9 Co-ownership - Lecture notes 9 PDF

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9. CO-OWNERSHIP    There are four kinds of co-ownership, only two of which are of any contemporary significance and are examined on the FE1 examination paper - Joint Tenancy and Tenancy in Common, can be on both freehold and leasehold land.   Joint Tenancy    Must have right to surv...

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9. CO-OWNERSHIP 

There are four kinds of co-ownership, only two of which are of any contemporary significance and are examined on the FE1 examination paper - Joint Tenancy and Tenancy in Common, can be on both freehold and leasehold land.

Joint Tenancy 

Must have right to survivorship and the Four Unities in order for JT to exist.

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Right to Survivorship - each joint tenant holds 100% ownership; when one dies, can't pass on interest - everything goes to other JT. Four Unities - unity of possession, unity of time, unity of title and unity of interest. CL presumes JT every time more than one property owner; can be rebutted leading to TIC; if co-owners want equity in property to be held in JT, should expressly state express trust.

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Tenancy in Common  

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No Right of Survivorship or Four Unities - all co-owners entitled to 'undivided share of ownership' - must have unity of possession (entitlement to possess all of land). TIC usually where intended that presumption of JT will not operate - parties either ensure Four Unities not present or add 'Words of Severance' indicating ownership is to be severed into shares of control e.g. "in equal shares", "amongst", "to be distributed amongst them in joint and equal proportions" etc. ->words can be overridden by clear intention to create JT; or if no WoS TIC can be created due to overriding intention of disposition. TIC may exist in equity where legal rights held in JT - in this case legal owners (JT in law) hold property on trust for the co-owners (TIC in equity).

a. Unequal Contributions to Purchase Price Equity might recognise that JT Right to Survivorship unfair, so will treat as TIC with coowners having proportionate shares to contribution. b. Commercial Arrangements Equity generally considers commercial co-owners as TIC, even without a formal commercial rship (must not really be family r'ship though). Reilly v Walsh - bros purchased commercial property together, one died, other brother took over business. Dead brother purported to leave his share to Reilly (3P) but Reilly had to prove they had TIC to get share; held that dead bro played no material role in business so family relationship, remained a JT, equity need not imply TIC - bro gets 100% (RoS) Reilly gets nothing. c. Co-Mortgagees If for some reason two banks who had separate mortgages over the same property were construed as JTs in law, equity would deem them TICs. d. Rights of Co-Owners Right to possess, right to rent/income and right to alienate. a. Right to Possess and Income 1

No co-owner can exclude another - would be trespass; one co-owner can't exclude another's reasonable invitees/guests. If property leased all co-owners entitled to share in rent. b. Right to Alienate Co-owner can sell, money held in co-ownership - overreaching applies. If JT alienates their share, severance; if TIC alienates share, purchaser steps into their place. Severance of Joint Tenancy Transforms JT into TIC, either in law or in equity. A. Severance in Law i.

Alienation to Third Party JT sells potential share to 3P who becomes a TIC with others, who still hold JTs in relation to each other (they still have 4 unities). Unilateral no longer possible (see below).

ii.

Unilateral Dealing Convey ownership to 3P to use of yourself, use executed so you end up being TIC in relation to the other original JTs. Now S30 2009 - can't do this without prior written consent of other JTs; if unreasonably withheld, can be dispensed with.

iii.

Acquisition of Additional Interest Acquisition by JT of an additional interest in the estate in the land (e.g. acquiring FS where others have LE) destroys Four Unities with other JTs so becomes a TIC in relation to original JTs. S30 consent needed.

iv.

Act of 3P Exercising Statutory Powers e.g. Court severs the JT - involuntary, not done by JT. Before 2009, if a JM obtained on JT's land, affects severance for UL; didn’t appear to be case for RL. Now under S30 2009, JMs do not sever JTs.

B. Severance in Equity i.

Furthering the Mutual Intentions of the Parties Burgess v Rawnsley - Mr H loved Mrs R, asked her to help him purchase FS from landlord, he realised the truth and wouldn't let her in house she now co-owned thru JT - he offered to buy her share for £750, then R changed her mind and wanted £1000. Matter unresolved, H died and R claimed survivorship as JT; held there was severance in equity due to their mutual intention for him to purchase R's share, despite their failure to complete the sale and formalise. Byrne v Byrne - creation of mutual contract for sale of co-owned property not necessarily severance - look to intentions - did they want contract to sever JT or did they want JT to remain over purchase monies? In reality many JTs will convey to 3P to their use, use is executed so they became TIC in law and equity and can do what they like.

ii.

Individual JT Acting Upon his Own Share JT acts on own share but sale not completed, contractual rule in: 2

Tempany v Hynes - where JT enters into enforceable contract with 3P to alienate and 3P pays some of purchase price but contract not completed, 3P will have acquired interest in equity. iii.

Course of Dealing Severance in equity can arise due to a course of dealing - not only negotiations that fall through but also they way in which those concerned dealt with the property.

Alienation Through mutual agreement, overreaching will apply over purchase monies normally. A JT's alienation will sever, TIC purchaser just slips in. Co-owners may rent out property, but with JTs all share rent equally and TICs in proportion to share. Possession Right to use and enjoy land, and to have reasonable number of invitees do the same (Lahiffe v Hecker). Any co-owner attempting to exclude another liable for trespass- every co-owner entitled to possess all of land, never physically divided.

Termination of Co-ownership a. Partition or Sale 

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Partition = physical division of property, done voluntarily by deed or if no agreement by court order. Can be sought by any 'interested party' e.g. co-owner, mortgagee or (limited) judgment mortgagee. Courts satisfied that they retain an equitable jurisdiction to engage in partition or sale. Uncertain area until LCLRA 2009 re-conferred statutory partition or sale jurisdiction on Courts, and abolishes equitable partition jurisdiction.

Co-owners entitled to partition or sale? First National Building Society v Ring - courts can refuse both applications, particularly where 3P interests (e.g. mortgagee) require it.  O'D v O'D - said partition traditionally discretionary; hotly contested - arguments that courts should only refuse applications due to extenuating circumstances. 

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Partition (from Fiona deLondras) Before 2009, issue as physical partition of land, or sale in lieu. Now can directly request whatever in S31 (above). Judgment Mortgagees - If a JM did not sever, holder of JM would not be able to apply, wouldn't have interest. But after S30.3 of 2009, JM never severs JT, but Judgment Mortgagees can expressly apply for order as above. Irwin v Deasy - uncertainty around discretion of Court to grant sale/partition over reg land for JMs; said Court does not have discretion to do so in same way as for unreg land. Mahon v Lawlor - JM secured on L's property, but he was a JT. Said that JM didnt sever - died when he died - the other JT (his wife) got Survivorship and JM wasn't against her so not enforceable. Now codified in S30.3 of Act. ->both situations changed under 2009.

b. Vesting in Sole Owner 3

Logically, no co-ownership any more where only one owner. Exam Regular appearance, focus on diffs between JTs and TICs and Severance.

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