If you own a property with someone else, it is important to know the details of the title under which you own it as this can affect your capacity to sell, rent or mortgage the property.
The two most common types of co-ownership of real property (that is land and buildings) are joint tenancies and tenancies-in-common.
Joint tenancy is distinguished by the four unities:
1. possession,
2. interest,
3. title and
4. time.
Unity of Possession means that each of the co-owners has an equal right to possession of the entire property. If a joint tenant excludes another joint tenant from the property, this amounts to trespass. Co-owners have a right to joint possession of the title deeds.
Unity of Interest means that both co-owners must have the same estate – such as a freehold or fee simple estate – with the same joint rights and obligations.
Unity of Title normally means that the tenancy must originate from the same source, such as a single conveyance.
Unity of Time means that the interest of both co-owners must have vested at the same time – again by a single indenture document.
With a tenancy-in-common, on the other hand, both co-owners have a right to possession of the entire property, although they may not have equal shares. For example, one person may be entitled to two thirds of the property, while the other owns the remaining one third. With a building or land, there is an obvious difficulty in deciding who owns what. Often the only solution in case of a dispute is to sell the property and divide the proceeds in the appropriate proportions.
The most important distinction between the two types of tenancy relates to survivorship: in the case of a joint tenancy, the surviving co-owner automatically succeeds to the share of a joint tenant who dies. With a tenancy-in-common, the tenant’s share will pass under a will or intestacy on that person’s death.
While the common law prefers joint tenancies (to avoid the division of land), equity favours tenancies-in-common. The law of equity recognises that a joint tenancy may become a tenancy-in-common by severance, by the elimination of any of the four unities.
If a joint tenant behaves in such a way that he appears to regard himself as holding under a tenancy-in-common, equity may imply a severance on the basis of a “course of dealing” (Wilson v Bell (1843) 5 Ir Eq R 501).
If co-owners contribute to the purchase price of a property in different amounts, there is a rebuttable presumption that they share the equitable estate as tenants-in-common, in proportion to the amounts of their contributions.
Co-ownership may be ended by partitioning the property (which is not a very practical solution) or by sale in lieu of partition, under s.4 of the 1868 Partition Act. On the request of one of the co-owners, the Court will order the sale, “unless it sees good reason to the contrary”.
Alternatively, the Court may decide that the legal owner of property is holding it in trust for someone else. A resulting trust may be presumed where one person provides the money to buy property, but it is conveyed in another person’s name.
The Court may also decide that a person holds a property under a constructive trust, a device which can be imposed by the Court in any situation – no matter how novel – to achieve justice.
Where two owners of real property are married to one another, they will also have to consider the terms of the Family Home Protection Act 1976 if they wish to sell or mortgage the property. The Act requires that, before such a property is sold or used as security for a loan, the written consent of both parties is required – even if the property is registered only in the name of one of the parties.
A joint tenant is not entitled to convey land held in joint tenancy or acquire another interest in such land without first obtaining the consent of the other joint tenancy under Section 30 of the Land and Conveyancing Law Reform Act 2009, and any such conyenace is void at law and in equity. Consent means the prior consent in writing of the other joint tenant and if there is more than one, all of the other joint tenants.
Under Section 31 of the 2009 Act, a trustee, mortgagee, secured creditor and a judgment mortgagee having an interest or estate in land which co-owned whether at law or equity can apply to the Court for an order, which can include the following measures;
- an order for partition of the land amongst the co-owners.
- an order for the taking of an account of incumbrances affecting the land, if any, and the making of inquiries as to the respective priorities of any such incumbrances.
- an order for sale of the land and distribution of the proceeds of sale as the courts directs.
- an order directing that accoutant adjustments be made as between the co-owners.
- an order dispensing with consent to severance of a joint tenancy where such consent is being unreasonably withheld.
- such other order relating to the land as appears to the court to be just and equitable in the circumstances of the case.
Under Section 31, “accounting adjustments” is defined as the following;
- payment of an occupation rent by a co-owner who has enjoyed, or is continuing to enjoy, occupation of the land to the exclusion of any other co-owner.
- compensation to be paid by a co-owner to any other co-owner who has incurred disproportionate expenditure in respect of the land (including its repair or improvement).
- contributions by a co-owner to disproportionate payments made by any other co-owner in respect of the land (including payments in respect of charges, rates, rents, taxes and other outgoings payable in repsect of it).
- redistribution of rents and profits received by a co-owner disproportionate to his or her interest in the land.
- any other adjustment necessary to achieve fairness between the co-owners.
The equitable jurosdiction of the court to make an order for partition of land which is co-owned whether in law or equity has been abolished.