User:RichsLaw/Co-ownership

Co-ownership in English law refers to the joint ownership of a property by more than one person, either through a tenancy in common, or a joint tenancy. Common situations giving rise to co-ownership include the purchase of matrimonial homes, the cohabitation of couples, and the purchase of property by business partners. The type of co-ownership that exists directly affects the way in which an owner may deal with their share of property, to leave it in a will to a third party, or to sever their share of property.

Joint tenancies
A joint tenancy, between two or more individuals, represents their ownership of property as a single entity. As no one individual owns their own interest in the property, they are not able to leave a share of it to another individual in their will, as the principles of survivorship apply. This means that upon the death of one joint tenant, the remaining tenants receive the remaining share of the property, until eventually one tenant becomes the sole beneficial owner.

As a joint tenancy reflects a collective group of people forming one single owner, four unities are required in order to legally form it. The unity of possession requires that each co-owner has an equal right to possess their property. As demonstrated by the case of Dennis v McDonald, if one co-owner forces another out, they can be ordered to pay a rental fee to the removed co-owner. The second unity of interest requires that each co-owner acts equally with regard to the property. For example, if a group of joint tenants lease a property, including a break clause, all of them must agree to exercise such a clause for it to be effective. Equally, where one joint tenant in a lease agreement serves notice to quit, this will bring the tenancy to an end, as there is not an agreement as to the interest the collective owners hold. The last two unities, of title and time, require joint tenants to acquire their interest in the same manor, and at the same time, in order for it to be effective.

Severance
A joint tenancy may be severed, or held not to exist at all, based on the words and acts of the purported joint tenants. The recognition of severance, either at the outset of an agreement, or through later dealings, is important to establish the rights of joint owners. For example, the effect of survivorship may be disputed following contrary statements of a desire to form a joint tenancy.

Factors precluding a joint tenancy
It is not necessary for tenants to explicitly state that they wish to create a tenancy in common, so long as an intention can be inferred that a joint tenancy was not envisaged. It has been held that the words "in equal shares" will be sufficient to form a tenancy in common, as may other similarly termed phrases implying a property will be divided in some way between owners. Additionally, a tenancy in common may be inferred in several situations. For example, where two individuals purchase land together as a business investment, there is a presumption in equity that they intended a tenancy in common.

Acts of severance
There are several instances where the actions of a joint tenant may sever a joint tenancy, either via statute or via a common law rule. The Law of Property Act 1925 provides that a joint tenant may sever their share by giving notice to all his other joint tenants. Such notice does not need to be given in any particular form, so long as it is an unequivocal statement of intent. For example, where a party to a divorce petition states by way of affidavit that a property be sold, with the proceeds to be divided equally, this constitutes an intention to sever. It is necessary however that the notice be properly served upon all joint tenants, and that this is done so before the death of a tenant. At common law, a joint tenancy may be severed in the ways outlined in William v Hensman. The first method given was that of a tenant operating on their own share. If a tenant purports to sell his interest in a joint tenancy, this is sufficient to sever a joint tenancy, as will the bankruptcy of one tenant The second method and third methods, of mutual agreement and course of dealings, refer to situations such as one joint tenant agreeing to purchase another's share in a property. In the case of Burgess v Rawnsley it was held that this principle could apply even where only an oral contract had been entered into. It is not thought that a final agreement is necessary in order to effect a severance, so long as the intentions of the parties in dealing infer a desire to sever their joint tenancy.

Tenancies in common
A tenancy in common differs from a joint tenancy, insofar as each tenant owns a distinct and separate share of a property. This does not represent a physical share, and so each tenant may occupy a whole property, and it may be the case that each tenant holds a differently proportioned share. As each tenant has a clearly established share, the right of survivorship found in joint tenancies does not exist, and a tenant may leave their share in a will, or it will be automatically passed in his estate. Whilst the Law of Property Act 1925 abolishes the legal status of tenancies in common, they are still recognised in equity. Thus a tenancy in common will legally be represented as a joint tenancy, with each tenant holding a trust of land.