Joint Tenancy

In 1995 Adam and his sisters, Constance and daisy all former
Schoolteachers, decided to buy a large property called Minerva lodge, where they planned to live, along with Eddie, Daisy's twelve-year-old son. They also planed to run an educational consultancy there. Constance and daisy each paid 60,000 pounds of the purchase price, which was 270,000 pounds. Adam paid the balance. The property was transferred to all three as joint tenants in law and equity, and the title was registered. Later that year at HM land registry.

By the last year they have each conflicting educational philosophies and had begun to quarrel over the consultancy business. Two months ago Adam left the house and moved in his girl friend Belinda. Shortly afterwards he wrote a letter to the others and gave Belinda a copy saying;
''I want to be paid my share of the house soon. The best course be for you two to organise a sale for it'' Eddie's au pair signed for the letter but inadvertently threw it away and forgot to tell Constance and daisy about it. A week later Adam died in road accident leaving all his property to Belinda.

After the funeral Constance and daisy discussed the future of the consultancy and of Minerva lodge. Constance was keen to have Minerva lodge sold as soon as possible, especially as she had been both puzzled and appalled to overhear Belinda saying at the tea party that she rather fancied moving into Minerva lodge to be with Constance and daisy. Daisy however objected to Constance suggestion, because she could not afford to buy another property in the area would be different area to obtain rented accommodation, and a move to a different area would disrupt her sons education not to mention her consultancy work.

Explain

1] the legal and equitable ownership of the property, and
2] How the dispute should be resolved.

We must first ascertain whether there is in fact a Joint tenancy in law. This is when one or more people have an interest in land as joint tenants, thus then making them co-owners of that land. This form of ownership is characterised by the indivisibility of the estate. Therefore this means that no individual joint tenant can identify his specific `piece' of the estate. This means that the estate can only be transmitted in its entirety, and if one of the joint tenants dies his share is not inheritable by his successors. This is in contrast to a tenancy in common, where each owner has a specific interest that is transmissible.

For a join tenancy to exist there must be the four unities. These are unity of possession, unity of interest, unity of title, and unity of time, as in the case of Hammersmith and Fulham L.B.C v Monk (1992). These would seem to have been in place upon the three moving in and so warrant no further discussion here.

We must now look at the different interests that this creates. The co-owners do not have particular shares in the property; they own the whole thing together. Each has a right to live in and use the property as if they are a beneficial owner, during their lifetime. When one of the owners dies, the property becomes the possession of the other owner(s). Therefore ordinarily in this scenario Constantine and daisy would be left as the sole legal owners, with the equitable ownership being vested in those two and Eddie. As a side issue when there is only one joint tenant left, he or she becomes outright owner of the property. Because no joint owner has a defined share, their interest in the property does not become part of their estate when the die, but simply disappears. The definition of the legal ownership and equitable ownership will be approached now, before moving to the consequences of the letter and the will from Adam.

Legal ownership can be summed as follows - the people named on the title documents are in essence the legal owners. Where the property is registered in the public District Land Registry as all properties bought on or after 3 December 1990 will be, the legal owners are the people listed as the registered proprietors.

Beneficial ownership is where the real value of the property lies. In reality it is the right to live in and use the property, and the right to share in the proceeds of any sale. A beneficial owner may also be able to control a legal owner and decide on the sale of the property. This may cause problems for a buyer, as the existence of a beneficial owner may not be revealed by searches of the land or enquiries of the seller; and yet the buyer may still have to let the beneficial owner live there.

Where the legal owners and the beneficial owners are different, this gives rise to an arrangement called a trust. A trust may be set up by a document called a deed or a written agreement (although this is not always needed); it may be imposed by the law; or it may be automatic - where there are at least two legal owners, there is always a type of trust called a trust of land. This is so even if the beneficial owners are the same people, as beneficial owner A has rights against legal owner B, and vice versa. It is possible to have two or more legal owners holding the property on behalf of only one beneficial owner, or one legal owner holding it on behalf of any number of beneficial owners. The question of how a beneficial interest is formed is dealt with next.

In this scenario, Constance, Daisy and Adam are all legal owners and all three as well as Eddie are beneficial owners as well. Ordinarily the effect of the unfortunate demise of Adam on the situation that has been described above would be that, as Gray and Gray state, "joint tenancy can never be severed by a will".1 However as we shall now see this is not quite the whole picture.

We shall now move to the effect of Adam's letter. Under the LPA section 36(2) if the joint tenant desires to sever the joint tenancy then in order to achieve this they must ensure that they give notice to the other tenants in writing. A notice which has been posted but not received is still effective however, in essence the severance is unilateral2 as per the case of Re 88 Berkeley Road London NW9 (1971). In the case of Kinch v Ballard (1998) there was a posted letter that had the aim of severance, however the other joint tenant had gone to hospital so did not get notice of it. Despite the writer changing their mind the notice was still held to be good. Thus here, the fact that Constantine and daisy have not received the letter will be wholly irrelevant. The letter will constitute severance of the tenancy.

The end result is therefore a tenancy in common. This occurs when two or more people have an interest in land and they each have an identifiable share of the property, which is capable of being transferred to another party, and is inherited by the owner's estate if he dies. In principle, each of the tenants in common may be able to identify a specific part of the property which he `owns'. This is in contrast to the other form of co-ownership, the joint tenancy, in which the assets are indivisible, and cannot be transmitted separately. Therefore all the tenants became tenants in common and thus there shares in the property. Here there is no right of survivorship, and thus the size of the share is unaffected by any other tenants death. Therefore the passing of the interest in the land to Belinda by Adam in his will will have the effect of placing her as the owner of his share.

Thus what is the situation now as Constantine wants the property sold, Daisy wants to stay and Belinda wants to move in? There is of course a trust of land here. If the trustees cannot agree on whether or not the land should be sold then they can apply o the court to ask of it to make an order as it sees fit in the situation. This power is conferred under the Trusts of Land and Appointment of Trustees Act 1996 Act section 14. On a sale the proceeds pf the sale are held for those whose interests have been overreached. Section 14 emphasises such factors as the purpose for which the trust was formed being taken into consideration. Thus the reality behind the setting up of the home to run the business and the use if it as a family home for Eddie will be weighed up by the court. This is known as the doctrine of collateral purpose, as per the case of Jones v Challenger 1961. In addition the fact that the welfare of a child is at possible risk will also have a significant bearing on the case3 . Under the section the Court may make any order that it sees fit. By virtue of section 14(2).

It is my opinion that in this case, the Court will hold that the fact that Eddie may have his work disrupted and that a suitable property will be hard to come by will have a significant effect on the case. The Court is likely to hold that there need be no sale of the property, Minerva Lodge. In the words of Sir Wilfred Greene MR in Re Buchanan-Wollaston's Conveyance (1939) the court shall do that which equity seeks to be "right and proper".

  1. Gray and Gray Land Law, Butterworths, pg 291[^ Return]
  2. Harris v Goddard (1983) [^ Return]
  3. Indeed the Act itself specifically mentions minors under section 15 (1) (c).[^ Return]

BIBLIOGAPHY

Bray, J Key Facts: Land Law (Key Facts for Law) Hodder & Stoughton Educational

Dixon, M Land Law Q&A (Questions and Answers) Cavendish Publishing Ltd

Gray and Gray Land Law, Butterworths,

Howarth, W Nutshells: Land Law Sweet & Maxwell

MacKenzie, J Textbook on Land Law Oxford University Press

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