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SQE1 - Land Law 🌴 > 5. Co-Ownership of Land > Flashcards

5. Co-Ownership of Land Flashcards

1
Q

What will the court do where, e.g. two parties buy a property, each contributing to the purchase price, but legal estate is conveyed to only one?

A

Infer a resulting trust, with the legal owner holding the estate on trust for both

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2
Q

What are the options where contributions are (1) equal and (2) unequal?

A
  1. Equal: Joint tenancy
  2. Unequal: Tenancy in common
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3
Q

What way must the legal estate be held, and why?

A

As joint tenants, because tenancy in common cannot exist at law

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4
Q

What does the doctrine of survivorship provide?

A

If a joint tenant dies, their interest automatically passes to the surviving tenant(s)

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5
Q

How is a joint tenant’s ownership described?

A

They do not have a share in the land, but are each entitled to possess the whole

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6
Q

What is the impact of the doctrine of survivorship?

A

Any attempt to gift or leave a joint tenancy upon death will fail, and it will revert automatically in the surviving joint tenants

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7
Q

What is the maximum number of trustees that can hold the legal estate in land?

A

Four

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8
Q

What is the limit on the amount of people that can hold the behind-the-scenes equitable interest?

A

No limit

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9
Q

What are the two ways an equitable interest can be held?

A
  1. Joint tenancy
  2. Tenancy in common
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10
Q

Does the doctrine of survivorship apply to joint tenancies in equity?

A

Yes

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11
Q

Does the doctrine of survivorship apply to tenancies in common in law or equity?

A

No

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12
Q

When will a tenancy in common be appropriate?

A

When the parties:

  1. Do not wish for survivorship to apply
  2. Contributed unequally to the purchase
  3. Enter into a commercial transaction where a joint tenancy would be inappropriate
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13
Q

What is a declaration of trust?

A

A conclusive agreement between co-owners as to how their beneficial interest is to be held

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14
Q

What is severance in the context of a beneficial interest?

A

Bringing the equitable joint tenancy to an end and converting it to a tenancy in common

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15
Q

What are the seven ways a equitable joint tenancy can be severed?

A
  1. Written notice
  2. Treating a share as separate
  3. Disposal of equitable interest
  4. Mutual agreement
  5. Course of dealings
  6. Forfeiture
  7. Bankruptcy
  8. Homicide by one JT of the other.
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16
Q

What are the two requirements for severance by written notice?

A
  1. Show clear intention to sever
  2. Be sufficiently served
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17
Q

One of what two things will cause a written notice of severance to be sufficiently served?

A
  1. Left at last known home or business address, or
  2. Sent there by registered post
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18
Q

How might a party treat their share as separate?

A

By attempting to sell it in spite of the doctrine of survivorship and the fact that joint tenants all enjoy the whole

19
Q

After a party disposes of or treats their share as separate, are they completely out of the picture?

A

No, they still hold the legal estate on trust for the purchaser of their share, because severance only concerns the equitable interest

20
Q

Can course of dealings, e.g. agreement between the parties to dispose of share, effect severance even if the agreement is not enforceable?

A

Yes

21
Q

When does severance by forfeiture occur?

A

If one tenant kills the other, the right of survivorship will not apply

22
Q

Why does the bankruptcy of one joint tenant sever an equitable joint tenancy?

A

Because the bankrupt’s equitable share is transferred to the trustee

23
Q

What is the starting point in determining whether an equitable joint tenancy or tenancy in common has been created?

A

Intention of the parties

24
Q

If the intention of the parties cannot be determined, what will the court assume?

A

That equity follows the law, and the beneficial interests reflect the legal interests, i.e. joint tenancy, because tenancies in common cannot exist at law

25
Q

What is overreaching?

A

A process under which a buyer may take property free of a beneficiary’s interest under a trust

26
Q

How many trustees should purchase money be paid to and how does this allow overreaching?

A

When purchase money is paid to all trustees (minimum of two or one if a trust corporation). The payment transfers the equitable interest of the beneficiary from the land and attaches it to the purchase money.

27
Q

What should a buyer do if there is only one trustee, to ensure they take property free of the interest?

A

Ensure that a second trustee is appointed to receive the money, or obtain a written release from the beneficiary regarding this requirement

28
Q

In the registered system, how will behind the scenes beneficial interest typically be evidenced?

A

By a Form A restriction on the proprietorship register

29
Q

What considerations must a solicitor give to a trustee’s duty to consult beneficiaries?

A

A solicitor acting on sale of trust property where adult beneficiaries are involved must have regard to the trustee’s duty to consult and take into account the wishes of at least a minority of them

30
Q

When will sections 14 and 15 of the Trusts of Law & Appointment of Trustees Act 1996 help co-owners?

A

If they cannot decide how or when to dispose of property

31
Q

What does section 14 allow?

A

It allows a trustee or any other person with an interest in property subject to a trust to apply to the courts for an order relating to the trustee’s duties to sell, obtain consent, or declare the nature of a party’s interest

32
Q

What does section 14 not give the court the power to do?

A

Appoint or remove a trustee

33
Q

What does section 15 provide?

A

Factors for the court to consider in determining an application under section 14

34
Q

What are the four factors under section 15?

A
  1. Intentions of those who created the trust
  2. Purpose for which the property subject to the trust is held
  3. Welfare of any minor who occupies or might reasonably be expected to occupy
  4. Interests of any secured creditor or beneficiary
35
Q

If property is transferred to parties jointly, what is the presumption as to how it is held upon breakdown of the relationship, and who bears the burden of displacing that presumption?

A

Legal and equitable joint tenancy is presumed, and it is for the party claiming otherwise to prove this

36
Q

If the court does have to make a split upon the breakdown of a relationship, what proportion will each receive and what will the court consider?

A

Each party will receive the proportion the court considers fair, considering all the circumstances and not just those surrounding the purchase

37
Q

Where severance of a JT occurs by written notice, when is it deemed to take effect?

A

immediately, and notice need not be read by the co-owner, provided there is evidence it has been delivered.

38
Q

What is required for severance to occur via mutual conduct?

A

High-threshold
- inconclusive negotiation to sell co-owner’s share, and physical division of land were all held not to be instances of successful severance.
- must be clearly obvious from facts.

39
Q

When might co-owners wish to apply to court under s.14 of TOLATA 1996?

A

to ask court to either
1) exercise on their behalf any of their functions as trustees;
2) declare the nature and extent of a person’s interest in trust.

anyone with an interest in the land can apply.

40
Q

When making an order under s.14 of TOLATA, what factors will the court take into account?

A

s.15(1) of TOLATA
- intentions of the person(s) who created the trust (ie. is the purpose still continuing?);
- welfare of any minor that might reasonably be exepcted to occupy the land;
- purpose for which property is subject to a trust;
- interest of any secured creditor or beneficiary of trust

under 15(3) - any wishes of beneficiaries of full age and entitled to an interest in possession.

41
Q

What is a key point to remember for exam if property passes via will, but not all the beneficiaries are of age?

A

there will be no unity of time, so no JT in equity.
- acquire a vested interest at difference times.

42
Q

What are the four unities required to give rise to joint tenancy?

A
  • unity of time, interest, possession, and title
43
Q

When will a tenancy in common be presumed, in the absence of express words rebutting the JT presumption?

A

Business tenancy, even if all four unities are satisfied.

44
Q

What does the case law relating to the factors under s.15 of TOLATA indicate?

A

generally greater preference is given to creditors’ interests, even if they, in priciniple are only one of many factors.
* notably where debt has spiralled out of control, and there is sufficient equity in the property for its owners to buy a smaller property.

SQE1 - Land Law 🌴 (9 decks)

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