The Legal Estate and Equitable Interests in the Property - Essay Example

? Land Law Number: Land Law Outline the devolution of the legal e and equitable interests in the property (70 marks) Property that is owned by two or more individuals, jointly and at the same time is referred to as concurrent estate. In retrospect, persons who jointly own the property are either termed as co- tenants or co-owners. There are different ways by which more than one person can own property. These include: joint tenancy, joint tenants in common, community property and tenancy in the entirety. Different types of ownership stipulate different rights and liabilities of co-tenants. The type of ownership determines guidelines on the property in terms of attempts to sell it, and methods by which the property can be transferred. In this case, each owner is referred to as a tenant in common. The freehold property that the four pioneer owners (Allan, Ben, Chris and David) bought by contributing different amounts makes them tenants in common (TIC). Unless otherwise stated, most courts assume that a tenancy in common exists whenever several persons take concurrent possession of a single piece of land. When land is granted, transferred, conveyed, assigned or bequeathed to two or more persons, other than as executors, administrators or trustees in either fee simple or any lesser estate, legal or equitable, and the tenancy is not specified in the document creating the estate, the co-owners hold as tenants in common1. Each member has an interest in a particular part of the parcel and the right to access the parcel as a whole. Each co-owner is allowed to choose who will inherit his or her ownership interest upon death. In cases where no will exists, then the share of the deceased would go to the persons entitled under the rules of intestacy. Each co-owner is liable to the others if they cause any deterioration in the value of the property. Tenancy in common only has the unity of possession and has no right of survivorship. Unity of possession is achieved when each co-owner is entitled to possession of the whole property. In situations where the conveyance in favor of the co-owners includes how the co-owners should hold the equitable interest in the property, this agreement is conclusive2. Each tenant in common enjoys autonomy in dealing with his interest, including the decision to dispose of the interest by will. Each tenant in common holds undivided proportionate interests. Tenants in common cannot hold unity of interest because their interests are not proportionate. Each tenant is awarded interest according to his contribution. Initially, the shares of Allan, Ben, Chris and David are determined by how much each owner contributed to the purchase of the property. After Chris retired and sold his shares to Fiona, Fiona owned Chris’ shares and hers as well. The sale of Chris’ shares to Fiona does not alter the arrangement between the remaining owners. However, a transfer must be used and fees should be charged on the value of the proportionate interest being transferred. On the other hand, Elsa took over David’s shares after David died. After Elsa died, Gerry and Harry became co-owners, each entitled to the share Elsa assigned him. It is permissible for Harry and Garry to hold Elsa’s interest in joint custody. In that case, Harry and Garry can be joint tenants so that they are both tenants in common with the other co-tenants. As joint tenants, they enjoy the right of survivorship which presumes that when one dies, the other takes over ownership of the entire parcel which they shared before the death. This minimizes delays when handing over property. Incase Garry, having inherited property does not desire to claim any ownership interest, the interest to the property can be transferred to the other tenants in common. As joint tenants, Harry and Garry have four unities which include: interest, time, title and possession. Joint tenancy mandates owners to have the same interest, developed under the same conveyance, starting at the same time and held under the same undivided possession3. Unity of time mandates the co-owners to acquire the property at the same time. Unity of title mandates the co-owners to have the same title to the property. Unity of interest mandates each co-owner to own an equal share of the property. For example, it requires Garry and Harry to each own half of the shares left by Elsa. Unity of possession mandates the co-owners to have equal right in possession of the parcel. A unilateral declaration made by either the co-owners does not shake any of the unities, hence, it does not severe the joint tenancy.4 When Harry died and left no will, his shares would be left to Garry. When two co-owners sever joint tenancy, they both become tenants in common. Severance of joint ownership can happen either by notice which must be given in writing; or by act of one tenant operating on the basis of his own share5. Explain whether Ben is free to sell the property as he chooses (20 mks) Working with other persons in some cases leads to property disputes and conflicts. In cases where the conflicts fail to be resolved, it is advisable to file a civil suit in court to find a solution. Ben is entitled to choose to dissolve the concurrent ownership following disagreements arising among tenants. Disagreements on how the property should be used and maintained justify Ben’s decision to dissolve the tenancy in common. Also, any individual may buy the property and convert it to his own use. Fiona, whom Ben suspects may oppose his decision to dissolve the business, may buy the property and convert it to her own use. However, Ben is not free to sell the property as he chooses. When the members decide to dissolve the business, a court order to partition the property follows. This allows each of the concurrent members to choose how to deal with property. If the parties can agree on how to divide the property, the tenants can avoid going to court to facilitate partitioning of the property. However, if disagreements persist, Ben or any other co-owner should file a law suit requesting relief. Filing a partition action is made in the court to request it to divide the property among the tenants in common. The court requires all owners of the property to be present at the hearing of the partition. Failure of an owner to appear at a court hearing translates to the owner losing his right to contest any rulings by the judge in the future. Before the hearing, it is important to have the value of the property ascertained and notes made in case the court proceedings will make the property depreciate. What steps should be taken to effect a sale? A tenancy in common can be terminated by the sale of the entire property either to a single -owner in common or to or to several co-owners. Any co-owner that made improvements to the property receives compensation from the other co-owners. Alternatively, any member that caused any devaluation in the property bears the liability of any deterioration in value. To effect a sale, a partition is to be filed. There are three ways through which tenants can make a partition. First, they can make a voluntary agreement that does not involve the courts. Secondly, co-owners can make a petition in kind. This requires a petition to partition and divides each member’s share. Thirdly, petition by forced sale involves selling the property and dividing the proceeds from the sale according to each member’s share. The last two methods involve going to court and securing a court order to sell the property, and distribute the proceeds amongst owners. Most TICs require judicial foreclosure. Partition by sale is advantageous because selling the whole piece of land means that more value of the land is retained. In this case, if Ben cannot reach an amicable agreement with Fiona, he must file a suit in court. He may obtain a partition of the property. This divides the land into particular owned parts. In case this partition is not allowed, a forced sale of the property ensues which is followed by distribution of the proceeds. If the suit succeeds, the property is sold and the proceeds are distributed equitably among the members. Since members own separate and distinct shares from the company, the proceeds from the sales are divided equitably according to the interest rates of each member. References Burgess v Rawnsley, ER 142 (1975) Ettrick(Lord) v Hunter, AC 713 (1993) Gafford v Graham, 3 EGLR 75 (1999) Goodman v Gallant, Fam 106 (1986). Greenfield v Greenfield, 38P and CR 570 (1979) Harris v Goddard, 1 WLR 1203 (1983) Henry Campel Black, 4th rev. ed. Blacks’ Law Dictionary, American Bar Association (1968) Hillingdon v ARC Limited, ch. 139 (1998) Jaggard v Sawyer, 1 WLR 269 (1995) Johns & Hem 546 (1861) Law of Property Act, R.S.A 2000 c.L-76, Albert Queens Printer (2000) Nielson-Jones v Fedden , 222 (1975) Schofield v. Graham, 69 W.W.R 332 (1969) Tinsey v Milligan, 2 FLR 963 (1993) Williams and Hensman, 70 E.R 862 at 867 (1861) Read More