Property Law Lecture 7 Flashcards

Institute of Law Jersey

Property Law Lecture 7

Learning Outcomes

By the end of this topic and the relevant readings, students should be able to:

• Explain the distinction between a joint tenancy and a tenancy in common, identifying key features and legal implications of each.

• Describe the various modes of severance applicable to joint tenancies, including both common law and statutory methods.

• Recognise situations in which a resulting trust or constructive trust may arise, with reference to appropriate case law.

• Explain the significance of the LPA 1925 and TLATA 1996 reforms relating to co-ownership and trusts of land, emphasizing their impact on property law.

• Apply the above rules and principles to hypothetical scenarios involving property ownership disputes or co-ownership arrangements.

Co-ownership

Co-ownership arises when two or more people are simultaneously entitled in possession to an interest in the same land. This can occur in both freehold and leasehold arrangements and gives rise to complex legal relationships that must be navigated carefully.

Forms of Co-ownership

1. Joint Tenancy:

• Co-owners collectively own the entire property with no individual shares. Each co-owner has equal rights to the whole property.

• Features the right of survivorship, whereby the interest of a deceased joint tenant automatically passes to the surviving joint tenants, meaning that upon death, there is no need for probate.

• Joint tenants are treated as a single entity in terms of ownership, making wills ineffective for property disposition.

• Joint tenancies can be severed, either voluntarily or involuntarily, which changes the ownership structure to a tenancy in common.

2. Tenancy in Common:

• Each co-owner possesses a separate, defined share of the property, though the physical property remains undivided.

• Co-owners retain the right to their respective shares upon the death of a co-owner; shares can be inherited according to a will or the rules of intestate succession.

• Tenants in common may freely transfer their shares without requiring consent from other owners, leading to different ownership dynamics compared to joint tenancies.

Both forms possess unity of possession, meaning all co-owners have equal rights to occupy and use the entire property, though there may be exceptions based on agreement.

The Four Unities of Joint Tenancy

1. Unity of Possession:

   • Each co-owner must have equal access to possess the entirety of the co-owned land; no one may exclude others from use of the property.

2. Unity of Interest:

   • All co-owners hold identical interests; for example, each must hold freehold interests. Different interests disrupt this unity, causing a conversion to a tenancy in common.

3. Unity of Title:

   • Co-owners must acquire their interests from the same act, document, or transaction, emphasizing the need for a unified title.

4. Unity of Time:

   • Co-owners must acquire their interests simultaneously; if one co-owner acquires their interest later, this disrupts unity of time.

Severance of Joint Tenancy

Common Severance Queries:

• Are the four unities present?

  • Yes: Joint tenancy is possible.

  • No: No joint tenancy exists.

• Is there any wording that indicates severance (e.g., 'X and Y in equal shares')?

  • Yes: Indicates tenancy in common.

  • No: Joint tenancy presumed.

• Is the situation where equity presumes tenancy in common?

  • Yes: Presumption of tenancy in common can be rebutted.

  • No: Joint tenancy is maintained.

Acquisition of Equitable Interests

• When property is registered under one person’s name, that individual is presumed the sole equitable owner, granting rights and responsibilities that may be contested.

• When registered under multiple names, all are presumed equitable co-owners, but these presumptions can be rebutted by demonstrating common intention, which requires careful documentation and proof of agreement.

Common Intention in Family Homes

Contribution Considerations:

• The contribution to the family home need not be financial; non-monetary contributions—such as childcare and homemaking—are valid considerations in evaluating interests among co-owners.

• Case outcomes often reflect a division of shares according to financial contributions, highlighting the need for clear records of both financial and non-financial inputs.

• Relevant cases: Stack v Dowden, Jones v Kernott illustrate the evolving understanding of contributions in family and partnership contexts.

Answering Problem Questions: The Five Tests

1. Presumptions:

   • Legal ownership presumes equitable interest.

2. Rebutting Presumptions:

   • Five approaches to assess common intention include examining conversations, financial inputs, and actions demonstrating intent.

3. The Rosset Approach:

   • Focuses on public discussions leading to agreements or contributions towards purchase; non-financial contributions may not be considered valid.

4. The Balance Sheet Approach:

   • Recognizes contributions proportionate to financial stakes; it critiques past trust approaches, emphasizing equitable rights over formal ownership considerations.

5. The Family Assets Approach:

   • Considers all interactions and contributions (both financial and non-financial) from the course of dealings when determining interests.

• Relevant Case: Midland Bank v Cooke [1995] exemplifies this approach.

Unconscionability Approach

• Courts examine situations where denying a claimant rights would be unconscionable, a concept rooted in equity. Although it hasn't been extensively cited in recent UK cases, it retains relevance in jurisdictions such as Australia.

Proprietary Estoppel

• This legal concept addresses scenarios of detrimental reliance on promises regarding property rights and can yield various awards based on contributions or assurances made. Key cases exemplifying its significance include Re Basham [1986], Jennings v Rice [2002], and Gillett v Holt [2001], illustrating the evolving nature of property rights beyond formal agreements.

Jurisprudential Approaches to Trusts

Types of Trusts:

• The ruling in Jones v Kernott highlights common intention constructive trusts, where past intentions supersede property formalities, presenting a nuanced understanding of ownership rights.

Exercises and Hypotheticals

• Students are encouraged to analyze hypothetical situations involving individuals Betty and Dan in the context of property ownership, inviting examination of presumptions and the application of legal principles discussed in this lecture.

Severance of Joint Tenancies

Applicability and Law:

• It is important to note that only equitable joint tenancies are subject to severance; legal joint tenancies remain intact notwithstanding any severance actions. Relevant statutes include s. 36(1) LPA 1925, which features severance processes that must be adhered to.

Severance Methods

• Notice in Writing: Must be sufficiently clear and indicate intention; relevant case law includes Harris v Goddard, Quigley v Masterson, demonstrating varying judicial interpretations of severance.

• Common Law Methods:

  • Involve acting upon a share, mutual agreements, or a course of dealing without formal evidence of intent.

Other Considerations

• A joint tenant who unlawfully kills another joint tenant cannot benefit from survivorship (Re K [1985]), reflecting the legal perspective that individuals involved in wrongful deaths should not inherit from their victims.

• Severance cannot be executed via a will (Re Caines law), reaffirming the requirement for clear action to sever joint tenancies distinct from testamentary intentions.