Co Ownership I Notes

• 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...

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