CO-OWNERSHIP OF LAND

INTRODUCTION
Co-ownership arises when two or more persons own concurrent interests
in the same estate in the same piece of land in either freehold or
leasehold.
Successive co-ownership
Where parties are entitled to ownership of a freehold in chronological
succession. So, for example, one party may hold a life estate in the
freehold. After that person’s death, another party may then also be
entitled to a life estate and finally after that person’s death, another party
may be entitled to the fee simple in remainder. Such long-term
arrangements were traditionally created to ensure that land would
automatically be held by successive generations of the same family and
were generically known as ‘settlements’.
Concurrent co-ownership
Concurrent co-ownership occurs where two or more persons own the
same estate in a piece of land at the same time. So, for example, where a
couple buy a house together, both sharing the ownership of the registered
freehold, they are said to own the freehold concurrently.
Co-ownership can arise expressly or they can be implied due to
circumstances in purchase.
Express – when the estate in land is transferred to joint legal owners.
Implied - An implied co-ownership on the other hand will come into
existence where the legal ownership is held by one person, but there are
other people who also have shares in the property.

With express co-ownerships there’ll always be a deed or document

that gives details of the co-ownership. This may, for example, be the
registered title of the property or a trust deed.

But with implied co-ownerships, there may not be any document

recording the co-ownership. An implied co-ownership will arise
because of the circumstances of the transaction, and it’s sometimes
difficult to discover

Forms of Co-Ownership -Joint Tenancy and Tenancy in Common

Joint Tenancy
In a joint tenancy all the co-owners together are deemed to constitute one
ingle owner. Although they may have separate right between themselves,
they are considered as a unitary body against everyone else.
As Joint tenants are viewed as a single entity joint tenancy cannot exist
unless ‘four unities of Possession, Interest, Title and time are present (AG
Securities V Vaughan).
The right of survivorship applies to joint tenants as a consequence of
regarding co-owners as a single entity. This right of survivorship means
that when one joint tenant dies, his interest dies with him. It does not pass
under his will or intestacy. This is because the right of survivorship
operates immediately on death, whereas a will is operative after death, so
survivorship takes effect first (In Re Caines deceased)
Tenancy in Common
Under a tenancy in common, each co-owner is regarded as having a
distinct, identifiable ‘undivided share in the land’. The tenants have quite
separate interests, although while the tenancy lasts no-one can say which
of them owns any particular part of the land; hence their shares being
‘undivided’. The undivided shares can be unequal, for example ‘to A as to
one tenth and to B as to nine tenths’.
The right of survivorship does not apply to a tenancy in common. On the
death of a tenant in common, the deceased’s share will pass under his will
or by the rules of intestacy.
Structure of Co-ownership
Imposition of Trust
The LPA 1925 imposed a trust for sale in all cases of co-ownership. Under
LPA s 34(2) and 36, whenever a land is expressly conveyed to more than
one person there would be trust for sale. Similarly, a trust for sale was
imposed whenever the land is left by will to more than one person (LPA,
ss 34(3) and 36).
The trust for sale is now abolished by The Trusts of Land and Appointment
of Trustees Act 1996 (TLATA 1996) and replaced with a new concept of
the ‘trust of land’. The main principle is that the co-owned properties are
automatically held on trust. Thus, there would be separation of legal title
held by the trustees and equitable title enjoyed by the beneficiaries.
Ownership of the bare legal title imposes duties and powers of
management on the trustees and the beneficiaries enjoy the benefit of the
land.
All trusts for sale existing as at 1 January 1997 were converted into trusts
of land (TLATA 1996, s 1(2)(b)) and are now governed by TLATA 1996.
Co-ownership at Law and Equity
Law : the legal title (trustees)
The Law of Property Act 1925 (LPA), s.1 (6) provides that the legal
title must always be held by way of joint tenancy. LPA s. 36(2) states
that there can be no severance of legal joint tenancy so as to create
tenancy in common. Severance is a process whereby a joint tenancy is
converted into a tenancy in common.
Trustees Act 1925 s 34(2) read with LPA s 34 (2) we find that the
maximum number of legal owners (trustees) is four. The beneficial
interest can be held by any number of people as tenants in common.
If there is an attempt to transfer the legal title to more than four people,
then the first four named will hold the legal title LPA s 34(2)).
To be a legal title holder the trustee must be of full age (18 years)
according to LPA s 34 (2). There is no restriction of age to hold the
equitable title.
So, a co-owned legal title will always be held under a joint tenancy unlike
the beneficial interest where it will need to be determined whether a joint
tenancy or a tenancy in common exists.

Determining how the Equitable interest is held in land

Equity deals with the actual ownership of the land. In equity, co-owners
can be either joint tenants or tenants in common. There are tests to
determine whether the equitable interest in held as joint tenants or
tenants in common.
First Test: Are all four unities satisfied?
As mentioned earlier, for a joint tenancy all for unities of possession,
interest, time and title should be satisfied.
Possession
Each co-owner is as much entitled to possession of any part of the land as
the other. No joint tenants (or any other co-owner) can be excluded from
any part of the land.
Interest
The interest of each joint tenant must be the same in nature (for example
freehold or leasehold) and duration (for example fee simple or life
interest).
Title
All joint tenants must acquire title under the same document or act. This
requirement is satisfied if they all take their rights by the same
conveyance, or simultaneously take possession of the land, together.
Time
The interest of each joint tenant must vest at the same time which is less
to do with the parties signing their agreement at the same time (which
would be almost impossible in practice) but more to do with the interest
taking effect from the same start date, even if the contracts were signed a
considerable period apart.

Second Test: Express Declaration

Even where all four unities are present, it is still possible for the equitable
interest to be held as either a joint tenancy or a tenancy in common. How
do you then determine the Co-ownership of Land I 241 way in which the
equitable interest is actually being held? The first thing to look for is
evidence of an express declaration as to how the parties want the
beneficial interest to be held. Such a declaration will be found in the
express words in the grant, i.e. the will/conveyance/transfer. Where there
is an express declaration, this declaration is conclusive (Goodman v
Gallant) and will prevail (Pink v Lawrence).
If title is registered, the express declaration would be included in the
transfer to the co-owners. If it is in Form TR1, any declaration would be
included in section 10.

Third Test: Words of Severance

In the absence of declaration, a tenancy in common may be found in
words of severance indicating that the co-owners intend to own the land
in separate and distinct shares albeit undivided.
Such words include:
1. ‘in equal shares’ (Payne v Webb);
2. ‘share and share alike’ (Heathe v Heathe)
3. ‘to be divided between’ (Fisher v Wigg)
4. ‘equally’ (Re Kilvert deceased)
5. among A and B

Fourth Test: Presumptions – Does Equity presume a tenancy in

common?
Circumstances of the purchase to see if they are such that equity
presumes ternancy in common. The three situations are:
a) Partnership property
b) Lenders
c) Unequal contributions towards the purchase price
If all four unities are present, there is no express declaration as to how the
equitable interest is held, no words of severance and none of the
equitable presumptions apply, the co-owners will hold as joint tenants, ie
‘equity follows the law’, as we have seen that the legal estate has to be
held on a joint tenancy.

Co-ownership and Registered and unregistered land

Where the title to the land is unregistered the fact that the last
conveyance is to more than one person indicates that there is co-
ownership. If the conveyance declares how the co-owners decided to hold
the equitable interest it tells how they initially owned the equitable
interest.
Where title to the land is registered, the co-owners will be the registered
proprietors. If they hold the land as tenants in common in equity then a
restriction should be placed on the proprietorship register recording that
fact (LPA 1925 s 40).

Change of mind – Severance of equitable joint tenancy

The process of converting an equitable joint tenancy into tenancy in
common is known as severance. When severance occurs, the new tenants
in common will acquire equal shares in the land regardless of the
proportions of their contributions to their purchase price.
For example, if two equitable joint tenants, J and K, sever their joint
tenancy, both J and K will obtain a half share in the property: tenants in
common (J, K) joint tenants severance J – 1/2 , K – 1/2 ,
If three equitable joint tenants, J, K and L, sever their joint tenancy, J, K
and L will receive a one-third share each, and so on: tenants in common (J,
K, L) joint tenants severance J – 1/ 3 , K – 1/ 3 , L – 1/ 3 ,
Sometimes severance is desired only by one and not all of the joint
tenants. If there are two joint tenants, J and K, and only J severs, then both
J and K become tenants in common because there is no-one else for K to
continue a joint tenancy with (see above).
However, if there are more than two joint tenants and only one wishes to
sever, then the position may be different. Only the severing party’s share
will be held under a tenancy in common and the remaining joint tenants
will stay as they were, holding the remaining ‘share’ of the property
between them: (J, K, L) joint tenants severance by J only J – 1/ 3 tenant in
common, (K L ) – 2 / 3 as joint tenants

Methods of Severance
 Notice under LPA 1925 s 36(2)
 Alienation
 Mutual agreement or course of dealing
 Homicide
Severance by Notice
Notice under LPA, s 36(2) has three requirements:
a) The notice must be given in writing
b) The notice must show the correct intention
c) The notice must be correctly served (LPA, s 196)

a) The notice must be given in writing

There is no requirement of signature in 36 (2).

b) The notice must show the correct intention

Written notice must be given ‘to the other joint tenants’ and note that
it must be to all
the other equitable joint tenants stating the unequivocal and
irrevocable intention to
sever immediately, either expressly or by implication.
The notice must state the intention to bring about the wanted result
immediately and not some time in the future. In Harris v Goddard a
prayer in a divorce petition to sever joint tenancy was not notice as it
did no more than invite the court to consider at some time in the
future.
In contrast, Re Draper’s Conveyance, on similar facts, the wife’s
affidavit asserting that she is entitled to half share in matrimonial
home was held to have shown the requisite intention.
c) The notice must be correctly served (LPA, s 196)
it must be deemed served on the other joint tenants. It is
deemed sufficiently served if handed over to the other joint
tenant(s) or if left at the ‘last known place of abode or business’
of the person upon whom it is to be served (LPA 1925, s 196
(3))
 In Re 88 Berkley Road and Kinch v Bullard

Severance by alienation
‘An act of a joint tenant operating on his own share’ is known as
severance by alienation. This may occur when the joint tenant sells, gives
or mortgages his equitable interest to a third party. To be effective, the
gift, sale or mortgage must be in signed writing (Law of Property Act 1925,
s 53(1)(c)).
The joint tenant cannot transfer his interest in the legal estate (if he has
one) at the same time, as this would require severance of the legal joint
tenancy, prohibited by s 36(2) of the 1925 Act. He would remain a trustee
despite disposing of his equitable interest. Any dealing with the legal
estate requires all the trustees to participate.
Bankruptcy of a co-owner also has the effect of automatically severing his
equitable joint tenancy, as it results in involuntary alienation of the
equitable interest to vest in his trustee in bankruptcy.
Example: pg 143 Manual
Severance by mutual agreement or a course of dealing
Mutual Agreement
Burgess V Rawnsley
It was held that the agreement to sell part of the property to a co-owner
amounted to severance even though they never reached an agreement in
relation to the sale price. Severance by mutual agreement applies where
the co-owners expressly agree to sever the joint tenancy in equity, or
where the parties agree to deal with the land in a certain way and that
method of dealing would have the effect of severing. The agreement
between the parties need not be one that is binding on the parties; it is
sufficient for it to show a common intention to sever (Sir John Pennycuick)
Course of dealing
Severance by a course of dealing is any course of dealing by the joint
tenants showing that their interests should be treated as a tenancy in
common rather than a joint tenancy. Here there is no necessity for an
express or implied agreement. It is sufficient that the parties act in such a
way that they intend that their shares would be held as tenants in
common and not as joint tenants (per Lord Denning in Burgess v
Rawnsley).
Homicide
Where one of two joint tenants murders the other, this has the effect of
severing the joint tenancy in equity. This prevents the murderer from
benefiting from the crime. The victim’s equitable interest in the land
passes to the beneficiaries under his or her will or intestacy. The murderer
takes the legal estate in the land as a result of survivorship. The legal
estate is held on trust of land for the murderer and the victim’s estate as
equitable tenants in common (Re K)
Effect of Severance where there are two co-owners and more than
two co-owners

Protecting the tenancy in common after joint tenancy is severed

After co-owners sever the joint tenancy in equity, they should record this
on the title to the property. How they do this depends on whether title to
the land is unregistered or registered:
a) Unregistered titles. When the joint tenancy is severed in equity, a
memorandum of severance should be placed on the conveyance to
the co-owners. This is just a note recording the fact that the joint
tenancy has been severed in equity. The reason for doing this is to
ensure that anyone who looks at the deeds can see that even
though the co-owners may have originally bought as beneficial joint
tenants, they now hold as equitable tenants in common. However,
the fact that there is no notice of severance on the conveyance does
not mean that the joint tenancy has not been severed and its
absence does not affect the validity of the severance. The notice is
to warn purchasers that the co-owners are now tenants in common
in equity.
b) Registered titles. When the joint tenancy is severed in equity, a
restriction should be placed on the register (LRA 2002, s 40) to
indicate that the land is no longer held by the co-owners as joint
tenants. Again, the purpose of the restriction is to warn purchasers
that the co-owners now hold the land as tenants in common in
equity.
CO-OWNERSHIP and LEASES LECTURE

Trust Creation
Creation of Express of Trust: Signed writing – s. 53(1) (b) LPA 1925
Implied Trust:
No formalities – s 53 (2) LPA 1925
Two types:
Resulting trust – contribution to purchase price not intended to be a gift
or loan (remember to raise the question in the answer). The proportion of
the shares will be proportionate to the contribution (Curley v Parkes)
Constructive trust – express agreement/ inferred common intention and
act of detriment
Lloyd’s Bank v Rosett – because of the behaviour of the parties it is
possible to construe a constructive trust.
First situation – an agreement / arrangement/ understanding between
legal and non-legal owner to share the equitable interest and in reliance
of such agreement the non-legal owner acts to his own detriment.
Commonly hand over some money.
Second situation – In the absence of any such arrangement/ agreement/
understanding, the conduct of the parties allows the court to infer a
common intention to share the equitable interest. The non-legal owner
should make a direct contribution to the purchase price and the non- legal
owner has again acted to his detriment.
Once the courts establish an agreement, arrangement, understanding or
common intention along with the acts of detriment by a non-legal owner,
they have a discretion about the size of share they can award the non-
legal owner ( Drake v Whipp and Stack v Dowden).
In the exam when facts don’t make it clear about the resulting or
constructive trust, we need to consider both resulting as well as
constructive trust. In basic form and not as detailed as equity.
Once the trust has risen then look at how that interest is held.
Statutory trust is imposed where 2 or more people have a concurrent
interest ss 34(2) and 36 (1) LPA 1925. Now Trusts of Land – TLATA 1996

Co-ownership – 2 types
Joint tenancy – legal estate and equitable interest
Tenancy in common – equitable interest
Separate the two types and approach separately when approaching the
question.
Legal interest is always joint tenancy but equitable interest can be either
joint tenancy or tenancy in common. To find the nature of the equitable
interests there are 4 tests:
- Test of 4 unities of possession, interest, time and title (always be
applied before going to the next tests). All must be present for joint
tenancy. Apply those unities to the facts.
 - Express declaration in the transfer deed. Even if there is a differing
contribution to the purchase price, the declaration hold it as joint
tenants is conclusive (Goodman v Gallant).
- Words of Severance – any suggestions in the deed
- Presumption in equity that it is a tenancy in common – partnership
property, lenders (rare) unequal contributions to the purchase price.
Exam tip - If it turned out that it is a tenancy in common, it will usually be
a short answer for that exam question. Always explain with legal interests
and equitable interest.
Legal Estate – only held as JT and cannot sever – survivorship applies
Equitable interest – can be severed by notice, mutual agreement/conduct,
alienation (voluntary / involuntary) homicide
Notice – should be served on all the co-owners and not just one (s 36 LPA
1925). It has to be in writing and correct intention to sever immediately
and not in the future. (Harris v Goddard). No requirement of signing.
Mutual Agreement / conduct
Alienation – signed writing (s 53 (1) (c) LPA 1925) – mortgage (usually
crops up in exam). Involuntary – bankruptcy situation – shares
automatically severed and goes to trustee in bankruptcy. – once severed
always severed even if it comes back in mortgage case.
Homicide (Re K) – Exam tip – argue on formalities – have/ haven’t.
Alternative arguments.
Lecture Activity
TALATA 1996
s 6 – Trustees have all the powers of an absolute owner
s 11 – Duty to consult beneficiaries
s 12 – Beneficiaries’ right of occupation – where a new person moves in
inheriting share
s 13 – exclusion and restriction of right to occupy – an occupier who may
be incapacitated and property may be unsuitable for needs.
s 14 – application to court – both trustees and beneficiaries
s 15 – matters court needs to take into account – list of factors – relevance
and application to facts here.

Workshop 4 Prep Activity

In 2009 Ken Baxter, Lara Stuart, Mike Brennan and Nick Spring decided to buy a holiday home
together. They found a suitable property in the village of Ilkley, known as Hope Cottage. Ken and
Lara each contributed £50,000, whilst Mike and Nick each contributed £100,000. The transfer
contained a declaration that all four owners were beneficial joint tenants. The land was registered in
Mike and Nick’s names only. In 2015 Ken moved abroad and sold his share in Hope Cottage to Lara
for £70,000. In 2017 Nick died. His will left his entire estate to his cousin Joanne. Two months ago,
Mike decided to move abroad. Lara agreed in principle to buy him out of the cottage at market
value, but she has since had difficulty finding the finances, and has now changed her mind. Mike
wants to sell the cottage but Lara is against this proposal.

Advise Mike: (a) As to the effect of the events outlined above on the legal estate and the equitable
interest in Hope Cottage;

2009 – initial purchase of the house

Legal Estate

K, L, M and N purchased the house. The legal estate is under M and N’s name.

Equitable Interest

There is unequal contribution to buy the cottage K (50,000), L(£50,000), M(£100,000) and
N(£100,000). The unequal contribution does raise a presumption of tenancy in common ie they have
an undivided shares in the cottage where the shares re marked out proportionate to their
contribution to the purchase price. However, the express declaration in the transfer that they are
beneficial joint tenants will be conclusive (Goodman v Gallant) and confirmed in Pink v Lawrence.
Thus, the cottage is held as beneficial joint tenants between K, L M and N. As Beneficial joint tenants
they have no sperate shares and are treated by the outside world as single person without separate
shares in the property.

2015 – Ken sells his share to Lara

Legal Estate

The legal estate is unaffected by the sale and M and N hold the cottage on trust.

Equitable Interest

A beneficial joint tenancy can be severed by alienation and sale of the share of the property to Laura
satisfies the condition of alienation. The sale of the share of Ken means Ken’s share will be held as
tenancy in common and the remaining joint tenants will stay as they are. Thus, L now holds 1/4 th
share in the cottage as tenant in common and L, M, and N hold 3/4th share as tenants in common.

2017 – Nick dies

Legal Estate

The legal estate is held by M as a sole trustee as N has died.

Equitable Interest

N was a joint tenant and right of survivorship applies to joint tenants. That means when N dies the
survivors L and M become owners of the joint tenancy and own 3/4 th the share as joint tenants.
Joanne will not get any interest under N’s will. L continues to hold 1/4 th of the share in the cottage as
tenant in common.
2 months ago

Legal Estate

M is the sole owner of the legal estate and holds cottage on trust.

Equitable interest

M and L agree on principle for the sale of M’s share in the cottage. This can be severance by mutual
agreement or course of dealing. Applying Brugess v Rawnsley, M’s agreement with L to sell the
property is to deal with the property in a certain way and that certain method has the effect of
severance. This means M now holds his share as a tenant in common. This ends the joint tenancy
between M and L. The shares are as follows: M – 3/8th share in the cottage. L – 3/8+1/4 = 5/8.

(b) whether Joanne or Lara can prevent the proposed sale; and

Joanne has no interest in the cottage and she can not prevent the sale of the cottage. M is the
sole trustee and L is only a beneficiary. M has the powers of an absolute owner to deal with the
property (s 6 (1) Trusts of Land and Appointment of Trustees Act (‘TALATA)). M has to have regard
to the rights of L who is a beneficiary when exercising the power (s 6 (5) TALATA). When selling the
land M as a trustee must consult the beneficiary L who we can assume is of full age and capacity
and is entitled to possession (ie immediate interest in land) and comply as far as practicable with the
wishes of the L as she owns the majority share of the equitable interest (s 11 TLATA).

If M still goers ahead with the sale, L may make an application to the court under s 14 TLATA to
make orders obliging M to exercising his function as a trustee. In making an order under s 14, the
court will consider factors such as intention of the settlor creating the trust, purpose of the trust and
the intention of the settlor (s 15 TLATA).

Discuss facts about holiday home etc. – purpose of the trust

(c) if the sale goes ahead, whether a buyer would be bound by any trust interests which may
subsist in Hope Cottage.

As there are only two beneficiaries M and L, the purchaser has to obtain consent of two people at
least. As L is refusing to let M sell the cottage, the purchaser is unlikely to obtain consent from both
Mand L and hence is likely to be bound by the interests of L (s 10 TLATA).

The short answer is that the purchaser is not bound if Mike appoints a second trustee and
overreaches L’s beneficial interest (City of London Banking Society v Felgg).

If the buyer doesn’t insist on appointing the second trustee, the buyer will take the cottage subject
to L’s beneficial interest if Lara’s interest overrides under Sch. 3 Para 2 (Williams and Glenn Bank v
Boland)

 Lara could have entered a restriction in proprietorship register which would warn the
prospective buyer.
 Overreaching ( s 2 and s 27 LPA 1925)
 If L’s interest is not overreached then L’s interest will override Sch 3 Para 2 LRA 2002
o L has a Proprietary interest in the cottage as beneficiary of the trust (WBG v Boland)
o If L is in actual occupation – discuss cases
o Conditions – careful inspection
 o Disclosures – if the buyer asks L whether she has any interest and if she fails to
disclose it then she can’t claim her overriding interest.
o Even if L is in actual occupation, if the buyer insists on M to appoint a second
trustee, her overriding interest will be overreached. (CLBS v Felgg)

Model Answer

K, L, M and N bought the cottage together and hence are co-owners and the cottage will be held on
trust ( s 34(2) and s 36(1) LPA 1925) and the trust is governed by TLATA 1996.

Purchase in 2009

Legal Estate

M and N are the legal owners as the land was registered in Mand N’s names in the proprietorship
register at the Land Registry. They are the two trustees and can only hold the cottage as joint
tenants and that joint tenancy can never be severed (s 1(6) LPA 1925).

Beneficial Interests

4 unities present – when the cottage was bought they were all entitled to possession and the facts
don’t suggest otherwise; they also had the same interest; they bought at the same time in 2009 and
they own the cottage under the same title ie transfer.

The express declaration in the transfer states that they are beneficial joint tenants will be conclusive
(Goodman v Gallant) and confirmed in Pink v Lawrence. Thus, the cottage is held as beneficial joint
tenants between K, L M and N regardless of their unequal contributions. As Beneficial joint tenants
they have no sperate shares and are treated by the outside world as single person without separate
shares in the property.

2015 – Ken sells his share to Lara

Legal Estate

No effect. M and N hold the legal estate.

Beneficial Interest

When K sold his share to Laura it is severance assuming that the condition of signed writing in s 52
(1) (c) LPA 1925 is satisfied. The effect of the sale is that L has acquired K’s share and is now tenant in
common. When beneficial joint tenancy severs, it severs equally (equity is equality) and size of the
contribution is irrelevant. The sale of the share of Ken means Ken’s share will be held as tenancy in
common and the remaining joint tenants will stay as they are. Thus, L now holds 1/4 th share in the
cottage as tenant in common and L, M, and N hold 3/4 th share as tenants in common between
themselves.

2007 – Nick dies

Legal Estate

The effect of N’s death is that ‘rule of survivorship’ applies ie the survivor inherits the deceased ( N)
property automatically. The legal estate is held by M as a sole trustee. N was a joint tenant and right
of survivorship applies to joint tenants. That means when N dies the survivors L and M become
owners of the joint tenancy and own 3/4 th the share as joint tenants. Joanne will not get any interest
under N’s will. L continues to hold 1/4th of the share in the cottage as tenant in common.

2017 – agreement to buy Mike out

Legal Estate

M is the sole owner of the legal estate and holds cottage on trust. No effect on legal estate.

Equitable interest

M and L agree on principle for the sale of M’s share in the cottage. This can be severance by mutual
agreement or course of dealing. Applying Brugess v Rawnsley, M’s agreement with L to sell the
property is to deal with the property in a certain way and that certain method has the effect of
severance. In Burgess, the price was agreed upon but there the price was not agreed here. If the
agreement constitutes severance then the shares are L and M – 3/4th as joint tenants and L- ¼. If the
joint tenancy was severed, M now holds his share as a tenant in common. This ends the joint
tenancy between M and L. The shares then are as follows: M – 3/8th share in the cottage. L –
3/8+1/4 = 5/8.

Additional Problem Question

a) Alan (A) and Carl (C) bought Abbey View to live together. Both their
names appear on the proprietorship register and hence are thus co-
owners. Co-ownership gives rise to statutory trust under s 34 (2)
and 36(1) Law of Property Act 1925 (LPA) and is governed by Trusts
of Land and Appointment of Trustees Act 1996 (TLATA).

2010 – after the purchase

Legal Interest
A and C are the legal owners as the land was registered in A and C’s
names in the proprietorship register at the Land Registry. They are
the two trustees and can only hold the cottage as joint tenants and
that joint tenancy can never be severed (s 1(6) LPA 1925).

Beneficial Interest

Beneficial interest can be held as joint tenants ie no sperate shares

and are treated as single entity to the outside world or tenants in
common ie they have undivided shares in Abbey View which may be
equal or unequal. To ascertain their beneficial interest we need to
see if there are 4 unities present:

 Possession – A and C both have their names on proprietorship

register and wanted to live together and hence each is
entitled to possession of the whole land and cannot exclude
one another.
  Interest – Both A and C as co-owners have the same interest
in the property.

 Time – Each co-owner’s interest vested at the same time here

when they transfer was complete.

 Title – Both A and C received their titles to Abbey View under

the same document.

Express Declaration
There is no express declaration on the transfer deed about joint
ownership and hence we need to see further if any words of
severance exists

Words of Severance
The proprietorship registry does not contain any words of
severance.

Presumption of tenancy in common?

The title states that the price paid for Abbey View was 230,000. The
facts don’t state if A and C paid equally or not. If they paid unequal
purchase price then this raises the presumption of tenancy in
common. We need more information. Assuming they paid equally
we may assume that they hold the beneficial interest as joint
tenants.

Legal Interest - (AC) as joint tenants

Beneficial Interest – (AC) as joint tenants.

2011 – Dave paid for the share in Abbey View

Legal Interest
The legal interest remains unaffected and A and C are the trustees.

Beneficial Interest
Dave (D) paid for a ‘share in Abbey View’. The facts do not state the
exact amount of share in Abbey View. In consideration for the share
Dave paid for an extension. Assuming that D’s share is 1/3 rd as A
and C are other co-owners, A and C will still remain joint tenants of
the 2/3rd of the shares in Abbey View. The assumption is based
facts not suggesting any severance between A and C.

Alternatively, if thee is a mutual agreement or course of dealing

between A and C then there is severance. Can the giving of share to
D be considered as course of dealing? In Burgess v Rawnsley, Lord
Dening held that the course of dealing need not amount to express
or implied agreement to sever. If the parties act in such a way that
it is clear that they intend that their shares should be held as
tenants in common the severance by course of dealing takes place.
The facts are not clear and we need more information. However, the
fact that two months ago A sent a letter to C suggests that A and C
intended to hold Abbey View as joint tenants.

Legal Interest – (AC)

Beneficial Interest – (AC) – 2/3rd of Abbey View ads joint tenants and
D – 1/3rd of Abbey View as Tenant in Common.

June 2020- A sends letter to C

Legal Interest
Legal interest is unaffected by severance of beneficial interest. A
and C remain legal owners.

Beneficial Interest
A sending a letter to C to get his share in Abbey View may amount
to severance by notice under s 36 (2) LPA The requirements of valid
notice to be given in writing and showing correct intention are
satisfied as A wrote a letter and clearly mentioned that he wants
Abbey View to be sold immediately (Re Draper’s Conveyance) so he
can get his share. But has the notice been properly served as per s
196 LPA? In Kinch v Bulard court held that the notice is served under
s 196 (3) if they were delivered properly. The facts state that the
the letter appears to have been lost and C never received it. The
letter was posted through special delivery and s 196 (4) states that
the letter must be posted by registered post or recorded delivery
service. We are not clear of the term ‘special delivery’ and it is
unlikely that there is a severance due to notice not being properly
served.

Legal Interest – (AC)

Beneficial interest – (AC) – 2/3rd share as joint tenants and D – 1/3 rd
share as tenant in common.

July 2020 – Alan dies in car crash

Legal Interest
As a joint tenant the legal interest will pass to C through rule of
survivorship. C holds Abbey View as a sole trustee.

Beneficial Interest
 If the severance didn’t take place, then A and C remain joint tenants
and C will get A’s share by rule of survivorship ie when A dies the
surviving joint tenant C becomes the sole owner of the beneficial
interest.
Alternatively, if the severance took place by mutual course of
dealing in 2011 then A’s severance by notice is irrelevant and Sally
(S)will get A’s share of 1/3rd of Abbey View through A’s will. If the
severance didn’t take place in 2011 and if the severance was
effective in June by A’s letter then S will get the 1/3 rd share of A in
Abbey View. As discussed above, we need more information and it is
unlikely on the given facts severance took place.

Legal Interest – C
Beneficial Interest – C – 2/3rd as tenant in common as joint tenancy
ends with A’s death. D – 1/3rd share tenant in common.

b) C is the sole trustee who holds the trust for the benefit of himself
and D. If the severance took place then S would also be a
beneficiary. We concluded it is unlikely S has a share. C has
absolute power in relation to Abbey View (s 6(1) TLATA). In
exercising his power, C has to have regard to the rights of D and S
(s 6(5) TLATA). S and D have a right to be consulted by C while C
exercises his function as a trustee of Abbey View so far as
practicable and so far as consistent with the general interest of the
beneficiaries (s 11(1) TLATA). S and D as beneficiaries will also have
right to occupation of Abbey View (s 12 TLATA) and cannot be
excluded unreasonably by B (s 13 (2) TLATA). In case of dispute with
C, both S and D can apply to the court for an order under s 14
TLATA.

c) As beneficial owners of Abbey view both S and D can enter

restriction in the proprietorship register which would warn the
prospective buyer. As S and D together have higher value of share
in Abbie View their interests will prevail and the purchaser has to
take Abbey View subject to their interests.
C may have to appoint a second trustee to overreach the interests
of S and D.

If the restrictions are not entered, then S and D’s beneficial interests
might override under Sch 3 Para 2 LPA 1925 id both S and D are in
actual occupation; . If their interests override, have proprietary
interests (which they both will have). The purchaser has to satisfy
conditions of careful inspection and disclosures.
 Even if the interests override, C may still appoint a second trustee
and D and S’s interest may be overreached.

Leases
Lease is a right in land capable of binding third parties
Licence is a personal contractual right not binding on the third parties.

Key test- Street v Mountford (1985 HOL)

 - Certainty of duration - that the lease was granted for a clearly
definable term (term of years absolute s 1(1) (b)) – Lace v Chantler –
agreement for duration of war not certain and hence not lease.
- Exclusive possession – right to exclude everyone including the
landlord
- (Rent) – indicates intention to create legal relations but not essential
(Ashburn Anstalt v Arnold).
Two types of leases
Express fixed term – TOYA
Eg. 6 yrs/ 6 months/ 6 weeks
Depending on formalities – could be legal / equitable – if legal by deed s
52 LPA 1925

Periodic
Weekly, monthly or quarterly
Express or implied
You only need to consider legal –

Formalities
- Legal lease has to be created by deed: s 52 LPA 1925; Deed s 1 LP(MP) A
1989
- Lease of 3 years or less – Parol Lease Exception s 54 (2) LPA 1925 –
term 3 years or less.
Creation of Equitable Lease
- A type of estate contract
- s 2 LP (MP) A 1989
Enforceability of leases