Purchased and the nature of co ownership

The legal and equitable co-owners of the House when it was purchased and the nature of co-ownership

The legal ownership of 1 Curzon Street, Trumpton (the House) vests in a maximum of four individuals as per the Law of Property Act 1925 (LPA 1925), Section 34 (2), which allows legal estate to be vested in a maximum of four individuals. Accordingly, legal estate is vested in. being a minor could not have legal estate in property and it was held in trust for him by the other owners. At the time of the purchase, Chris was 17 years of age, which makes him a minor at the point of purchase. Equitable ownership vests in all five owners (i.e. Ann, Ben, Doug, Eva, and Chris). .

The property was conveyed to the parties with a declaration that they were joint tenants in law and equity and this was registered at the H.M. Land Registry. This is pertinent to the issue of nature of co-ownership of the property. Co-ownership is assumed to be joint tenancy based on the common intention of the parties to purchase the property as joint owners (Marr v Collie [2017]). A statement expressing a common intention of joint tenancy can be used to create a joint tenancy of the co-owners. In this case, the property was conveyed with a declaration that they were joint tenants in law and equity and this is an express declaration as to the nature of beneficial interest in the property, which is decisive in nature (Goodman v Gallant [1986]). As joint tenants in law, the five owners have four unities of title, interest, possession and time. This means that the owners of the property own the property as a whole and they do not have separate interests in the property.

Who are the current owners in law and equity and what is the nature of their co-ownership?

The current owners in law are Doug, Eva, and Chris. Ann and Ben have died, therefore, they are no longer legal owners, but their beneficial interest has passed on to the remaining joint owners (in case of Ann) and Flora (under Ben’s will). Milly will not receive the beneficial interest in the property as per Ann’s will because the severance of joint ownership had not taken place prior to Ann’s death. Severance is effected through mutual agreement or one party acting on their share (LPA 1925, Section 36(2)). Ann discussed with Ben the possibility of selling her interest to him because she was having financial difficulties but before they could discuss it further, Ann was killed in a car crash. Ann’s will left her share her mother, Milly. As long as the severance of joint interest is not done, joint owners cannot dispose of their through will because severance of interest can only be inter vivos (Gould v Kemp (1834)). The rule of jus accrescendi will apply to devolve Ann’s interest in the surviving joint owners of the property. Ben’s signed notice of severance to the House by registered post is an act of severance of the joint tenancy. Severance of joint tenancy can take effect once the notice of severance is served to joint tenants (LPA 1925, Section 36(2)). The notice should make the intention clear that the joint owner wishes to sever joint tenancy immediately and effectively (Re Draper's Conveyance [1969]). The notice is deemed to be received by the joint tenants if a recorded delivery post is used to send it (LPA 1925, section 196(4)). In such a case, the notice will sever the joint tenancy even if the other joint tenants claim that they did not receive the notice of severance (Re 88 Berkeley Road NW9 [1971]). Chris received the letter and forgot to mention it to the others, but the notice is deemed to be served. Ben’s notice has an effect with respect to creation of beneficial interest for Flora, to whom he has left everything in his will.

Whether Chris and Doug are likely to obtain a court order for the immediate sale of the house

When owners have beneficial joint interests in the property, some of them cannot exclude others from living on the property under Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996), Section 12). Under TOLATA 1996, Section 6, trustees have the right to sell property, but they must take into consideration the wishes of the other beneficiaries with the majority of the equitable interest (Section 11). TOLATA 1996, Section 14, allows an owner of the property to apply to the court for an order that declares the extent of the individual ownership interests and sale of property. This amount to forcing of a sale, which can happen only when the joint tenancy is severed. However, the court will consider the interest of the minor (Flora’s son) who was born and is now living in the property (TOLATA 1996, Section 15 (1) (c)). Court may not allow sale of property if the interest of the minor may be impacted adversely (Rawlings v Rawlings [1964]). If the minor is living on the property and it is to their benefit to continue living there, then the sale may not be allowed (Williams v Williams [1976]). Because the child, George is settled at a local nursery, the court may consider the sale to be to the detriment of the child’s interest and not allow it.

Kemi’s claim to a share in 241 Villa Place: likelihood of success and factors for calculation.

Although the legal estate of the property is in the sole name of Tolu, a beneficial interest has been created for Kemi as well. TOLATA 1996, Section 1 provides that when two or more people own land concurrently there is a creation of trust of land and the rights of ownership may be divided between legal and beneficial owners. Beneficial owners may be people who have contributed to the purchase of the property. The purchase of the property was for £200,000, which was through a mortgage of £180,000 (taken by Tolu), and a deposit of £20,000 (paid by Elizabeth). At the time Kemi only paid the legal expenses of £3,000. Therefore, Kemi has not contributed to the purchase price of the property at all. Nevertheless, what needs also to be factored in is the fact that all household expenses barring the mortgage, were paid by direct debit out of a joint account to which both Tolu and Kemi have contributed equally and, Kemi paid mortgage repayments for a 12 month period when Tolu lost his job. Kemi also used £25,000 of her inheritance money to convert a loft in the into an extra bedroom. The repayment of mortgage for 12 months is Kemi’s contribution to the purchase amount. Because Kemi did not contribute to the purchase price equally as Tolu, there is uneven contribution, which would impact Kemi’s share in the beneficial ownership of the property.

It is also relevant that Tolu and Kemi had the original intention to purchase a house in joint names, but because Kemi was a full time university student, they decided to buy the house in Tolu’s sole name. There is no express declaration of trust for presumption of joint tenancy, but the conduct of the parties can lead to the presumptions on how they intend to divide their interest into shares (Goodman v. Gallant, [1986]). The intention of the parties at the time of the purchase and later course of dealings can lead to the implication of whether they intended to hold the property as tenants in common (Burgess v Rawnsley [1975]). The parties’ course of conduct can key to ascertaining the beneficial interests (Fowler v Barron [2008]). The respective shares in the property can be ascertained on the basis of their contribution (Same v Shaire [2001]). However, Kemi’s equal contribution to the household expenses can also be considered as indirect payments towards the purchase of the house (Le Foe v Le Foe [2001]). When beneficial owners are not in a married relationship or filial relationship, the question of their contribution to the purchase can help determine their respective interests (Stack v Dowden [2007]). Owner may equal or unequal shares depending on their contributions (Malayan Credit Ltd v Jack Chia-MPH Ltd [1986]). Kemi may not have paid directly at the time of purchase of the property, but the course of dealings between her and Tolu, including payment of household expenses equally, payment of mortgage when Tolu was out of work, and spending money to upgrade the property, can all be used to determine Kemi’s beneficial interest in the property. Added to that, their intention to hold the property as joint owners can also be inferred from the course of their dealings with respect to the property.

Elizabeth’s share in the house and whether this share would take priority over any claim established by Kemi.

Elizabeth’s beneficial share in the property can be determined on the basis of her contribution to the purchase of the property. At the time of the purchase, Elizabeth paid a deposit of £20,000, which is 10 percent of the price of the property at the time. Therefore, as a contributor to the purchase of the property, Elizabeth has a beneficial interest in the property. In the event that individuals contribute to the purchase price unequally, the nature of the ownership can be presumed to be tenancy in common (Malayan Credit Ltd v Jack Chia-MPH Ltd [1986]). With respect to the share that the individuals will own, this is determined on the share of their contribution to the purchase (Stack v Dowden [2007]). Unequal contribution will lead to unequal shares in the property in the absence of joint ownership (Malayan Credit Ltd v Jack Chia-MPH Ltd [1986]). In this case, Elizabeth’s beneficial share is 10 percent. With regard to priority of shares, joint owners take precedence because of the right of survivorship in the joint property. Since, there was a common intention for Kemi to be a joint owner of the property, which is established through the course of dealings between Kemi and Tolu, the precedence of interests places Kemi before Elizabeth.

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