Investigation of title - Co-ownership issues

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Investigation of Title - Co-ownership Issues: A Guide for SQE1 FLK2 Exam Preparation

Overview

Understanding the nuances of co-ownership and conducting detailed title investigations are essential for property law practitioners and crucial for the SQE1 FLK2 exam. This guide examines joint tenancy and tenancy in common, the process for both registered and unregistered land, and their practical aspects in property transactions.

Co-ownership Structures

Joint Tenancy

Joint tenancy features four unities: possession, interest, title, and time. It includes a right of survivorship, where the interest of a deceased tenant automatically transfers to the other joint tenants.

Key aspects:

  • Equal undivided shares
  • Same time acquisition
  • Identical nature and duration
  • Survivorship rights

Legal considerations:

  1. Severance: Joint tenancy can change to tenancy in common through:

    • Unilateral actions (e.g., sale or mortgage)
    • Mutual agreement
    • Actions inconsistent with joint tenancy

  2. Mortgages: A tenant can mortgage their share, possibly leading to severance.

  3. Bankruptcy: The bankruptcy of a tenant severs the tenancy, protecting creditors' interests.

Case Example: Williams & Glyns Bank v Boland [1981] AC 487

This case illustrates the importance of clear agreements in joint ownership due to beneficial interests from financial contributions.

Tenancy in Common

Tenancy in common allows co-owners to hold separate, possibly unequal shares without survivorship rights.

Key aspects:

  • Distinct shares
  • No automatic survivorship
  • Allows unequal shares
  • Independent dealings

Legal aspects:

  1. Partition: Co-owners can have the property physically divided or sold, with proceeds split.

  2. Alienation: Each owner may sell, lease, or mortgage their share independently.

  3. Survivorship: A tenant's share passes via will or intestacy, not to other co-owners.

Title Investigation Process

Registered Land

Investigating registered land involves reviewing the land register and related documents.

Steps:

  1. Obtain register copies and title plan
  2. Check ownership in the proprietorship register
  3. Look into property rights in the property register
  4. Examine charges for encumbrances

Key points:

  • Enforceability of restrictive covenants
  • Easements' effect on land use
  • Priority of charges
  • Notices affecting land dealings

Unregistered Land

Investigating unregistered land requires examining historical documents.

Steps:

  1. Review abstract or epitome of title
  2. Confirm root of title (at least 15 years old)
  3. Verify ownership chain through deeds
  4. Investigate possible overriding interests

Key points:

  • Gaps in title chain
  • Proper execution of deeds
  • Adverse possession claims
  • Unregistered easements or covenants

Complex Scenarios and Challenges

Example 1: Severance of Joint Tenancy

Scenario: Alice and Bob own a property as joint tenants. Alice secretly severs the tenancy before dying, leaving her estate to her children.

Analysis:

  • Severance validity hinges on execution and notice to Bob
  • If valid, Alice's share goes to her children
  • If not, survivorship applies, giving Bob sole ownership

Example 2: Equitable Interests in Co-owned Property

Scenario: Carol funds 70% of a property in David's name, and they live together unmarried.

Analysis:

  • Carol might have an equitable interest through resulting or constructive trust
  • Interest extent depends on intent and reliance
  • Title checks must consider potential unregistered interests

Trusts in Co-ownership

Trusts are vital in co-ownership, especially with unequal contributions or inheritance preferences.

Resulting Trusts

These arise when one contributes to the purchase but another holds the title, reflecting financial contribution.

Constructive Trusts

Imposed when retaining the whole beneficial interest would be unjust, such as:

  • Cohabitation contributions
  • Promises of beneficial interest

Practical Applications for Solicitors

1. Identifying and Resolving Title Defects

  • Conduct thorough searches
  • Address title chain breaks with declarations or insurance
  • Negotiate or insure over restrictive covenants

2. Drafting Ownership Agreements

  • Reflect ownership structures and rights clearly
  • Include dispute resolutions and exit strategies
  • Consider joint tenancy severance

3. Managing Multi-Party Transactions

  • Coordinate property chains
  • Handle shared ownership schemes
  • Advise on tax ramifications

4. Client Communication

  • Provide clear legal explanations
  • Address client concerns with solutions
  • Explain long-term ownership effects

Conclusion

Understanding co-ownership and title investigation is vital for success in SQE1 FLK2 and future practice. Key takeaways include:

  1. Features and legal aspects of joint and common tenancy
  2. Importance of thorough title investigation
  3. Handling complex scenarios and trusts

Candidates will be prepared to tackle property law challenges in exams and professional settings by analyzing scenarios and offering practical solutions.