Tenancy In Common In Property Ownership

Answer to Question 1

There are two ways in which Toby, James and Henry can jointly own property. These two ways are through joint tenancy and tenancy in common. Accordingly, Toby, James and Henry can either become joint tenants, or they may choose to become tenants in common. These methods create different kinds of rights and interests. The most important consideration for making this decision for them is how they want this jointly owned property to devolve in case of the death of one of the co-owners. This is because the right of survivorship is an essential characteristic of joint tenancy. This is discussed in some detail below.

In the case of joint tenants, the three owners will equal rights to the whole property and none of the three can pass on the ownership of the property in their own will. Instead, if one of the owners were to die, his property will automatically go to the other owners that have survived him. This principle is known as jus accrescendi and it is an important characteristic of joint tenancy. Thus, joint owners cannot dispose of their interest by making a provision in a will. Therefore, joint tenancy involves the four unities of title, interest, possession and time, wherein each owner holds the same interest as the other owners provided in the same document, vested in all owners at the same time. However, law does allow severance of joint ownership. This can be effected when a joint tenant acts on his own share by doing some act, such as, contracting to sell the property. It can also happen by mutual agreement between the joint tenants provided that it is made between all existing joint owners. It can also be severed when one joint tenant mortgages his interest in the property. A final and irrevocable unilateral act of alienation of own share by a joint tenant can also lead to the severance of joint tenancy under the LPA 1925, Section 36(2).

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In case of tenants in common, each of the three owners will own different share of the property and can pass on his share of the property in his will. Therefore, the property share of an owner will not automatically pass to the other surviving owners if he were to die.

In this situation, Toby, James and Henry are friends who met at university and have decided to get onto the property ladder by buying a property together. Although they can take either route to co-ownership of property, that is, either joint tenancy or tenancy at will; they will be advised to co-own the property as tenants in common as there are several advantages to this. First advantage is that the co-owners will be able to let their respective shares go to their family members or partners instead of having their share devolve upon the survivor as is the case with joint tenancy. The second advantage is that the creditors of one will not have a claim in the share of the other co-owners as is the case with joint tenancy, where the owners hold their shares in a unity so that creditor of one may have recourse against the entire property. The disadvantage of tenancy in common is that any of the co-owners may sell their share to anyone else which may mean that the remaining owners have to share this property with someone they did not intend to in the first place. However, this can be easily avoided by inserting a clause in the co-ownership agreement, which provides co-owners right of first refusal when one of the co-owner wishes to sell their share in the property. Therefore, considering all the relevant factors, it will be advised that the friends buy the property together as tenants in common and not as joint tenants.

Answer to question 2

Registration of land is governed by three principles, which underpinned the Land Registration Act 1925 and now Land Registration Act 2002. The three principles that underpinned the LRA 1925 were the mirror principle, the curtain principle, and the insurance principle. The mirror principle provides that the Register should reflect the reality of the title of the property. The curtain principle provides that the buyer of the land should not be concerned with the issues behind registered property. The insurance principle provides that the state guarantees the accuracy of the register and compensates those who suffer loss due to errors in the same. The overarching aim of land registration is that transfer of land should be easy, safe and efficient and that interests in land should be appropriately protected. This was the purpose for which the LRA was enacted in 1925. The same purpose continues to be involved in the LRA 2002. The three principles were identified and explained by Theodore Ruoff, the Chief Land Registrar from 1963 to 1975. These principles are briefly discussed below.

The first is the mirror principle, which provides that the register should reflect on the totality of ownership and interests in a specified piece of land and the title of the registered land should accurately reflect the position ‘on the ground’. This effectively means that an inspection of the Land Register should reveal the identity of the legal owner and the nature of his ownership. Moreover, the inspection of the Register should also reveal any limitations on the interests of the owners and any rights that other people may have over the land. The purpose of this principle is to ensure that in the event a person wants to purchase the land, he will be able to know the full character of the land. The mirror principle also reduces possibility of fraud because the paper owner will not be able to hide the interests that others may have on the land, or the limitations on his interests.

The second is the curtain principle, which provides that some of the equitable interests in the property may be hidden behind a curtain of trust of a special kind. The existence of such equitable interests in the property does not impact the purchaser when the formalities of the purchase are observed as per Sections 2 and 27 of the LPA 1925. These interests are overreached on the completion of such formalities. The underlying reason for this principle is that there should be no need for a purchaser to go behind the title to see everything that has happened off the register. The particular inference here is to trusts that affect the land.

The third principle is the insurance principle. This principle is related to the guarantee provided by the state that if the title to a land is duly registered, the state shall protect it. In other words, the insurance principle is where the state guarantees registered title and provides that it shall indemnify owners of land due to losses occurring from the errors in the register. There is a statutory indemnity in the form of monetary compensation, which is given to a purchaser of land who suffers a loss due to an error in the Register. The underlying reason for the insurance principle is the conclusive nature of the Register. As the Register is conclusive, any loss due to the errors in the Register are to be indemnified by the state.

When these principles are applied strictly, the result of the same is that Registered Title in land becomes indefeasible, which means that the title is incapable of being defeated and is immune from any claims other than those referred to in the Register. Mark Davys argues that despite the underlying three principles behind land registration, there is no system of land registration that can achieve in totality the three principles in practice. The total application of the three principles is not possible because this would mean favouring certainty over justice in some instances. As this would manifestly lead to unjust consequences in some instances, the three principles cannot be achieved in the absolute sense in the system of land registration.

Answer to question 6

In situations where the Land Registration Act 2002 (LRA 2002) applies, adverse possession can be claimed as per the provisions of the Act. The LRA 2002 is applicable to adverse possession with relation to registered land. The LRA 2002, Schedule 6, paragraph 1(1) provides the procedure making an application to the registar for the purpose of having the title registered under the LRA 2002. As per this provision, the claimant to title can apply to the registrar to be registered as the proprietor of a registered estate in land on the ground that he has had the adverse possession of the estate for a period of ten years ending on the date of the application. Once this application is made by the claimant, the registar serves a notice to the paper owner and any other person who may have an interest in that particular property. There is a period of 65 days that is provided to such persons to respond to the application of the claimant and show the interest that they have in the land.

The claimant to a title on the ground of adverse possession has to prove certain conditions in order to be registered as proprietor under the provisions of the LRA 2002. At the outset, it may be noted that there is a crucial difference in how adverse possession affects registered and unregistered land after the application of LRA 2002. With respect to unregistered land, the claimant to adverse possession may make an application to the Land Registry for registration after 12 years of occupation, but with regard to registered land, such an application can be made after 10 years. The basic rules governing adverse possession remain the same; these were laid down in JA Pye (Oxford) Ltd v Graham as follows: (a) claimant has to prove factual possession of land; (b) claimant must have the intention to possess the land; and (c) claimant must have exercised factual possession and intention to possess over the period requisite for adverse possession. It is in the last respect that there is a difference in registered and unregistered land, the former needing 10 years possession and the latter 12 years possession for adverse possession to apply. The LRA 2002, Schedule 6 makes certain changes to the registered land adverse possession, which go on to making it easier for the paper owner to prevent an application for adverse possession of their land being completed. This is because a notice is given to the paper owner and any other person who has interest in the property and time is given to make objections to the claimant’s application. Prior to the LRA 2002, there was an automatic effect of 12 years’ occupancy wherein the claimant would become entitled to be registered as proprietor. This has changed under the LRA 2002, which provides the mere right to apply for request to registration as proprietor after 10 years adverse possession. There is no automatic right of registration. Secondly, prior to the LRA 2002, paper owners were not even made aware of the adverse possession claims or given opportunities to object to such claims. Now, the request to the registrar for registration as proprietor triggers a notice by the registrar to the paper owner and other interested parties. Martin Dixon argues that the onus is on the adverse possessor under the LRA 2002 and has substantially diminished the chances of successful claim to adverse possession. This is because of the long period of 2 years to oppose the application and assert their legal title by the paper owner. Until the lapse of this period, registration of proprietary interest of the adverse possessor is not done. In case the paper owner opposes the registration within the period of 2 years, the adverse possessor only has three grounds on which he may base his claim: estoppel dictates that it would be unconscionable; entitlement to be registered for another reason; and ‘stepping-over’ one’s own boundary.

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Bibliography

  • Davys M, Land Law (Palgrave 2017)
  • Dixon M, Land Law (Routledge 2018)
  • King S, Beginning Land Law (Routledge 2015)
  • MacKenzie J, Textbook on Land Law (16th Edition Oxford University Press 2016) Martin Dixon, Land Law (Routledge 2018).

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