True/False Quiz

With the exception of the first question, answer the questions below based on the facts of this short scenario. A and B purchased No. 1 Main Street as beneficial joint tenants in 2003 and were registered as freehold proprietors. The bulk of the purchase money was provided by A. In 2005 they granted a mortgage to ABC Bank. In June 2007 A was declared bankrupt. His trustee in bankruptcy decided that the sale of the house was the best option to maximise the assets available to his creditors and so he applied to the court for sale until section 14 TLATA. B does not want the house to be sold. Her children, one of whom is about to sit his GCSEs, are well settled at the local school and the money which will remain after the sale would not be enough to purchase a similar house in the area. In addition, her mother is terminally ill and the family need easy access to the hospital nearby. She also believes it is relevant that A has been suffering from depression for some time and feels that any move would make this condition worse.

Statute Quiz

Here you should outline the main effect, role, etc. of the provisions below. This is designed as a guide to the most important provisions, and as a means to improve your recall of the statutory provisions.

Case Law Quiz

Here you should attempt in one or two sentences to outline the main points to be taken from these cases and also three or four key words with their subject matter. This should assist in revision.

Short Answer Questions

Podcasts

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Podcast Script

This podcast considers severance and sections 14 and 15 of the Trusts of Land and Appointment of Trustees Act 1996.

The previous podcast in this series outlined the concept of land charges in relation to unregistered land. This podcast begins to look at the substantive rights that form the body of proprietary interests. Today we will look at co-ownership interests and in particular the issues of severance and sections 14 & 15 of Trusts of Land and Appointment of Trustees Act 1996.

Co-ownership is an essential concept in modern land law. This can be seen in chapter 4. Where there is more than one registered freeholder or leaseholder on the land register, we know how this legal title is held as joint tenants at law. But we also need to know how this is held in equity.

Here we will look at two issues. Firstly, where the co-owners hold as joint tenants in equity, how do we know when this has been severed so that they hold as tenants in common? Secondly, how are disputes between legal freeholders regulated in cases of co-ownership?

(1) Severance

Severance is the term given for the transformation of a joint tenancy in equity to a tenancy in common. The key result of this is that the right of survivorship no longer applies. When will severance take place? There are four methods:
(1) Mutual agreement;
(2) Mutual conduct;
(3) Written notice under section 36(2) LPA 1925; and finally
(4) Acting on your own share in a manner inconsistent with the continuation of the joint tenancy.

What does this mean?

Mutual agreement. The joint tenants can together agree to sever the joint tenancy. In problem questions, look out for an agreement to split, agreements referring to shares, and to agreements where one joint tenancy agrees to purchase the other’s ‘half’. These are all indicators of an agreement to sever.

Mutual conduct. This is quite rare and there are not many successful cases of this type. The parties must have acted in such a way that clearly they no longer intend a joint tenancy. Physical partition of the land would be an example of this, as would the drafting of a mutual will. Crucially, their conduct must show an immediate intention to sever, not a future intention to do so.

Written notice. This is completely unilateral. The other tenant does not even have to have read the notice, as long as it can be proved that it was sent to an appropriate address. This can be seen in Kinch v Bullard.

Acting on your own share. This is another unilateral method of severance. This includes selling your share, granting a mortgage over your share, or falling into bankruptcy. Any attempt to deal with the legal title without the consent of the other legal owners will have the same effect.

When you sever a joint tenancy in one of these ways, it will be split evenly unless there is an agreement to the contrary, and if for example there are two joint tenants, they will become tenants in common with 50:50 shares.

(2) Trusts of Land and Appointment of Trustees Act, Section 14 & 15

What happens when joint owners are in dispute? How can this be resolved? The answer is that a joint owner or anyone else with an interest can bring an action under section 14 of the 1996 Act. This is an action asking the court to order, for example, that the property be sold, or physically split. The court has a wide power to make an appropriate order under the section.

When the dispute is brought to court it must be resolved in accordance with section 15 of Trusts of Land and Appointment of Trustees Act. This section contains a non-exhaustive list of considerations that the court will take into account.
(1) The intention of the settlor when the trust was established.
(2) The purpose of the trust property now.
(3) The welfare- not just the existence - of any children who use the property as their home.
(4) The interests of any creditors.

Normally the wishes of the equitable owner will also be taken into account. But be aware: if one of the joint owners is bankrupt and the application is made by his trustee in bankruptcy, then section 15 does not apply and instead section 335A of the Insolvency Act 1986 will apply where the needs and wishes of the bankrupt equitable owner are not considered.

By this means, disputes between co-owners can be resolved.

In the next podcast we will be looking at the operation of the 1996 Act in relation to successive interests. Today’s key concepts, severance and sections 14 and 15 TLATA.