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Question 1

What does statute say about co-ownership and trusts?

Answer 1

S34 - 36 LPA 1925 as amended by TOLATA imposes a trust on all co owned property.

Question 2

In a trust, who are the trustees?

Answer 2

The legal owners of the estate.

Question 3

In a trust who are the beneficiaries?

Answer 3

Those who have an equitable interest in the land.

Question 4

Who can be a trustee?

Answer 4

S34(2) LPA 1925 says there can be no more than 4 trustees, this is to simplify the conveyancing process. S34 also prevents a minor from being a trustee.

Question 5

True or false.

3 business partners together purchase the freehold of an office. This is an example of co ownership?

Answer 5

True.

Question 6

True or false.

3 business partners all but freehold property. They are adults so the property will not need to be held on trust?

Answer 6

False. A trust is required with all co ownership (s34 - 36 LPA 1925 as amended by TOLATA).

Question 7

3 business partners all but freehold property. They all contributed to the purchase price and were all named as transferee in the transfer document. Are they trustees or beneficiaries?

Answer 7

They will all be both beneficiaries and trustees of the property.

Question 8

P and B together with their daughter buy a property. All of them contributed to the purchase price. Who is trustee and beneficiary?

Answer 8

Only P an B can be trustees unless their daughter is 18 or older.

Question 9

What does TOLATA do?

Answer 9

It governs how trusts are run - it sets out the powers and duties of trustees and beneficiaries.

Question 10

Who does TOLATA apply to?

Answer 10

Only trusts of land s1(1)(a) says a trust of land means any trust property which consists for includes land.

Question 11

What is the role of the trustees?

Answer 11

To look after the interests of the beneficiaries under the trust.

Question 12

What powers does a trustee have?

Answer 12

S6(1) gives trustees all the powers of an absolute owner.

Question 13

As an absolute owner, can the trustees do what they want with the property?

Answer 13

No s6(5) TOLATA provides that the trustees must have regard to the rights of the beneficiaries and s6(6) provides they must not act contrary to any rule or law of equity.

Question 14

Imagine a trust where the trustees are different people to the beneficiaries and they decided to sell the property. They have the power to sell if it is in e interests of the beneficiaries. However they sold it at a discounted price to their spouses. What does this mean?

Answer 14

It would breach s6(5) and s6(6) having no regard to beneficiaries interests, only their own by selling it to their spouses and one of the rules is that they must not profit from the trust.

Question 15

Are there any restrictions on the trustees powers?

Answer 15

S10 states that an expressly created trust can impose an obligation for consent for any dealings with the land (usually a beneficiary). S11 says they have a duty to consult with beneficiaries and give effect to wishes of the majority.

Question 16

What if the trustees disagree with what the beneficiaries want?

Answer 16

They do have the power to override if they think the beneficiaries wishes are not consistent with the general interest of the trust.

Question 17

Does a beneficiary have the right to occupy trust property?

Answer 17

S12 TOLATA says the right arises if:
The purpose of the trust is to make the trust land available for occupation OR
The trustees hold the land so as to be available AND
The land is suitable for occupation

Question 18

What is the purpose of s13 TOLATA?

Answer 18

It sets out some conditions on the right to occupy.

• if 2 or more beneficiaries are entitled to occupy, e trustees can exclude 1 or more but not all of the beneficiaries and must act reasonably in doing so
• trustees can impose reasonable conditions on the occupying beneficiaries
• an occupying beneficiary may be required to pay pentathlon to an excluded beneficiary, example rent.

Question 19

Who has the standing to apply to court for an order in relation to trust properties?

Answer 19

S14(1) TOLATA says that an application to resolve a dispute can be made by any trustee of land or any person who has an interest in the land.

Question 20

What must the courts consider when determining an application under s14 TOLATA?

Answer 20

S15(1) says the court must consider:

• the intentions of the person who created the trust
• the purposes for which the trust property is held
• welfare of any minor who is or might be expected to be in occupation
• he interest of any secured creditor of any beneficiary

Question 21

How can a trustee in bankruptcy order a sale of a property?

Answer 21

Under s14 however TOLATA cannot be used. The court uses the criteria in s335(a) of the insolvency act 1986.

Question 22

What are the details of s335(a) of the insolvency act 1986?

Answer 22

The court shall make an order having regard to:

• interests of the bankrupts creditors
• all circumstances other than the needs of the bankrupt

In addition where the property was the home of the bankrupt or their spouse:

• conduct of spouse insofar as contributing to bankruptcy
• needs and financial resources of spouse
• needs of any children

After 1 year the courts shall assume the interest of the creditors outweigh all other considerations.

Question 23

Viscount M died last year and in his will established a trust of a stately home, Grandville Hall. He intended the East Wing should be let out to provide an income to the beneficiaries, while the rest of the hall (West Wing and central building) should be available for the beneficiaries to live in. D and all were the trustees. Beneficiaries were B, M and H. They were living abroad at the death and now wish to occupy Grandville Hall. West Wing was badly damaged by fire. East Wing and central building are in good condition and currently unoccupied. Is it correct that the trustees can currently refuse any of the brothers to occupy the west wing?

Answer 23

Yes as the property is not fit for occupation, it has been damaged by fire (s12 TOLATA).

Question 24

Viscount M died last year and in his will established a trust of a stately home, Grandville Hall. He intended the East Wing should be let out to provide an income to the beneficiaries, while the rest of the hall (West Wing and central building) should be available for the beneficiaries to live in. D and all were the trustees. Beneficiaries were B, M and H. They were living abroad at the death and now wish to occupy Grandville Hall. Is it correct that the trustees must not allow any of the brothers to occupy the east wing since it was intended to be let out to provide an income and was not intended for occupation?

Answer 24

No, although the purpose is to provide an income they can permit a beneficiary to occupy if it is available for occupation (s12 TOLATA).

Question 25

Viscount M died last year and in his will established a trust of a stately home, Grandville Hall. He intended the East Wing should be let out to provide an income to the beneficiaries, while the rest of the hall (West Wing and central building) should be available for the beneficiaries to live in. D and all were the trustees. Beneficiaries were B, M and H. They were living abroad at the death and now wish to occupy Grandville Hall. The trustees must allow at least one of the brothers to occupy the central building?

Answer 25

True. They can only stop the other 2 if they had good reason (s13(1) TOLATA).

Question 26

Viscount M died last year and in his will established a trust of a stately home, Grandville Hall. He intended the East Wing should be let out to provide an income to the beneficiaries, while the rest of the hall (West Wing and central building) should be available for the beneficiaries to live in. D and all were the trustees. Beneficiaries were B, M and H. They were living abroad at the death and now wish to occupy Grandville Hall. If B occupied e central building and M and H did not, B could be required to pay compensation to his brothers?

Answer 26

True combined effect of s13(3) and s13(6).

Question 27

Viscount M died last year and in his will established a trust of a stately home, Grandville Hall. He intended the East Wing should be let out to provide an income to the beneficiaries, while the rest of the hall (West Wing and central building) should be available for the beneficiaries to live in. D and all were the trustees. Beneficiaries were B, M and H. They were living abroad at the death and now wish to occupy Grandville Hall. The trust will have to use some of its income to pay for the gas and electricity that B uses in occupying he central building, given the purpose if the trust was that a beneficiary should be able to occupy that part of the property?

Answer 27

False s13(3) trustees can impose any reasonable conditions on them which can include paying the bills.

Question 28

2 years ago F and G bought Long Acre as a home in which to bring up their 2 children and as a place F could work as a sculptor. Together they paid the whole of the purchase price and it is registered in both names. 3 months ago G left F and has contacted her saying he wants Long Acre sold so he can have some capital to buy a place in his own. Since F does not want to sell it G has said he will seek an order to force sale. Is G eligible to apply to court for an order under TOLATA 1996?

Answer 28

Yes he is (s14 confers a status on any trustee or person so an interest).

Question 29

2 years ago F and G bought Long Acre as a home in which to bring up their 2 children and as a place F could work as a sculptor. Together they paid the whole of the purchase price and it is registered in both names. 3 months ago G left F and has contacted her saying he wants Long Acre sold so he can have some capital to buy a place in his own. Since F does not want to sell it G has said he will seek an order to force sale. Under TOLATA s15(1)(a-d) there are train matters that a court has to take into account considering as application. Is it likely the court will make an order in Gs favour?

Answer 29

No, their intention when they bought the property was to use as a family home and a place for F to work and it is still satisfying those functions. S15(1)(a-c) are satisfied.

Question 30

D and E co own a property as beneficial joint tenants. E is made bankrupt. Bankruptcy severs a joint tenancy. Is it correct that severance occurs because the bankruptcy order operates as a written notice to sever under s36(2) LPA 1925?

Answer 30

No. It is severed by conduct under the case of William v Hensman.

Question 31

D and E co own a property as beneficial joint tenants. E is made bankrupt. Bankruptcy severs a joint tenancy. The trustee in bankruptcy can apply for an order of sale because under s14 TOLATA he is a trustee of the property?

Answer 31

False. The application can be made under s14 TOLATA by any trustee or person with interest in it. Trustee in bankruptcy obtains the beneficial interest.

Question 32

D and E co own a property as beneficial joint tenants. E is made bankrupt. Bankruptcy severs a joint tenancy. The court will consider the trustee in bankruptcy's application for an order of sale under the provisions of s15 TOLATA?

Answer 32

False, bankruptcy is one occasion where s15 does not apply. They will consider the application under s335A of the insolvency act 1996.

Question 33

What are the two types of co ownership?

Answer 33

Joint tenants or tenants in common.

Question 34

What is joint tenancy?

Answer 34

Each owner is seen as entitled to the whole intent in the property. They are seen as one unit.

Question 35

What is the right of survivorship?

Answer 35

It's a consequence of co owning when one party dies. The party who dies, their interest will be extinguished on death, the other party will become the sole owner.

Question 36

What would happen if the person that died as a joint tenant left their half to someone else in their will?

Answer 36

Nothing due to the right of survivorship. The person named in the will would get nothing.

Question 37

Does the right of survivorship apply to tenants in common?

Answer 37

No as each has a distinct share in the property.

Question 38

Can trustees who own both the legal estate be tenants in common?

Answer 38

No they must be joint tenants (s1(6) LPA 1925.

Question 39

Can beneficiaries be joint tenants or tenants in common?

Answer 39

Both.

Question 40

What are the four unities?

Answer 40

``` 4 requirements that must be satisfied for a joint tenancy to exist. Unity of possession Unity of interest Unity of title Unity of time ```

Question 41

What does unity of possession mean?

Answer 41

Each co owner is equally entitled to possession of the whole property.

Question 42

What is the unity of interest?

Answer 42

Each co owner must have an identical interest in the property, example both own freehold or leasehold.

Question 43

What is unity of title?

Answer 43

Co owners must acquire title from the same document (transfer deed) TR1.

Question 44

What is unity of time?

Answer 44

They must all receive their interest at the same time.

Question 45

For a joint tenancy to exist what needs to be met?

Answer 45

All four unities, if one fails they will become tenants in common.

Question 46

For a tenancy in common to exist what needs to be met?

Answer 46

The unity of possession only.

Question 47

A and B are joint tenants in law and equity. They have equal shares in the house. True or false?

Answer 47

False, the concept of shares does not exist in a joint tenancy.

Question 48

What does the doctrine of survivorship apply to?

Answer 48

Joint tenancy only.

Question 49

A and B own a house and are joint tenants in law and equity. They argue and B writes his will to leave his interest in the house to D. B dies. Who owns the beneficial interest in the house?

Answer 49

A due to the doctrine of survivorship.

Question 50

The four unities must exist for which type of co ownership to exist?

Answer 50

Joint tenancy.

Question 51

J and M buy a leasehold flat together. If they are equally entitled to possession of the flat, acquire title from the same document, and at the same time, will this mean the four unities are present?

Answer 51

Yes.

Question 52

J and M buy a leasehold property together. The document used to transfer the title to them is a TR1. Will this satisfy the requirements of the four unities?

Answer 52

Yes. Using TR1 suggests they obtained the same interest, through the same document at the same time and this will entitle them both to equal possession.

Question 53

Why do we refer to tenancy in common as having undivided shares?

Answer 53

Because undivided means each co owner is equally entitled to possession of the whole property.

Question 54

What if co owners make a written statement when purchasing a house to say what they want to be?

Answer 54

Goodman v Gallant says this statement will be binding unless it was made fraudulently or by mistake.

Question 55

What happens if co owners do not make a statement of if they will be tenants in common or joint tenants on the TR1 form?

Answer 55

Equity presumes they should be tenants in common.

Question 56

If the four unities are present then they will be joint tenants. True or false?

Answer 56

False. Where they do exist it simply enables them to have a joint tenancy.

Question 57

The cad of Goodman v Gallant is authority for what?

Answer 57

Where co owners expressly declare they wish to be joint tenants, this is conclusive in the absence of fraud.

Question 58

Where co owners contribute unequally to the purchase price and have not declared the form in which they wish to co own the property, equity will always impose a tenancy in common to reflect their differing contributions? True or false.

Answer 58

False, it is only a presumption in equity which can be displaced by evidence. This will never apply to a family home (Stack v Dowden).

Question 59

What is severance?

Answer 59

Where you can sever your beneficial joint tenancy to become a tenant in common.

Question 60

What is severed?

Answer 60

The beneficial tenancy, you can never sever at law (s36(2) LPA 1925).

Question 61

When severance occurs what share will each own?

Answer 61

Goodman v Gallant says they will come out with equal shares, it will not reflect original contributions.

Question 62

What happens if 3 people are beneficial joint tenants and one severs?

Answer 62

The one that severed will become a tenant in common and the other 2 will remain joint tenants.

Question 63

A and B are joint tenants in law and equity. A severs and dies. What happens?

Answer 63

The doctrine of survivorship applies at law as a joint tenancy cannot be severed at law (s36(2) LPA 1925).

Question 64

In 2005 L and J buy a house. J pays 1/3 and L 2/3. TR1 states they are beneficial joint tenants. In 2011 L severs the joint tenancy and travels the world. In 2012 L dies climbing Everest. In her will she left everything to K. In 2005 how did j and L own the property?

Answer 64

As joint tenants in law and equity.

Question 65

In 2005 L and J buy a house. J pays 1/3 and L 2/3. TR1 states they are beneficial joint tenants. In 2011 L severs the joint tenancy and travels the world. In 2012 L dies climbing Everest. In her will she left everything to K. What is the effect of Ls severance at law?

Answer 65

She remains a joint tenant (s36(2) prevents it from ever being severed).

Question 66

In 2005 L and J buy a house. J pays 1/3 and L 2/3. TR1 states they are beneficial joint tenants. In 2011 L severs the joint tenancy and travels the world. In 2012 L dies climbing Everest. In her will she left everything to K. What is the effect of Ls severance in equity?

Answer 66

She becomes a tenant in common.

Question 67

In 2005 L and J buy a house. J pays 1/3 and L 2/3. TR1 states they are beneficial joint tenants. In 2011 L severs the joint tenancy and travels the world. In 2012 L dies climbing Everest. In her will she left everything to K. What happens on Ls death?

Answer 67

The doctrine of survivorship applies at law.

Question 68

In 2005 L and J buy a house. J pays 1/3 and L 2/3. TR1 states they are beneficial joint tenants. In 2011 L severs the joint tenancy and travels the world. In 2012 L dies climbing Everest. In her will she left everything to K. After Ls death J and K are the trustees. True or false?

Answer 68

False. Doctrine of survivorship applies at law.

Question 69

In 2005 L and J buy a house. J pays 1/3 and L 2/3. TR1 states they are beneficial joint tenants. In 2011 L severs the joint tenancy and travels the world. In 2012 L dies climbing Everest. In her will she left everything to K. After Ls death J and K become the beneficiaries. True or false?

Answer 69

True.

Question 70

In 2005 L and J buy a house. J pays 1/3 and L 2/3. TR1 states they are beneficial joint tenants. In 2011 L severs the joint tenancy and travels the world. In 2012 L dies climbing Everest. In her will she left everything to K. K inherits Ls share in equity. What is the size of that share?

Answer 70

1/2 Goodman v Gallant.

Question 71

In 2005 L and J buy a house. J pays 1/3 and L 2/3. TR1 states they are beneficial joint tenants. In 2011 L severs the joint tenancy and travels the world. In 2012 L dies climbing Everest. In her will she left everything to K. J is the sole owner at law. In equity J and K are tenants in common in equal shares?

Answer 71

True.

Question 72

A, B and C are beneficial joint tenants. What happens if A severs the joint tenancy in equity?

Answer 72

A becomes a tenant in common and the others remain joint tenants.

Question 73

How can severance happen?

Answer 73

S36(2) LPA 1925 requires joint tenants to give written notice to sever to other joint tenants.

Question 74

Is there is a special form to give notice of severance?

Answer 74

No form or format needed (Re Drapers).

Question 75

What must the notice say to be sufficient to sever?

Answer 75

Harris v Goddard shows it must have an immediate intention to sever and they must make clear they have the intention to sever and become a tenant in common.

Question 76

What if an intention to sever is not expressly stated?

Answer 76

The wording should make some direct or indirect reference to the co owner having a share in the property.

Question 77

What is an acceptable way of serving a notice?

Answer 77

S196(4) says it can be served by registered or recorded delivery to the last known place of abode or business address S196(3) says the notice can be left at, or affixed to, the last known place of abode or business Kinch v Bullard says it also include service by post.

Question 78

What did the court decide in Kinch and Bullard?

Answer 78

All that was required for service under s196(3) was proof that it had in fact been left at the address. Therefore ordinary first class post is acceptable if it could be shown the postman had in fact delivered it.

Question 79

What if the notice is not received by the addressee?

Answer 79

Kinch v Bullard and Re 88 Berkeley Road show that provided the notice is correctly served it doesn't' have to be received by the addressee.

Question 80

Could someone serve a notice of severance and then change their mind?

Answer 80

If the letter was validly served, severance will occur. The change of mind would need to be communicated before the notice was served (Kinch v Bullard).

Question 81

G and B bought a property as joint tenants. They argued and G wrote to B sell the house and send me my share of the sale proceeds. Is this an intention to sever?

Answer 81

It probably shows an intention to sever. It depends on the interpretation to sell.

Question 82

G and k co own a property. K decides to leave and go to London. When she left she wrote on the mirror in the hall in lipstick, I want my share of the value of this house immediately so I can get a proper place to live. Has she severed?

Answer 82

Yes, it does not matter she wrote it on the mirror (Re Drapers with regards to form) (s36(2) LPA 1925).

Question 83

Under s196 of the LPA a notice is only validly served if it is sent by recorded or registered post. True or false?

Answer 83

False, Kinch v Bullard says it can be ordinary post and s196(3) states just left at the place.

Question 84

Under both s196(3) and s196(4) a notice is adequately served if it is left either at the last known place of abode or at the last known place of business or the person to be served. True or false?

Answer 84

True.

Question 85

Will the court accept that a notice of severance has been properly served, even if it is not delivered in accordance with s196 LPA 1925 providing their is evidence the addressee did actually receive the notice of severance. Example delivery to a holiday home?

Answer 85

Yes s196 says sufficiently served which means methods not specified by act the act can ok provided the notice is actually received.

Question 86

What ways can you sever the beneficial joint tenancy in common law?

Answer 86

Williams v Hensmann said: By an act operating on ones own share or Through mutual agreement or Through mutual conduct

Question 87

What does the phrase, operating on ones own share, mean?

Answer 87

When a co owner deals with his potential share in some way, example, sell beneficial interest, granting a mortgage over the interest or becoming bankrupt.

Question 88

What is through mutual agreement?

Answer 88

Meaning all joint tenants agree that one or more of them will hold their interest as a tenant in common, this does not need to be legally enforceable (Burgess v Rawnsley).

Question 89

What does through mutual conduct mean?

Answer 89

All of the joint tenants act towards each other in a way that makes clear they treat themselves as being tenants in common. Their behaviour shows it.

Question 90

A and husband P bought a house in 2000 as joint tenants in law and equity. In 2011 P announced he was leaving to start a new life in Spain. He requested S buy his share of the property as he needed the money now. S said she would consider doing so and would have the property valued but did nothing further. P left and 2 months later sent a postcard saying S I have found a bar out here I want to buy, please sell the house and send me my share of the proceeds as soon as possible. When P requested S buy out his share as he needed money now, this is severance by unilateral conduct under Williams v Hensmann. True or false?

Answer 90

False, unilateral conduct requires a legally binding action such as the sale of an interest.

Question 91

A and husband P bought a house in 2000 as joint tenants in law and equity. In 2011 P announced he was leaving to start a new life in Spain. He requested S buy his share of the property as he needed the money now. S said she would consider doing so and would have the property valued but did nothing further. P left and 2 months later sent a postcard saying S I have found a bar out here I want to buy, please sell the house and send me my share of the proceeds as soon as possible. P requesting S buy him out now and her getting the property valued is severance by mutual agreement. True or false?

Answer 91

False, mutual agreement can be reached informally but it does require actual agreement.

Question 92

A and husband P bought a house in 2000 as joint tenants in law and equity. In 2011 P announced he was leaving to start a new life in Spain. He requested S buy his share of the property as he needed the money now. S said she would consider doing so and would have the property valued but did nothing further. P left and 2 months later sent a postcard saying S I have found a bar out here I want to buy, please sell the house and send me my share of the proceeds as soon as possible. P ask S to sell now and her having the property valued is severance by mutual conduct. True or false?

Answer 92

False, it requires both parties are thinking in terms of a tenancy in common. S thinking about it and getting it valued does not indicate this.

Question 93

A and husband P bought a house in 2000 as joint tenants in law and equity. In 2011 P announced he was leaving to start a new life in Spain. He requested S buy his share of the property as he needed the money now. S said she would consider doing so and would have the property valued but did nothing further. P left and 2 months later sent a postcard saying S I have found a bar out here I want to buy, please sell the house and send me my share of the proceeds as soon as possible. The sending of the postcard is likely to meet the requirements for severance by written notice. True or false?

Answer 93

True, meets form, content and service.

Question 94

What is co-ownership?

Answer 94

Where 2 or more people have an interest in the ownership of the same property at the same time.