Co Ownership Part I - GDL Land Law

• Co-ownership arises where two or more persons together own the same estate in the same piece of land

• Successive co-ownership: Different parties entitled to ownership of a freehold in chronological succession

• Concurrent co-ownership: Two or more persons own the same estate in a piece of land at the same time

Structure of co-ownership

Imposition of a trust

• “Trust for sale”: vehicle for investment where land was conveyed to trustees who were placed under a duty to sell and reinvest the proceeds (although had power to postpone)

• Separation of legal and equitable title, imposing duties and powers on the trustees

• LPA 1925: trust for sale in all cases of co-ownership

  • S34(2) and s36 LPA 1925 – whenever land was expressly conveyed to more than one person

  • Ss 34(3) and 36 LPA 1925 - trust imposed whenever land was left in a will to more than one person

Abolition of Trusts for Sale: replaced with new concept of ‘trust of land’

• Reform in The Trusts of Land and Appointment of Trustees Act 1996 (TLATA)

  • All trusts for sale existing as 1 January 1997 converted into trusts of land (s1(2)(b) TLATA 1996)

• S4 TLATA: express trusts existing before 1 Jan 1997- trustees will have power to postpose the sale despite any provisions to the contrary

  • Trusts of land created after 1 January 1997 – any provisions which restrict the trustees’ power to postpone are invalidated

• S34 and s36 LPA 1925 have now been amended by para 3 and 4 of Schedule 2 of TLATA 1996 – since 1 January 1997 – in all instances caught by ss34 and 36 – there is now a trust of land

• Section 5 and Schedule 2 TLATA 1996 : circumstances where there would be a statutory trust for sale, there is now instead a trust of land without a duty to sell

Abolition of doctrine of conversion

• S3 TLATA 1996 abolished doctrine of conversion as it applied to trusts for sale – (the rule that interests under a trust for sale were in the proceeds of the sale of land and not in the land itself) – but doctrine continues to apply to trusts of sale created by will where the testator died before 1 Jan 1997 (s3(2) TLATA 1996)

• (note that the doctrine still applies where a vendor contracts to sell land – so that he is deemed to hold it on trust for the purchaser)

Trusts of land

• Trust of land is governed by TLATA 1997 – effective on 1 January 1997

• S1(1)(a) – ‘Any trust of property which consists of or includes land’

• S1(2)(a) – it will apply to all types of trust of land whenever created (with the exception of strict settlements already existing on 1 Jan 1997)

• S1 - bare trusts are included as ‘trusts of land’

• Relationship btw T and B highly regulated under TLATA

Nature of co-ownership

• Two types:

1. Joint tenancy

2. Tenancy in common

• Common feature – each co-owner simultaneously entitled to exclusive possession of the whole land – not specific part

• “Unity of possession” distinguishes co-ownership from sole ownership

Joint Tenancy

The four unities

• All the co-owners deemed to constitute one single owner – unitary body vs. the rest of the world

• Viewed as a single entity – so there must be ‘four unities’ – AG Securities v Vaughan & others

1. Unity of possession

   • Each co-owner as much entitled to possession of any part of the land as the other

   • No joint tenants can be excluded from any part of land

2. Unity of interest

   • Interest must be the same in nature (freehold/leasehold for example) and duration (e.g. fee simple/life interest)

3. Unity of title

   • Must all acquire title under the same document or act – if all take rights by the same conveyance/transfer deed or simultaneously take possession and acquire title by adverse possession

4. Unity of time

   • Interest of each tenant must vest at the same time

Right of survivorship (jus accrescendi)

• Means that when one JT dies – his/her interest in the land passes to the surviving JTs – does not pass under his/her will or intestacy

• Right of survivorship acts immediately on death – whereas a will is operative on death – so survivorship takes effect first (Re Caines deceased)

• Ultimate survivor of all the joint tenants will eventually be the sole owner of the land

Tenancy in common

The unities

• Only unity of possession is essential for a tenancy in common (although others may be present)

• Each co-owner has a distinct ‘undivided share in the land’

• Tenants have quite separate interests, although while the tenancy lasts no-one can say which of them owns any particular part of the land – hence shares being ‘undivided’

• Can be unequal – ‘to A as to one tenth and to B as to nine tenths’

No right of survivorship

• Right of survivorship does not apply to a tenancy in common – deceased’s share will pass under his/her will or by the rules of intestacy

Co-ownership at Law: The Legal Title (Trustees)

Pre 1925

• Joint tenancy caused few problems – number of legal owners would just decrease as owners died

• But tenancy in common at law may have required a purchaser to investigate numerous titles causing conveyancing difficulties

Post-1925 position

• LPA 1925 abolished legal tenancy in common – legal title must now always be held by way of a joint tenancy: s1(6) LPA 1925

• There can be no severance of a legal joint tenancy so as to create a tenancy in common: s36(2) LPA 1925

• Limiting legal title to a joint tenancy ensures that the right of survivorship operates: must only show that the trustee has died (production of death certificate)

• S34(2) Trustee Act 1924 – maximum of legal owners is four

Co-ownership in Equity: The Equitable Interest (Beneficiaries)

• Deals with the actual ownership of the land - the trustees (legal owners) have the role of managing the property

The four unities

• For a joint tenancy to exist – four unities must be present

• If one or more of the unities are missing, the equitable interest cannot be held as a joint tenancy - but provided the unity of possession is present – it could be held as a tenancy in common

Express declaration

• Event where all 4 unities are present – it is still possible for the equitable...