Co-ownership articles/notes
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- Created by: Francesca Marks
- Created on: 31-03-16 15:29
Crown 'Severance of JT by partial alienation'
- co-ownership is one of the most common forms of land holding. The fact JT can be servered by alienation presents difficulties. Severance is effected by the unilateral act of alienation by one of the JT's. Perhaps the most important policy consideration today is that the law should strive to avoid any situation which might allow one joint tenant to server the JT without the knowledge of other tenants.
- Where a JT mortgaged his interest the JT was severed as it is an alienation of the borrowers legal interest in the land, As there is no alienation as such by the borrower it would appear that the grant of a registered mortgage by one of the JT's does not sever the JT at common law. Lyons v Lyons.
- Leases- partial alienation in the sense that the alientator still retains some interest in land. Doesnt really happen as very complicated. 16th C authority says this servers a joint tenancy but this is not convincing. Re Armstrong says that 'in the case of a term of years held in JT a lease by one JT for a term less than the residue does sever the JT.' This notion of suspension of JT has been criticised. 'Once a severance, albiet temporary, has occured, surely the unity of interest of the JT's is destroyed and the co-owners cannot afterwards be regarded as enjoying the unity of title and time.' Modern laws accept idea of severance by alienation because its in case law, not because its logical.
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Crown 'Severance of JT by partial alienation'
- where a trust is set up by a transfer of legal title from one JT to trustees to hold on trust for the beneficiary there will be an alienation which would have effected severance at common law. Problem is that declaration of trust can be a totally private matter. If this is an effective means of serverance it represents the easiest method of severing the JT behind the back of the other co-owners. It is open to a court to hold on policy grounds that a declaration of trust, which can be made in total secrecy, should not therefore be considered a sufficient 'act' for the purposes of the first head of severance under Williams.
- The most important factor is the existence in modern law of a simple and effective method of severance by means of a notice in writing. This coupled with the need to ensure that parties are fully aware of their rights and that courts should not be astute to discover new methods of severance and in particular, should avoid legitimising any form of severance that can be effected by one party without the knowledge of other joint tenants.
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Smith 'Property Law'
- extensive amendment by the LPA 1925 and the Trusts of Land and Appointment of Trustees Act 1996. 1996 reforms were essential.
- JT advantage is that it avoids proliferation of co-owners on the death of JT.
- Obligations are joint in a JT but may be separate in a TC. Courts will never impose a JT where it is made clear that the parties or the circumstances is unitended, but may still be presumed when parties havent been clear.
- Three ways equity considers survivorship odd and so must be a TC- partners in business. Not consistent with relationship. Mortgagees-may be mortgaged to them as JT's but equity presumes a tenancy in common. Unequal contributions- as JT needs identical shares.
- Do we need both JT and TC? yes as cannot put survivorship in every co-ownership.
- TLATA ensures that nearly all concurrent and successive interests take place under the trust of land regime that it establishes. Most modern conveyances to co-owners expreslly create a trust. S36 LPA says that a trust is imposed whenever JT's are the beneficial holders of legal estate. A trust is imposed normally to aid the sale of land. Regulated by statute. A trust is essential for protecting purchasers where there has been severance and it is easier to have a trust from the beginning. LPA s1(6) enacts that a TC cannot be a legal estate and must take place behind a trust.
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Smith 'Property Law'
- Occupation- a holder of legal estate cannot claim to occupy unless entitled by s12 as a beneficiary. s13 provides for its regulation where there are two or more people with the right. s12(2) excludes the right if land is either 'unavailable or unsuitable for occupation by him.' S12 is subject to s13 discretion of trustees. Cannot be restricted unreasonably. Under s14 trustees and the court have the power to order payments, at least from beneficiaries entitled to occupy. TLATA s6 confers unlimited powers on trustees to sell, lease or mortgage land. Must regard the rights of beneficiaries. S11 requires trustees to consult beneficiaries who are adults with interests in possession before exercising their functions. Trustees should give effect to the majority. Where trustees are divided the land cannot be sold. If still want to sell there must be an application to court if sale is to take place. Settlor has no standing to apply. Guidance under s15.
- Maximum of 4 trustees of land. Overreaching is used. Purchaser isnt bound by trust and doesnt need to investigate them. Curtain principle. Purchaser isnt concerned with beneficial interests at all. Just has the 2 trustee restriction. LPA s27(2). The overreaching rules work well in protecting purchasers. The protection of beneficiaries is reasonably good. Exceptions such as Flegg are fortunately rare. Law Commission said in 1980's that beneficiaries in actual occupation should consent before overreaching can operate.
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Smith 'Property Law'
- The idea wasnt accepted by government and is not in TLATA. More recently questions have been asked about human rights in relation to homes.
- Purchasers of registered land can rely upon the much more general provisions in LRA s26. Purchasers are protected against the invalidity of a conveyance unless they had actual notice from trustees. Law Commission recognises that a purchaser who is aware of breach of trust may be liable for knowing reciept of trust property.
- Successive interests- it may be said that there are successive interests whenever the land is not held for a fee simple absolute in possession or a term of years absolute. 1) the rule against perpetuities- distant happenings may adversely affect sale of land. Dont want too much restritcion on later generations. Cannot vest in unborn. Requirement that every gift must vest an interest within the period of a life in being plus 21 years. Law Commission reviewed this and said some control should be retained to limit 'the power of one generation to dictate the devolution of property.' New requirement that gifts should vest in 125 years.
- Reform until TLATA 1996- following Law Commission recommendations the act enacts that no future strict settlements can be created. Trusts for sale can be though.
- TLATA s9 permits trustees to delegate management of property to a beneficiary. Can delegate any power. Can be revoked by a trustee. s9 has duty of care to decisions relating to delegation.
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