#3742 - Co Ownership I - GDL Land Law

What is Co-ownership?

- Definition: 2 or more persons together own same estate in same piece of land.

• successive co-ownership (settlements): different parties entitled in chronological succession.

  • e.g. A: life interest; B: life interest after A; C: fee simple in remainder.

  • rationale: traditionally, ensured land stayed in family.

  • types of settlements: strict settlement; trust for sale; trust of land – dep. on when created.

• concurrent co-ownership: 2 or more persons own same estate in piece of land at the same time.

  • e.g. husband + wife buy house together + share ownership of freehold.

  • (N.B. this chapter: only concerned with concurrent co-ownership of freehold).

- Unity of possession essential: each co-owner simultaneously entitled to possession of whole of land.

• if not: just separate owners of different plots of land.

- How does co-ownership arise?

• expressly: all parties named on deeds / proprietorship register / lease.

• impliedly:

  • resulting trust: through contribution to purchase price.

  • constructive trust: Lloyd’s Bank v Rossett [1991].

- Practical issues with co-ownership.

• structure as between co-owners:

  • reflecting different contributions.

  • when 1 co-owner dies ensuring right person acquires interest.

  • what do beneficiaries inherit?

  • if 1 co-owner wants to sell / goes bankrupt what is position?

• purchaser’s position:

  • not be bound by a co-owner’s interests.

  • keeping sale process simple.

Historical Background

- Imposition of trust: needed to address issues with co-ownership.

• pre-1925 problem (joint ownership uncommon): any number of co-owners; purchaser had to negotiate with all individually land became unsaleable.

Historical Solution

- Trust for sale: s34(2) + s36(2) LPA 1925: statutory trust for sale imposed in all cases of co-ownership.

• definition: immediate binding trust for sale whether or not exercised at the request or with the consent of any person, and with or without a power of discretion to postpone sale – s205(1)(xxix) LPA 1925.

  • land conveyed to trustees duty to sell + re-invest proceeds + poss. power to postpone sale.

  • either express or statutory (e.g. under LPA 1925 for co-ownership).

• purpose: investment vehicle (trader’s settlement) investment sold if better investments available.

  • historical context: land ownership rare; most co-owned land bought as investment.

• BUT problematic: duty to sell not suitable for land bought for occupation.

  • dispute over whether to sell land: law favoured sale.

  • doctrine of conversion: bs’ interests in purchase money, not land for most purposes no right to occupy property.

    • rationale: equity views as done what ought to be done – i.e. land sold.

  • out of step with society’s attitudes: land increasingly bought as home not investment (contrary to original purpose – trust for SALE) many ts. indefinitely postponed sale.

- Abolition of trusts of sale.

• b’s right to occupy: gradually cemented.

  • Bull v Bull [1955; CoA]: [Ld Denning]: if land bought to occupy, t. duty to sell subject to b’s right to occupy.

  • Williams & Glyn’s Bank v Boland [1981; HoL]: confirmed.

• replacement of trusts for sale: Trusts of Land and Appointment of Trustees Act 1996 – into force 1 Jan 1997.

  • s1(2)(b): existing trusts for sale trusts of land.

  • s4: ts. have power to postpone sale despite any provision to contrary.

  • paras 3-4 Sch 2: s34 + s36 LPA 1925 amended trusts of land in all co-ownerships since 1 Jan 1997.

    • s5 + Sch 3 TLATA 1996: statutory trusts for sale trust of land without duty to sell.

• abolition of doctrine of conversion: s3 TLATA 1996.

  • exception: trusts of sale created by will where testator dies before 1 Jan 1997 – s3(2) TLATA 1996.

Modern Trusts of Land

- Trust of land: created by Trusts of Land and Appointment of Trustees Act 1996 (TLATA 1996).

• definition: any trust of property which consists of or inc. land – s1(1)(a).

• application: all types of trust of land whenever created – s1(2)(a).

  • except: strict settlements existing on 1 Jan 1997.

• s1: trust of land imposed in co-ownership.

• s4(1): ts. can postpone sale.

• s6(1): ts. have same power of disposition as absolute owner no duty to sell.

Nature of Co-ownership

- 1. Joint Tenancy.

• single entity at law: co-owners together constitute 1 single owner.

• no proportional/identifiable share: all owners own all land – level of contribution irrelevant.

• 4 unities essential – AG Securities v Vaughan and others [1990].

  • 1. unity of possession: each co-owner entitled to all of land; no exclusive possession of parts.

  • 2. unity of interest: same nature (e.g. freehold or leasehold) + duration (e.g. fee simple or life interest).

  • 3. unity of title: all must acquire title under same document/act.

    • e.g. all take rights by same conveyance/transfer deed.

    • e.g. all simultaneously take possession + acquire title by adverse possession.

  • 4. unity of time: interest of each tenant must vest at same time.

• right of...