Property Possession and Co-ownership | Land Law Essay

Co-ownership is the term used to describe the forms of ownership in which two or more persons are concurrently entitled in possession to an interest or interests in the same property. The law of co-ownership is a product of statute and the common law, the Law of Property Act and the Trusts of Land and Appointment of Trustees Act 1996, which are very important. There are two types of co-ownership: joint tenancy and tenancy in common. Joint tenancy is a form of co-ownership in which each individual is fully entitled to the whole of the estate. Within a joint tenancy the joint tenants enjoy as between themselves a right of survivorship and there is always a presumption of four unities being present.

The law always says that for a joint tenancy to be available all ‘four unities' must be present. This has been described as ‘a thorough and intimate union', union consisting of four unities which are title, time, interest and possession. All the titles are derived from the same grant and become vested at the same time; all the interests are identical in size; and there is unity of possession and each holds the whole in the sense that in conjunction with his co-tenants he is entitled to present possession and enjoyment of the whole. Henceforth no joint tenant may ever say they own a certain part of he land which, is restricted to other co-owners illustrated in Meyer v Riddick (1990). The most important feature of joint tenancy is the right of survivorship - the rule that when one joint tenant dies the surviving joint tenants become entitled to his interestThis right ensures that the entitlement of each joint tenant is simply extinguished upon his/her death as no share devolves upon those who take under the deceased's will or on his intestacy because a joint tenant does not have a share within the property.

If a co-owner does not wish to use the right of survivorship they could severe the contract. Severing a joint tenancy is the process by which you convert a joint tenancy into a tenancy in common. Before one can severe it is important to note down the two constraints which limit the availability of it which are (1) there cannot be severance by will and (2) there cannot be severance of a joint tenancy in a legal estate. Severance by a co-owner of the property will not affect his status as a trustee of the land although they become a tenant in common after the severance of the equitable estate. Severance should be done in certain methods which are:

Written notice by one party to the other:

The severance of a joint tenancy should where possible be done by notice in accordance with section 36(2) of the Law of Property Act 1925. Under the Trusts of Land and Appointment of Trustees Act 1996 it states that, “Where... [Land is owned by]...joint tenants beneficially, and any tenant desires to sever the joint tenancy in equity, he shall give to the other tenants a notice in writing of such desire…”. However, there are several conditions to the serving of the notice. In Harris v Goddard (1983) it was mentionedthat although a notice in writing of a desire to sever a joint tenancy took effect forthwith, the desire to sever must itself be immediate. Therefore it is important that that notice must show the desire to sever with immediate effect instead of a future point in time.

 

Severance by Mutual agreement or conduct:

In one of land laws important cases, Williams v Hensman (1861), it was recognised that all joint tenants may agree to severe. The consideration of the agreement is the consent of each party to ‘relinquish the beneficial interest of a joint tenant .. including the right of accretion by survivorship, in return for the share of a tenant in common' Corin v Patton (1990) per Deane J. Under this type of severance there is no need for it to be in writing as under the LP(MP)A 1989,s2(1).

Severance by Alienation:

In a joint tenancy a co-owner is free at any time to sell his interest in the property to a third party. Alienation operates to sever the joint tenancy because it destroys the unity of title. The purchaser from him of course must be a tenant in common as the unities of time and title are destroyed. ‘As a general rule, severance by selling or transferring a joint tenant's interest to a third person does not require the consent or notification of the remaining joint tenant(s). Upon transfer, the transferee and the other joint tenant will hold equal shares as tenants in common.' Severance by alienation can be done in different methods which are alienation by mortgage, bankruptcy and any act shown by the co-owner to severe will be seen as an act to severe.

 

Severance by homicide:

In this type of severance if a co-owner unlawfully kills another then in the eyes of the law it will severance. This is mainly based on public policy which states that no wrongdoer shall benefit from his own wrong.

A joint tenancy is usually a good option for married because when one dies his share will automatically be passed on to the surviving co-owner through the right of survivorship. Therefore it could be a good recommendation for a married couple as they will not need to write down a will. However, for a couple with children like yourselves, it is recommended that you co-own through tenancy in common. Simply because with joint tenancy the house will only pass on the other surviving spouse and they could easily sell the house without anyone objecting leaving the children with nothing in the event of death and we must also consider the fact that your children are from previous relationships. With Tenancy in Common it is different because the house will be passed on in accordance with your will so one can have the opportunity to to make sure that their children have a share.

The other side of co-ownership is tenancy in common which means that they would each own a specified share of the property. For example, one co-owner may have a 3/4 interest and the other a 1/4 interest. Nevertheless, neither has a greater right than the other to possession of the property. Thus tenants in common have quite separate interests; the only fact which brings them into co-ownership is that they both have shares in a single property which has not yet been divided among them and while the tenancy in common lasts, no one can say which of them owns any particular parcel of land, as described in the Law of Property Act 1925.

It is important to note that despite having shares within the property, as I joint tenancy, all co-owners will nave the same right to exercise acts of ownership over the whole land , provided that he does not interfere with the like-right of the other co-owner. Unlike joint tenancy within tenancy in common there is no right of survivorship as each has a share within the property. Therefore in the event of death the property will not be passed on to the co-owner but the share passes on to those who would have been granted it in the will or on his intestacy. The second thing is that unlike the four unities required to joint tenancy, in tenancy in common only one is required which is possession. This is an important unity as without it there would not exist a co-ownership of physically distinct areas of land.

A joint tenancy is usually a good option for married because when one dies his share will automatically be passed on to the surviving co-owner through the right of survivorship. Therefore it could be a good recommendation for a married couple as they will not need to write down a will. However, for a couple with children like yourselves, it is recommended that you co-own through tenancy in common. Simply because with joint tenancy the house will only pass on the other surviving spouse and they could easily sell the house without anyone objecting leaving the children with nothing in the event of death and we must also consider the fact that your children are from previous relationships. With Tenancy in Common it is different because the house will be passed on in accordance with your will so one can have the opportunity to make sure that their children have a share.

The second issue you have asked me to deal with is the selling of the property if one of you so wishes to sell their share. If a co-owner wishes to cash in his or her interest, and all the trustees do not agree to a sale, the co-owner can apply to the court for an order that the property be sold. Under section 14 of the Trust of Land and Appointment of Trustees (TLATA) Act 1996, if one party owns a part of the property within a tenancy in common then they could sell. However, with joint tenancy this differs. It very important to take into account the fact that the legal estate is always held by the co-owners as joint tenants. The purpose is to allow survivorship to apply to the legal estate so it is not necessary to trace the devolution of interest of the deceased co-owner. If one joint tenant sells his interest, he automatically takes it as a tenant in common. Therefore, in general if you are joint tenants and you wish to sell your share you must severe the contract through alienation because if that is not done and the share will be passed on automatically to the surviving spouse.

I hope you will find this letter useful to you when purchasing your house and wish you the best of luck.

Bibliography

ELECTRONIC SOURCES

  • Regulation on Trusts and co-ownership https:/.../current_students/programme_resources/laws/study_packs/land/land_studypack_03.pdf accessed on 5 Jan 2008
  • Severance of a Joint Tenancy http://www.haynesphillips.com/severance_joint.html accessed on 5 Jan 2008
  • Report on co-ownership of land by the law Commission http://www.bcli.org/pages/publications/lrcreports/reports(html)/Lrc100text.html#C.%20Tenancy%20in%20Common accessed on 5 Jan 2008
  • Severing a joint tenancy http://www.lawontheweb.co.uk/jointtenants.htmaccessed on 5 Jan 2008
  • Severance of a joint tenancy http://www.haynesphillips.com/severance_joint.html accessed on 5 Jan 2008
 
  • Cases cited within the document http://login.westlaw.co.uk/wluk/app/main/prep?vr=1.0&rs=WLUK1.0 accessed on 5 Jan 2008
  • Modern Land Law by Martin Dixon http://books.google.com/books?id=fB92PApvM9UC accessed on 6 January 2008
  • Problems associated with co-ownership of real property http://www.jonesbahamas.com/?c=135&a=13782 accessed on 6 January 2008

CASES

  • Harris v Goddard (1983) 1 WLR 1203
  • Williams v Hensman (1861) 70 E.R. 862
  • Corin v Patton (1990) 169 C.L.R. 540
  • AG Securities v Vaughan (1990) [1990] 1 A.C. 417
  • Meyer v Riddick (1990) 60 P. & C.R. 50
  • First national securities ltd v Hegerty[1985] Q.B. 850

 

LEGISLATION

  • Law of Property Act 1925
  • Trusts of Land and Appointment of Trustees Act 1996
  • Law of Property (Miscellaneous Provisions) Act 1989


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