#1969 - Joint Tenancy Or Tenancy In Common - Land Law

Joint tenancy or tenancy in common?

Distinguishing between the two

• Joint tenancy – which automatically grants right of survivorship. Requires:

  • Unity of possession

    • This requires that each owner be entitled to possession of the whole

      • Not just separate ownership of various parts of the land

      • Need not occupy the whole

        • Need only have the right to do so.

  • Unity of interest

    • Joint tenants must have interests of the same type and quantum

      • E.g. Life estate to R and fee simple to Y = not joint tenancy because not same type

      • Is impossible for X to have 1/3 and Y 2/3 and still be a joint tenant

        • At common law this would just be words of severance

        • In equity = no unity of interest

      • Thus, on severance, the shares as tenants in common will automatically be of the same size.

    • Gift to A and B for life, remainder to B would create a joint tenancy

      • Since B’s life interest is separated from the fee simple remainder.

  • Unity of title

    • Interests must derive immediately from same title

      • Thus, when JT1 transfers his share

        • Then the purchaser’s title is different from the other JTs

        • And therefore there ain’t a joint tenancy no more – it’s been severed.

  • Unity of time

    • Joint interests have to vest at the same time

      • Thus, there are problems if there is a gift to “the children of D at 21” since D’s children will reach 21 at different ages

      • Smith: isn’t really a problem though as it doesn’t apply to gifts by will or trusts –

        • and concurrent interests always take effect under a trust.

  • Smith: there is scope for relaxing some of these rules

    • Unity of interest is necessary in theory to show that the joint tenants own the whole rather than a notional part

      • And survivorship would make little sense if each party had a different estate in the land (e.g. fee simple and lease)

    • Could potentially get rid of unity of time and title, however, which appear to demand immediacy.

• Equitable Joint tenancy in common (s.36(2) LPA 1925)). Results in three situations:

  • 1. Where one of the four unities is not present

  • 2. Where parties expressly indicate for a tenancy in common or language points to this (words of severance)

    • Smith: never been any doubt that an express intention to create tenancy in common will be effective.

      • All you need is unity of possession

        • Court will also seize on language that purports to divide the property in order to show no intention of joint tenancy

        • Cos joint tenancy requires ownership of the whole, not the part.

  • 3. Where equity presumes tenancy in common from special circumstances

    • Three situations where equity presumes tenancy in common because right of survivorship is so odd

      • Equity doesn’t directly reject common law joint tenancy

        • But insists that joint tenants hold on trust for themselves as tenants in common in equity

    • Partners in a business

      • Survivorship generally seen as inconsistent with business relations.

        • However, courts will accept proof that survivorship was intended if compelling enough.

        • Malayan Credit Ltd v Jack Chia-MPH Ltd [1986]:

    • Mortgagees

      • This might be specified as a joint tenancy, but Law will more often than not hold that it a tenancy in common –

        • survivorship is out of place because the transaction is business in nature.

    • Unequal contribution

      • Where co-owners have contributed to the purchase price in unequal shares

        • There is a presumption of tenancy in common rather than joint tenancy.

          • This is more owing to the fact joint tenancy requires equal shares, and the trust analysis determines that the parties have unequal shares.

      • However, in family context

        • Stack v Dowden

          • Baroness Hale: So long as registered in joint names, rebuttable presumption = joint tenancy, regardless of unequal shares.

Severing a joint tenancy

• Williams v Hensman (1861):

• Page Wood VC

  • Act of any one of joint tenants on his own share

    • Requirements:

      • Smith: should any of the four unities be lost, then the joint tenancy will cease to exist

        • E.g. X sells share to Y, meaning Y has no unity of title with Z.

        • OR X and Z agree to partition which bits of the land they are allowed to possess

      • No need for any other parties to be involved.

      • Can also occur when bankruptcy, mortgage,

        • And possibly lease.

    • Effect:

      • Joint tenancy comes to an end – tenancy in common in equity may result

      • Where more than two parties, if X, Y and Z are joint tenant and X sells up to T,

        • Y, Z and T aren’t joint tenants

        • BUT Y and Z remain joint tenants of the two thirds remaining.

  • Mutual Agreement

    • Requirements

      • Equity allows severance on its own terms, even when none of the unities have been shattered.

        • Agreement has to be mutual between all parties.

      • Burgess v Rawnsley [1975]: two JTs agreed orally to sever tenancy and Y to buy X out. Unfortunately, X pulled out and then Y died.

        • Lord Denning MR (min): oral declaration is sufficient to sever joint tenancy as long as communicated to other party.

        • Sir Pennycuick (maj):

          • Mutual agreement is one way to sever joint tenancy

            • But there is a separate way to do so by the course of dealing.

      • Smith: interesting that this goes against need for land interests to be in writing, even in equity.

  • Any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common

    • Smith: this has given rise to the greatest number of controversies in recent cases.

    • Mutual agreement or common intention?

      • Nielson-Jones v Fedden [1975]:

        • Walton J:

          • Severance could be effected if sufficient course of conduct by parties so as to lead to the implication there was an agreement to sever.

      • Burgess v Rawnsley [1975]:

        • Lord Denning MR:

          • Severance is effective where one party evidences to the other through a course of dealing that he desires that the shares should no longer be held jointly.

        • Sir Pennycuick:

          • “Mutual agreement” should be kept separate from “course of dealing”

            • While agreement is sufficient to sever, a common intention shown through a course of dealing will also suffice.

    • Is an oral declaration sufficient?

      • Burgess v Rawnsley [1975]:

        • Lord Denning MR (min):

          • Yes.

        • Sir Pennycuick:

          • Oral declaration not sufficient

            • But course of dealing communicated to other party and not hidden behind their back is sufficient.

      • Carr v Isard [2007]:

        • The making a of a will, by its very nature, is behind the backs of other joint tenants

          • Only if you can show that party communicated content of their will which was inconsistent with joint tenancy

            • Can severance be effective before death.

    • When agreement has not been reached

      • Nielson Jones v Fedden

        • Walton J:

          • It appears to me that when parties are negotiating to reach an agreement, and never do reach any final agreement,

            • it is quite impossible to say that they have reached any agreement at all.

      • Burgess v Rawnsley:

        • Sir Pennycuick:

          • Mutual agreement is one way to sever joint tenancy but this can also be done by the course of dealing.

            • Thus, even if an agreement is not enforceable or agreement is not reached

              • The significance of an agreement is that it serves as an indication of a common intention to sever

      • Gore & Snell v Carpenter

        • Blackett-Ord J:

          • Clear no agreement reached in totality, as many disputes, even if main points agreed.

            • Negotiations are not the same thing as a course of dealing.

              • A course of dealing is where over the years the parties have dealt with their interests on the footing that they are not joint.

          • Although negotiations could be evidence of intent to sever

            • This is to be determined on the particular facts of the case.

• LPA 1925 s.36(2): notice in writing – essentially an easy way for JT to sever unilaterally

  • Where a legal estate... is vested in joint tenants beneficially

    • And any tenant desires to sever the joint tenancy

      • He shall give to the other joint tenants a notice in writing of such desire.

  • What suffices as a written notice?

    • Obviously if X writes directly to Y telling of notice to severance – but what about where documents, on the...