Co-ownership
1. What is co-ownership?
Whenever land is co-owned, a trust is imposed by statute – s.34(2) LPA 1925 –
separating the legal and equitable title between the trustees and the beneficiaries.
Such trust is known as trust of land – s.1(1)(a) Trusts of Land and
Appointment of Trustees Act 1996
Difference between a joint tenancy and a tenancy in common:
Joint Tenancy – the tenants/co-owners collectively constitute one legal
owner.
On the death of a joint tenant, their ownership immediately passes to
the other joint tenants by right of survivorship.
Do not obtain – as only one interest!
Other co-owner will want it to be a joint tenancy.
Tenancy-in-Common – each co-owner has a distinct but undivided share in
the land, and shares can be unequal.
No right of survivorship applies.
Instead, the tenant’s share passes in accordance with their will or
with the intestacy rules.
People named in the will, will want it to be a tenancy in
common in equity.
2. How is the property held at common law?
Legal title can only be held by way of joint tenancy – s.1(6) LPA 1925
Even if the parties wanted to create a tenancy in common, they cannot –
s.34(2) LPA 1925
Maximum number of legal owners = four – s.34(2) Trustee Act 1925
If more than four names are mentioned on the conveyance, the first four
named (of age and sound mind) will hold the legal title as trustees – s.34(2)
LPA 1925.
Why? The money is in the beneficial interest not the legal estate –
therefore, 5th and 6th person etc, do not lose out financially.
The trustees must be of:
Full age – ss.1(6) and 20 LPA 1925
s.1 Family Law Reform Act 1969 defines this as 18.
Sound mind – s.22 LPA 1925
3. How is the property held in equity?
Equitable title can either be held by way of joint tenancy or tenancy in common.
a. Express Declaration:
e.g., “the freehold title is in their joint names and held on trust for themselves
as joint tenants”.
This is usually decisive, providing that Parliament allows it – Goodman v
Gallant.
Express words prevail over any assumptions of joint tenancy or tenancy in
common.
b. Four Unities:
In order for the co-owners to be joint tenants in equity, the four unities must
be present – AG Securities v Vaughan.
A joint tenancy can only exist if there is:
(a) Unity of Possession – no tenant can be excluded from any part of the
land,
(b) Unity of Interest – each tenant has the same estate,
(c) Unity of Time – each tenant’s interest vests at the same time, and
(d) Unity of Title – all tenants acquire title under the same document.
, If unity of possession is present, but any of the other three unities are absent,
will instead be tenancy in common.
Antoniades v Villiers –
No unity of interest?
e.g., two “individual licence fee[s]”
One payment obligation which has been artificially divided
in 2.
No unity of title?
e.g., two documents, one title
Interdependent – one wouldn’t have been signed without the
other.
c. Words of Severance:
Where there is no express declaration, consider words of severance in the
grant.
e.g., “in equal shares” and “to be divided between” indicate a tenancy
in common.
Because – JT = one legal owner.
d. Equitable Presumption:
Lady Hale in Stack v Dowden –
There is a presumption of equal shares, and that equity follows the
law.
States that there are other ways of contributing than money – if find
it, then have joint tenancy.
This judgement is problematic – a presumption to sever into equal
shares suggests a tenancy in common, following the judgement in
Goodman v Gallant.
It is therefore now the case that a court would be slow to
come to the same judgement as Lady Hale.
Instead, a court would look chronologically at the events and
establish whether the parties intended survivorship at each
stage.
Look at the arrangement, most likely not, and
therefore most likely to be tenancy in common.
4. Severance:
If found to be a joint tenancy in equity, may argue that this has been severed to form
a tenancy in common.
Under s.36(2) LPA 1925, a joint tenancy can never be severed at law, only a
beneficial joint tenancy can.
Severance works by separating off the equitable interest of the joint tenancy.
Modes of Severance:
a. Written Notice:
s.36(2) LPA 1925 – written notice is sufficient where it is given to all tenants stating
an irrevocable intention to sever immediately.
Harris v Goddard – a notice in writing of a desire to sever served pursuant to
s.36(2) must evince an intention to bring about the wanted result
immediately to be effective.
A desire to bring about the result sometime in the future is not a
notice in writing with s.36(2).
b. Williams v Hensman:
“An act operating on own share”:
Difficulty = joint tenants do not have ‘shares’, so on what basis can a joint
tenant ‘act’ upon a share that they don’t have?
This can be sidestepped by treating the act itself as causing severance
and so freeing up the share as the subject matter of the act in
question.
1. What is co-ownership?
Whenever land is co-owned, a trust is imposed by statute – s.34(2) LPA 1925 –
separating the legal and equitable title between the trustees and the beneficiaries.
Such trust is known as trust of land – s.1(1)(a) Trusts of Land and
Appointment of Trustees Act 1996
Difference between a joint tenancy and a tenancy in common:
Joint Tenancy – the tenants/co-owners collectively constitute one legal
owner.
On the death of a joint tenant, their ownership immediately passes to
the other joint tenants by right of survivorship.
Do not obtain – as only one interest!
Other co-owner will want it to be a joint tenancy.
Tenancy-in-Common – each co-owner has a distinct but undivided share in
the land, and shares can be unequal.
No right of survivorship applies.
Instead, the tenant’s share passes in accordance with their will or
with the intestacy rules.
People named in the will, will want it to be a tenancy in
common in equity.
2. How is the property held at common law?
Legal title can only be held by way of joint tenancy – s.1(6) LPA 1925
Even if the parties wanted to create a tenancy in common, they cannot –
s.34(2) LPA 1925
Maximum number of legal owners = four – s.34(2) Trustee Act 1925
If more than four names are mentioned on the conveyance, the first four
named (of age and sound mind) will hold the legal title as trustees – s.34(2)
LPA 1925.
Why? The money is in the beneficial interest not the legal estate –
therefore, 5th and 6th person etc, do not lose out financially.
The trustees must be of:
Full age – ss.1(6) and 20 LPA 1925
s.1 Family Law Reform Act 1969 defines this as 18.
Sound mind – s.22 LPA 1925
3. How is the property held in equity?
Equitable title can either be held by way of joint tenancy or tenancy in common.
a. Express Declaration:
e.g., “the freehold title is in their joint names and held on trust for themselves
as joint tenants”.
This is usually decisive, providing that Parliament allows it – Goodman v
Gallant.
Express words prevail over any assumptions of joint tenancy or tenancy in
common.
b. Four Unities:
In order for the co-owners to be joint tenants in equity, the four unities must
be present – AG Securities v Vaughan.
A joint tenancy can only exist if there is:
(a) Unity of Possession – no tenant can be excluded from any part of the
land,
(b) Unity of Interest – each tenant has the same estate,
(c) Unity of Time – each tenant’s interest vests at the same time, and
(d) Unity of Title – all tenants acquire title under the same document.
, If unity of possession is present, but any of the other three unities are absent,
will instead be tenancy in common.
Antoniades v Villiers –
No unity of interest?
e.g., two “individual licence fee[s]”
One payment obligation which has been artificially divided
in 2.
No unity of title?
e.g., two documents, one title
Interdependent – one wouldn’t have been signed without the
other.
c. Words of Severance:
Where there is no express declaration, consider words of severance in the
grant.
e.g., “in equal shares” and “to be divided between” indicate a tenancy
in common.
Because – JT = one legal owner.
d. Equitable Presumption:
Lady Hale in Stack v Dowden –
There is a presumption of equal shares, and that equity follows the
law.
States that there are other ways of contributing than money – if find
it, then have joint tenancy.
This judgement is problematic – a presumption to sever into equal
shares suggests a tenancy in common, following the judgement in
Goodman v Gallant.
It is therefore now the case that a court would be slow to
come to the same judgement as Lady Hale.
Instead, a court would look chronologically at the events and
establish whether the parties intended survivorship at each
stage.
Look at the arrangement, most likely not, and
therefore most likely to be tenancy in common.
4. Severance:
If found to be a joint tenancy in equity, may argue that this has been severed to form
a tenancy in common.
Under s.36(2) LPA 1925, a joint tenancy can never be severed at law, only a
beneficial joint tenancy can.
Severance works by separating off the equitable interest of the joint tenancy.
Modes of Severance:
a. Written Notice:
s.36(2) LPA 1925 – written notice is sufficient where it is given to all tenants stating
an irrevocable intention to sever immediately.
Harris v Goddard – a notice in writing of a desire to sever served pursuant to
s.36(2) must evince an intention to bring about the wanted result
immediately to be effective.
A desire to bring about the result sometime in the future is not a
notice in writing with s.36(2).
b. Williams v Hensman:
“An act operating on own share”:
Difficulty = joint tenants do not have ‘shares’, so on what basis can a joint
tenant ‘act’ upon a share that they don’t have?
This can be sidestepped by treating the act itself as causing severance
and so freeing up the share as the subject matter of the act in
question.
