Co-ownership & trusts of land

LL.04 — Co-ownership & Trusts of Land

The dual structure. Whenever land is owned by more than one person, a trust of land arises automatically (TOLATA 1996). The legal estate is always held as a joint tenancy (LPA 1925 s.1(6) — no tenancy in common at law; s.34(2) — max 4 legal trustees, the first 4 named). The equitable (beneficial) interest can be either a joint tenancy or a tenancy in common.

Joint tenancy (JT) vs tenancy in common (TIC).

• JT: the four unities must all be present — Possession, Interest, Title, Time (PITT). Carries survivorship (jus accrescendi) — on death the share passes automatically to survivors, overriding any will.
• TIC: only unity of possession required; holders have distinct, devisable shares (no survivorship). Equity presumes a TIC where: unequal contributions, money advanced on mortgage, partnership/business assets, or an express declaration.

Express declaration is conclusive. A clear statement of beneficial holding in the transfer (e.g. TR1 panel) binds, absent fraud/mistake (Goodman v Gallant [1986]).

Severance — converts a beneficial JT into a TIC (never the legal title). Methods:

• Written notice under LPA 1925 s.36(2) — takes effect on deemed service, not on posting. Service is judged under LPA 1925 s.196: a notice sent by registered/recorded delivery is deemed served when it would ordinarily be delivered, even if the addressee never reads it (Re 88 Berkeley Road — delivered to the house, effective though unread). It is not irrevocable once posted: a notice can fail or be retracted before service is complete (Kinch v Bullard — a posted notice intercepted and destroyed by the sender before delivery did not sever).
• Williams v Hensman methods: (1) act on one's own share (e.g. mortgaging, selling); (2) mutual agreement; (3) course of dealing showing common intention.
• Unlawful killing severs automatically (forfeiture).

Sole legal owner, disputed beneficial interest. Equity follows the law — sole legal owner is presumed sole beneficial owner; claimant must establish a common intention constructive trust (Stack v Dowden [2007]; Jones v Kernott [2011]) or proprietary estoppel. Where legal title is joint, equity presumes a beneficial JT (equal shares); rebuttal needs evidence the parties intended otherwise.

TOLATA disputes. Trustees have powers of an absolute owner (s.6). Any person with an interest may apply to court under s.14; the court weighs the s.15 factors (intentions of those who created the trust, purpose of the trust, welfare of any minor occupant, interests of secured creditors). Beneficiaries of full age with a possession interest have a right to occupy (ss.12–13).

Traps: legal title can never be a TIC; survivorship beats a will; severance affects only the equity; a s.36(2) notice severs on deemed service (s.196), not the instant it is posted, and can fail before service; keep PITT and the severance methods crisp.