co-ownership Flashcards
what is the key feature of co-ownership?
simultaneous entitlement - a situation where 2+ people are simultaneously entitled to the same parcel of land
what are some common situations of when co-ownership occurs
- family or de facto relationships
- trusts
- maori land
- cross leases
- commercial relationships
can co-ownership interest exist in equity
yes, a person may have an equitable interest in land even if the legal title does not reflect this interest.
does legal incapacity prevent a holding of a co-ownership interest
no, minority age, mental disorder etc. do not prevent this
what are the 3 types of co-ownership
- joint tenancy
- tenancy in common
- joint family homes
what are the key features of what a joint tenancy is
- co-owners holding an interest in land as JTs together constitute, and appear to the outside world as, a single owner
- each co-owner is entitled to the entire property
- co-owners technically do not hold shares, each is invested with the whole interest in the land due to being deemed a single owner - they have interests
- each JT has an inalienable right to sever their interest during their lifetime. severance renders interests as tenants in common with equal shares
what is survivorship
if one of the joint tenant’s dies, the other takes the whole of the property
what type of co-ownership does NZ law presume
presumption of Joint Tenancy under the Land Transfer Act 2017 - “two or more persons named in an instrument as transferees, mortgagees, or owners of an estate or interest in land must be treated as joint tenants’ (s47). Tenancy in common requires an express decision or indication. However, this assumption does not apply to Maori land and can be overriden by “words of severance.”
how do you convey a JT
Grant “to A and B” - avoid using language that could imply that the grantees would own separate shares - otherwise it could be a tenancy in common so avoid language that would create the owners taking separate shares
what are the 2 main features of joint tenancy
- presence of the 4 unities
2. right of survivorship (just accrescendi)
what are the 4 unities for joint tenancy
- title: each co-owner’s title must be derived from the same instrument.
- time: all the co-owner’s titles must become vested at the same time - rights commence simultaneously.
- interest: all JTs own a single estate, the interest of which is held by each in the same extent, nature and duration.
- possession: no JT has an exclusive right to any particular part of the land. each is entitled equally to all of it.
what are some exceptions to the unity of time
- does not apply to wills
- does not apply to trusts
what are some unity of interest nuances
- cannot be a joint tenancy between people holding interest of: a different nature or a different duration.
- any legal act must be effected by all JTs if it is to bind the entire estate
what are some unity of possession nuances
Each JT is just as much entitled to possession of all or any part of the land as the other(s). Where fewer than the total number of JTs is in possession of the land, it is possible for those in possession to be in adverse possession against the others. A JT who has failed voluntarily to exercise their right of possession ordinarily cannot claim an occupation fee from the JT in possession.
what is the right of survivorship
it is a key feature and is a distinguishing characteristic of a joint tenancy. when 1 JT dies, their interest is extinguished and it accrues to the remaining JTs, who interests are correspondingly enlarged. the entire estate survives to the living JT(s). A JT may avoid the right of survivorship by severing their interest during their lifetime. I.e. the last person standing gets the entire property.
what happens in the case of simultaneous deaths of survivors
- if both/all die simultaneously, the property will devolve as if it were held as a tenancy in common with equal shares. division of the property will occur according to the deceaseds’ wills or intestacies
what happened in Wright v Gibbons
Sisters A, B and C owned a property as joint tenants. A and B wanted to end the joint tenancy so transferred their interests to each other in one document. C survived A and B and sought a declaration that the memorandum of transfer did not effect a severance of the joint tenancy. It was held that when a JT alienates their interest to another party (including another JT) it severs the original joint tenancy. A, B and C became tenants in common at that point.
what are some unity of interest nuances
- cannot be a joint tenancy between people holding interest of: a different nature or a different duration.
- any legal act must be effected by all JTs if it is to bind the entire estate
what are some unity of possession nuances
Each JT is just as much entitled to possession of all or any part of the land as the other(s). Where fewer than the total number of JTs is in possession of the land, it is possible for those in possession to be in adverse possession against the others. A JT who has failed voluntarily to exercise their right of possession ordinarily cannot claim an occupation fee from the JT in possession.
what is the right of survivorship
it is a key feature and is a distinguishing characteristic of a joint tenancy. when 1 JT dies, their interest is extinguished and it accrues to the remaining JTs, who interests are correspondingly enlarged. the entire estate survives to the living JT(s). A JT may avoid the right of survivorship by severing their interest during their lifetime. I.e. the last person standing gets the entire property.
what happens in the case of simultaneous deaths of survivors
- if both/all die simultaneously, the property will devolve as if it were held as a tenancy in common with equal shares. division of the property will occur according to the deceaseds’ wills or intestacies
what is the current approach on the right of survivorship in the case of homicide of one joint tenant over another
Under the Succession (Homicide) Act 2007 s8, the killer is not entitled to any interest in any property that the killer jointly owned with the victim and that otherwise would have passed to the killer. in respect of the jointly owned property, it is to be distributed or passed as if the killer predeceased the victim.
except where the property was owed in joint tenancy between the victim, the killer and any other person. in this situation, the property devolves at the death of the victim as if the property were owned by each as tenants in common with equal shares.
what happens if ‘no survivorship’ is entered on the register to the right of survivorship
under the land transfer act 1952, a transferor of land to two or more people who will jointly hold the land could request that ‘no survivorship’ be noted on the register under sections 130-133.
the aim is to protect the trust’s interests and minimise the risk to beneficiaries from the acts of a surviving sole trustee because if all the trustees except for one dies, they might not manage the property on behalf of the beneficiaries’ best interest.
the effect is that it is not lawful for a lesser number of joint proprietors than the number registered to transfer or otherwise deal with the land, estate, or interest without obtaining sanction from the High Court.
the protection provided by ‘no survivorship’ is limited and is “rather quixotic and cumbersome in its practical operation” (Re Bayly).
an entry of no survivorship does not prevent the operation of the right of survivorship - the word do not covert a joint tenancy into a tenancy in common (Re Denniston and Hudson). Instead the transmission of title to the surviving joint tenant requires sanction of the high court.
the land transfer Act 2017 repeals the ‘no survivorship’ provisions and does not replace them. IT IS NO LONGER POSSIBLE TO MAKE ‘NO SURVIVORSHIP ENTRIES ON THE REGISTER
how can a joint tenancy be determined (come to an end)
- union in a sole tenant or destruction of one of the 4 unities - results in a conversion into a tenancy in common to avoid the right of survivorship
how is a joint tenancy determined by union in a sole tenant
when there is a single owner, co-ownership is clearly at an end. this may occur:
- through the operation of survivorship
- where all existing JTs transfer the land to a 3rd party
- where JTs agree to transfer and release their interests to a single co-owner
- where a court order is made under the property (relationships) act 1976 - may arise in a divorce or break up of a de facto relationship where one partner has a significantly higher income/standard of living to make it more fair)
how can joint tenancies be determined by destruction of one of the 4 unities
unity of time cannot be destroyed, but unities of possession, title and interest can. destruction may be desirable to convert a joint tenancy into a tenancy in common, thereby avoiding the right of survivorship. the means of destruction include one JT acquiring a greater interest, partition and severance
how can the unities be destroyed by acquiring a greater interest
where one JT acquires a greater interest than the other JTs, the unity of interest is destroyed and the JT is severed. a classic example is one of several JTs for life purchases or inherits the reversion (life estate vs fee simple)
how can the unities be destroyed by partition
division of jointly-held land into separate holdings reflecting each owner’s respective share. this destroys the unity of possession. In NZ< this is known as ‘division’ under the Property Law Act 2007.
how can the unities be destroyed by severance
this destroys the unity of interest or title. the size of the severed share depends on the number of JTs - each is entitled to an equal fraction of the whole estate. this effects only the severed share and the others remain JTs with each other while the severed shares and the parties in the joint tenancy become tenants in common.
several methods:
- unilateral action
- mutual agreement
- course of dealing
- acquisition of a greater interest
- court order under the Property (Relationships) Act 1976
what are the 5 methods of severance
- unilateral action
- mutual agreement
- course of dealing
- acquisition of a greater interest
- court order under the Property (Relationships) Act 1976
what are some ways severance can come about by unilateral action (voluntary alienation)
- transfer to 1 (or more) of the other JTs
- transfer to oneself as a TIC
- sale by 1 JT of their interest
- gift by 1 JT of their interest
- transfer of legal interest alone to be held on trust by a third party
- assignment to a 3rd party (not sublease)
- granting of a lease to a 3rd party
- spouses (cannot sever if living in a registered joint family home)
- bankruptcy (title becomes vested for adjudication)
how can severance come about by mutual agreement
this is where all JTs together agree to sever the JT. It is effective at law when the memorandum of transfer giving effect to the agreement is registered. Legal title will then be held as tenancy in common. If the agreement is not registered, the equitable JT may still be severed, resulting in a specifically enforceable contract between co-owners.
what happened in Gateshead Investments Ltd v Harvey
Mr and Mrs H owned a family home as JTs. Mrs H’s separate business was probably going into bankruptcy so they entered a relationship property agreement to say the Coatesville property was Mr H’s and the business was Mrs H’s. Mr H died less than 2 years later and creditors claimed they should be entitled to the whole property due to survivorship.
Property (Relationships) Act 1976, s47: “Any agreement … between spouses or partners with respect to their relationship property and intended to defeat creditors of either spouse or partner is void.” Though this was a pretty clear use of such an agreement, the court found the JT had been severed. There was clear evidence the parties had a mutual intention to sever - Mr H was giving up his shares in the business and Mrs H gave up her interest in the property. They said the provision shouldn’t void severance because at the time of the agreement, creditors only had a claim to Mrs H’s interest in the property because Mr H was still alive. They didn’t know he was going to die and creditors shouldn’t be entitled to windfall by getting the whole property because of Mrs H’s management of the business. If Mrs H had died and severance hadn’t occurred the creditors would’ve been entitled to nothing so this was just.
