs.
Notice must:
(a) Use appropriate wording. This must express a desire to end the joint tenancy immediately. Expressing a future intent or desire is insufficient,
(b) Be received by all the other joint tenants or be deemed to have been received. Notice can be handed to the intended recipient or posted.
Registered post:
Deemed to be sufficiently served if the letter is not returned (via the post office) undelivered.
Ordinary post:
Any notice is sufficiently served if it is left at the last known place of abode or business in the UK of the person to be served.
Informal severance - Acts operating on the joint tenant’s share/Alienation
Unilateral act.
JT disposes of their equitable interest by sale, gift, lease or mortgage. The disposition relates to an equitable interest and must, therefore, follow the rules (ie in writing and signed).
A contract to dispose of the equitable interest will also sever the joint tenancy in equity provided it complies with the requirements in s 2 LPMPA 1989 and is capable of being specifically enforceable (on the basis that equity regards as done that which ought to be done).
Informal severance - by mutual agreement
JTs act together (either expressly or by implication) to sever the joint tenancy and must be supported by some valuable consideration.
An oral agreement will suffice and the agreement does not need to be carried through to performance.
Informal severance - by mutual conduct/ course of dealing
JTs show through their conduct (in relation to the land and each other) that they clearly regard themselves as owning distinct shares.
Must behave in this way of a significant period of time.
Informal severance - by bankruptcy
Involuntary alienation.
Severs the joint tenancy by causing an involuntary assignment of the equitable interest to the joint tenant’s trustee in bankruptcy. Once the bankruptcy is discharged, the equitable interest reverts to the co- owner who will continue to hold it as a tenant in common.
Informal severance - by homicide
Where one joint tenant unlawfully kills another joint tenant they won’t inherit through survivorship.
Settling disputes - s14
A trustee or any person who has an interest in the property may make an application to the court for an order under s 14.
The court has wide discretion to make an order:
(a) relating to the exercise by the trustees of any of their functions; or
(b) declaring the nature or extent of the person’s interest in property.
e.g order sale, refuse a sale, partition the co- owned property, make an order regulating the right to occupy
Settling disputes - s15 factors
List not exhaustive.
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 any secured creditor of any beneficiary.
Notice - More than 2 co owners
Where there are more than 2 co owners and only 1 co owner serves notice. That co owner is a tenant in common, the rest are still joint tenants.
