Central Problem in the 1925 Property Legislation - Essay Example

Year of Study/Semester: Submitted: The Law of Property Act 1925 s. 205 ix) defines land as constituted by “the surface, building, or parts of buildings” and everything else that is linked to the said land and as such becomes part of that land with respect to the Latin maxim of quicquid plantatur solo, solo cedit. The Law that relates to co-ownership which primarily relates to concurrent interests in land constitutes a significant section of most syllabuses in land law. Of significant importance is the reality that co-ownership is an area of land law which has a powerful impact on the lives of ordinary individuals in the U.K. In more straightforward terms co-ownership law is always in operation when two or more people are entitled to ownership of property at the same time, either leasehold or freehold (Dixon 115). The co-owners of property may be related as romantic partners, husband and wife, neighbours, friends or business partners, for example: Rodway v Landy (2001): a doctors’ surgery. In other words law on joint tenancy is a law that governs dealings with property which is ideally owned simultaneously by more than a single individual (Dixon 115). This law is not specifically associated with the property law problems that characterize unmarried or married couples. Law on joint tenancy is not a species of family law. A significant majority of problems that characterize jointly owned property often stems out of breakdown in emotional relationships as well as falling out between friends or the inability to service mortgages. Despite the fact that the above described are the primarily causes attributed to the problems in property, the law on co-ownership is not designed to serve these domestic eventualities. Of significance importance is remembering the fundamental and the nature of property law in discussions of land issues. The law that concerns co-ownership is found in the 1925 legislation on property primarily, The Law of Property Act 1925 (LPA1925) as well as TOLATA (1996) Trusts of Land and Appointment of Trustees Act. The last Law was a repeal of the 1925 law. In addition economic and social changes have greatly impacted the frequency with which joint tenancy arises as well as the consequent that comes up as a result of these joint tenancy. It is simply not feasible to limit joint ownership to large estates in the U.K or to land that is held for purposes of investment. It is neither true that joint tenancy only arises on deliberate conveyance of land to two or more individuals. A significant proportion of modern joint ownership law in the U.K relates more on the rights and liberties as well as responsibilities of the joint-tenants of the family home and the manner in which they relate in their interactions with financial institutions, for instance banks, other purchasers as well as building societies. This change in the role of joint tenancy or primarily the widening scope of the practice of co-ownership has resulted into significant fundamental changes with regard to the scheme of joint tenancy that contrasts it with the way it was initially intended to operate (Dixon 116). Co-ownership can be broken down into various constituent parts for the purposes of the ensuing discussion. Firstly, there is the concept of the nature of co-ownership and the types of co-ownership that were deemed probable to exist since the inception of the 1925 Act that took effect from 1st January, 1926. There also is the statutory machinery which oversees the use as well as enjoyment of jointly owned land’ moreover their also is the question of the motivation behind the enactment of the 1925 legislation and the subsequent repeal of that Act in 1996. The third aspect has to do with the statutory as well as common law rules that manage the creation of joint-ownership in both instances when co-ownership arises informally as a result of informal dealerships between co-owners and property as well as through deliberate dealerships. The fourth constituent part of co-ownership has to do with its impact on third parties, such as building societies as well as banks that may have financed the purchase of the property through lending out money. Third parties also include purchasers as well as occupiers. The fifth constituent part of co-ownership relates to matters that regard termination of co-ownership and as such the manner in which one form of co-ownership may be replaced by another. Before first January 1926, co-ownership of property took various models, but since the said date, for all reasons practical, co-ownership either was by tenancy in common or joint tenancy (). It is worth noting that in this respect, tenancy neither implies leasehold nor lease interest. Tenancy is defined under this Act as the type of joint-ownership that is enjoyed by joint owners whether they own leasehold or freehold land. I will now assess the concept of Joint Tenancy. When land is primarily owned by more than one person on the basis of joint tenancy, each co-owner is treated as holistically claiming that land. As such, there are no clearly defined shares whereupon no single joint-owner claims any greater right of ownership over the other with regard to the owned piece of land. It therefore follows that the land is regarded as owned by a single individual and thus the joint-owners of the said piece of land share in this single ownership. In practical terms this implicates that when a given piece of property is subject to co-ownership no given joint-owner claims a greater stake in that piece of property and as such all co-owners have the same equal stake of the whole property. If the said property is registered, this implies that it only qualifies for one title which is issued by the Land Registry and as such each co-owner is registered as a proprietor of that property with his or her name appearing in the proprietorship section of the certificate. In the event that the property is not registered, there is a single set of title deeds that specify the co-owners. In essence each given joint-owner owns a complete interest in the land. As such, it follows that the resulting form of ownership is co-ownership as there are neither partitions of the land nor shares but alternatively only right to ownership of the property which is enjoyed by all individuals that claim ownership simultaneously. The legal attributes of joint tenancy are a reflection of this nature of Joint tenancy as one title that is owned by two or more individuals. These attributes as stipulated below are regarded as the cornerstone of joint tenancy and their absence results into fatality with regard to the existence of joint-ownership. The first attribute is the issue of the right of survivorship. The right of survivor ship is ideal for trustees (Megarry & Wade, para 9-003.) By virtue of this right in the event that one tenant dies in the existence of co-ownership before its severance (as will be (discussed) his interests in the co-ownership which primarily is his right to derive enjoyment from the property is automatically passed onto the surviving joint tenants. In the ideal law, the concept of passing is itself wrong as in death, the joint tenant drops from the list of individuals that claim ownership over the entire property while the remaining joint tenant(s) continue to enjoy their rights over the entire property. Worth acknowledging is the fact that despite the demise of a joint- tenant, there’s no legal requirement for formal conveyance of the resulting status quo. It follows that there is nothing needed to be conveyed and as such the right of survivorship is prioritized over any attempts for transfer as may be postulated by the will of the deceased joint-tenant’s interests as unless that co-ownership had been severed before death there is no share for transfer (Gould v Kemp (1834). It therefore follows that co-ownership with regard to this law can be critically important as it does not demand for formal documents upon the death of a joint owner but at the same time it is unfair as it fails to leave the property to the surviving family of the deceased. Before joint tenancy can see the light of the day, 4 unities are required as exemplified in the case of (AG Securities v Vaughn (1988). The case involved a contract for co-ownership of a fully furnished flat in which the question was whether the joint-occupiers enjoyed exclusive occupation. Each agreement stipulated that each person that occupied the flat was to share the flat with up to 3 other individuals that were to be nominated by the landlord. The agreement stipulated that only a license was granted on each occupant. However, it was apparent that the entire motive of the contract was to avoid the Rent Act. The four occupants of the flat got their agreement rights to assume occupation and went ahead with their relevant obligations with different agreements with appellants which were made on separate payments and separate times but on identical terms. Each of the occupant’s agreement ran for six months and in given instances it was continued on a month to month basis but it seemed apparent that the agreement operated on the assumption that occupiers would come and go. In case of a vacancy, the landlord had a final say in who replaced the leaving occupier though his choice of the subsequent occupier was arrived at through consultation with the other occupiers. The court of appeal held that the occupiers were entitled to exclusive possession. This was because the proprietor had the right to appoint up to 3 cohabitants and as such, once the 4th occupant moved into the flat he was barred from nominating anyone else to move into the flat. As a result joint tenancy came into enforcement in the event of the fourth tenant moving into the flat. The suggested mechanism was a single implied agreement at the time so as to meet the four unities required for a joint agreement. These are unity of possession as well as unity of interest in addition to unity of time as well as unity of title which can also be traced in the case of Hammersmith and Fulham L.B.C v Monk (1992). The absence or presence of these unities enables jurists to distinguish tenancies in common from joint tenancies. The unity of possession for instance, which implies that there can be no restriction on a co-owner from his or her use of every part of the land, moreover, prohibits of division of the land. This participation implies that joint-tenants are entitled to deriving benefits from the property which includes collection of rental payments as well as profits that come from the property. Despite the fact that unity of possession must exist, its practical effects have undergone statutory modification and as such, in given circumstances a joint-tenant may be excluded in practice from the land as stipulated in ss 12 and 13 of the TOLATA 1996 and was invoked in the case of Chun vs HO (2001). This modification does not destroy the unity of possession in itself but on the contrary the power of ss. 12 and 13 of the TOLATA modifies the entitlements of the co-owners. There also is additional power with regard to given family issues: Part four of the Family Law Act 1996. In addition to Joint Tenancy, beneficial ownership can also be as tenancy in common. In this regard, the individuals who share the home or land, hold the said piece of land in undivided shares and as such each has a distinct share in the property which is ideally not divided among the tenants that claim its ownership. With tenancy in common no tenant has a right either partly or in entirety to the land. In the event that the land is sold by trustees, proceeds from the sale are divided amongst the respective tenants in common with regard to their shares in the sold equity (The Law Commission 11). Another critical aspect of property regards severance. Severance is the process by which a joint tenancy can be converted into a tenancy in common. Severance can only be influenced with regard to beneficial ownership as it is impossible to have legal estate as a tenancy in common. The consequence effect of tenancy in common is the conferment onto the individual whom his/her interests have been severed, a share that is ideally measured in a clear quantitative value with regard to the number of joint tenants who derive immediately after before severance takes place. As a result, if two individuals have previously held their home through joint tenancy and consequently benefited from the land (profits and rent), each of them is entitled to half a share. They can not claim to be granted a larger portion simply because they made more contributions in the development of the property: Goodman v Gallant [1986] Fam 106. The methods of severance are varied. According to Sir Page Wood in Williams v Hensmann, same as in joint tenancy of personality could have been severed before nineteen twenty six, which basically implies severance through an act of any individuals who were deemed to be operating on own personal share. As such, alienation in whole or in part of the co-owners interests through for instance, mortgage, lease or sale may result into severance (Megarry & Wade, paras 9-038). Severance can also be by mutual agreement whereupon the agreement is not obligated to be specifically enforceable: Burgess v Rawnsley; moreover severance can also be by any course of dealership that is sufficient to imply that all co-owners interests were treated mutually as to constitute a tenancy in common. It follows that a statement that is primarily unilateral by one joint tenant that was communicated by oral means in the process of negotiations would not suffice: Burgess v Rawnsley. A severance can also be effected through a notice to the other co-owners that ideally has to be in writing: s. 36(2) LPA 1925, as well as through a third party in which a classic instance regards the insolvency of a joint-tenant: Re Gorman. Severance can also be effected through acquiring of another estate in the land which implies the so called merger doctrine which is now of dubious application (Megarry & Wade, para9-048). In the case of homicide severance ensured that the murderer did not rip benefits from his crime by virtue of survivorship. Courts have been granted discretion powers to relieve from forfeiture consequences of the law with the exception of instances where applicants are convicted of murder: Forfeiture Act 1982, s. 2(4) (b). Section 14 and 15 of the Trusts of Land and Appointment Act 1996 stipulates methods for resolving disputes that regard land trusts. Any individual that is regarded as a trustee of land or who has an interest in any given property that is primarily subject to a trust of land or proceeds that are derived from the sale of the said land, has the right to apply to the court for an order to enable him regulate the exercise of trustees in any of their functions. Another option available to such persons is their liberty to seek a declaration with regard to the nature as well as extent of the individual’s interests in given property with regard to the trust (TOLATO s. 14 (2). In responding to such an application, the court is at discretion to provide direction to such an order as it defines fit. The court as such, can direct that the property under litigation be sold and the proceeds that are derived from such property be distributed as it directs. In exercising this statutory, the court is obligated to have regard to several factors. Firstly the court is obliged to put in mind the intentions if any of the creators of the trust. Secondly, the court is also obliged to put in mind the major rationale for which the land subject to the trust is held. This has to do with the purposes that subsist at the period the application appears before the court: (Rodway v Landy). The court is also obliged to regard the welfare of any children that are primarily minors who may be occupying or may be expected to occupy any land that is subject to the trust as his or her residence. Lastly the court is obligated to consider the interests of a secured creditor who identifies with the property by virtue of all or one beneficiary: TOLATA s. 15 (1). Although section 14 repealed the jurisdiction that was ideally vested in the hands of the court pursuant to section 30 of the LPA 1925, the principles that ought to be applied are not similar. In the case of section 30, the ideal rule was that with the exception of exceptional scenarios, the wishes of an individual that wanted to sale the property took precedence over all other wishes. The interests of minors as well as those of the family were regarded as secondary wishes: In re Citro (Domenico) (A Bankrupt) and Lloyds Bank plc v Byrne & Byrne. Despite this, the restoration of trusts for sale with ideally not as much arcane and primarily simpler trust of land was the onset of change in the treatment of applications on land by courts: Mortgage Corpn v Shaire. The prevalent notion among many professionals in law is that s. 15 changed the law with the consequence of inducing flexibility in the operations of the court: Bank of Ireland Home Mortgages Ltd v Bell There exists one absolutely critical restriction with regard to the powers of the court under s. 14 which empowers it to declare an existing right. Despite this power, the statute does not grant the court power to adjust existing rights. As such, s. 14 is a statutory jurisdiction that is significantly limited as compared to that which can be revoked in divorce cases pursuant to Matrimonial Causes Act 1973. Works Cited Burgess v Rawnsley. 1975. Ch 429,444, 446. Bank of Ireland Home Mortgages Ltd v Bell. 2001. 2 FLR 809, 816, per Peter Gibson LJ. Dixon, Martin. Principles of Land Law, 4th Edition, London. Cavendish Publishing 2002. Edward Burn. Cheshire and Burns Modern Law. Of Real Property. 14th ed. London Butterworths, 1988. Ferrishurst v Allcite Ltd [1999] Ch 355. Forfeiture Act 1982, s. 2(4) (b). Gray, K. and Symes. Real Property and Real People, London. Butterworths, 1981 In re Citro (Domenico) (A Bankrupt). (1991). Ch 142; Law of Property Act. 1925. Lloyds Bank plc v Byrne & Byrne. 1993. 1 FLR 369. Mackenzie, Judith-Anne and Phillips Mary .Textbook on Land Law, Oxford. Oxford University Press. 2006. Megarry, Robert and Wade, William. The Law of Real Property. London. Stevens & Sons. 1974. Mortgage Corpn v Shaire 2001. Ch 743, 757, per Neuberger J. Re Gorman [1990] 1WLR 616. Re Taylor [1932] 1 Ch 242 Rodway v Landy 2001. Ch 703, 711, per Peter Gibson LJ. Roome v Edwards 1981. STC 96 Sexton, Roger. Land Law Textbook, Oxford. Oxford University Press. 2002. Simpson, Alfred A History of the Land Law. 2nd (ed). Oxford. Oxford University Press. 1986. Sinclair, Alan and McCallum, Margaret, Introduction to Real Property Law. 4th Edition. Toronto: Butterworths, 1997. Smith, Bailey and Gunn. Modern English Legal System, London: Sweet and Maxwell, 2007. . Read More