Co-Ownership Flashcards
(54 cards)
1
Q
Co-ownership
A
Where we have 2 or more people who own the same piece of land, it is known as co-ownership.
Where there is co-ownership, unity of possession is essential.
2
Q
Trust of Land
A
Whenever land is co-owned a trust is imposed by statute, according to sections 36(2) and 34(2) Law and Property Act 1925 (“LPA”).
Such a trust is known as a trust of land, according to s1(1)(a) Trusts of Land and Appointment of Trustees Act 1996 (“TLATA”), which separates legal and equitable title to the land between the trustees and the beneficiaries.
In order to create an express trust, the declaration must be evidenced in signed writing as per s53(1)(b).
3
Q
Initial Acquisition of Legal title
Co-Ownership
A
- S1(6) LPA tell us that legal title can only be hold by way of joint-tenancy (“JT”).
- s34(2) LPA 1925 holds that only a maximum of four people can hold legal title.
- S34(2) also states that if there are more than four names mention on the conveyance, the first four named on the title deed who are of full age and sound mind will hold the legal title as trustees.
- Full age is 18 according to s1 Family Law Reform Act.
4
Q
Initial Acquisition of Equitable title
Co-Ownership
A
There is no maximum number of beneficiaries and the equitable title can be held either as joint tenants or as tenants in common.
4 unities must be present for a Joint tenancy (AG Securities v Vaughan)
If only unity of posession, will be a TIC
If different contributiont to purchase price, presumed TIC (Bull v Bull)
Words of severance also suggest TIC
5
Q
AG Securities v Vaughan
Initial Acquisition of Equitable title
Co-Ownership
A
- In order to be joint tenants, the four unities must be present
- Unity of possession – no tenant can be excluded from any part of the land
- Unity of interest – each tenant has the same estate
- Unity of time – each tenant’s interest vests at the same time
- Unity of title – all tenant acquire title under the same document
- If not, but unity of possession is still present, it will be a tenancy-in-common
6
Q
Bull v Bull
Initial Acquisition of Equitable title
Co-Ownership
A
If the parties have made differing contributions to the purchase price then there is a presumption of a tenancy in common.
7
Q
Pink v Lawrence
Initial Acquisition of Equitable title
Co-Ownership
A
Express declarations of trust complying with s53(1)(b) LPA 1925 (signed writing by someone who can declare the trust) prevails over presumptions of joint-tenancy or tenancy-in-common
8
Q
Payne v Webb
Initial Acquisition of Equitable title
Co-Ownership
A
“in equal shares” are words of severance, indicating a TIC
9
Q
Fisher v Wigg
Acquisition of Equitable Title
Co-Ownership
A
“to be divided between” are words of severance, indicating a TIC
10
Q
Heathe v Heathe
Acquisition of Equitable Title
Co-Ownership
A
“share and share alike” are words of severance, indicating a TIC
11
Q
Re Kilvert Deceased
Acquisition of Equitable Title
Co-Ownership
A
“equally” is a word of severance, indicating a TIC
12
Q
Lake v Craddock
Acquisition of Equitable Title
Co-Ownership
A
Commercial situations are presumed to be TICs, unless rebutted by express words
13
Q
Significance of a Joint Tenancy
Co-ownership
A
- In a JT, the tenants/co-owners constitute one legal owner.
- On the death of a joint tenant his ownership immediately** passes to the other joint tenants **by right of survivorship** – and not by will, because wills operate **after death (Re Caines)
14
Q
Significance of a Tenancy in Common
Co-ownership
A
- In a TIC, each co-owner has a distinct but undivided share in the land, and shares can be unequal.
- No** right of **survivorship applies.
- It is possible to be a JT at common law and a TIC at equity
15
Q
Severance of Legal Title
s36(2) LPA 1925
A
- A JT can never** be severed **at law (s36(2) LPA 1925), only a beneficial JT can be.
16
Q
Harris v Goddard
Severance
A
-
Severance separates off the equitable interest of the JT, and only affects the severing tenant – the others are still joint tenants of the rest. The severing tenant becomes a tenant-in-common
- Unless there are just 2 JTs, in which case they both become TICs.
17
Q
Goodman v Gallant
Severance
A
-
Severing JT gets an equal share regardless of contribution (unless there is an express agreement to the contrary)
- E.g. if there are 5 JTs and 1 severs, that 1 has a 20% TiC and the others hold the 80% as JTs, even if the 1 had contributed 75% of purchase price
18
Q
Death
Modes of Severance
A
-
Legal Title
- Legal title can only be held by way of joint tenancy (s1(6) LPA 1925)
- Not possible to sever a legal joint tenancy (s36(2) LPA 1925)
- Doctrine of survivorship applies – legal title passes to other JTs (re Caines)
-
Equitable Title
- JT – share will pass to other JTs
- TIC – share will follow will – either to deceased’s estate or beneficiary
19
Q
Written Notice
Modes of Severance
A
-
Legal title
- Not possible to sever a legal joint tenancy (s36(2) LPA 1925)
-
Equitable Title
- Form – must be in writing although no signature required (re Draper’s Conveyance)
- Content – must demonstrate an unequivocal and irrevocable intention to sever immediately (Re Draper cf Harris v Goddard)
-
Deliver – must be delivered/left at last known address (s196(3) LPA
- Has it been ripped up? (Kinch v Bullard)
- Sent by registered post? Has it been returned? (s196(4) LPA 1925) (Re 88 Berkeley Road)
20
Q
Re Draper’s Conveyance
Written Notice
Modes of Severance
A
- Court held that asking for sale and proceeds to be split was sufficient notice under s36(2) LPA 1925
- Compare with Harris v Goddard
21
Q
Harris v Goddard
Written Notice
Modes of Severance
A
- A divorce petition alone was not sufficient notice as it didn’t necessarily mean severing AND it was in the future and severance must be immediate
22
Q
Kinch v Bullard
Written Notice
Modes of Severance
A
- Court said notice had been successfully served as had complied with statutory rule; notice had been left at last known abode.
- Did not matter that wife had ripped up notice
23
Q
Re 88 Berkeley Road
Written Notice
Modes of Severance
A
- If notice is sent by registered post to last know address, and not returned undelivered, it will be regarded as served (s196(4) LPA 1925),regardless of whether all tenants have seen the notice
24
Q
Williams v Hensman
An Act operating on own share
Modes of Severance
A
-
Legal Title
- Not possible to sever a legal joint tenancy (s36(2) LPA 1925)
- Equitable Title
-
A joint tenancy may be severed in 3 ways
- UNILATERAL act – JT operates on his own share
- Total Alienation - sold interest
- Partial Alienation - leased or mortgaged interest
- MUTUAL agreement of JTs
- MUTUAL conduct of JTs
- UNILATERAL act – JT operates on his own share
25
Total Alienation
An Act operating on own share
Modes of Severance
* If Joint Tenant **_sells or gives away interest to someone else is effective to sever a JT_** –
* Disposition must be in **_signed writing by the person disposing -_** **s53(1)(c) LPA 1925**
* **New person comes in as TIC**
26
**Ahmed v Kendrick**
Total Alienation
An Act operating on own share
Modes of Severance
**_Severance**_ occurred where _**husband forged wife’s signature_** to **sell jointly owned house** and the registered transfer
27
**Penn v Bristol & West Building Society**
Total Alienation
An Act operating on own share
Modes of Severance
**_No severance**_ where _**purchaser colluded in forgery_** by the husband
28
**First National Securities Ltd v Hegerty**
Partial Alienation
An Act operating on own share
Modes of Severance
Husband **purported to mortgage jointly owned property** by forging his wife’ signature.
Held to be a **charge on his equitable interest only**, which **severed** the **joint tenancy**
29
**Re Gorman**
Involuntary Alienation
An Act operating on own share
Modes of Severance
* **_Bankruptcy_** – equitable interest will be **severed** and **vest in creditor**
* Husband and wife were **co-owners of matrimonial home**. Wife had paid for house but transfer of land contained a **declaration that they were to hold as _joint tenants beneficially_**.
* **Upon bankruptcy of the husband, _trustee was entitled to one half of value of house_.**
30
**Re Draper's Conveyance**
Involuntary Alienation
An Act operating on own share
Modes of Severance
* **Divorce proceedings** that have become **irrevocable** can **sever joint tenancy.**
31
**Nielsen-Jones v Fedden**
Mutual Agreement/Conduct
An Act operating on own share
Modes of Severance
* **Court held there was _no agreement to sever_ as _memorandum was to sell the house as a whole._**
* **_Inconclusive negotiations_ are _not_ _sufficient_ to sever**
* Compare with **Burgess v Rawnsley**
32
**Burgess v Rawnsley**
Mutual Agreement/Conduct
An Act operating on own share
Modes of Severance
* **Court said _oral agreement to sell_ and _agreement of price_ at £750 was _enough to constitute a mutual agreement_ at a point in time.**
* Judge stated **Fedden** wrongly decided, because no specifically-performable contract is actually necessary, **just evidence of _intention**_, so depending on the facts, _**inconclusive negotiations may be sufficient to sever_**
33
**Gore & Snell v Carpenter**
Mutual Agreement/Conduct
An Act operating on own share
Modes of Severance
* **Court said there was _no point in time when they could say there was mutual agreement_ to sever JT**
* Husband and wife - 2 properties. Lived in 1 each after separation
* Inconclusive negotiations about whether had agreed severance before he died - Mrs Carpenter argued she took both houses as JT; Mrs Snell disagreed
34
**Davies v Smith**
Mutual Agreement/Conduct
An Act operating on own share
Modes of Severance
* Court held there **was mutual agreement to** **sever** because **_had gone further than agreeing to sell**_. They had, _**cashed in endowment policy,**_ _**agreed how to split proceeds**_, and _**consulted solicitors_**.
35
**Hunter v Babbage**
Mutual Agreement/Conduct
An Act operating on own share
Modes of Severance
* Court held there **was mutual agreement to sever** because **_had agreed to split property**_ and to _**split the proceeds in unequal shares_**.
* However, because the **husband died before negotiations were completed**, court ruled the **_split had to be on 50:50 basis_**.
36
What happens at the termination of Co-Ownership?
* When sold the **_proceeds of sale are split equally_** between the beneficiaries.
* A JT **_ends if_** there is **union in the sole surviving tenant**, OR if **one tenant acquires all the beneficial interests.**
37
Termination of Co-Ownership
Process
* Trustees have **power of sale** as though they were absolute owners (**s6(1) TLATA**
* But **must have regard to rights of the beneficiaries** (**s6(5) TLATA**) and consult them to **give effect to wishes of majority of beneficiaries** insofar as it is consistent with general interests of the trust (**s11(1)(b) TLATA**
* What was the purpose of the trust? Is it still the purpose?
* If there is disagreement, could apply to court for an order of sale (**s14 TLATA 1996**)
38
**s15 TLATA Factors considered by court**
Termination of Co-Ownership
* **S15(1)(a)** **intentions** **of person/persons who created the trust** – relevant if have a settlor setting up a trust
* **S15(1)(b)** **Purpose for which property is held** – purpose on acquisition was co-owners could be available for work at short notice
* **Re Buchanan-Wollaston, Re Evers, James v Challenger**
* **S15(1)(c)** **Children** –
* **Re Evers** – purpose was to be a family home
* **S15(1)(d)** **Interest of Creditors** –
* **Ss15(2**) and **(3)** - **circumstances and wishes** of **beneficiaries** –
* What shares do each have? Is there a majority?
* Look at **all factors in the round** and decide what position court are going to take.
* **S15** factors are not weighted. Provisions replaced **s30** of LPA under which there was a presumption in favour of sale.
* BUT case law suggests that **courts tend to favour interests of creditors** (**First National Bank v Achampong**, **Bank of Ireland v Bell**) – court may well favour a sale, if not immediately but at some point in the future.
39
**Re Buchanan-Wollaston**
s15 TLATA Factors considered by court
Termination of Co-Ownership
* **court for order of sale and was refused as _purpose of trust was still possible_**
* 4 houses in a row overlooking the sea; owners **bought the land in front to preserve the sea view** and held as tenants-in-common; one of the owners applied to court for order of sale
* pre-TLATA but can be used for interpretation
40
**Re Evers' Trust**
s15 TLATA Factors considered by court
Termination of Co-Ownership
* **Courts are reluctant to order a sale when _against interests of children_**
* **Man had left family home and applied for sale of it**; court **refused as _purpose was to provide a family home for the children_ and that purpose was still continuing**.
* Would have more sympathetic judgement when children were grown up and purpose as family home had been fulfilled.
* Pre-TLATA but can be used for interpretation
41
**Jones v Challenger**
s15 TLATA Factors considered by court
Termination of Co-Ownership
* **_Can’t unilaterally carry on a joint purpose_****.**
* **Purpose of property being bought together was as matrimonial home**; bought as JT; wife left and went to live with another man; husband said purpose as matrimonial home was still possible as he wanted her to come back
* Pre-TLATA but used for interpretation
42
**Bank of Ireland v Bell**
s15 TLATA Factors considered by court
Termination of Co-Ownership
Even though the property was still being used as a family home, the **_interest of the secured creditor was powerful enough to force the sale_**
43
**First National Bank v Achampong**
s15 TLATA Factors considered by court
Termination of Co-Ownership
Even though infant children lived in the property, **_the mortgagee could no longer be kept out of his money_**
44
Application for Sale by Trustee in Bankruptcy
* Bankruptcy follows different rules.
* **Bankruptcy _severs a JT**_, _**giving the bankrupt a TIC**_, which then _**vests in the trustee-in-bankruptcy_** (**s306 Insolvency Act 1986**) – though the bankrupt remains on the **_legal title**_, the _**equitable interest_** vests in the trustee-in-bankruptcy
* The trustee-in-bankruptcy will want to sell the land to realise assets, so must seek a **S14 TLATA** court order, assuming the others oppose a sale.
* The **S15 TLATA** orders are **_not relevant**_, so the court will instead _**consider the S335A Insolvency Act factors_**.
45
**S335A(2) Insolvency Act 1986 Factors**
* The court take into consideration:
* **s335(2)(a) -** the **interests of the bankrupt’s _creditors_**
* **s335(2)(b)(i)** - the **_conduct of the spouse_ so far as _contributing to the bankruptcy_**
* **s335(2)(b)(ii) -** the **_needs/financial resources_** of the **spouse**
* **s335(2)(b)(iii)** - the **needs of the children**
* **S335A(3) IA 1986 -** **Creditors’ interests** are **paramount _after 1 year_ so _order of sale very likely to be granted_**
* UNLESS **_exceptional circumstances_** apply
46
**Re Citro**
Exceptional Circumstances taking precedent over creditor's interests
**s335A(3) Insolvency Act**
Termination of Co-Ownership
* the **_presence of children**_ / _**interruption of education**_ is _**not_** **exceptional circumstances**.
* **Nourse LJ** - “*They are the melancholy consequences of debt and improvidence with which every civilised society has been familiar.”*
* 6-month delay was ordered
47
**Barca v Mears**
Exceptional Circumstances taking precedent over creditor's interests
**s335A(3) Insolvency Act**
Termination of Co-Ownership
**_Sale ordered_** even though **son had special needs**, as postponement would have **_made creditors wait 3 years**_, which would have been _**unfair_**
48
**Re Mott**
Exceptional Circumstances taking precedent over creditor's interests
**s335A(3) Insolvency Act**
Termination of Co-Ownership
Judge **_postponed sale**_ until after the _**seriously ill, elderly bankrupt’s mother**_ had died. She had also lived in the house for _**40 years_**.
49
**Re Raval**
Exceptional Circumstances taking precedent over creditor's interests
**s335A(3) Insolvency Act**
Termination of Co-Ownership
Sale was **_postponed_** as time was needed to **put in place suitable support for resident with schizophrenia** before she moved.
50
**Donohue v Ingram**
Exceptional Circumstances taking precedent over creditor's interests
**s335A(3) Insolvency Act**
Termination of Co-Ownership
‘exceptional’ **_does not_** include **educational needs**
51
**Ford and Another v Alexander**
Exceptional Circumstances taking precedent over creditor's interests
**s335A(3) Insolvency Act**
Termination of Co-Ownership
**ss335A(2) & (3) IA** adequately **balance the rights of creditors** with a **debtor’s right to a home and private life**, so are **compatible** with the **ECHR**.
52
Methods of Overreaching
Termination of Co-Ownership
* If a potential buyer is buying from 2 or more trustees, the buyer **_will overreach the beneficiaries’ equitable interests_** and so take the land free of them (**ss 2 & 27 LPA 1925**)
* A **court ordered sale** under **s14 TLATA** will **always constitute an _overreaching event_** (**s2(1)(iv) LPA 1925**), attaching the beneficial interests to the purchase monies.
53
Overreaching
Protection through Registration
Registered Land
Termination of Co-Ownership
* If a **s40 LRA 2002** restriction is entered on the proprietorship register, the buyer **_must overreach**_, or the interests of anyone in occupation are _**overriding_** if the elements of **sch 3, para 2 LRA 2002** are present, **_unless_** one of the **sch 3** exceptions are present.
* **City of London Building Society v Flegg**
* Spouse can protect interest by entering a **s32 LRA 2002 notice**
54
Overreaching
Protection through Registration
Unregistered Land
Termination of Co-Ownership
* Beneficial interests are **_not_** registrable charges at the Land Charges Department because **they can be _overreached_**.
* If they are **_not_** **overreached**, the **purchaser** will **_not be bound**_ if he is _**Equity’s Darling_**.
* Spouse can protect interest by entering a **Class F** restriction at **Land Charges Registery**
