Express Co-Ownership

Week 8 Reading – Core textbook, Chapters 8 and 10

EXPRESS CO-OWNERSHIP

CO-OWNERSHIP

Concurrent rather than successive

Property may be conveyed to multiple owners – express

Trust will be imposed to simplify conveyance

Property may have one (or more) person(s) holding legal title but other people with equitable interest – implied

Trust arises for their protection

EXPRESS OR IMPLIED?

Express – stated clearly from outset, i.e….

Implied – arises from actions, implied by the court i.e….

TWO KEY TYPES OF EXPRESS CO-OWNERSHIP:

Joint Tenancy (JT)

Tenancy In Common (TIC)

DEFINING EACH:

SURVIVORSHIP

LEGAL OR EQUITABLE TITLE?

Legal title always held either by sole trustee or joint tenants

Can only be a maximum of 4 (JT) (of age) on legal title

Equitable title can be held as (JT) or TIC

Can be more than 4 and can be any age

S.34(2) – 4 (JT) of full age

S.36(2) – Cannot sever legal title

FOUR UNITIES

Possession (all must be entitled)

Bull v Bull [1955] 1 QB 234

Note – Unity of possession required for (JT) and TIC

Interest (must be identical)

Time (must arise at same time)

Title (must have same origin)

If all four unities are present, (JT) exists UNLESS…

Words of severance appear in the transfer deed

Payne v Webb (1874) LR 19 Eq 26

Lewen v Dodd (1595) Cro Eliz 443

Peat v Chapman (1750) 1 Ves Sen 542

TENANTS IN COMMON (TIC)

Still must show unity of possession

Common law favour towards (JT) but equity favours T.I.C.

Represents fairness & certainty (Kinch v Bullard [1998] 4 All ER 650)

Legal estate vests in (JT) – T.I.C. on equitable

Not subject to doctrine of survivorship

PRESUMPTIONS IN EQUITY FOR TIC

Unequal contributions to the purchase price

Ownership for investment or speculation

Money advanced on mortgage by joint mortgagees

Premises held for multiple business purposes

Malayan Credit Ltd v Jack Chia – Mph Ltd [1986] AC 549

EXERCISE

Determine whether J.T. or T.I.C. –

A and B buy a house. Each contributes ½ of the purchase price. There is no express declaration of trust in the transfer.

A, B and C buy a house. A pays ½, B & C each pay ¼. There is no express declaration of trust in the transfer.

A and B buy a property for use as an office for their computer repair business. They each contribute ½ of the purchase price. There is no express declaration of trust in the transfer.

SEVERANCE

SEVERANCE OF THE (JT) IN EQUITY

Converts J.T. into T.I.C. – in equity only!

Reasons for severing Joint Tenancy:

Allows freedom for B

Avoids survivorship

Equal shares on severance

Goodman V Gallant [1986] Fam 106

S.36(2) LPA 1925:

Cannot sever legal title

Can sever equitable interest by notice in writing.

How to serve notice in writing?

S.196(4) LPA:

Registered/recorded delivery letter

Re 88 Berkeley Road NW9 [1971] Ch 648

S.196(3) LPA:

Leave at last known place of abode

Kinch v Bullard [1998] 4 All ER 650

Statutory requirements prevail:

Grindal v Hooper [1999] EGCS 150

Williams v Hensman (1861) 1 John & H 546

 “A joint tenancy may be severed in three ways, in the first place, an act of any one of the persons interested operating upon his own share…secondly a joint tenancy may be severed by mutual agreement. And in the third place, there may be a severance by any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common.”

REQUIREMENTS

‘An act operating upon his own share’

Sale

Bankruptcy

Mortgage

Mutual agreement

Express

Implied – Burgess v Rawnsley  [1975] 3 All ER 142

Mutual course of dealing

Party makes clear to other  – Burgess v Rawnsley [1975] 3 All ER 142

EXERCISE

Consider the following events.

Explain how legal and equitable title will devolve on the happening of each event.

What share will the bank be able to claim in the property?

In 2009 Whiteacre was conveyed to A,B,C & D as joint tenants of the legal title. Each contributed equally to the purchase price.

The following year A, having finished university, decided to live abroad and left a letter at Whiteacre addressed to B,C & D that he would like to hold his share independently of their interest.

In 2012 B & C went to the pub and discussed the idea that the co-ownership situation was not ideal, as D was a bit of a loose cannon, and agreed between them to separate their interests.

Last year D went bankrupt and the bank, E, are now seeking an interest in Whiteacre.

Trusts of Land and Appointment of Trustees Act 1996 (TOLATA)

USE OF TRUSTS

Any interest in land that involves co-ownership takes effect in a trust

Legal title to property is held by trustee(s) on behalf of beneficiaries

Trust for land should be manifested & proved in writing s53 (1)(b) LPA 1925

Only implied/ resulting/ constructive trusts will be exempt s53 (2) LPA 1925

AIMS OF TOLATA 1996

Aimed to simplify dealings with trusts

Clarifies situation when trust arises

Clarifies duties of trustee & beneficiary

Makes all types of interest involving co-ownership in property trusts of land

DEFINITION OF A TRUST UNDER S.1 & 2

(1)In this Act—

(a)“trust of land” means … any trust of property which consists of or includes land, and (b)“trustees of land” means trustees of a trust of land.

(2)The reference in subsection (1)(a) to a trust—

(a)is to any description of trust (whether express, implied, resulting or constructive), including a trust for sale and a bare trust, and

(b)includes a trust created, or arising, before the commencement of this Act.

POWER OF TRUSTEES UNDER S.6 – ABSOLUTE OWNER

Trustee can sell, lease or mortgage land

Trustee can buy land as investment or occupation by any beneficiary or other reasons

Trustee can transfer land to beneficiaries, if of age

Trustee must have regard to rights of beneficiaries

Trustee cannot profit from position

DELEGATION UNDER S.9

B must be of full age

B must be entitled to possession (doesn’t have to wait)

T cannot delegate tasks relating to monies (receipt or investment etc.)

T continues to be under duty of care & should review and intervene if necessary

DUTY 1 – CONSENT UNDER S.10

T must get B’s consent before exercising powers/duties

If 2 give permission transaction valid but T liable for breach if not all Bs

Applies to all transactions, not just purchase

DUTY 2 – CONSULTATION UNDER S.11

B must be of full age & capable of possession

Must be realistic – B must be contactable

T honours wishes of the majority

RIGHT TO OCCUPY UNDER S.12

B must be entitled to possession

Must be in purpose of trust 

Land must be available

CAN TRUSTEE EXCLUDE? – S.13

T ‘reasonably’ looks at intentions of trust, purpose of land & wishes of Bs

T can also impose conditions on B in occupation

APPLICATION TO COURT UNDER S.14

T, B or other parties can make application to court

Refers to duties or benefits, not appointment

Could obviate from duty to consult or obtain consent

Court may also determine nature or extent of ben. interest

WHAT WILL COURT CONSIDER? – S.15

Intention of creator

Purpose for which the property subject to the trust is held

Interests of minor in ‘home’

Interests of any secured creditor of any beneficiary