Co-ownership of Land Property - Case Study Example

Land law Co-ownership of Property In the case of Phillip and Rachel so d that Rachel agreed that the house could be transferred into joint names where Phillip paid half of the price f the house. By virtue of the Property Act 1925 and the land Registration Act 2002, the act of Rachel in transferring the title to the property to joint names and the Phillip’s Act of paying off the price of the property constituted a valid conveyance of property1. Consequently, since there was an act of perfected sale of sale of the property in College Road, Phillip and Rachel are now deemed as co-owners of the property in equal share as agreed. According to English law, co-habitants are not covered by the Matrimonial Causes Act 1973 sections 24 and 25, thus, the distribution of the properties among co-habitants would rest solely on the orthodox principles of property law. As decided in the case of Burns v Burns (1984)2 Fox LJ noted that, “What is needed I think is the evidence of a payment or payments by the plaintiff which it can be inferred was referral to the acquisition of the property…”3 In the case of burns, the Court defined at least four ways wherein contribution to the payment of the property may be effected. First, as in the case of Stokes v Anderson [1991] 4, the Court ruled that if the co-habitant directly provided money for the purchase of the property they shall be considered as co-owners, second, if the parties made contributions to the mortgage payments they own a share of the property, third, a party shall have a share in the property if he/she pays off part of the mortgage payment and fourth, substantial contribution towards the family expense which “enable the mortgage payments to be paid”5 would gave rise to part ownership. In the case of Phillip and Rachael, there was a clear showing that Phillip gave money equivalent to half the price of the property. Since Rachel already agreed to transfer the property to joint names and accepted the money of Phillip, the principles of estoppel which were laid in the case of Moorgate Mercantile v Twitchings [1976] 1 QB 225, CA 6, will now apply. Based on the rulings of the cases Willmott v Barber (1880) 7 and the case of Matharu v Matharu (1994)8, Rachel is now estopped by her actions and could not legally claim that the property is hers and that she intends to leave it to her children. Furthermore, as Phillip is entitled to his just share, Rachel cannot compel Phillip to accept the £ 50,000. Since it is well established that the property at College road in indeed co-owned by the co-habitants, the question now is whether or not Phillip is entitled to half the price of the property based on its present value. Since Phillip paid for half of the price of the property, based on the prevailing price at the time, our English law so provide that he is therefore entitled to the beneficial rights over the property such as the increase in the price thereof. Therefore, the basis for the computation of the sharing of the property shall be the value of the property at present. On the question as to how much shall be the share of Phillip on the property, the computation of the shares shall be based on their agreement and other circumstances that may facilitate equitable sharing. Note that in this case, the half of the purchase price of was raised by a mortgage of the College Road property. According to the case of Savill v Goodall (1993)9, where the parties had an agreement as to their sharing in the property, the agreement shall be binding upon the parties, however, in the event where the other co-habitant contributed to the payments of the mortgage on the property, he or she will now be entitled to an increase based on his or her contribution on the payments of the mortgage price.10 In the case of Savill v Goodall (1993)11, Mr. Savill agreed to pay part of the mortgage price of the property. According to the court in this case, since, Mr. Goodall had contributed to the payment of the mortgage, his share in the property increased, thus, he can now claim a share commensurate to his increased interest. Therefore, in our case, where Rachel could show that she contributed in the payments of the mortgage, her share over the property can be considered higher than that of Phillip. 2. Regulation on allocation of real property among cohabitants Cases regarding the division of the properties of couples who relationship had deteriorated have been brought before the court time and again. Consequently, our jurisprudence is already replete with decisions that defined the rights of the couples and their properties. More often than not, the decisions of the court leave one of the parties at a loss12. In fact, there are many instances when the decisions of the Court are viewed to be inequitable towards one of the parties. Following the trend of the Court’s decisions for the last several years on the division of properties of couples whose relationship has become sour, the intention to enact legislation to regulate the allocation of real property interest on the breakdown of relationships between heterosexual cohabitants is to be welcomed. The case of Burns v Burns (1984)13 where the parties co-habited without the blessings of marriage for 19 years is one of the leading cases that have been brought to court regarding the rights of co-habitants. Note that this case, Valerie Burns did not make any monetary contributions in the purchase of the house but she had contributed to the redecorations of the house as well as made small contributions to the family expenses. When the relationship went sour and the partners decided to go their separate ways, Valerie asked for her share in the property. However, according to the Court in the case of Burns v Burns (1984)14 which was later on upheld in the case of Winkworth v Edward Baron Development Co. Ltd. [1988]15 , the “absence of financial contribution that can be related to the acquisition of the property”16 would negate the right of the co-habitant over the property. This means that even if the partners had shared the property for a long time, there partner who did not give money for the purchase of the house was left without any rights over it. For co-habitants who have spent so many years together without the blessings of marriage, it is often unfair for the parties to come out as having no share at all in the properties which they both enjoyed while they were together. It is only when the co-habitants are considered on equalled financial footing that the properties that they bought during their cohabitation is deemed to be their joint properties17. According to the in the case of Springette v Defoe (1992)18, since the parties were already both financially stable and mature, the purchase of the properties during their cohabitation is to be construed as a “joint venture or commercial partnership.” Aside the contribution of the parties on the cost of the acquisition of the property, the intentions of the parties may also be taken into considerations in determining the share of the parties (Hayton 1990). However, although the law allows for the intentions of the parties to be made as part of the bases, the requirement for such intention to be valid is rather stringent. In the case of Lloyds Bank plc v Rosset [1993]109 L.Q.R. 114], the Court ruled that “the interests of the parties on the house should be determined based on their inferred intentions during the time of the acquisition of the property and not be their subsequent conduct”19. According to Lord Bridge, it is imperative that the agreements of the parties must be done at the time of the acquisition of the property and in exceptional cases, the conduct of the parties after the purchase of the properties, such as when the co-habitants contributed money for the payment of the mortgage. Since the monetary contribution of the parties is given big importance in the determination of the ownership of the properties of the co-habitants, the partner who happens to dedicate his or her time to the care of the other and thereby failed to be gainfully employed would be at a loss when the relationship breakdown. Often times, it is very difficult for the partners to prove beneficial interests over the property. In fact, even married couples often find it difficult to prove that they have beneficial interests over the property20. Considering how the law may seem to be so harsh when it comes to dealing with the property rights of co-habitants, whatever intentions to enact legislation to regulate the allocation of real property interests to co-habitants is very much welcome. References: Laws, Books and Journals 1. Co-habitation: The financial Consequences of Relationship Breakdown http://www.lawcom.gov.uk/docs/cp179.pdf retrieved February 28, 2007 2. Gardner, S (1993) Rethinking Family Property 109 Law Quarterly Review 263. 3. Hayton, D (1990) Equitable Rights of Cohabitees [1990] Conveyancer 370. 4. Land Registration Act 2000 5. Law of Property Act 1925 http://www.paclii.org/vu/legis/vu-uk_act/lopa1925198/ retrieved February 28, 2007 6. Matrimonial Causes Act 1973 7. Cases: 1. Burns v Burns (1984) Ch 317, [1984] 1 All ER 244 2. Lloyds Bank v Rosset [1993]109 L.Q.R. 114 3. Matharu v Matharu (1994) 26 HLR 648 4. Moorgate Mercantile v Twitchings [1976] 1 QB 225, CA 5. Savill v Goodall (1993) I FLR 755 6. Springette v Defoe (1992) 24 HLR 552, [1992] 2 FCR 561 [1192] Family Law 459 7. Stokes v Anderson [1991] 1 FLR 391, [1991] Fam Law 310, [1991] FCR 539 8. Willmott v Barber (1880) 15 Ch D 96 9. Winkwork v Edward Baron Development Co. ltd. (1988) 1 WLR 1512 Read More