Co Ownership I - GDL Land Law

What is Co-ownership?

- Definition: 2 or more persons together own same estate in same piece of land.

• successive co-ownership (settlements): different parties entitled in chronological succession.

  • e.g. A: life interest; B: life interest after A; C: fee simple in remainder.

  • rationale: traditionally, ensured land stayed in family.

  • types of settlements: strict settlement; trust for sale; trust of land – dep. on when created.

• concurrent co-ownership: 2 or more persons own same estate in piece of land at the same time.

  • e.g. husband + wife buy house together + share ownership of freehold.

  • (N.B. this chapter: only concerned with concurrent co-ownership of freehold).

- Unity of possession essential: each co-owner simultaneously entitled to possession of whole of land.

• if not: just separate owners of different plots of land.

- How does co-ownership arise?

• expressly: all parties named on deeds / proprietorship register / lease.

• impliedly:

  • resulting trust: through contribution to purchase price.

  • constructive trust: Lloyd’s Bank v Rossett [1991].

- Practical issues with co-ownership.

• structure as between co-owners:

  • reflecting different contributions.

  • when 1 co-owner dies ensuring right person acquires interest.

  • what do beneficiaries inherit?

  • if 1 co-owner wants to sell / goes bankrupt what is position?

• purchaser’s position:

  • not be bound by a co-owner’s interests.

  • keeping sale process simple.

Historical Background

- Imposition of trust: needed to address issues with co-ownership.

• pre-1925 problem (joint ownership uncommon): any number of co-owners; purchaser had to negotiate with all individually land became unsaleable.

Historical Solution

- Trust for sale: s34(2) + s36(2) LPA 1925: statutory trust for sale imposed in all cases of co-ownership.

• definition: immediate binding trust for sale whether or not exercised at the request or with the consent of any person, and with or without a power of discretion to postpone sale – s205(1)(xxix) LPA 1925.

  • land conveyed to trustees duty to sell + re-invest proceeds + poss. power to postpone sale.

  • either express or statutory (e.g. under LPA 1925 for co-ownership).

• purpose: investment vehicle (trader’s settlement) investment sold if better investments available.

  • historical context: land ownership rare; most co-owned land bought as investment.

• BUT problematic: duty to sell not suitable for land bought for occupation.

  • dispute over whether to sell land: law favoured sale.

  • doctrine of conversion: bs’ interests in purchase money, not land for most purposes no right to occupy property.

    • rationale: equity views as done what ought to be done – i.e. land sold.

  • out of step with society’s attitudes: land increasingly bought as home not investment (contrary to original purpose – trust for SALE) many ts. indefinitely postponed sale.

- Abolition of trusts of sale.

• b’s right to occupy: gradually cemented.

  • Bull v Bull [1955; CoA]: [Ld Denning]: if land bought to occupy, t. duty to sell subject to b’s right to occupy.

  • Williams & Glyn’s Bank v Boland [1981; HoL]: confirmed.

• replacement of trusts for sale: Trusts of Land and Appointment of Trustees Act 1996 – into force 1 Jan 1997.

  • s1(2)(b): existing trusts for sale trusts of land.

  • s4: ts. have...