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Flashcards in Co-Ownership & Trusts Deck (39)
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1

S. 184 LPA 1925

If two people who own as joint tenants die, the person who dies first…their equity in the property will vest. We assume that the older of the two died first.

2

S. 34(2) LPA 1925.

The legal ownership will always be held as joint tenants, you can only have a maximum of four legal owners/trustees.

If you tried to transfer legal ownership to more than four people, then legal ownership will vest in the first four that you have named.

3

S 1(6) LPA 1925

If you are a minor then you cannot be a legal owner (NB can own in equity). You must be 18 or over to be a legal owner. You can still get an equitable interest in the land, an enjoyment, but you can’t be a legal owner.

Holding the legal estate as joint tenants. S. 1(6) LPA 1925

4

s. 196 (4) LPA 1925

You are serving the notice under the LPA 1925 s. 196 (4).
By registered post/recorded delivery. s. 196 (4)
To last known abode/place of business. s. 196 (4)
Not returned by post office as undelivered. s. 196 (4)
If these are done correctly, it is considered to be proper notice.

s. 196(3) Notice “shall be sufficiently served if left at the last known abode or place of business in the United Kingdom of the …person to be served…” CASE: Kinch v Bullard [1999] 1 WLR 423.

5

KINCH V BULLARD

A and B held as joint tenants at law and in equity
A served valid notice of severance on B by ordinary post. B had heart attack.
When noticed delivered, B out so A picked up letter.
Be then died.
Was notice valid served under s. 196(3) LPA 1925? Yes, it was. The court took a strict interpretation.

6

RE 88 BERKLEY ROAD

A and B held as joint tenants at law and in equity.
A served valid notice of severance on B by registered post.
When notice delivered, B out so A signed for it and never gave it to B. A then died.
Had the notice been served?

7

HARRIS V GODDARD

Husband and Wife were again joint tenants
Wife petitioned for divorce asking that “such order may be made” as was just.
Husband died and his executors claimed that there had been severance.
If there was no valid notice of severance, then the wife got the lot.
The court said no severance. She wasn’t showing a clear intention to sever now

8

RE Drapers Conveyance:

Notice of severance. Unilateral (i.e., do not all have to agree)

Husband and wife were joint tenants at all and in equity.
Wife issued court proceedings asking for court order matrimonial home to be sold and proceeds divided up.
Held writ + affidavit amounted to valid notice of severance.
This was a procedure of dividing up the matrimonial home without getting divorced

9

STACK V DOWDEN [2007] 2 AC 432

If land is bought as a family home and no express declaration about ownership of the equitable interest… Joint tenancy of equitable interest rebutted by showing both parties intended to hold the equitable interest as tenants in common.

10

Methods of severance

Notice s.36(2) LPA 1925 - (Single beneficiary can sever unilaterally).

Alienation - (Single beneficiary can sever unilaterally).

Homicide - (Single beneficiary can sever unilaterally).

Mutual Agreement/Conduct - (All beneficiaries must agree)

11

s. 36(2) LPA 1925

Notice of severance - in writing, immediate, and correct service.

12

s. 53(1)(b) LPA 1925

Creation of Express Trust of Land must be evidenced in writing.

13

s. 52 LPA 1925

Creation of Express Trust of Land involves a conveyance/transfer to trustees.

14

Re King’s Will Trust [1964] 1 Ch 542

T in his will gives land to X & Y to hold on trust of land for B
X & Y are also appointed as T’s executors under the will
T dies- land vests in X & Y as PRs
X and Y assent the land to selves as trustees to deal with it in capacity of trustees

15

s. 34 TA 1925

No more than 4 Trustees.

16

s. 34(2) TA 1925

Takes effect as transfer to first 4 named

17

s. 6 TOLATA 1996

General powers of trustees

18

s. 6 (1) TOLATA 1996

“all the powers of an absolute owner”

19

s. 6 (5) TOLATA 1996

Duty to “have regard to the rights of the beneficiaries”

20

s. 6 (6) TOLATA 1996

Duty to not contravene “any rule of law or equity”

21

Rodway v Landy [2001]

Winding up medical partnership
One partner wanted sale other wanted partition
Court held could divide up occupation between partners – used s13

22

s. 14 TOLATA 1996

Any person with an interest in property which is subject to a trust of land can apply to the court under Section 14.

The court can make such orders as it thinks fit.
This is important for implied trusts.
About the trustees exercising their functions
Declaring the nature or extent of a person’s interest in land subject to a trust.

The court can make such orders as it sees fit - sale, retention, retention for a limited period of time, etc.


When the court makes an order under section 14 it has to take into account factors listed under section 15 which come from preexisting case law.

23

s. 7 TOLATA 1996

Partition - The trustees can do this if the beneficiaries are of full age and absolutely entitled. This is a way of bringing the trust to an end.

24

s. 8 TOLATA 1996

Only applies while you have an express trust of land. We are not looking at co ownership here where two people buy a house together. An express trust is drawing up a will, and naming trustees and who equal shares.
Express private TOL - settlor can restrict trustees powers - example, by requiring consents before trustees can exercise their powers.

25

S. 11 TOLATA 1996

Consultation Requirement

Applies to both express and implied trusts.
Does apply to the co ownership examples we have looked at.
When the trustees exercise their powers, they have a duty to consult with the beneficiaries who are fully age and beneficially entitled to an interest in possession.
Consult beneficiaries of full age and beneficially entitled to an interest in possession - if you have an interest in remainder, reversion, or you are not of full age, the trustees don’t have to consult you.
It does not say obtain consent, it just said “consult.”

once the trustees have consulted, then if practical, they have to give effect to the wishes of the beneficiaries. They are saying if it is practical to do so…then comply with their wishes. Why? Being a trustee is an onerous position.

26

Section 12 & 13

BENEFICIARIES OCCUPATION RIGHTS

Look out for this question. One wants to sell, and one wants to carry on living there. If this is the case, you need to see if this beneficiary has the right to occupy the trust land.

1) The beneficiary must have an interest in possession. If it is just a beneficiary in remainder, there is no right to occupy.

2) Second thing is you need to show is that the purpose of the trust was to make the land available for occupation.

27

Barclay v Barclay

Trust of bungalow for 5 beneficiaries.
Settlor left instructions to be sold and proceeds was to be divided amongst the 5 beneficiaries.
The court said that despite that one of the beneficiaries was trying to occupy and prevent the sale…section 12 and 13…the purpose of the trust was not to make the bungalow for occupation; it was to be sold.
Should the trustees sell or not? They were trying to figure out what to do.
The court ordered sale because the trust left instructions for the sale and the money to be divided. This was an express trust in the trust instrument. Sometimes it is not clear, however.

28

Edwards v Lloyds TSB

Purpose of trust.

Lenders order for sale postponed as children of relationship needed a home.
A lender in this case, applied to the court for an order of sale.
The couple had defaulted on the mortgage.
The court postponed the order of sale because the children of the family needed a home for a short period of time.

29

Jones v Challenger [1961]

Court ordered sale of matrimonial home as after divorce purpose of trust ended.

30

Bedson v Bedson

Trust property bought both as matrimonial home and as H business premises
Two purposes and since business premises still ongoing, so there was no order for sale.

The court will decide on the facts presented to it.

An equitable joint tenants can sever by:
Sale
Mortgage
NB formalities s.53(1)(c) LPA 1925