co-ownership and trusts of land

Co-ownership

Where two or more persons have concurrent interests in the same property – must exist under a trust of land (s.36(1) LPA 1925 & s.1 TOLATA 1996)

Trust of land

Separates legal title (held by trustees) and equitable title (held by beneficiaries)

Trustees vs Beneficiaries

Trustees manage the property – beneficiaries enjoy the property

Express Trust

Created in writing and signed (s.53(1)(b) LPA 1925) – not needed for resulting or constructive trusts (s.53(2))

Purpose of Express Trust

Defines beneficial shares via deeds – conveyances – or wills

Implied Trust

Arises automatically under ss.34–36 LPA 1925 – includes resulting and constructive trusts

Trigger for Implied Trust

Where someone contributes to the price but isn’t on the legal title

Number of Trustees

Maximum of four trustees for legal title (s.34(2) LPA 1925)

Overreaching

When two trustees sell and receive purchase money – equitable interest is detached from land (ss.2 & 27 LPA 1925)

Legal co-ownership

Must be held as joint tenancy only

Equitable co-ownership

Can be joint tenancy or tenancy in common

Joint Tenancy (equity)

Equal undivided shares with right of survivorship

Requirement for legal title

Must be joint tenancy (s.1(6) & s.36(2) LPA 1925)

Right of survivorship

Deceased’s share passes to surviving co-owners

Effect of joint tenancy in practice

Simplifies conveyancing – limits number of legal owners over time

Severance of joint tenancy

Converts it into tenancy in common (equity only)

Example of joint tenancy

A – B – C are joint tenants – A dies – B & C hold full title

Tenancy in Common (equity)

Distinct shares – no right of survivorship

Share transfer in TIC

Shares pass via will or intestacy – not survivorship

Example of TIC from £50k

A = £50k – B = £25k – C = £25k → equity = A: ½ – B: ¼ – C: ¼

Effect of death in TIC

A dies – share passes to heirs – not co-owners

Express Trust Declaration

Can define beneficiaries – tenancy type – and share proportions

No express declaration

Equity follows law – presumed joint tenancy (Stack v Dowden)

Words indicating TIC

Phrases like “in equal shares” – “to be divided” – “share alike”

Four unities of JT

Interest – possession – title – time

Unequal contributions

May suggest TIC – not determinative in domestic cases (Stack v Dowden)

Business use

Courts prefer TIC (Laskar v Laskar) – but context matters (Barton v Morris)

Contrary intention

Court may infer based on parties’ conduct (Jones v Kernott)

Registered title declaration

Optional but assists in inferring beneficial interests

Severance (definition)

Ends right of survivorship – creates TIC in equity (Harris v Goddard)

Legal JT severance

Not allowed by s.36(2) LPA 1925

Effect of severance

Equal division unless agreement says otherwise (Goodman v Gallant)

Severance with 3 co-owners

Severing party gets ⅓ TIC – others share remaining ⅔ as JT (Bedson v Bedson)

Formal severance

Written notice under s.36(2) LPA 1925

Informal severance

Via mutual agreement – conduct – or physical division (Williams v Hensman)

Valid notice wording

Must express desire to sever immediately (Goodman v Gallant)

Example of invalid notice

Divorce petition lacked immediate effect (Harris v Goddard)

Valid written notice

Requires receipt or deemed receipt (Kinch v Bullard – Re Draper’s Conveyance)

Notice service rules

s.196(3)-(4) LPA 1925 – valid if delivered or not returned

Method 1 of informal severance

Unilateral act operating on own share (Williams v Hensman)

Transfer of share

Must be in writing (s.53(1)(c)) – effects severance

Contract to transfer

Binding contract = severance (equity treats as done)

Mortgage or Bankruptcy

Can sever JT if it affects own equitable interest (Bedson v Bedson)

Method 2 of informal severance

Mutual agreement to hold as TIC (Williams v Hensman)

Method 3 of informal severance

Course of conduct showing TIC intention (Williams v Hensman)