co-ownership

co-ownership

= concurrent ownership

2 or more ppl have interest in ownership of the same property at the same time

the use of trust

ss.34-36 LPA 1925 - requires the use of trust in all cases of co-owned property

trustee - has paper title - has to look over the land

beneficiary - has the benefit of land

A + B buy a house together - in law A+B are trustees, in equity they are beneficiaries

s.34(2) Trustee act 25 - max number of trustees = 4 adults - minimum age of 18 yrs

co-ownership types

1. joint tenancy

2. tenancy in common

joint tenancy

• don’t have specific shares - own whole interest in property simultaneously

• impact of death - right of survivorship applies - if B dies, A becomes sole owner - unless written otherwise in a will

tenancy in common

• each owner has a specific undivided share + the can decide relative value of shares

• doctrine of survivorship does not apply - If B dies, goes to relative/whoever in will

JT + TiC within a trust

trustees (at law) can only be joint tenants - s1(6) LPA 1925: a legal estate in land is not capable of subsisting or of being created in an undivided share in land

beneficiaries can be joint tenants or tenants in common (in equity)

beneficial JT

JT in equity + law

upon death - doctrine of survivorship applies - remaining owner gets the interest + becomes sole owner

beneficial TiC

at law JT - TiC in equity (beneficiary)

upon death - at law - doctrine of survivorship applies + remaining T becomes sole trustee

but in equity - doctrine doesn’t apply + share is passed down

pre-conditions for existence of JT + TiC

JT: 4 unities must be present

• P - possession: each equally entitles to possession of whole property

• I - interest: identical interest in property - type of proprietary right they have in property

• T - title: acquire title by same doc

• T - time: interest in property vests at same time

TiC: only need P - possession

must be unity of possession - undivided in possession of physical property

working out if beneficiaries are JT or TiC

co-ownership + severance

the conversion of JT into a TiC

• legal JT - no - s.36(2) LPA 25 - no severance of JT of legal estate so as to create a tenancy in common in land shall be permissible - cannot sever legal estate

• beneficial JT - yes - beneficiaries become entitled to equal portions of property value - Goodman c Gallant (1986) - other T can remain in joint tenancy at the same time + T w severance gets only their share

methods of severance

1. statutory severance - notice in writing under s.36(2) LPA 1925

2. common law severance - 3 methods in Williams v Hensman (1861)

3. severance by operation of law - forfeiture - one Jt murders another JT causing a severance

1. statutory severance

s.36(2) LPA 1925: where any T desires to sever the JT in equity, shall give to other JTs a notice in writing of such desire

1. its form - unilateral act, one JT can serve notice to others w/out consulting them - no specified form just in writing - Quigley v Masterson (2011)

2. its content - Harris v Goddard (1983)

• evidence of intention to sever - wording

• need for immediacy - not in future

3. its service

• the addressee - all the JTs

• method of service - s.196 LPA 25

method of service

s.196(4) LPA 25: notice can be sent by registered or recorded delivery to last known place of abode or business of person to be served

s.196(3) LPA 25: notice can be left at, or affixed to, last known place of abode or business of person to be served

first class post - Kinch v Bullard (1999) - valid service + comes under ss.3 - postman acts as agent + leaves notice at property

lack of receipt/change of mind

lack of receipt by addressee:

Kinch v Bullard: beneficial JT, wife wants to serve notice + become TiC, Fri solicitor sends notice by post, Sat husband has heart attack, wife doesn’t want severance anymore, court ruled severance took place as soon as notice arrived at property

• don’t need to see it

change of mind by sender: K v B

obiter dicta - can change mind if you tell person of this before notice arrives

2. common law severance

William v Hensman (1861):

1. an act operating on one’s own share - unilateral conduct

2. mutual agreement - Burgess v Rawnsley (1975)

3. mutual conduct - Greenfield v Greenfield (1979) + B v R

unilateral conduct

an act of one JT operating upon his own beneficial share by a legally enforceable act - sale, mortgage, bankruptcy - in equity - may still own trust in law

mutual agreement

an agreement between all the JT indicating a common intention to sever - not legal but more than inconclusive negotiations

Burgess v Rawnsley: 2 friends buy a house - JT in equity, only orally agreed he would buy out share in house + price, dies + daughter claimed severance

court held that severance took place upon when they reached a oral agreement - daughter got half share of house

course of dealing

which shows that the interest of all the JT were mutually treated as constituting a TiC - course of dealing which shows they wanted severance

can get inconclusive negotations

Greenfield v Greenfield: 2 brother buy house, turned into 2 flats when both married, 1 brother dies + wife entitled to property under will - wife argued making it into 2 flats = course of dealing to sever

court held physically dividing house was for convenience, no intention to sever

trusts of land

trusts of land and appointment of trustees act 1996 (TOLATA)

power of trustees

s.6: for the purpose of exercising their functions as trustees, the trustee of land have all powers of absolute owner

• power of sale, leasing, mortgaging

s.6(5): the trustees must have regard to the rights of beneficiaries and

s.6(6): must not act contrary to any rule of law or equity

restrictions on powers of trustees

s.10: consent - an expressly created trust can impose a requirement for consent from named parties to dealings w land

• cant sell w/out consent from X

s.11: consultation - duty on trustee to consult w adult beneficiaries entitles to interest in possession

• so far as practicable

• giving effect to wishes of majority by value - so far as those wishes are consistent w the general interest of trust - beneficiary who has majority by value (share)

beneficiary’s right to occupy (s.12)

a beneficiary w an interest in possession has right to occupy the trust property

s.12: the right arises if -

• the purposes of trust include making trust land available for occupation

OR

• the T’s hold land so as to be available, and

• land is suitable for occupation

beneficiary’s right to occupy (s.13)

s.13(1): where +1 beneficiary’s entitled to occupy, Ts can exclude 1 or more but not all of the beneficiaries

they:

• must act reasonably 13(2)

• and take into account the matters set out in 13(4)

• and can exclude a beneficiary already in occupation 13(1)

s.13(3): T can impose reasonable conditions on occupying beneficiaries

s.13(6): occupying beneficiary may be required to pay compensation to excluded beneficiary

application to court to resolve disputes

s.14(1) who can apply:

• any trustee of land

• any beneficiary under a trust of land

s.14(2) orders the court can make:

any order it thinks fit in relation to -

• the exercise by the trustees of any of their functions

• for the purpose of declaring nature or extent of any persons interest

matters court must consider in determining an application for disputes

Fred Perry v Ivan Genis (2014):

husband selling counterfeits, FP charged order over house to sell in order to be paid, 2 children living in property

court gave priority to creditors over family but delayed sale of house so family can find place to live

application for sale by trustee in bankruptcy

bankruptcy automatically severs any beneficial JT

the trustee in bankruptcy must

• apply to court order under s.14 TOLATA

• then court will apply criteria in s.335A Insolvency Act 1986