Land Law and Equity Problem

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Date added: 17-06-26

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LAND LAW AND EQUITY PROBLEM Co-ownership is where two or more people simultaneously enjoy the responsibilities and rights of owning a property. From first January 1926, there exist two manifestations of Co-ownership specifically joint tenancy and tenancy in common.[1] Joint tenancy exists where four co-owners simultaneously enjoy the responsibilities and rights of owning a property. According to the law, joint tenants are considered as one person who is possessing the entire property. This is to say that they have no distinct shares in the property. Therefore, none of them can dispose their individual interest in the property through a will if they pass away. However, they enjoy the right of survivorship which occurs if one of them dies and the surviving tenants assume the interest rights left behind by the deceased.[2] Tenancy in common exists where two or more co-owners each have a distinct share of a property. They can therefore, dispose of their share of the property throughout their lifetime or when they pass away. Furthermore, these distinct shares are only a percentage of the property and not physically separated, rather it is an undivided share. Consequently, they each have a right to possess the entire property since the share is not divided. Nevertheless, none of them can exclude another from a given part of the property.[3]
  1. Advice for their interest in the cottage
First of all, the five are joint tenants since they declared to have held title in trust for themselves. Additionally, legal property is held on trust for each other only in joint tenancy[4]. The five now are joint tenants with only the first four being recognised as the legal co-owners of the cottage[5]. This is only so if the first four joint tenants are of full age and able to become trustees[6]. The reason being that for a valid joint tenancy, there must exist four trustees who hold title to the cottage under a single document. Therefore, in view of the law none of them can dispose of their share of the cottage in a will. This is because of the way joint tenancy is considered to be owned by a single entity not unless the joint tenancy is severed.[7] Uniquely, joint tenancy starts and ends on the same date for all of them. Therefore, in case one of them is deceased, the cottage will lawfully belong to the four surviving tenants through survivor-ship right. This happens as long as the joint tenancy was not severed before the tenant’s death [8]. If the joint tenancy was severed before the death, then the tenant can transfer his/her share through a will or conveyance can be carried out as per the intestacy rules of the state[9]. Joint tenancy satisfies all the four unities namely possession, interest, time and title[10]. If any of the unities is broken then a tenancy in common exists instead[11]. Possession is where the co-owners are equally entitled to the whole property. This means that restriction must not exist on the property use by the co-owners. In addition, no physical property division to each joint tenants share can be there. In the case of the cottage joint tenancy, unity of possession is present. This is because the possession is entitled to all the five without exclusion of any one as a co-owner. Unity of title is present since they receive their interest in the cottage in a single document same time. The unity interest of the five co-owners is initially present as they have identical interests before they start severing the joint tenancy. When they severe their interest starts changing duration as they start dropping out one after the other, they inhibit presence of unity of interest though their interest had been of the same manner. Therefore, the unity of interest is absent. Unity of time is absent. The co-owners title vest at the same time but the five receive their share under dissimilar conveyance. Having considered the four unities, the joint tenancy present at first is severed due to absence of unity of interest and unity of times. Severance of interest of joint tenancy of a legal estate to create a tenancy in common in land is prohibited by law. However, it does not affect the rights of a joint tenant to release his/her interest to fellow joint tenants. Consequently it does not affect the right or sever a joint tenancy in equity whether a property is vested in joint tenancy or not, so long as any tenant desiring to sever the joint tenancy in equity notified the other tenant in writing[12]. Unfortunately, the consequences of severing are irrevocable. Once one has severed his/her interest, the severing cannot be reversed In our facts, Dirk is about to sever his interest and this is allowed by law provided he notifies the other joint tenants through writing. He notifies them through writing, and his notification is left in the last known place of business as required and they fall into Shabaz’s hands.[13]
  1. How the Proceeds of sales would be divided if the cottage was sold
As earlier stated, in Joint tenants’ kind of ownership, they all have equal rights to the whole property and in case one of them dies, the cottage automatically passes to the surviving tenants through survivorship right. Therefore, Dirk’s share of the cottage is passed to the surviving tenants namely Mitchell, Anisah and Shabaz. However, none can pass ownership of the cottage in their will. This is because joint tenants appear as an individual and thereby cannot have distinct shares in property.[14] We also know that they were registered initially as joint tenants and that they held title in trust for themselves as joint tenants. In Joint tenancy, they all have equal rights to the whole property and in case one of them dies, the cottage automatically passes to the surviving tenants through survivorship right. Correspondingly, a joint tenancy will happen in co-ownership as the lawful title of the joint tenants. Also, there is a title for the tenants which is common via equity which represents a person's interest in the property. Now considering that some property transfer occurred from the time they purchased the cottage to the time they sold it, Elijah’s interest shall go to Mitchell who bought his share. Therefore, Mitchell will have a share of 40% of the sales after summing up both his share and that which he bought from Elijah. Since in joint tenancy the ownership of all the tenants ends at once, as Mitchell gets his share, Anisah and Shabaz will both have their shares too. However, since Dirk died and left all his property to Anisah, according to the Land law no one can pass property ownership to another person with or without a will. Therefore, if the joint ownership over the cottage was completely a joint ownership solely by law, then she cannot legally possess Dirk’s share of the sales of the property. But since in Equity they had unequal commitment to the price tag, Anisah can now have Dirk’s share of the property price tag since as a friend she is allowed to possess the deceased friend’s property in monetary terms as in accordance with the rules intestacy. Thus, Anisah should have 50% and Shabaz 10% of the price tag.
  1. I) If the property was conveyed into their joint names but no reference to any trust was made in the conveyance
In the event that an express announcement of trust is not made during procurement, the position is more entangled because when the passages at Land Registry record the responsibility for legitimate property they will not record useful interests. It can in this way be to a great degree hard to focus the share in the property that every person is qualified for if their individual shares are not recorded at the time of procurement[15]. Where a property is acquired in joint names and there is no express attestation of trust, the general supposition is that esteem takes after the law that the persons hold the property as joint tenants. In any case, taking after the late decisions in Stack v Dowden and Jones v Kernott, there is amazing powerlessness here of the law. In Stack v Dowden, the House of Lords had held that, in places which no express declaration of trust that has been made, the people will be endeavoured to be joint tenants and met all requirements for comparable shares in the property unless one individual can show that the property was wanted to be held in an unforeseen way. A broad mixed bag of parts can be considered to show this. Then again, it may be in unprecedented cases that a court will be impelled that the people arranged a choice that is unique in relation to proportionate shares[16]. In Jones v Kernott, the Supreme Court comprehensively took after the methodology in Stack v Dowden. They included that in the event that it could be demonstrated that the individuals had planned to hold the property in discrete shares, however that it was unrealistic to focus the extent of the shares they had expected to have each, then the court would need to choose what was reasonable in light of the entire course of managing between the gatherings in connection to the property.[17] In such cases, without any important agreements between the parties that show they proposed something else, their advantageous shares will mirror the measure of their commitments. A conveyance to a buyer of a lawful estate in land should overreach any impartial enthusiasm influencing that domain, whether he has recognize thereof, if the conveyance is made by trustees available to be purchased and the even-handed interest is at the date of the conveyance equipped for being overreached by such trustees under the procurements of subsection (2) of segment (2) section I and the statutory prerequisites regarding the instalment of capital cash emerging under a disposition upon trust available to be purchased are agreed to. Along these lines without a reference to any trust they will not be in any position to offer the cottage which is their property.[18]
  1. II) If Mitchell is adjudged bankrupt
For the situation that Mitchell is pronounced bankrupt and he holds the cottage as a trustee when he is made bankrupt, then there will exist a few outcomes as takes after. The joint gainful tenure gets to be naturally severed since Mitchell is a helpful joint tenant. Any of Mitchell's gainful enthusiasm for the trust on which the property is held, or in the returns of offer under such a trust, is a piece of his domain thus vests in the trustee in insolvency in understanding to segment 306 of the Insolvency Act 1986 and no points of interest of the vesting will be made[19]. Furthermore, no change exists in the lawful domain, which stays vested in the joint tenants including Mitchell. The lawful joint tenure cannot be separated (Segment 36(2) and (3) of the Law and Property Act 1925)[20]. The legitimate domain does not structure piece of the bankrupt's home (segment 283(3) of the Insolvency Act 1986)[21]. No insolvency notice or restrictions will be entered on the register. On any air the joint tenants including Mitchell keep on being the persons who must execute the significant deed. Mitchell can apply for a Form J restriction to ensure that the cottage is not put disposition after his trustee receives the disposition written notice[22]. Additionally, if there does not exist an already registered Form A restriction in the ownership then Mitchell will be able to apply for one to be entered since the beneficial joint tenancy will have been severed by the bankruptcy[23]. A Form J or A restrictions will not keep the enrolment of a disposition to which segment 27 of the Law and Property Act 1925 (instalment of capital cash to no less than two trustees) applies, as in the accompanying sample. Mitchell held the property as beneficial joint inhabitant before the liquidation. Mitchell's trustee in liquidation applies to enrol Form J and Form A restrictions. A man in compliance with common decency can buy the property or development cash on security of a lawful charge. They pull out as needed by Form J and follow Form A by acquiring a receipt for capital cash from alternate trustees. That individual takes free of the trustee to greatest advantage in the valuable investment once in the past partly owned by Mitchell. On account of the buy the transferee will be enlisted as the owner and the confinements drop; on account of the charge, it will be enrolled yet the restrictions will stay in the ownership register and Mitchell will be unable to protest the enlistment and will need to look to the enlisted owners to record for any net returns because Mitchell and the other joint tenants have the capacity to offer the property given any Form A or J restrictions is agreed to, the buyer is not influenced by the liquidation. Likewise they held the title in trust for themselves as joint tenants, it is viewed that they hold trust for Mitchell. They can make an intentional game plan as follows: In chance that the course of action contains a task of Mitchell's advantage or makes a trust for the chief then an application may be made for enrolment of a confinement in standard Form A, if it has not been selected in the register. In risk the purposeful strategy contains an errand of Mitchell's profit, it is viewed as that the chief likewise applies for a restriction in standard Form II, since the trust investment will be claimed by the director and not by Mitchell. In the event that the investment is hung on trust by Mitchell for the leasers or charged to the director, it is viewed as that no manifestation of confinement, other than in Form A (if not effectively entered), can be sought unless all the enlisted owners agree to the restrictions. This is because the enthusiasm of the director or lenders will be subsidiary. While Mitchell's advantage would give off an impression of being a privilege or claim in connection to an enlisted bequest (Section 42(1) (c) of the Land Registration Act 2002), the charge on or valuable interest to his greatest advantage are one expelled from the enrolled property thus are viewed as not to be rights or claims inside segment 42(1) (c)[24]. Bibliography Bailii.org, 'Jones V Kernott [2011] UKSC 53 (9 November 2011)' <http://www.bailii.org/uk/cases/UKSC/2011/53.html> accessed 17 March 2015 Bailii.org, 'Stack V. Dowden (Respondent) [2007] UKHL 17 (25 April 2007)' <http://www.bailii.org/uk/cases/UKHL/2007/17.html> accessed 17 March 2015 Findlaw.co.uk, 'Joint Tenancy Vs Tenancy In Common - Property Law' (2014) <http://www.findlaw.co.uk/law/property/buying_property/500189.html> accessed 15 March 2015 Gov.uk, 'Joint Property Ownership - GOV.UK' (2015) <https://www.gov.uk/joint-property-ownership/overview> accessed 15 March 2015 Gov.uk, 'Practice Guide 34: Personal Insolvency - GOV.UK' (2015) <https://www.gov.uk/government/publications/personal-insolvency/practice-guide-34-personal-insolvency> accessed 16 March 2015 Inbrief.co.uk, 'Legal Interests and Equitable Interests Compared: Discretionary Nature of Equity' (2015) <http://www.inbrief.co.uk/land-law/legal-and-equitable-interests.htm> accessed 16 March 2015 Inbrief.co.uk, What Is Co-Ownership? : Law of Land - When Does Co-Ownership Arise? (2015) <http://www.inbrief.co.uk/land-law/coownership-land-law.htm> accessed 16 March 2015 Jamesonlaw.co.uk, 'Contribution-Of-Equity' (2015) <http://www.jamesonlaw.co.uk/propertylaw/contribution-of-equity.php> accessed 16 March 2015 Lawsociety.org.uk, 'Joint Ownership - The Law Society' (2013) <https://www.lawsociety.org.uk/support-services/advice/practice-notes/joint-ownership/> accessed 14 March 2015 Legislation.gov.uk, 'Law of Property Act 1925' <http://www.legislation.gov.uk/ukpga/Geo5/15-16/20/enacted> accessed 17 March 2015
[1] Inbrief.co.uk, 'What Is Co-Ownership? : The Law of the Land - When Does Co-Ownership Arise?' (2015) [2] Inbrief.co.uk, 'What Is Co-Ownership? : The Law of the Land - When Does Co-Ownership Arise?' (2015) [3] Inbrief.co.uk, 'What Is Co-Ownership? : The Law of the Land - When Does Co-Ownership Arise?' (2015) [4] Inbrief.co.uk, 'What Is Co-Ownership? : The Law of the Land - When Does Co-Ownership Arise?' (2015) [5] Legislation.gov.uk, 'Law Of Property Act 1925' section 34 [6] Inbrief.co.uk, 'What Is Co-Ownership? : The Law of the Land - When Does Co-Ownership Arise?' (2015) [7] Inbrief.co.uk, 'What Is Co-Ownership? : The Law of the Land - When Does Co-Ownership Arise?' (2015) [8] Gov.uk, 'Joint Property Ownership - GOV.UK' (2015) [9] Lawsociety.org.uk, 'Joint Ownership - The Law Society' (2013) [10] Findlaw.co.uk, 'Joint Tenancy Vs Tenancy in Common - Property Law' (2014) [11] Gov.uk, 'Joint Property Ownership - GOV.UK' (2015) [12] Legislation.gov.uk, 'Law of Property Act 1925' Section 36 [13] Legislation.gov.uk, 'Law of Property Act 1925' Section 196 [14] Inbrief.co.uk, 'What Is Co-Ownership? : The Law of the Land - When Does Co-Ownership Arise?' (2015) [15] Lawsociety.org.uk, 'Joint Ownership - The Law Society' (2013) [16] 'Stack V. Dowden (Respondent) [2007] UKHL 17 (25 April 2007) [17] 'Jones V Kernott [2011] UKSC 53 (9 November 2011) [18] Legislation.gov.uk, 'Law of Property Act 1925' [19] Gov.uk, 'Practice Guide 34: Personal Insolvency - GOV.UK' (2015) [20] Legislation.gov.uk, 'Law of Property Act 1925' [21] Gov.uk, 'Practice Guide 34: Personal Insolvency - GOV.UK' (2015) [22] Gov.uk, 'Practice Guide 34: Personal Insolvency - GOV.UK' (2015) [23] Legislation.gov.uk, 'Law Of Property Act 1925' [24] Gov.uk, 'Practice Guide 34: Personal Insolvency - GOV.UK' (2015)
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