Key Points of Express and Implied Co-Ownership
Express Co-Ownership
Definition:
• Co-ownership occurs when two or more people simultaneously hold title to a freehold or leasehold estate, having legal or beneficial rights to the land.
Types:
1. Joint Tenants:
◦ LPA 1925, s.36: Joint tenancy is the default type of co-ownership for up to four people. If more than four are named, the first four are the trustees.
◦ Survivorship: When one joint tenant dies, the surviving joint tenants automatically inherit the deceased's share. This is known as the right of survivorship.
◦ Severance: A joint tenant can sever the joint tenancy to become an equitable tenant-in-common, which divides the shares. Severance must be clear (e.g., Harris v Goddard [1983]).
2. Tenants in Common:
◦ Co-owners hold separate, distinct shares in the property. There is no right of survivorship, so shares pass according to a will or intestacy laws.
Key Aspects:
• Severance of Joint Tenancy:
◦ Can occur through mutual agreement, a course of dealing that shows a change in intention, or an act of alienation (e.g., selling or transferring one's share).
◦ Murder of a Joint Tenant: Under the Forfeiture Act 1982, a person who murders a co-owner cannot benefit from the estate of the victim.
• TOLATA 1996:
◦ s.14: Trustees of land can apply to the court to determine the nature and extent of a person’s interest in land.
◦ s.15(d): Creditors may request a court order for sale if they have an interest in the property. The court may rarely rule against a sale but can delay it based on circumstances (e.g., Edwards v Lloyds [2004]).
• Insolvency Act 1986:
◦ s.335A(3): A year after bankruptcy, the court assumes creditors' interests outweigh all other considerations, except in exceptional circumstances.
◦ Barca v Mears [2004]: Potential conflict with Article 8 ECHR regarding the right to respect for private and family life, but generally compatible (Nicholls 2006, Ford 2012).
Implied Co-Ownership
Definition:
• Implied co-ownership arises where a sole legal title holder is deemed to hold the property on trust for another party based on the contributions and intentions of the parties involved.
Types of Implied Trusts:
1. Resulting Trusts:
◦ Concept: Implied by law when one party contributes to the purchase price but is not named on the title. The contributing party may be presumed to have an equitable interest.
2. Constructive Trusts:
◦ Concept: Implied when parties have a common intention to share the property and one party relies on that intention to their detriment.
Key Cases and Principles:
• Indirect Contributions: Contributions such as paying household bills can influence the determination of beneficial entitlement.
• Direct Contributions:
◦ Lloyds Bank plc v Rosset [1991]: Established that direct financial contributions to the purchase price justify the creation of a constructive trust if there is a common intention to share and this intention led to the claimant’s detriment.
◦ Intention: The intention to share ownership can be articulated or implied through actions and contributions.
Summary
• Express Co-Ownership: Involves clear legal arrangements, including joint tenancies and tenancies in common, with mechanisms for severance and rules governing the impact of insolvency and third-party interests.
• Implied Co-Ownership: Focuses on trusts implied by law based on contributions and intentions, addressing situations where legal title is held by one but equitable ownership is shared based on the parties' dealings and contributions.