Property Law in Practice - Case Study Example

 Property Law The Case of Wendy, Arnold and Bill: The current legal and beneficial interests in the house as per the scenario involving Wendy, Arnold and Bill is based on who first held ownership of the property and then who retained ownership from there. When the house was first purchased, it was purchased for only 60% of what is was worth by Wendy, Arnold and Bill. Due to the inability of Wendy and Arnold to get a loan, Wendy’s younger brother Bill was willing to be added to the purchase of the house. Being that Bill, Wendy and Arnold are all named on the loan, they are also all three named on the deed to the house. This means that all three of these individuals own the house equally. As it is customary for spouses to purchase property as joint tenants, it is also the case with relatives such as in the case of Arnold, Wendy and Bill. The case of Bill, Arnold and Wendy can be said then to be joint tenancy making all three of them equal owners of the property which is still the case in death but serves to transfer to the still living spouse. Additionally, because there was no declaration of beneficial interest at the time of purchase, it can be said that each of these three individuals held equal ownership of the property. We also know that there was no expressed intention which then removes the possibility of ‘joint in common’ from the table. The Laws Regarding the Issue: Based on laws of severance in equity, Bill and the children of Wendy are all in partial possession of the estate as no severance took place making the parties tenants in common. This can be said to further the petition for Bill to be reimbursed fro his participation in the ownership of the land overall. At no point in the dealings between Bill, Arnold and Wendy were there ever any sort of implications of written words of severance including the written statement sent by Wendy offering Bill a place to live within the estate that he helped Arnold and Wendy to procure. Based on these same laws however, a predetermined part of the estate may be written up at the time of purchase but in this case, it can be assumed that each of the 3 parties had equal ownership of the land as all three were name don the mortgage and thus the deed to the house. The laws of joint tenancy extend to grant Wendy, Arnold’s portion of the land which leave her with 2/3 ownership which she may then transfer by will to her children. This leaves Bill with the remaining 1/3 ownership of the estate. It was Arnold who actually paid the mortgage installments until his death. At his time of death, his portion of ownership of the property immediately transferred to Wendy. This means then that 2/3 of the property is now owned by Wendy while 1/3 is owned by Bill. Bill eventually moved in to the property with his 8 year old son after a marital breakup. Wendy invited Bill in writing to do so and Bill began to help pay the mortgage installments. The property was paid off in 2006 having been paid off in part by Bill (25%) and the rest by Arnold and Wendy during their years of paying it off together. Wendy then died and left her 3 children equal parts of her portion of the property which was equal to 2/3 of the property. Bill still alive, remained owner of 1/3 of the estate, along with his son now 15. The 3 children who have inherited Wendy’s 2/3 of the estate are indicating that they wish to sell the estate in order to split the money from the sale into three equal parts. Bill and his son however, wish to remain in the house and do not wish to sell it. One of the first things that may be recommended to Bill, as he is the client which is being advised, is to retain a mediator in order to legally settle the dispute at hand. It is important to inform Bill the client, that a mediator is not to be partial to either side but is to operate merely as a bipartisan whereby looking equally at both sides of the property dispute in order to lawfully settle who is entitled to what percentage of the estate. Possible Steps To Take: Certainly, Bill may choose to go through litigation without a mediator in the event that he feels that the dispute can be easily and amicably settled with Wendy’s children. If however, Bill feels that the settling of the issue is in no way going to be arrived at easily, a mediator is his best option in the interest of saving time and money. Litigation often turns out decisions which are unfavorable to one or even both parties after a lengthy and pricey battle. Hiring an unbiased mediator is truly the best suggestion to offer to Bill in the dilemma between he and Wendy’s children. Once a mediator has been procured, it is possible that the mediator will advise both parties that because Bill is only owner of 1/3 of the estate, the children of Wendy who are beneficiaries of her two thirds ownership may in fact force a sale such that the estate be sold in order to split the money appropriately. This does not mean that Bill is not entitled to part of the estate but it does mean that Wendy’s children are in possession of a larger percentage of the estate and in all fairness, though Bill and his son wish to remain in the house, that selling the house and splitting the money is most likely the only option that any of the parties involved have. Certainly the decision of whether to sell the house or not is only a portion of the issue at hand. Once the house has sold, the division of the money to Wendy’s children as well as to Bill is going to be an even larger aspect of the issue. We know that Wendy’s children are theoretically entitled to 2/3 of the house (or money from the sale of the house) and we also know that Bill is then 1/3 owner of the house. We may also consider that 25% of the total sale of the mortgage was actually paid off by Bill. Certainly, the profit from the house’s sale can be said to belong to Bill to the tune of 1/3 of the total sale amount. This is greater than 25% of the house’s mortgage pay off assuming that the sale of the house is at a higher price than its purchase at the time of Arnold, Wendy and Bill’s purchase. In the event that a mediator determines that the now 4 individuals who share ownership of the property can be considered tenants in common rather than joint tenants (as the children of Wendy and Arnold are not named on the original documentation with Bill), a forced sale of the property may then be imposed by either Bill upon the three children or vice versa which in this case is most likely what will have to happen. By disputing the outcome of the estate (whether to sell it or keep it), the 4 owners may have to be deemed tenants in common which tends to change what is legally possible as far as the outcome of the estate which was originally Bill’s, Arnold’s and Wendy’s. Conclusion: Truly, there is no sound advice to give to Bill other than to consent to selling the estate whereby he may receive his portion of the proceeds, in order to settle this dispute in a way which retrieves compensation for all of the parties involved. Keeping the property would at this point, would simply be an impossibility as Wendy’s children are jointly possession of a larger portion of the estate and the only reason to keep the property would be in Bill’s best interest. It would be a possibility however to establish a sale of the property to Bill whereby Wendy’s children were paid 2/3 of the selling price by Bill such that he and his son could retain full ownership and possession of the house. Such a plan would circumvent even the need for a mediator or any type of litigation. This would be the most amicable means of settling the dispute whereby everyone was able to gain what they desired from the scenario, if Bill can produce the money or retain a loan for the amount he would owe to Wendy’s children for their portion of the estate. Presumptions of Advancement: Cases of presumptions of advancement involve typically a spouse or a child who serves to inherit property, may consider such an advancement a gift. The legal system is not immune however, to a great deal of contest when it comes to such a statute. It is very difficult to rebuttal presumptions of advancements without proof of illegal activity or motive. It can be said that presumptions of advancement are somewhat set in stone provided that certain criteria exist. The following legal definition is helpful in understanding what is implied by ‘presumptions of advancement‘: “ A presumption that is strong enough to make a prima facie case, but that is subject to being overcome by the presentation of stronger evidence to the contrary. There is an added impetus for the purchases and loan to be regarded as gifts by reason of the presumption of advancement”(your dictionary.com, 2008). An example of a situation where presumptions of advancement may be implied is the case of Tinsley vs. Milligan. This particular case involved two women who were lovers. When the relationship dissolved, the ownership of the house in which they lived became a legal issue. Ownership was held in Tinsley’s name even though the couple purchased the house together. Tinsley held that she should have the house awarded to her as the house was indeed in her name. Milligan however, rightfully claimed that she was part owner not only because she had helped pay for the house but also because she was Tinsley’s partner during their stay within the home and that also made her half owner of the house by presumptions of advancement. Milligan suitably stated her case and therefore won in her favor. The case of Milligan and Tinsley was a somewhat landmark case as it paved a way for other cases to claim the same type of presumptions of advancement such as in the case of Silverwood vs. Silverwood. This particular case dealt with an amount of money left by an elderly woman to her two sons. The money was withdrawn from her account when she was 88 years old and was deposited into two separate accounts in the names of her two grandchildren. At a later date, it was pointed out that the two beneficiaries of her will were her two sons, one of which was the father of the two grandchildren. The other son sued for recovery of the money only to be ruled against as the money was considered a gift and therefore was covered under the rule of presumptions in advancement. Part B First and foremost, it was necessary to break question ii into a few different parts. The question dealt with a relatively complicated situation as ownership was transferred through deaths and was also shared between more than 2 people at any given time. The first part of the question dealt with whether or not there were any current and legal beneficials in the house. It was helpful to first consult lecture notes and text book assigned readings for the pertinent information. This is where most of the information was retrieved. It was also helpful to undergo a bit of a refresher on the terms and their usages by simply running them through the Google search engine in order to view different ways in which they may be used as well as to identify any interesting cases in which they may have come up. On the other hand, it was not entirely difficult to see the most probable outcome of this scenario as it was clear through the beginning of the scenario that Wendy and Arnold were 2/3 owners of the estate while Bill was 1/3 owner. At the time of Arnold’s demise, since all three were tenants in joint rather than tenants in common as there was never a written severance, such that Arnold’s 1/3 ownership automatically transferred to Wendy. This made Wendy 2/3 owner of the estate leaving Bill with his 1/3 ownership. Once again in death, Wendy was then able to transfer her ownership to her 3 children such that there were still individuals who maintained Arnold and Wendy’s 2/3 ownership while Bill continued to remain in ownership of 1/3 of the estate. The final outcome to this as the children wished to sell their portion in order to split the proceeds, leaves Bill with no choice but to consent to sell allowing everyone involved a monetary amount which represented their respective ownership. In regards to question ii, the review of cases was necessary once again by means of search engines such as Google. This was accomplished by utilizing the term presumptions of advancement which in many cases will immediately pull up the landmark case of Tinley vs. Milligan. After reviewing this case at length, it was not difficult to then locate information on other cases which were decided based on the outcome of the case of Tinsley vs. Milligan. Any of the cases which can be researched on this subject revel that in the event of ownership which transfers through family relations or through the severance of those who are involved in committed, intimate relationships; decisions are ultimately decided based on an implication of the giving of a gift rather than of somenting which is to be later paid for by the recipient. Again, most of this information could be fundamentally reviewed within the class notes and required reading but could then be fine tuned by undertaking database searches online. Works Cited: Hepburn, Samantha J., (2001), Principles of Equity and Trust, Routledge, London. Ramjohn, Mohamed., (1998) Source Book on Trusts Law, Routledge, London. ----------------, (1996), Tinsley vs. Milligan, retrieved January 1, 2009 from website at: http://ourworld.compuserve.com/homepages/pntodd/cases/cases_t/tinsley .htm -----------------------,(2008), Definition of Presumption of Advancement, retrieved from website January 1, 2009 at: http://www.yourdictionary.com/presumption Read More