Angelinas Interest in the Property - Essay Example

?Angelina’s Interest in the Property The to the house is held in both Angelina and Brad’s However, based on the facts of the case for discussion there is no specific declaration of beneficial interests. According to the ruling in Stack v Dowden, equity will follow the law. Where the parties hold joint title to property and there is no declaration of beneficial ownership the law will presume that the parties are joint tenants.1 It can therefore be presumed the Angelina holds both the legal and equitable interest in the house jointly with Brad. As a result of the joint tenancy, the whole of the property is treated as if it is owned entirely by the parties and not in specific shares.2 In other words, in the eyes of the law, Brad and Angelina own 100% of the shares in the property together. When parties hold property together as joint tenants, the property passes from one to another upon the death of one of the parties under the doctrine of jus accrescendi. Therefore, when one party passes away, the whole of the property will automatically vest in the surviving joint tenant.3 As a result, it will be presumed by law that upon Brad’s death, Angelina automatically becomes entitled to the fee simple absolute in the property. However, the presumption can be rebutted by evidence of a common intention to sever the joint tenancy or to create a tenancy in common which will affect the shares that Angelina is entitled to. For instance, if Charles, Jennifer and Erica assert claims to an interest in the property, the court will determine whether or not sufficient evidence of a common intention to divide the property as tenants in common exists and if so the extent to which the property should be divided.4 For present purposes, it can be stated that based on the documents of title, Angelina and Brad held the property jointly as joint tenants, unless Charles, Erica and/or Jennifer can successfully rebut the presumption. If Angelina’s name did not appear on the documents of title, the court would necessarily examine the common intentions of the party in order to ascertain what Angelina’s interest in the property should be. It will not automatically be inferred that just because Brad and Angelina were involved in a relationship at the time the house was purchased that they shared a common intention to own the property jointly. The courts will examine the evidence of common intention to determine whether or not there is sufficient evidence for justifying Angelina’s claim to joint ownership despite the legal title.5 The court will determine how the property should be divided by reference to “what the parties must, in light of their conduct, be taken to have intended.”6 In assessing the common intentions of the parties, the court will take account of the number of factors including the contributions that the parties made toward the property’s purchase price. The court will also take account of, conversations/communications around the time the purchase was conducted; the reason for purchasing the property in one parties’ name alone; the reason the property was purchased; the parties’ relationship; children involved; financing of the home; how the parties dealt with the financial affairs either separately or jointly; and how the property and household expenses were dealt with.7 Based on these factors it can be assumed that while Brad and Angelina were both responsible for the mortgage, Brad eventually discharged most of the mortgage although the initial deposit was furnished by Brad and his father Charles. The couple shared a child and obviously purchased the home together as a family home. Charles’ contribution will be viewed as a gift to the couple and will not be looked upon as a contribution by Brad.8 Based on the evidence it appears that the couple shared a family and divided the responsibilities for the family home between them. Brad took care of most of the family expenses, discharged the bulk of the mortgage while Angelina took care of the children. Although, Angelina’s contributions were non-financial for the most part, the constructive trust operates to look at the common intentions of the party so that the party doing something to his or her detriment, such as remaining at home so that the other party is free to earn more money and thus discharge the mortgage based on the understanding that the home is shared equally can fully expect that intention to be honoured.9 The fact is, the financial responsibility for discharging the mortgage on what can be characterised as a family home was jointly shared by both Brad and Angelina and it can therefore be assumed that the common intention was to share ownership of the home. Based on the authorities, the evidence of co-ownership intentions and a shared family will be sufficient to rebut the presumption that the home is owned only by Brad whose name appears on the title deeds. What is important is that the parties’ shared intention were obvious enough to form the basis of effective communication.10 In this regard: The relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by the party’s words and conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party.11 It would therefore appear that regardless of whether or not Angelina’s name appears on the title deeds, she owned the property jointly with Brad. It was their intention to purchase a family home to raise children together. This intention was manifested by the parties’ pooling their resources to discharge the mortgage together and to purchase the home after the birth of their child India. The only question is whether or not there was an agreement to sever the joint tenancy prior to Brad’s death and the extent to which that impact’s the share that Angelina would be entitled to. Charles, Erica and Jennifer: Severance of the Joint Tenancy In order for Charles, Erica and Jennifer to claim a share in the property jointly owned by Angelina and Brad, there will have to be evidence that the joint tenancy was severed or that there was in fact no joint tenancy and that Angelina and Brad owned the property as tenants in common. The consequences of a joint tenancy mean that Jennifer cannot have inherited any part of the property from Brad. As a joint tenancy, Brad was not legally capable of transferring either by will or otherwise, his interest in the property to Jennifer as he owned the whole of the property together with Angelina. Only if there is evidence that the joint tenancy was severed either by conduct or by deed or otherwise, would Brad have been able to pass his share of the property onto Jennifer. In order to determine whether or not the joint tenancy was severed or otherwise came to an end, it will have to be ascertained whether or not, at the time of Brad’s made his will or at the time leading up to the making of his will, whether or not the co-ownership between Brad and Angelina’s co-ownership continued to be characterized by the four unities. The first two unities would not have changed. By virtue of the first two unities: unity of time; unity of title will only be useful for determining the initial existence of a joint tenancy. In this regard, unity of time refers to the fact that the title was obtained by the joint tenants simultaneously. Unity of title requires that the interest of both parties were passed pursuant to the same title deed or instrument. The second two unities are more significant: unity of interest and unity of possession. Unity of interest implies that both parties share the same interest in the property and unity of possession implies that both parties have the right to possession.12 It can be argued that prior to the break-up of the relationship there was no doubt that the four unities existed. Both parties acted as though they owned the property together and there was no doubt that they both equally had the right to possess the property together and at will. The fact is, each of the four unities are important for the creation of a joint tenancy. However, should any of the four unities be broken, the joint tenancy is severed. Once one of the co-owners acts in a way that reflects he or she has separate shares, the joint tenancy will be severed. Be that as it may, merely declaring one’s own shares will not function to alter the four unities or any of them. Far more substantial evidence must be demonstrated.13 Brad moving out of the family home and living with Jennifer would certainly serve as evidence that the joint tenancy was severed. Moreover, the fact that both Brad and Angelina encouraged Erica to sell her home and move in with them to help Angelina through her pregnancy indicates that there was a conscious agreement between Brad and Angelina to sever the joint tenancy and to confer upon Erica a life interest in the home. Erica was invited to live in the home until she died. The courts have generally taken the position that any conduct in terms of dealing with the property indicative of an intention to deal with the property as a tenancy in common would typically function to sever the joint tenancy. However, the court has always emphasized that there must be evidence that the co-owners under a joint tenancy have a mutual agreement either implicitly or expressly to treat the interest in the property as a tenancy in common.14 There is certainly evidence that the parties agreed to treat the property as a tenancy in common when they invited Erica to move in with them for the remainder of her life. They encouraged her to sell her home in order to do so. It would therefore appear that both Brad and Angelina intended to share their interest in the home with Erica during Erica’s life time. Therefore there is evidence that the intention to create a tenancy in common was mutual. Brad’s letter to Angelina indicating his intention or wish to sell the home is arguably the required statutory notice for severing the joint tenancy. Pursuant to Section 36(2) of the Law of Property Act 1925, a joint tenancy may be severed by notice.15 The statutory notice is required to be in writing and must illustrate the intention to sever the property held under a joint tenancy and must be served on the other co-owner.16 Brad’s letter does not speak to severing the property or the proceeds of the property. However, it can only be assumed by virtue of the contents of the will that Brad fully intended to sell the property and divide the proceeds of sale between himself and Angelina. Angelina’s response is not known, but she acted as though the sale was eminent as she asked Erica to move out and to move in with Brad. Although Angelina’s conduct was motivated by anger at Brad it is also obviously motivated by a belief that the sale was eminent and she could not take Erica with her. Therefore, in all the circumstances, there was not only notice of the severance in writing as required by the Law of Property Act 1925, but there is also evidence of a mutual intention to sever the joint tenancy as evidenced by moving Erica in and then subsequently asking Erica to move out.17 It therefore follows that the joint tenancy was severed by the time Brad died and by the time he made his will. The will was obviously made after he moved in with Jennifer since Jennifer is mentioned in the will. When a joint tenancy is severed, a tenancy in common is automatically inferred. As a result of the tenancy in common, Jennifer will inherit a share of Brad’s interest in the property after it is divided between Jennifer and Brad’s two children. Based on the ruling in Stack v Dowden, much depends on how the parties dealt with their finances. If the parties dealt with their finances in a way that reflected a shared responsibility and in the whole course of dealing the property would be treated as owned in equal shares, provided their names were on the title deeds. The court acknowledged that while the parties may have an intention to share the property one way at the time of acquiring the property, if there is evidence by reference to their “whole course of dealing” that they subsequently intended to share the property differently, then the property will be dealt with accordingly.18 However, since Brad’s interest in the property is derived from a severed joint tenancy between two co-owners, it will be assumed that his estate takes a one half interest in the property.19 Obviously, Brad and Angelina’s half shares of the property will have to be adjusted to take account of Erica’s interest in the property. Erica clearly did something to her detriment when she sold her home and moved in with Brad and Angelina. However, she would have received money for the sale of her home and there is no evidence that she paid any of that money to Brad and Angelina in return for accommodations. It therefore follows that it is entirely doubtful that Erica acted to her own detriment and based on common interest to actually acquire an equitable interest in the home. It would appear that the offer of a home for a lifetime was gratuitous and while it might be evidence of an intention to sever the joint tenancy as it allowed another party to occupy the home for life, it does not represent a gift of ownership. It was merely giving a family member a place to live and as there was no consideration on Erica’s part, she does not acquire an equitable interest in the home. Charles contribution to the purchase of the family home is merely a gift to Brad and Angelina s a couple and will not be viewed as entitling him to a share in the property. He was merely helping his son and his partner and there was no intention on his part to acquire an interest in the home. Therefore Charles will not acquire an interest in the property. Based on the above discussion, the family home is held by Angelina in trust for herself, Jennifer and the children. Since it will be determined that the tenancy in common which arises out of a severed joint tenancy divides the property in half between the parties, Charles share of 50% will be divided between his two children and Jennifer in equal shares. Therefore, if Angelina does not want to sell the house, she can purchase Jennifer’s 1/3 share of Brad’s 50% interest and hold the remaining 2/3s in trust for her children until such time as they are old enough to acquire it. However, since the property is a trust in land, if Jennifer demands that the property be sold, she is at liberty to apply for the sale so that the property can be divided.20 It therefore follows that Angelina will be wise to offer to buy Jennifer’s share since she is only interested in the money so that she can purchase her own home. Bibliography Textbooks Dixon, M. Modern Land Law. (Taylor and Francis 2011). Articles/Journals Harris, J. W. ‘Doctrine, Justice, and Home-Sharing,’ (Autumn 1999) 19(3) Oxford Journal of Legal Studies, 421-452. Wong, ‘Constructive Trusts Over the Family Home: Lessons to be Learned from other Commonwealth Jurisdictions?’ (1998) 18(3) Legal Studies, 369-390. Cases Abbott v Abbott [2007] UKPC 53. Burgess v Rawnsley [1975] Ch. 42. Fowler v Barron [2008] EWCA Civ 377. Gissing v Gissing [1971] AC 886. Grant v Edwards [1986] EWCA Civ 4. Hammersmith and Fulham L.B.C. v Monk [1992]1 AC 478. Harris v Goddard [1983] 1 WLR 1203. Jones v Kernott [2011] UKSC 53. Neilson-Jones v Fedden [1975] Ch 222. Palmer v Rich [1896] 1 Ch. 134. Stack v Dowden [2007] 2 AC 432. Statutes Law of Property Act 1925. Trust of Land and Appointment of Trustees Act 1996. Read More