Tenancy in Common in the Case of 16 Acacia Avenue

SECTION- A

Q. 2

The nature of co-ownership claims that there can be more than one party having interest in the title of the estate, where the land is held collectively like in the case of Alun, being Alun, Badun, Calum and Danun having rights on a freehold property in 16 Acacia Avenue by investing their inheritance money on the same. There can be typically two ways the ownership may be categorized as being either Joint Tenancy or Tenancy in Coon. However, this situation particularly defies the characteristics of joint tenancy wherein, the property is owned by all the parties completely and “wholly”and qualifies for tenancy in common.

The formalities regarding the sale of land are stated by the Law of Property, 1925, under Section 40 lay down rules for contract of sale but any contract that do not follow the requirements as laid down in these sections will not stand void but remain unenforceable. The section also covers any kind of oral contracts that is made between the parties but it may pose a bar on the methods and procedural remedies are applied. The oral contracts are more protected if they are in written form like a memorandum to help provide for easy evidence in case of any dispute. The law of Property 1925 states sets of proprietary rights including the freehold title and possession known as the legal estates and the ones that are governed by “years absolute”. The requirements therefore, laid down are important and must be followed but it has been argued over and over again that if the formal requirements are not followed it would result in showing the conflicted and ignorant interest of the parties. Having the formal requirements and following them provides a lot of benefits having a clearer evidence in times of dispute, the question of security is better dealt with and others.

In a freehold property, there can be up to four owners and in this case A, B, C and D are four owners of the freehold property. All four parties contributed to the purchase price of the property equally and the deed transferred the property to the joint names. In the initial stage, all four were equal owners of the property and shared joint tenancy properties where in there isn’t one owner, and without any declaration of the same everyone shared same ownership in the property. Only on the death of one of the four parties could forward their share of property to their assigned successor or chosen representatives to carry forward their share like original survivors and would have their place as the same. However, the “right of survivorship” is not suitable in the respect of these tenants and therefore, since the properties are transferred to other successors, this can be considered a tenancy in common.

Calun and Danun continued to live in the freehold property since the beginning. Only Alun and Badun had gone their own ways to set up a business but however as the turn of events would suggest, the business failed and they suffered huge losses. The situation remains as such that Alun had been killed and therefore transferred his share of the property to a charitable organization: Good Boy” rescue charity. Badun was struggling with debts and turned to be bankrupt and had no means to pay back the debts the failed business concurred. Fidelity Finance was Badun’s trustee and would pay back the creditors and at this point Badun wanted to move back in the house.

1. Explain how the estate would devolve in both legal and equitable title.

The perspectives of an estate must be decided as to whether the freehold property has a legal or an equitable title. The legal title confers the parties an original ownership where the deed or the legal documents has proper records claiming the parties having a proper title. Having the ownership to a land gives the owner or owners multiple rights be it with easement, conveyance rights, possession or right to dispose of the property. The owner has the right to maintain or control the property. However, with having equitable title on a property, the real power to use and enjoy lies with that title. It differs from legal title in slight ways as being an equitable owner does not make the person the true owner, which can be achieved only when the title is converted to a legal title. However, the equitable owner has much closer control over the enjoyment of the property. The main privilege gained by an equitable owner is the power to get access to the property even though there isn’t any real transfer of the ownership, however there is a high chance such might be received in the future. It helps laying a ground in respect with the financial interest in any estate.

In this scenario the estate was first purchased by the quadruplets and was a registered freehold property. However, Alun and Badun were not living in the property as opposed to Calun and Dadun who were in constant touch with the property and were enjoying the property qualifying to have an equitable ownership as well as a legal title since the deed is registered for the freehold property. However, Alun and Badun had both legal and equitable title over the property but since they chose live outside of the property, they were exercising their leal title. As Alun had died and his property was given to “Good Boy” rescue charity and Balun was recovering from debts and was a declared bankrupt, leaving Fidelity Finance to help repay the creditors. Therefore, in the case of Alun and Balun, they are the legal owners or have legal titles to the property and may exercise such rights.

2. Advise Calum and Danum whether they should allow Badum to move back into the property.

In this case Calum and Danum wishes to live in the purchased estate but is not willing to allow Badun who is a bankrupt at this point to let in on the house. The question comes into place where a tenant in common becomes a bankrupt, in this instance the position of Badun, the trustee who is appointed to take charge of paying back the debts ,then the trustees name or Fidelity Finance is put on the “Certificate of Title” which automatically gives the power to the trustee to sell the home. Badun’s interest and right in property is severed as soon as he was bankrupt and the entre charge is delivered to Fidelty Finance. It is then on the trustee to provide the other co-owners, Calum and Danum the option to buy Fidelity Finance’s interest in the home. . If Calum and Danum does so then they will have complete ownership over the property which is the most reasonable idea to do. If Calum and Danum refuses to do so, then the Fidelty Finance has the right to ask court to intervene and appoint a “Statutory Trustee for sale”

3. Advise Calum and Danum as to whether there is any threat to their hold on the property, or whether any other interested party could force its sale.

The property held by the four parties are not joint tenancy and is a tenancy in common, therefore the legal title of all the parties are with the Charitable organization as passed by Alun, Badun’s trustee is in place of Badun and Calum and Danum have their original right over the property undisturbed. However, since Badun is bankrupt then the trustee may intrude to sell Badun’s share of property. Generally, the trustee tries to sell the share when there is equity in a house which only arises when the debts that the trustee is meant to repay has a smaller value than the value of the share in the property. Chances are if the property is not valued at a higher price, the trustee may not sell the property but may transfer the certificate of title and have ownership over the property. He may introduce caveats which also means that he may disallow or make suitable clauses where the other co-owners are barred from mortgaging the property or selling the property. There hold in property is not under threat since it is not a joint property but the threat could be in the way if they want to keep their family home intact otherwise, only Badun’s portion may be up for sale.

SECTION B.

Q. 1

The Landlord in UK has the one primary duty is to provide and let out properties that they own which are “fit for human habitation” as per S.10 of the Housing Act, 2004. Britain’s laws regarding housing and tenancy has changed drastically since the first world war and the emergency period. The rights of landlords and tenants have been covered under the Landlord and Tenant Act, 1954. This piece of legislation is meant to protect the rights of tenants and provide rights of landlords in cases of a business venture or cases where rents are quite low. In this case, Andy is the owner of a registered freehold property of 24 Kitty Corner, a four storey house. The rights of a freehold property owner generally mean that the property is not held by any other entity and the Andy in this case is the original owner. He retains absolute unhindered right to use the property as per his choice and motive. There is no time limit like any leasehold property and therefore, makes it easy to let out or put up for sale. Since it is a freehold property, the sale of this estate creates a lot less issues as the state interference is absolutely prohibited and can be sold in a hassle-free manner.

Andy has given his freehold property up for rent to three parties one being his best friend for “200 per month for ‘1 year in the first instance’. Carey was given the top floor for £800 per month for a term of 6 years which was in a written format as a license agreement and thirdly to Denny paying £ 100 per week. At this point a few obligations arises on both the part of Andy being the landlord and the tenants.

The obligation on the part of the landlord is to give the right of possession to the tenant and no paramount title can exist in the property already rented out. Secondly, the landlord must provide a premise that is fit for human habitat and that warrant is also an onus on the tenant since a significant room is given out to the tenant to check before signing the lease and if any latent defect is to be found, due to the techniques are sufficiently modern and is suitable for the tenant to fix or maintain certain minor defects, the landlord is not completely liable. Thirdly, there must be no interference in the use of the property and the onus heavily lies on the landlord.

Tenancy Agreement or License

The agreement that was made between Andy and Carey was a license agreement as it was explicitly written and signed off as the same. This is most useful in cases of short time period rents be it giving accommodation to students or the likes. In law, there is no genuine contrast between the importance of the words lease or tenancy. Be that as it may, Acts of Parliament identifying with private inhabitance will in general be called a tenancy and those controlling business inhabitance shall be known as rent or lease. Exclusive possession plays a massive role in understanding the difference between the two concepts. Now it is possible that Occupancy or permit arrangements might be composed or verbal. Verbal arrangements are as lawfully authoritative as much as the composed ones. Nonetheless, it is prudent to have an understanding recorded as a hard copy so it is more clear where each gathering stands. Arrangements can't remove the rights allowed by Acts of Parliament to inhabitants or licensees, regardless of whether the phrasing of an understanding says something else. For instance, area 11 of the Landlord and Tenant Act 1985 spots certain fixing commitments on the landowner which can't be eliminated by putting the commitment on the occupant in the phrasing of the tenure arrangement.

Sale of freehold property

A lot of time the landowners of freehold properties often are willing to maximize their profits by selling the property to another investor. This is one of the main rights given undet the Landlord and Tenant Act, 1987 is the “right of first refusal granted to long leasehold tenants”. The landlord must serve a notice on the tenants who are qualifying as “qualifying tenants”. However, in this case such is not the concern since it does not involve purchase of flats on and off contracts however, such practices happen quite often. The lease that is initiated holds a legal interest in the estate owned and if the ownership of the entire property changes the legal interest that was created does not change or get affected at any cost. Even though the property is sold, the three tenanst occupying the estate has their interests intact. In many cases, the change of ownership of the landlords are not even known to the tenants in many cases. The same tenant rights remain in the property and they are not changed until such has been discussed and the terms are altered before the ownership is changed.

Whatever, the fixed term period is in the contract, that is maintained and the new landlord who is buying the property off Andy, has to agree by the tenants that are already in place until the term period by the contract is changed. The non-interference clause is absolutely important and therefore, the landlord needs to serve a notice in case any agent comes to inspect the premises. In case the tenants are facing difficulty with regard to repairs, in that case such needs shall be catered to and the damages must be fixed. Even though Andy sells off the property, such responsibility must be borne by him as per the Landlord and Tenant Act, 1985. The requirement to provide a safe and habitable condition is of utmost importance otherwise, the landlord could be in breach of law.

The section 5 notices must set out the terms on which the landlord intends to sell the property and must provide the qualifying tenants with a timescale within which to decide whether to exercise their right of first refusal and step into the shoes of the freehold buyer. The shortest timescale which can be stipulated in a section 5 notice is two months. In the intervening time between the serving of the section 5 notices and the expiry of the prescribed timescale, the landlord may not exchange contracts for the freehold sale.

Whilst the delays to the transaction and logistical and administrative effort of serving section 5 notices on qualifying tenants are troublesome, landlords should also be aware that failure to comply with the Act is a criminal offence subject to an unlimited fine.There are some exemptions under the Act, such as where corporate landlords sell the freehold interest to a company which is associated with them and the onward freehold sale then takes place via a share sale of the associated company rather than a straight forward property sale. It is also possible to avoid the need to serve section 5 where blocks do not yet contain 50% qualifying tenants.

Dig deeper into Primary Aim Of Land Registration Act 2002 with our selection of articles.

BIBLIOGRAPHY

CASE LAWS

1. Burton v Camden LBC [2000] 2 AC 399
2. Street v Mountford (1985) 17 HLR 402,
3. Antoniades v Villiers and Bridger (1989) 21 HLR 79, HL;
4. Bruton v London and Quadrant Housing Trust (1999) 31 HLR 902, HL.
5. Javins v. First National Realty Corp., 428 F.2d 1071, 1078-79 (D.C. Cir.), cert. denied, 400 U.S. 925 (1970).

STATUTE

1. Law of Property Act 1925, ss. 34, 36
2. Housing Act, 2004, S.10
3. Landlord and Tenant Act, 1985

JOURNALS

1. James C. Smith ,Urban Law Annual; Journal of Urban and Contemporary Law, “The Dynamics of Landlord-Tenant Law and Residential Finance: The Comparative Economics of Home Ownership”, Vol 44, 1993

BOOK

1. McFarlane, B., Hopkins, N. and Nield, S., 2009. Land Law. Oxford [UK]: Oxford University Press.

ARTICLES

• Essay Sauce , Legal formalities in property transactions. https://www.essaysauce.com/law-essays/legal-formalities-in-property-transactions/ accessed on 26th November, 2020
• Vineeta Menon, Real Estate basics, “ What Is a freehold property” < https://housing.com/news/real-estate-basics-freehold-property/#:~:text=There%20are%20no%20restrictions%20on,registration%20of%20a%20sale%20deed. > accessed on 5Th December, 2020
• The Economic Times, “ Partners and Co-owners in Property” < https://economictimes.indiatimes.com/partnership-and-co-ownership-of-property/articleshow/5758785.cms>
• All Answers ltd, 'Joint Tenancies v Tenancies In Common' (Lawteacher.net, December 2020) accessed 5 December 2020
• Justice Connect, Self Representation service, “ Bankruptcy and Family Home” < https://justestconnect.com/wp-content/uploads/2018/07/Bankruptcy-and-the-Family-Home.pdf > accessed on 5th December, 2020
• The Tenants Voice, “Landlord Selling Property – Renters’ Rights” , < https://www.thetenantsvoice.co.uk/advice_from_us/landlord-selling-property/#tenant_rights_during_a_property_sale > accessed on 5th December, 2020.
• Rights and Duties of Landlords and Tenants”, < https://saylordotorg.github.io/text_introduction-to-the-law-of-property-estate-planning-and-insurance/s16-02-rights-and-duties-of-landlords.html > accessed on 5th December, 2020
• All Answers ltd, 'Licences and Proprietary Estoppel Lecture' (Lawteacher.net, December 2020) accessed 5 December 2020
• Shelter Legal, England and Wales, “ Tenancy and License Agreements” , < https://england.shelter.org.uk/legal/security_of_tenure/basic_principles_security_of_tenure/the_tenancy_agreement > accessed on 5th December, 2020