Co-Ownership Flashcards
Obligatory trusts - s36
s36(1) LPA - Whenever two people buy a house, they automatically hold title for themselves as beneficiaries, unless otherwise specified.
JT versus TC - what are they, requirements, privileges?
Joint tenancy: everyone owns the undivided whole
Four unities required
Right of survivorship
TC: Everyone has distinct shares, only unity of possession needed, no right of survivorship
What is capable of existing at law, and how many people can hold legal right?
s1(6) LPA + s36 - Only a JT can be held at law.
Maximum 4 joint trustees at law (first 4 named) - s34(2) LPA.
What happens in equity when multiple people buy a home together?
They can choose between a JT and a TC.
Acquisition of the equitable interest - how does this happen?
Trusts of land are only enforceable if ‘manifested and proved by signed writing’ - s53(1)(b) LPA 1925 - done ticking box in TR1 form.
What happens to the equitable interests if there is no signed writing? - Stack v Dowden
Resulting or constructive trust with aim to avoid unconscionability.
S53(2) - This section does not prevent operation of RTs and CTs.
Stack v Dowden - If family home, presumed JT however rebuttable by different contributions, separation of assets.
If not family home, TC reflecting percentage contribution to purchase price.
Goodman v Gallant rule - equal splitting
If joint tenancy created at equity, result of severance is equal split regardless of contribution to purchase price.
UNLESS document is sham/fraudulent.
Methods of severance 1: Written notice - s36(2) + s196
Re Draper, Kinch and Re 88
- Must communicate immediate intention to sever - Re Draper
- Must be served on all other JTs:
s196(3) and (4) - Left at last known abode sufficient, and if using post, deemed served when would ordinarily be delivered.
Kinch v Bullard and Re 88 - doesn’t matter if they didn’t see it if it was delivered.
Method of severance (set out in Williams v Hensman) 2: Acting on own share
Some act treating one’s own interest as constituting a share.
Eg:
Entering into an enforceable contract (s2 LPMPA) to sell one’s share.
Transferring one’s interest (with signed writing s53(1)(c) LPA.
Never by a will - wills don’t sever.
Method 3 of severance (set out in Williams v Hensman): Mutual agreement (Burgess)
Must be mutual agreement amongst all JTs to sever
Burgess - Agreement to sell shares (without agreement on price) is enough agreement
Method 4 of severance (set out in Williams v Hensman) - Course of dealing + Davis
Short of agreement, but sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common - Williams
Davis - Husband and wife divorcing, had convos about dividing sale of house. This was a shared intention to treat shares as severed, even without final agreement.
Forfeiture through homicide as a method of severance
One obviously cannot kill all other joint tenants at equity and inherit their share.
Killer’s share will be severed, so they lose right to survivorship.
Forfeiture Act s1-2 govern relief in cases where justice would support it.
Recap: What happens to beneficiaries under trusts under normal priority rules?
s28 - First in time prevails
s29 - Registrable disposition for valuable consideration takes priority over unprotected interests.
Interest under trust cannot be entered as a notice (s33) for protection under s29.
Unprotected unless they are in actual occupation - sch 3(2)
UNLESS they are overreached, or acquisition mortgage, or they have waived priority.
How does the court resolve disputes around co-ownership? TOLATA
s6 - Trustees have all powers of an absolute owner including sale and purchase.
s14 - Any party with interest in land can apply for a court order relating to trustees’ functions
s14 applications for a court order
Can be brought by trustees, bfs, secured creditors (ANYONE WITH INTEREST).
Asking court to:
Make order relating to exercise of T’s functions or
Declare nature and extent of any party’s interest.
s15 TOLATA - Factors to which the court shall have regard
Includes interests of secured creditors, purpose and intention of creating trust, welfare of minors, wishes of bfs/majority of bfs
Why do creditors seek sale under TOLATA?
If they can get priority (ie s29, overreaching, acquisition mortgages or waiver/consent), they can apply directly for possession and sale under LPA.
If they cannot get priority, have to apply for sale under TOLATA - less preferable, more factors for court to consider.
Shaire - how has TOLATA affected mortgage cases
TOLATA has given greater flexibility, more factors to take into account.
Tipped balance toward families, away from banks.
Husband took out mortgage of his share, held that wife was allowed to stay in home, could pay off bank’s share over time - flexible solution rather than ordering sale
Bell - A case which favoured the bank
Wife and teenage son wanted to stay in house.
Husband’s mortgage debts so great that even sale wouldn’t cover them.
It would be more inequitable to prevent sale (given how big the debt was), than it would be for 17 year old to leave house.
First National Bank v Achampong (breakdown of family, children older)
Unfair to keep bank waiting indefinitely.
Husband and wife had been living apart.
Children were adults, one had moved out.
Edwards v Lloyds TSB (postponement of sale)
Sale postponed for 5 years.
Intention and purpose - family home
Welfare of minors - two children
Interests of creditors - debt less than value
Wife also unlikely to find money to buy adequate house
Forfeiture relief cases - Re K, Gray v Barr, Ninian v Findley
Re K - not financially motivated, woman being abused - court granted relief.
Gray v Barr and Ninian - take into account deliberateness, threats, nature of relationship and intention.
On facts of Ninian, she reluctantly assisted with husband’s travel to assisted dying facility.
