Real Property LAWS5017 Templates

Transcription

1 Real Property LAWS5017 Templates 1

2 CO- OWNERSHIP: Step 1: Identify the relationship TENANTS IN COMMON A. There is a presumption that a conveyance of property to multiple people creates a tenancy in common General Principle Instruments aka WRITING A conveyance of property to two or more persons creates a tenancy in common CA s26(1) UNLESS there is express intention to create a joint tenancy CA s26(2) Does not require the use of the precise formula as joint tenants It is sufficient for the instrument to indicate plainly that a joint tenancy was intended o Section 26 does not apply to transfers to trustees, executors, administrators or mortgagees. CA s26(2) ORAL à Where co- ownership arises through means other than under an instrument, it is presumed under equity that it is created as a tenancy in common as equity is presumed to follow the law under s26 (Delehunt v Carmody) Features of Tenancy in Common: Where each tenant in common owns their own share of the land but has a right to possession over the whole land. o The tenants can have any share of the property as long as the total adds to 100%. The shares do not have to be equal. There is no right of survivorship when a tenant in common dies, his or her interest continues after death and can be transferred according to their will. Only unity of possession is required. JOINT TENANCY B. You can rebut the s.26(1) presumption by evidencing a plain intention that a joint tenancy was intended. Joint tenancy must have the 4 unities: o Unity of title all joint tenants hold their title to the land under the same instrument o Unity of interest joint tenant interests in the property must be identical o Unity of possession each joint tenant is entitled to possession of the whole property o Unity of time interests of joint tenants must be vested at the same time. o Most importantly: the right of survivorship! RPA s100 Anomaly Here there appears to be an apparent conflict. S100(1) RPA presumes a joint tenancy in Torrens land while s26(1) CA presumes a tenancy in common in old system land Butt says ignore s100: You cannot register as a joint proprietor anymore, no such thing anymore apply the tenancy in common presumption to Torrens land also! 2

3 STEP 2: Ways that Co- ownership can come to an END TENANCY IN COMMON: Terminates if the land vests entirely in one of the tenants in common (i.e. where all the tenants in common convey their interests in land to one person) All of the co- owners may transfer the property to a single third- party. Note: Since each tenant in common is seized of his/her own share they can readily transfer those interests Old systemà Transfer by deed Torrens titleà Transfer by registration If the co- owners cannot agree to divide the property into their respective shares, the court may order sale or physical partition of the land (CA s66g). JOINT TENANCY: Severance of Joint Tenancy The operation of the right of survivorship à the land simply goes to the last survivor One of the co- owners may buy or otherwise acquire the interests of all of the other co- owners. All of the co- owners may transfer the property to a single third- party If the co- owners cannot agree to divide the property into their respective shares, the court may order sale or physical partition of the land (CA s66g). A. Has there been any ACT that has severed the JOINT TENANCY? If any of the 3 unities (Possession, Title and Instrument) are destroyed = joint tenancy will be SEVERED (the 4 th unity (time) only applied to the creation of the joint tenancy) Severance of Joint Tenancy à turns into a Tenancy in Common Where there are more than two joint tenants, the severance only occurs for the co- owner who is severing the interest o A and B are joint tenants and B transfers his interest to C; B and C will hold as tenants in common with 50% each. o A, B and C hold as joint tenants and A transfers her share to D D is becomes a tenant in common of 33%, while B and C are joint tenants of 66%. Where B or C dies, the survivor will take the whole 66%. 1. Severance by alienation through CROSS- TRANSFER of interests If A, B and C hold as joint tenants, A transfers her interest to B and B transfers her interest to A, then all three hold as tenants in common (Wright v Gibbons) o 1) As soon as A transfers the interest B; A severs their interest in the property (no interest) B takes A s share as a tenant in common at 33% B and C still hold as joint tenants of 66%. o 2) When B transfers 33% to A; this severs the joint tenancy with C, and means that the overall result is that all three co- owners are tenants in common with 33%. 3

4 2. Severance by unilateral alienation to oneself A joint tenancy can be severed unilaterally where the joint tenant transfers the legal interest to themselves. (Public Trustee v Hall; CA s24) Old System: It is by way of a deed (CA s.23b) Notice of the unilateral severance must be given to all other joint tenants as soon as practicable after the joint tenancy has been severed (CA s.30(1)). BUT: Failure to give notice does not invalidate the severance of the joint tenancy (CA s30(3)). Torrens Title: It is registered on the register under Torrens (RPA s97(1)); OR There is also equitable severance under Torrens title were the rule in Corin v Patton (1990) is satisfied (that the person has done all that is possible to transfer the title). The Registrar General must notify the other joint tenants of the lodgment of a unilateral dealing that may sever the joint tenancy (RPA s97(5)). 3. Severance by alienation to another **Equity steps in to perfect an alienation to another which is not effective at law. SALE where the joint tenants interest is sold to a third party Where A and B are joint tenants, and A enters into a specifically enforceable contract to sell to C: o At law: A and B remain joint tenants until the conveyance to C is complete o Under equity: Equity will enforce the severance where there is a specifically enforceable contract (i.e. there is writing or part performance). A and B hold on trust for B and C as tenants in common in equal shares (Corin v Patton) GIFT where the joint tenants interest is gifted to a third party Old System Land - Gift takes effect when the donor executes and delivers a deed conveying land to done Torrens Land - Gift takes effect when the donee becomes RP of the land. Equity - will enforce the gift and subsequent severance where the joint tenant has done everything that is required to be done to pass the legal title (Corin v Patton) o Under Torrens this requires the donor to give the donee the CT and signed transfer form and to have done whatever is necessary to place the transfer beyond his or her recall. MORTGAGE Old System Land - A mortgage (whether legal or equitable) under old system title will sever a joint tenancy as the legal estate is transferred with the mortgage. o This is because the mortgage is a conveyance to the mortgagee of the legal estate in land destroys the unity of title and time (different instrument at a different time) o Where a mortgage is granted by only one of two joint tenant, the mortgage is only enforceable against 50% of the estate (need consent from other co- owner Thames Guaranty v Campbell Torrens Land - A mortgage under Torrens does not affect the severance because there is no transfer of the legal interest (it is a charge over the property). Where the mortgagor joint tenant dies before the other joint tenants, the mortgagee s charge is extinguished. This is because the interest over which the mortgage was given no longer exists, having passed by the right of survivorship to the other joint tenants (Lyons v Lyons) Where the mortgagor survives the other joint tenants, the mortgagee s charge becomes a mortgage over the whole property due to the right of survivorship. If A mortgages his interest in land and then transfers his interest to B, the A s share remains in existence for the purpose of preserving the mortgagee s interest: see Guthrie v ANZ Banking (1991). EASEMENT à Easements do not sever joint tenancies LEASE à A lease by a joint tenant does not sever the joint tenancy but rather suspends the joint tenancy for the period of the lease (there is temporary severance). The joint tenancy revives at the end of the lease (Wright v Gibbons). Thus, if the lessor dies during the lease, the reversion expectant upon the lease passes to the surviving joint tenants but the lessee s rights are preserved (Lyons v Lyons Victorian case). 4

5 4. Severance by agreement or course of conduct Where all tenants agree (through actual agreement or course of conduct) to sever the joint tenancy (by agreeing to hold as tenants in common or to hold distinct shares in the property), equity will enforce this. Actual Agreement o Agreement (written or verbal) between the parties to sever the joint tenancy Gould v Kemp (1834). o Equity regards the parties as tenants in common as soon as the agreement is formed, even though the legal title remains in them as joint tenants. o If 1 of the now tenants in common DIES before the legal title is altered to reflect the change in co- ownership à equity will compel the survivor(s) to hold the deceased s undivided interest on trust for the persons entitled under the deceased s will. (Dominicus v Spano (1998)) Course of conduct o Course of conduct must demonstrate that the all parties interests can be mutually treated as constituting a tenancy in common (i.e. conduct over a long period of time that shows that the co- owners think they are tenants in common). Examples: Continuously dividing the income from jointly owned property into separate bank accounts; Division of the proceeds of the sale of the property between the co- owners The creation of mutual wills which devise the interests in the jointly held property in an agreed manner B. Has there been a SALE or PARTITION of the land? Partition à terminates co- ownership, whereby each co- owner becomes the sole owner of a specifically ascertained portion of the land. Sale à is preferred by courts (William v Legg), so the onus is on the person opposing sale to show that partition is more beneficial (CA s66g(4)). Where the co- owners cannot reach agreement as to how to terminate the co- ownership, the parties can seek an order from the court (discretionary) for sale or partition of the land Where any property (other than chattels) is held in co- ownership the court may, on the application of any one or more of the co- owners, appoint trustees of the property and vest the same in such trustees, subject to incumbrances affecting the entirety, but free from incumbrances affecting any undivided shares, to be held by them on the statutory trust for sale or on the statutory trust for partition (CA s66g(1)). 5