Co-Ownership

Question 1

What are needed for joint tenancies to exist?

Answer 1

The 4 unities (AG Securities v Vaughan and Others)

Question 2

What is the right of survivorship?

Answer 2

When a JT dies their interest does not pass under their will. Instead it passes automatically and immediately to the surviving JTs. The right operates immediately on death, before the will is executed (Re Caines)

Question 3

Which unities are needed for tenants in common?

Answer 3

unity of possession

Question 4

How can ownership be divided for tenants in common?

Answer 4

The share of ownership can be proportionate to the contribution

Question 5

When does the right of ownership apply?

Answer 5

Joint tanancies only

Question 6

Define co-ownership

Answer 6

the simultaneous ownership of the same estate in land by two or more persons

Question 7

Which statute is used to determine that co-owned land is automatically held under a trust of land?

Answer 7

s1 TLATA

Question 8

What can a co-owner be?

Answer 8

joint tenant or a tenant in common or both

Question 9

How may a co-owner acquire co-ownership?

Answer 9

Expressly: by having his name on the title deed, or

Impliedly: by contributing to the purchase price of the property (Lloyds Bank v Rossett)

Question 10

Joint tenants or tenants in common: which can hold a legal title?

Answer 10

Joint tenant (s1(6)LPA)

Question 11

What is the limit number of trustees?

Answer 11

4 (trustee act 1925)

Question 12

What 2 things must the first 4 trustees be for equitable title?

Answer 12

Sui juris (of sound mind), 18yo

Question 13

How many beneficiaries can there be?

Answer 13

No limit

Question 14

Must the beneficiaries be named on the title deed?

Answer 14

No

Question 15

Equitable title - What are the 4 unities?

Answer 15

AG Securities

Unity of Possession
Each owner owns and is entitled to access the whole of the land
Unity of interest
All must have the same interest (i.e. a freehold or leasehold) and the interest must be for the same duration
Unity of title
All JTs must derive title from the same document (i.e. the same title deed)
Unity of time
All JT’s interests must start and end on the same date

Question 16

Equitable title - is there an express declaration?

Answer 16

An express declaration as to their status as JTs or T in Cs will always prevail (Pink v Lawrence), provided it is in writing and signed by the trustees (s 53(1)(b) LPA 1925)

Question 17

Equitable title - are there any words of severance?

Answer 17

A T in C may be found where there are words of severance, as these demonstrate the parties’ intentions to have ‘shares’ in the property and thus hold equitable interests as T in Cs
Ex of words of severance:

‘In equal shares’ Payne v Webb

‘Share and share alike’ Heathe v Heathe

‘To be divided between’ Fisher v Wigg

‘Equally’ Re Kilvert deceased

Question 18

If there is no express declaration or words of severance a JT will exist under the principle that equity follows the law unless one of the presumptions applies

What are these presumptions

Answer 18

(i) Where purchase money is provided in unequal shares the purchases take as T in Cs in proportion to their contributions (Bull v Bull).

This presumption must be viewed with caution; Stack v Dowden – in the context of domestic properties the presumption of T in C arising form unequal purchase contributions will not apply unless one of the parties can provide evidence to the contrary

Jones v Kernott – where a home is held in join names, equitable title is presumed to be held as JTs, even if contributions to the purchase price are unequal. Presumption is only displaced if the parties common intention could justify it in the light of their whole course of conduct

(ii) Where a commercial or business relationship exists between the parties (Lake v Craddock

Question 19

Define severance

Answer 19

he process of separating the shares of a JT to create a T in C so that the right of survivorship no longer applies (Harris v Goddard, per Dillon LJ)
Severance is recognised under s 36(2) LPA 1925

Question 20

Requirements for severance

Answer 20

(1) The severing JT must sever while alive, it cannot take place after death (Re Caines deceased)
(2) The severance only applies to the beneficial interest, not the legal title (s 36(2) LPA 1925). You can never sever legal title

Question 21

Effects of severance -

Answer 21

(1) Ownership status
Severance has no effect on other JTs; only the JT who severs their interest obtains a T in C
However, if two only two JTs to begin with and one severs both JTs become T in Cs
You take a straight share (Goodman v Gallant)

(2) Share of Property
Co-Owners receive equal shares in the property regardless of the relative size of their contributions (Goodman v Gallant)

(3) Right of survivorship
No longer applies between the severing party and the remaining JTs

Note: impossible to contract out of the ability to sever a JT (Grindal v Hooper)

Question 22

2 methods of severance

Answer 22

Notice n writing

by doing acts or things which have the effect of severing

(s 36(2) LPA 1925

Question 23

Severance - notice in writing - statute, and conditions

Answer 23

Need to give all other JT’s notice in writing stating the unequivocal and irrevocable intention to sever immediately, either expressly or by implication (s 36(2) LPA)

Impliedly - re draper (notice tp express desire to sever sufficient), contrast harris v goddard (general acquisition not sufficient)

service (s196lpa) - served to all other JTs

Question 24

Severance - Service (s 196 LPA 1925)

Answer 24

Notice must be served on all other JTs

Notice will be served if personally handed to JTs, or
Leaving it at the other JT’s last ‘known place of abode or business’ (s 196(3) LPA 1925)

Rules for post vary depending on whether ordinary or registered post was used:

Ordinary:
Effective when it is delivered at the property (Kinch v Bullard). No need for JT to read it or be aware of it. Can’t change your mind after posting 196.3

Recorded:
Effective as soon as it is posted, unless it is returned undelivered (s 196(4) LPA 1925)
Irrelevant whether other JTs are aware that notice has been posted in order for it to be deemed served (Re 88 Berkley Road)

Question 25

Notice in writing - cases

Answer 25

Re Draper – application for a court order under the Married Women’s Property Act 1882 s 17 for house to be sold and proceeds equally split amounted to notice in writing despite lacking a signature Harris v Goddard – divorce petition seeking a future property adjustment didn’t convey sufficient desire to sever immediately, desire to sever in the future

Question 26

Severance by ‘other acts or things (s 36(2) LPA)

Answer 26

Williams v Hensman sets out 3 ways other acts can sever Unilateral act - An act operating on your own share By mutual agreement By a course of conduct (mutual conduct)

Question 27

Williams v Hensman - An act operating on your own share

Answer 27

A unilateral action requiring no agreement or knowledge of the other tenants and no service or notice Types of acts operating on one’s own share: (1) Total Alienation (Ahmed v Kendrick cf. Penn v Bristol and West Building Society) (2) Partial alienation 3) Commencement of litigation

Question 28

Total alienation

Answer 28

(Ahmed v Kendrick cf. Penn v Bristol and West Building Society) Occurs by gifting or selling one’s share to a third party Requirements: must use signed writing (s 53(1)(c) LPA 1925)

Question 29

Partial alienation

Answer 29

mortgaging (First National Securities v Hegerty) or leasing one’s interest in the property (Re Gorman)

Question 30

Involuntary alienation

Answer 30

Bankruptcy automatically severs and the interest vests in the trustee in bankruptcy Re Gorman

Question 31

Contract to alienate

Answer 31

Where a JT enters into a specifically enforceable contract to dispose of their interest in the property (Brown v Raindle)

Question 32

Commencement of litigation

Answer 32

Re Draper’s Conveyance - A memorandum not a notice in writing as the intention manifested by the exact wording simply authorised the husband to sell on behalf of both - Re Draper wrong; an application for the property adjustment order insufficient to be a unilateral act on his share and didn’t amount to a notice in writing

Question 33

WvH - by mutual agreement

Answer 33

Both parties must be clearly in agreement at some point in time that each should own a separate share (Burgess v Rawnsley) Agreement on price will help but is not conclusive. Oral agreement sufficient Must be an agreement to sever, an agreement merely to sell will not suffice (Nielson-Jones v Fedden) Continuous negotiations / discussions with no ultimate agreement will not suffice (Gore and Snell v Carpenter)

Question 34

WvH - mutual conduct

Answer 34

Definition: continuous behaviour or course of dealing which shows all the parties consider each other to be T in Cs Long term assumptions - A course of dealing is where over the years the parties have dealt with their interests in the property on a footing that they are interests in common, negotiations in divorce proceedings not sufficient (Gore and Snell v Carpenter) Obtaining legal advice on severance, making an application to court for the division of the property and making an agreement in principle that the sale proceeds would be divided equally is indicative of severance (Davis v Smith) - The drawing up of a consent order sufficient to constitute severance by mutual conduct (Hunter v Babbage) Insufficient to merely: - Physically divide a property (Greenfield v Greenfield) - Leave the property

Question 35

Method of severence - Homicide

Answer 35

Where one JT kills another, the latter’s interest will be severed so the murderer will not gain the tenant’s interest through the right of survivorship (Cleaver v Mutual Reserve Fund)

Question 36

Sale

Answer 36

Proceeds divided amongst the owners according to their relative interests. Co-ownership ends

Question 37

What kind of powers do trustees have?

Answer 37

Trustees have the powers of an absolute owner (s 6(1) TLATA 1996)

Question 38

Duties to beneficiaries

Answer 38

In exercising their powers trustees must have regard to the rights of beneficiaries (s 6(5) TLATA 1996) They must get the best possible return from the trust property and exercise reasonable care and skill (s 1 TA 2000) Where beneficiaries are of full age and capacity and absolutely entitled to the land there is a duty to convey land to these beneficiaries (s 6(2) TLATA 1966)

Question 39

Duty of consultation

Answer 39

IN BOOK Duty to consult the beneficiaries who are of full age and beneficially entitled to an interest in the possession in the land (s 11(1)(a) TLATA 1996), and Duty to give effect to the wishes of beneficiaries who are of full age, or, where a dispute exists to the wishes of the majority in value, but only in so far as it is consistent with the general interest of the trust (s 11(1)(b))

Question 40

Duty to obtain cosent

Answer 40

Only have a duty to obtain consent if the trust instrument requires them to do so (s 8(2) TLATA 1996) Only the consent of two beneficiaries need be obtained (s 10(1) TLATA 1996) Obtaining consent from a minor: trustees must obtain consent from those who have parental responsibility for that minor / a guardian (TLATA s 10(3))

Question 41

Application of a court order

Answer 41

Where a dispute has arisen between the co-owners, any of the co-owners can apply for a court order in relation to the trust property (s 14(1) TLATA) Where the dispute involves the sale of property, the court will settle it using s 15 TLATA guidelines. May use them for other court orders Pre-1996 case law (TMC v Sharie)

Question 42

Application of a court order - s15(1)TLATA

Answer 42

``` S 15(1)(a): The intentions of the person who created the trust The fact that a testator ultimately wanted a property to be sold and its proceeds split among the beneficiaries was a determining factor in the court deciding to sell the property (Barclay v Barclay) ``` S 15(1)(b): The purposes for which the property subject to trust is held A single co-owner unable to sell a piece of land which had been purchased by a number of home owners for the purpose of preventing developers from building on it as that purpose was deemed to be continuing (Re Buchanan-Wollaston) Where the purpose is a matrimonial home, that purpose will be brought to an end by the departure of one of the spouses (Jones v Challenger) Where the purpose is a family home it will not be brought to an end by the departure of one of the spouses (Re Evers trust) S 15(1)(c): The welfare of any minors who occupy the trust land as their home S 15(1)(d): The interests of any secured creditor of any beneficiary This will apply where a co-owner mortgages his share in the property The interests of creditors weigh very highly in the courts’ judgement. They may take precedent over: The disabilities of any occupants (and the fact the grandparents still lived there) (First National Bank v Achampong) The purpose of the trust (still being used as a family home) (Bank of Ireland Home Mortgages v Bell) The poor health of any occupants (Putnam and Sons v Taylor) S 15(3): will take account of the majority beneficiaries by value’s wishes

Question 43

Bankruptcy

Answer 43

When one of the co-owners becomes bankrupt, his share of the property vest in the trustee in bankruptcy (s 306 Insolvency Act 1986). If the bankrupt part is a JT the bankruptcy will amount to an act of severance. The trustee in bankruptcy will have an interest in the property because the property vests in them at bankruptcy

Question 44

Selling the property

Answer 44

The trustee in bankruptcy will desire to sell the property as quickly as possible in order to fulfil his duty to ‘get in, realise and distribute the estate under s 305(2) IA 1986. The Enterprise Act 2002 requires a trustee in bankruptcy to make an application to realise the bankrupt’s assets within 3 years of bankruptcy The other parties will oppose the sale and the trustee must obtain a s 14 TLATA court order

Question 45

Court order considerations - insolvency act factors

Answer 45

The s 335A(2) Insolvency Act 1986 factors apply: 335A (2)(a): the interest of the bankrupt’s creditors (2)(c) All the circumstances of the case other than the needs of the bankrupt Where the house is a dwelling house the following will also be considered: (2)(b): where it’s a dwelling house which is/has been the bankrupt’s or their spouse/former spouse’s home: (i): the conduct of the spouse, so far as contributing to the bankruptcy (ii): financial resources of the spouse ``` (iii): needs of any children; Re Citro (Domenico) - Where a spouse has a beneficial interest in the matrimonial home and has become bankrupt under debts, which can’t be paid without sale, the interest of the creditors will usually prevail and sale will be ordered within a short period Voice of spouse will only prevail in exceptional circumstances. No distinction made between a case where the property is still being enjoyed as the matrimonial home and one where it is not ```

Question 46

Court order considerations - a year passing since bankruptcy, plus exceptional circumstances

Answer 46

After a year has passed since bankruptcy the court must treat the creditor’s interests as paramount and will generally order a sale of the property unless ‘exceptional circumstances can be show (s 335A(3)). Exceptional circumstances: Elderly person in home she had lived in for forty years, near to death and sale of the property would harm her (Re Mott) Schizophrenic spouse who would be seriously affected by move (Re Raval) Terminal cancer, 6 months left to live (Re Bremner) Severely disabled children (Re Haghighat – 3 year suspension) Moderate / severe depression (Ford v Alexander) S 14(2)(a): empowers court to dispense with any requisite consent to a sale or to consult any person in connection with the exercise of their power of sale claughton v charalamous

Question 47

Court order considerations - Human rights law

Answer 47

HR law may apply here but it has not yet been found to apply on the facts of any case (Barca v Mears). Ford v Alexander suggested that ss 335A(2) & (3) provided a necessary balance between the rights of creditors and the respect for privacy and the home of the debtor. BUT NO incompativility with art 8. Donohoe v Ingram

Question 48

Protection of beneficial interests - reg unreg

Answer 48

Reg land Restriction in proprietorship register (s40 lra 2002) If none: OI if in actual occupation (sched 3 para 2) unless enquiry is made and interest not revealed. Overreaching applies - City of london building society v flegg Unreg land Can’t be protected by reg’n of a land charge Overreaching applies But if there is only one trustee, then the doctrine of notice applies Kingsnorth finance co ltd v tizard