Co Ownership Notes

Land Law: Co-Ownership

• LPA 1925: statutory imposition of a ‘trust for sale’ in co-ownership. Focused on exchange value of land, land as an investment, impetus to sell.

• Replaced by TLATA 1996:

  • Co-owned property held on trust

  • Trust of land (cf ‘trust for sale’ under LPA 1925). Now the impetus is not to sell; reflecting land as use value, impetus of retention of land)

  • S1(1)(a), ‘trust of land’ = any trust property including land.

  • S1(2)(a): applies to all types of trust of land, whenever created .

  • S2(1)(b): all trusts for sale existing as at 1/1/97 converted into trusts of land.

  • S4, trustees power to postpone sale.

  • S3, abolition of doctrine of conversion (i.e. abolishes rule that beneficiary interests under a trust for sale were regarded as interests in the proceeds of sale of land; rather than interests in the land itself.

  • S6(1): trustees have same power of disposition as an absolute owner.

• Distinction between legal & equitable title:

  • Legal title: the ‘public face’.

  • Equitable title: where value lies; internal disputes between co-owners resolved here, behind curtain of legal ownership, away from purchaser.

NATURE of co-ownership (JT vs TIC)

• All co-owned property (JT and TIC) requires ‘unity of possession’—i.e. each co-owner is simultaneously entitled to possession of the whole land.

• JT,

  • requires 4 unities (AG Securities v Vaughan), PITT

  • (1) Possession: each co-owner entitled to possess any part of the land; no co-owner can be excluded from any part.

  • (2) Interests: interest of each JT must be the same in nature (eg freehold or leasehold); and same duration (eg fee simple or life interest).

  • (3) Title: all must acquire title under the same document or act.

    • Satisfied if: all take rights by same conveyance; or simultaneously take possession together.

  • (4) Time: interest of each JT vests at same time. [[not about signing the agreement at same time; but with interest taking effect from same start date, even if contracts signed at different times]].

  • Right of survivorship applies (Re Caines Deceased): when one JT dies, his interest dies with him; does not pass under will or intestacy; survivorship takes effect on death. His interest simply dissipates. Until the ultimate survivor, that JT becomes sole owner.

• TIC

  • Needs unity of possession (but not the other 3).

  • Each individual has a distinct, but ‘undivided’ share (not physically divided, have unity of possession; but has an intangible % share).

  • No right of survivorship.

LEGAL TITLE (only as JTs)

• LPA 1925 abolished legal TIC; legal title only as JTs [[rationale: right of survivorship applies re death of a co-owner; by limiting legal title to JT, a buyer does not have to trace devolution of title of a deceased’s trustee’s ownership of his/her share of legal estate]].

• LPA 1925, s1(6): legal title always held as JTs.

• S36(2): no severance of a legal JT.

• S6(1) LPA: cannot be held as infants.

• Max 4 legal owners, s34(2) LPA 1925; s34(2) Trustee Act 1925

  • If more than 4 purport to buy legal title; legal title goes to the first 4 adults named in the conveyance.

• Survivorship applies: when a legal JT dies, his interest dies with him, does not pass under will or intestacy.

EQUITABLE TITLE

• Express declaration = conclusive (Pink v Lawrence; Goodman v Gallant): regardless of contributions; even if 4 unities are present, if expressly says TIC, then TIC.

  • But still need 4 unities for a JT

• If no express declaration:

• For JT, need 4 unities (PITT, AG Securities v Vaughan)

• TIC if:

  • Lack of 4 unities (exception unity of possession is also needed for TIC).

  • Words of severance (i.e. doesn’t expressly say TIC, but words to that effect in the grant):

  • Egs:

  • ‘in equal shares’ (Payne v Webb)

  • ‘Share and share alike’ (Heathe v Heathe)

  • ‘To be divided between’ (Fisher v Wigg)

  • ‘Equally’ (Re Kilvert)

  • These words indicate parties’ intention to have ‘shares’, albeit undivided, in the property, and thus hold equitable title as TICs.

• Presumptions (against JT):

  • Purchase money provided in unequal shares (commercial context??) presumed TIC in proportion to contributions (Bull v Bull).

  • CF, for domestic/marriage context, JT presumed if joint legal names, even if unequal contributions [presumption only displaced if can show evidence of contrary common intention] Stack v Dowden; Jones v Kernott.

  • Commercial partnership assets (purchase by commercial partnership) presumed TIC, not JT (right of survivorship has no place in business, Lake v Craddock).

• SO, to have JT, need:

  • No express declaration of TIC

  • No words of severance

  • 4 unities

  • no presumption against JT applies (commercial context unequal purchase money, Bull v Bull; partnership assets, Lake v Craddock

Co-ownership provisions of TLATA

• s6: general powers of trustees

• s7: power to partition

• s11: duty to consult beneficiaries & give effect to their interests as far as poss

• s12: beneficiary’s right to occupy

• s13: exclusion or restriction of right to occupy

  • occupation rent: if, as a beneficiary, you’ve been ousted (under s13, excluded from occupying) (eg for domestic violence of other party; or dispute with other party), you can claim occupation rent from the other party (Re Pavlou; Murphy v Gooch; Re Barcham; Rodway v Landy) [[though mortgage interest payments might cancel out occupation rent]]

SEVERANCE of a beneficial JT

• Severance = converting JT into TIC.

  • Harris v Goddard, Dillon LJ: =’severance’ = ‘the process of separating off the share of a JT, so that the concurrent ownership will continue but the right of survivorship will no longer apply’.

• NB: cannot sever legal JT, only equitable—s36(2) LPA 1925.

• Effect of severance, EQUAL SHARE: results in an equal share for the TIC, NOT in proportion to contributions made to purchase price (Goodman v Gallant).

• Severance must be inter vivos, cannot sever by will (Re Caines)

Methods of severance s36(2) LPA

• (1) notice in writing; or (2) ‘other acts or things’

Method 1, notice in writing

• s36(2) LPA

• Must be given to all the other JTs,...

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