Co-Ownership

Question 1

What are the two forms of Co-Ownership?

Answer 1

Joint Tenancy and a Tenancy in Common

Question 2

What is a Joint Tenancy?

Answer 2

The owners hold both the legal and equitable interest in the land concurrently and are entitled to the whole of the land.

Question 3

What are the three key features of a Joint Tenancy?

Answer 3

1. Each tenant is jointly entitled to the whole
2. The right of survivorship
3. The presence of the four unities

Question 4

Outline the process surrounding the right of survivorship.

Answer 4

On the death of a joint tenant their interest does not pass on under the laws of succession, but rather passes to the surviving joint tenant(s).

Question 5

What would occur if a joint tenant left his estate in his will to a third party?

Answer 5

That third party would acquire not rights in the land.

Question 6

What would occur if there was a sole ‘joint tenant’, and they left their estate to a third party?

Answer 6

As they are the last joint tenant, their estate passes on under the laws of intestacy

Question 7

What are the four unities in a joint tenancy?

Answer 7

1. Unity of possession
2. Unity of interest
3. Unity of title
4. Unity of time

When considering the four unities the Court will not consider them requirements rather it will consider their presence within the intentions of the parties (Goodman v. Gallant).

Question 8

What would occur if one of the four unities was absent?

Answer 8

The agreement would be considered a tenancy in common

Question 9

What is the unity of possession?

Answer 9

There is unity of possession if two or more people have concurrent rights to enjoy the whole of the relevant piece of land

Question 10

In the absence of unity of possession, what agreement is left?

Answer 10

There is no co-ownership in this case, and there is neither a tenancy in common or a joint tenancy

Question 11

What is the unity of interest?

Answer 11

For their to be unity of interests, each co-owner must have absolutely identical rights over the land in question. This can be broken down to 2 key points:
1. Each co-owner must have the same estate
2.Each co-owner must have an equal right to enjoy the land
(for example if 4 co-owners rented out a property, they would each be entitled to 25% of the rent)

Question 12

What is unity of title?

Answer 12

This means that each joint tenant must have acquired their interest from the same document or transaction

Question 13

What is the unity of time?

Answer 13

This outlines that the rights of each joint tenant must ‘vest in interest’ at the same time, meaning they must commence at the same moment
An example of a failure of this would be if land was left in a will on trust until the children reach the age of 21, and they all reach that age at a different time, there would be no unity of time in this case

Question 14

What is a tenancy in common?

Answer 14

The co-owners are said to own the property in undivided shares, the land has not been physically dived up, however each co-owner has a distinct share.
Under law tenants in common are considered joint owners, however under equity they are regarded as tenants in common.

Question 15

What occurs when a tenant in common dies?

Answer 15

There is no right of survivorship, and the deceased tenants share passes under normal laws of succession

Question 16

Can a tenancy in common exist in unequal shares?

Answer 16

Yes - they normally arise in reflection of the purchase price of the property

Question 17

When is a co-owership more likely to come to an end, with a joint tenant or with tenants in common?

Answer 17

Due to the rule of survivorship a joint tenancy is more likely to end before a tenancy in common because people die.

Question 18

Why was there a need to reform the way that tenancy is commons worked in 1925? And what is the statutory reform passed by parliament to address this?

Answer 18

Because it was possible for each tenant in common to pass their share in the property down to a number of people, this meant that the owner of a property through a tenancy in common could be 20+ easily, therefore this was detrimental to the alienability of land.
Parliament passed the Law of Property Act 1925, ss.34-36 which established that where land is co-owned there is a maximum of four signatures needed for the sale of land.

Question 19

s.34 (2) LPA 1925?

Answer 19

“Where after the commencement of this act land is expressed to be conveyed for the purpose of a tenancy in common the conveyance shall operate as if the land had been expressed to be conveyed to grantees as joint tenants, and in the case of more than four grantees, the first named four.”

Question 20

Which statute establishes that a tenancy in common only exists under equity?

Answer 20

s.36 (2) LPA 1925

Question 21

How can an express declaration of a trust in land be made?

Answer 21

Via:

• The deed (Goodman v. Gallent establishes that the deed is decsive)
• Any other express statement however it must be in writing per s.53(1)LPA
• Potentially through TR1 part 10 if filled in

Question 22

What is the presumption in the event of no express statement of Co-Ownership?

Answer 22

Equity follows the law, therefore it will be presumed that a JT is intended

Question 23

Will the inference of a contructive trust only occur in married parties?

Answer 23

no, the court will infer a constrictive trust between married parties - Lloyds Bank v. Rosset

Question 24

If you wanted to remain in a property on unregistered land through a constructive trust, how would you go about doing so?

Answer 24

You would need to remain on the property so to gain actual occupation. As it is a constructive trust therefore it is not registerable on the land charges register, so the doctrine of notice applies. This would involve telling anyone who asked her of her interest that she has one.

Question 25

if some one acquires a constructive trust in a JT, what does that mean?

Answer 25

it makes them a TiC.

Question 26

What act imposes a trust for sale/ trust of land upon a owner?

Answer 26

ss.34-36

Question 27

Upon being in registered land how would you protect your interest in the form of a constructive trust?

Answer 27

being in actual occupation and having an overriding interest per sch 3 para 2 LRA 2002

Question 28

If there is a dispute as to who should occupy the land as a beneficary what section is applied and who has control?

Answer 28

The trustees get control per s.13 TLA 1996, however if the beneficiaries/ anyone with an interest in the land is unhappy with this then they may apply to the court s.14(1)

Question 29

Are contributions relevant in a joint ownership?

Answer 29

the contributions of a party are irrelevant, as each is equally entitled to the whole.

Question 30

Each tenants is jointly entitled to the whole in a joint tenancy?

Answer 30

This was summarised in the case of Murray v. Hall where it was stated that “each holds nothing and yet holds the whole”. This demonstrates that intentions in a JT do not arise from the contributions made to the property rather they come from the description in the deed.

Question 31

What is the commentaries rule?

Answer 31

This is the rule that when it is unclear who died first, the court will presume that the oldest died first.

Question 32

What is required in the deed of a TiC?

Answer 32

Goodman v. Gallant considered that in a TiC, the deed is a definite expression of the parties intentions, and therefore when express words of severance relating to the shares of the property are used in the deed, a TiC will exist. This can be seen in the case of, Payne v. Webb, Fisher v. Wigg and Heathe v. Heathe

Question 33

Payne v. Webb, Fisher v. Wegg and Heathe v. Heathe

Answer 33

the court held that the wording “had an interest in equal share” amounted to a TiC.

Fisher v. Wigg: the court held that the wording “to be divided between” amounted to a TiC.

Heathe v. Heathe where the court held that the wording “share and share alike” amounted to a TiC.

Question 34

Distigishing between the equitable and legal title, and why?

Answer 34

At law, the legal title is prescribed and the only form that exists is that of a JT. This has been established by the s.1 (6) LPA 1925, which states “a legal estate is not capable of subsisting or being created in a undivided share of land”. This was done to promote the alienability of land through ensuring a single legal ownership exists. The act also ensured the alienability of land through only allow four owners to exist at the legal level. Any other trustees will have a equitable relationship with those owners. This was established by s.34 (2) of the LPA 1925.

Question 35

Acquisition of a beneficial interest in land, in terms of the trusts available.

Answer 35

A constructive trust may be imposed through contributions to the land made to the land after purchase in cases of TiCs. Whereas a resulting trust can be established in cases where contributions have been made to the purchase.

Question 36

How does one acquire a beneficial interest in land? (historical context)

Answer 36

Throughout the 1980’s there was development in this area considering the extent of a contribution must be to amount to gaining a beneficial interest in the land. This can be seen in cases such as Ewes v. Ewes where it was held extensive manual labour on the property could amount to a contributions resulting in a beneficial interest, Lord Denning notes in this case the claimant had hammered the patio with a heavy hammer. However, this decision was reversed by the House of Lords in the cases of Lloyds Bank v. Rossett [1991] and Burns v. Burns, where it was held that only financial contributions would suffice, and that your upkeep of a property should not occur solely for gaining a beneficial interest in it (Lord Bridge).

Question 37

How does one acquire a beneficial interest in land? (current case law)

Answer 37

In the case of Stack v. Dowden [2007] Baroness Hale argued that people do not organise their family lives through discussing every financial detail, therefore it should be appropriate to considered all the circumstances when deciding if one has a beneficial interest in the land. She states that “the law has moved on in response to changing social and economic conditions, the search is to ascertain the parties intentions, inferred, imputed or actual with respect to the property and their whole course of dealings with it”. However this has been criticised due to the decrease in preciseness of the law. The case of Jones v. Kernott echoed this shift in judicial attitude relating to the question of contributions.

Question 38

What is the significance of ascertaining a beneficial ownership in the land?

Answer 38

When a beneficial ownership in terms of a tenancy in common, is paired actual occupation, and overriding interest will exist. This allows the tenant to override the bona fide purchaser for consideration (equity’s darling).

Question 39

What powers do the trustees of a property have (equitable co-owners)?

Answer 39

The powers of a trustee are laid out in s.6 TLA 1996, which states that a trustee will have all the powers of an absolute owner.

Question 40

s.10 TLA 1996

Answer 40

S.10 TLA 1996 states that where a disposition requires the consent of two trustees any two will be sufficient. The reason for this statute is a safeguard against fraudulent trustees.

Question 41

s.11 TLA 1996

Answer 41

S.11 TLA outlines when exercising a function in relation to the land: a.) should consult the beneficiaries of full age and b.) so far as consistent with the general interest of the trust give effect to the wishes of the beneficiaries, in the event of a dispute the weighting will be given to their wishes in accordance with their share in the property.

Question 42

Section 14 of the TLA 1996

Answer 42

Section 14 of the TLA 1996 outlines the powers of the courts in resolving disputes arises over the sale of the property. 14(1) states that “any person who is a trustee of land or has an interest in that property may make an application to the court for an order under this section”.. 14(2) outlines the powers of the courts stating that they have power relating to any exercise of the trustees and their functions and b.) declaring the nature and extent of a persons interest in the subject matter as the court sees fit.

Question 43

s.15 TLA 1996

Answer 43

However in applying s.14, s.15 TLA 1996 states that the court will have regard to

a. ) the intentions of the parties,
b. ) the purpose for which the property is being held,
c. ) the welfare of any minor
d. ) the interests of any certified creditor of a beneficiary.

Question 44

What is the case law surrounding the implementation of s.14 and s.15 of the TLA 1996?

Answer 44

Bernard v. Josephs, Re Evers Trust and Re Buchanan- Wollastons Conveyance,

Question 45

Re Buchanan- Wollastons Conveyance,

Answer 45

4 purchasers a strip of land, when one sold his house he wanted to sell the land. The court held that as the purpose of the purchase remained unchanged he could not force the sale of the strip of land.

Question 46

Re Evers Trust [1980]

Answer 46

the court similarly held that the age of the children and inability to find alternative accommodate meant that the wife could keep the house and pay the husband rent.

Question 47

Bernard v. Josephs [1982]

Answer 47

it was held that in a dispute between a wife and husband regarding a sale of property, the wife could remain in the property and pay rent to the husband.

Question 48

What is the position of creditors in bankruptcy?

Answer 48

Bankruptcy automatically severs the joint tenancy of an equitable co-owner. When a trustee in bankruptcy applies under the s.14 procedure, the court will use the criteria set out in s.335a of the Insolvency Act 1986.

Question 49

s.335a of the Insolvency Act 1986

Answer 49

Under this the court will consider the creditors on a first come first served basis. The court will also consider the role of the spouse and any children in relationships,

Question 50

Cases about s.335a IA 1986

Answer 50

however the case of Re Citro the court held that these will only be put over the needs of the creditors in exceptional circumstances, such as a husband declaring bankruptcy to avoid paying ancillary relief (Re Holliday) and negligence on the part of the trustee in bankruptcy (Re Gorman).

Question 51

What is the meaning of Severance?

Answer 51

Severance is “the process of separating off a share of a joint tenancy so that co-ownership continues, but the right of survivorship does not apply” per Harris v. Goddard.

Question 52

Statute about severance?

Answer 52

Section 36(2) of the LPA 1925 states that there is no severance of a legal joint tenancy, therefore the severance only occurs at equity.

Question 53

The importance of the deed in severance

Answer 53

Goodman v. Gallant holds that the deed is conclusive evidence in determining the share of the property. Lord Slade in that case noted that it is up to the parties to put into the deed if unequal contributions to the purchase price are made, then unequal shares are desired. This case was upheld by Stack v. Dowden.

Question 54

What are the 5 modes of severance?

Answer 54

1. Severance by written notice
2. Severance by a JT operating on his own share
3. Severance by mutual agreement
4. Severance by course of dealings (mutual conduct)
5. Severance by homicide

Question 55

Severance by written notice

Answer 55

Section 36 (2) LPA 1925 notes that severance can be made in writing, in this case all the tenants must be notified through writing. If the writing is issued by post this may amount, however if the written notice is not recieved by the tenants, it will only amount to effective communication of the severance if it is issued by registered post.

Question 56

Case concerning written severance?

Answer 56

This was demonstrated in the case of Re 88 Berkley Road.

Question 57

What amounts to written notice of severance?

Answer 57

The court requires clear communication of the severance. This can be seen in the case of Re Drapers Conveyance, where an application to the court under s.14 TLA amounted to effective written communication of the severance.

Question 58

Does an application for ancillary relief amount to severance?

Answer 58

In the case of Harris v. Goddard it was held that an application for ancillary relief did not amount to written notice

Question 59

What are the common law means of severance?

Answer 59

Williams v. Hensman (1861) lays out three means of severance capable of subsisting at common law. These are: a JT operating his own share, mutual agreement and mutual course of dealings.

Question 60

Severance by a Joint tenant operating on his own share.

Answer 60

When a JT does something or acts in a way which treats his own share as his this is enough for severance to occur. Bankruptcy is an automatic act of severance.

Question 61

Would Fraudulent behaviour suffice as “operating a JTs own share”?

Answer 61

The courts have considered the impact on innocent parties in fraudulent behaviour when considering if it could amount to severance. In the case of First national securities v. Hegerty, it was held that it could amount to severance whereas this should be compare to the case of Penn v. Bristol West building society, where in this case the reverse was held.

Question 62

Severance by mutual agreement.

Answer 62

When considering the route of mutual agreement, the element of agreement is an important consideration and should be distinguished from mutual conduct.

Question 63

Are negotiations mutual agreement?

Answer 63

Gore Snel v. Carpenter held that mere negotiations were not enough to amount to a mutual agreement. In terms of the formation of the agreement, it was held by Burgess v. Rawnsley that it need not be in writing, oral agreement is sufficient.

Question 64

Severance by course of dealings.

Answer 64

In contrast to the severance by mutual agreement, severance by course of dealings considers negotiation and course of dealings.

Question 65

Burgess v. Rawnsley [1975]

Answer 65

their was judicial dialogue between Lord Denning and Lord Pennycuick, Denning favours a clear approach to severance, where as Pennycuick considered more the common intention of the parties, with no agreement necessary. Therefore as negotiations highlight the common intention of the parties to sever, it may amount to severance. Whereas the case of Greenfield v. Greenfield highlights that the court draws a distinction between proper negotiations and merely preparatory discussions.

Question 66

Homicide as a mode of severance.

Answer 66

Due to public policy considerations, the right of survivorship cannot apply in circumstances of homicide. However it was held in the case of Re K (deceased) that the rule of forfeiture applies in these cases, and the degree of homicide is relevant. In this case as it was manslaughter right of survivorship applied.

Question 67

Overreaching

Answer 67

s. 2 of the LPA 1925 (1) states that the equitable interest of beneficiaries can be overreached if the purchase price is paid to 2 or more of the trustees.

Question 68

Why can equitable interests be overreached?

Answer 68

This is of benefit for the purchaser as it promotes the ailenability of land, as they can buy the land free from equitable interests. It protects the trustees as they can act in accordance with this provisions and it protects the beneficiaries as the price has to be paid to two or more beneficiaries. s.2 (2) LPA 1925 states that the interest must be capable of being overreached in order for this to take place. Interests for the benefit of the land in a commercial context are those incapable of being overreached.

Question 69

Overreaching by sale of a single trustee.

Answer 69

Williams v. Boland cf with City of London v. Flegg

Question 70

How does one acquire a beneficial interest in land?

Answer 70

When one acquires an interest in land it is to be done through s.53 (1)(b) (via some signed writing), however this section does not apply to constructive, resulting or implied trusts. Therefore a beneficial interest in land can be gained through a resulting, implied or constructive trust.

Question 71

Which form of trust does one use to gain a beneficial interest in the land?

Answer 71

Historically resulting trusts have been used when contributions to the purchase price have been made (Lord Bridge in Lloyds Bank v. Rossett), whereas Lady Hale in Stack v. Dowden has argued that the law has moved on from then, and now only constructive trusts should be used (affirmed in Jones v. Kernott).

Question 72

How does one acquire a constructive trust in land?

Answer 72

Where there is an intention that a beneficial interest can arise (either through express or inferred by conduct, note it can also be imputed). The conduct that is to be considered is direct and indirect contributions to the property.

Question 73

What is the criticism of the decision in Jones v. Kernott?

Answer 73

J. Mee (2012) considers that the decision in Jones v. Kernott promotes uncertainty in law and there is too much power to the judiciary in determining when a trust should be given.

Piska (2008) also states that it is confusing for the lower courts to have to follow the holistic approach as outlined in Stack.

Question 74

Which act regulates the rights and powers of the trustees and beneficiaries in trusts of land?

Answer 74

Trusts of Land Act 1996

Question 75

What are the objectives of the TLA?

Answer 75

1. defines the rights and duties of beneficiaries and trustees under a trust of land
2. incorporates provisions aimed at the protection of purchasers of co-owned land (in terms of overreaching)
3. lays down the principles which govern the appointment and removal of trustees

Question 76

What did the TLA 1996 do in terms of keeping a trust of land?

Answer 76

It replaced the trust of sale of the land which required the trustees to exercise their power of postponement in the sale of the land, with a trust of land which establishes that land can be kept without the need for sale. - this highlights that the law has kept up with the changing societal attitudes towards land.

Question 77

What is a trust of land (authority)?

Answer 77

s.1 TLA “trust of land means any trust property which consists of land”
basically defines the parameters of the act

Question 78

Where are the powers of the trustees listed?

Answer 78

s.6 TLA - this outlines the principle that trustees have the power of the absolute owner

Question 79

s.11 TLA

Answer 79

“the trustees of land shall in the exercise of any function relating to land subject to the trust:

a. ) so far as practical consult the beneficiaries of full age
b. ) so far as consistent with the general interest of the trust give effect to those wishes of those beneficiaries (or in the case of dispute) the majority (according to the value of their interest combined).

Question 80

What is the criticism of s.11?

Answer 80

the word consultation is loose and does not state if this is legally binding etc.

Question 81

What is s.14 TLA state?

Answer 81

(1) - any person who is a trustee of land or has an interest in the property subject to a trust may make an application to the court for an order under this section
(2) - upon an application the court may make such an order:
(a) relating to the exercise of the trustees of any of their functions
(b) declaring the nature or extent of a person interest in property subject to the trust, as the court sees fit
(3) the court can appoint/ remove trustees

Question 82

What about the interception between s.15 and HRA art 8?

Answer 82

it was held in the case of National Westminster Bank v. Rushmer that it was compatible with art.8

Question 83

What is the position of creditors in bankruptcy?

Answer 83

this automatically severs the joint tenancy, and the criteria outlined in s.335A of the Insolvancy Act will be applied. Under this section the court will primarily consider the interest of creditors in the bankrupts share.

Question 84

The share of the bankrupt trustee will vest in the trustee in bankruptcy?

Answer 84

s.306 Insolvency Act 1986

Question 85

Upon bankruptcy there is automatic severance of a joint tenancy?

Answer 85

Re Pavlou (a bankrupt) 1993

Question 86

What is the equitable presumption about a commercial context and the type of co-ownership?

Answer 86

Re Fuller - if it is commercial then it will be presumed to be a tenancy in common

Question 87

Clemants (1998)

Answer 87

the 1925 legalisation was intended to promote the alienability of land however society has evolved and therefore it needs to be updated to deal with the the problems faced by society today - such as co-habitation of unmarried couples. this act has updated the law which was important