Co-ownership and trusts of land

Co-ownership is an inescapable feature of modern land law. Whenever two or more persons hold a simultaneous interest in land—whether as family members, cohabitees, or business partners—the law must allocate legal title, beneficial interests, and decision-making authority. Since 1997, all such arrangements have been governed by the unified statutory code in the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA), which replaced the older dual regime of strict settlements and trusts for sale.

This note examines the two forms of co-ownership recognised in English law: the joint tenancy and the tenancy in common. It analyses the distinction between legal and equitable title, the mechanisms of severance, the rights and duties of co-owners under TOLATA (including occupation rights under s 12 and applications for sale under ss 14–15), and the interplay between co-ownership and third-party rights through the doctrine of overreaching. Understanding these principles is essential not only for resolving disputes between co-owners but also for advising on conveyancing, mortgage transactions, and insolvency.

The material builds directly on prior weeks: the doctrine of estates (W1), registered and unregistered title (W2), priorities and overreaching (W3), and overriding interests (W4). Co-ownership sits at the intersection of property, equity, and family law, and has generated significant judicial and academic debate—particularly concerning the balance between creditors' rights and family homes.

Co-ownership has long been recognised at common law, but its modern structure is a creature of statute. Before 1926, co-ownership could exist both at law and in equity, in either of the two forms. The Law of Property Act 1925 effected a fundamental division: henceforth, the legal estate could be held only as a joint tenancy, and only by a maximum of four trustees (s 34(2) LPA 1925). Any purported tenancy in common at law was automatically converted into a joint tenancy on trust, with the beneficial interests held as tenants in common. This "curtain principle" simplified conveyancing by ensuring that purchasers need deal only with up to four trustees, behind whom equitable interests were concealed.

The 1925 legislation imposed a trust for sale whenever land was co-owned (s 36 LPA 1925). Under this device, trustees held legal title subject to a duty to sell, with a power to postpone sale. Beneficiaries' interests were notionally interests in proceeds of sale, not in the land itself. The trust for sale was intended to facilitate alienability, but it sat awkwardly with the reality of family occupation: few co-owners viewed their homes as assets awaiting liquidation.

The TOLATA 1996 abolished the trust for sale (save where expressly created) and replaced it with the trust of land: a unified regime applicable to all trusts of land, whether express, implied, resulting, or constructive (s 1). The key change was recognition that beneficiaries' interests are in the land itself, not merely in proceeds. TOLATA also introduced explicit rights of occupation (s 12), statutory duties for trustees (s 6), and a reformed framework for dispute resolution (ss 14–15). The Act came into force on 1 January 1997. All trusts for sale created before that date were automatically converted into trusts of land, though any contrary intention in the trust instrument can still be given effect (s 3).

The historical shift reflects a broader policy evolution: from viewing land as a commodity to recognising its social and residential function, particularly in the context of the family home.

The two forms of co-ownership

English law recognises only two species of co-ownership: the joint tenancy and the tenancy in common. The distinction turns on the presence or absence of the right of survivorship (ius accrescendi).

Under a joint tenancy, co-owners hold as a single notional entity. Each is wholly entitled to the whole; there are no distinct shares. On the death of one joint tenant, the interest simply accrues to the survivors automatically, by operation of law, outside the deceased's estate. The last survivor becomes solely and beneficially entitled. Because joint tenants are regarded as a single unit, four unities must be present:

• Unity of possession: each must be entitled to possess the whole.
• Unity of interest: each must have the same interest in terms of nature and duration.
• Unity of title: all must derive title from the same instrument or act.
• Unity of time: interests must vest at the same moment (subject to exceptions for resulting trusts).

Under a tenancy in common, each co-owner holds a distinct, albeit undivided, share. Shares may be equal or unequal. There is no right of survivorship: on death, a tenant in common's share passes under their will or intestacy. Only unity of possession is required.

The legal/equitable divide

1. Foundation: Explain the difference between a joint tenancy and a tenancy in common, and the significance of the 'four unities.'

1. Foundation: What are the methods by which an equitable joint tenancy may be severed? Illustrate with reference to Burgess v Rawnsley and s 36(2) LPA 1925.

1. Standard: Alan and Bella purchase a house in joint names. The transfer is silent as to beneficial interests. Alan contributed 70% of the purchase price; Bella 30%. Bella has recently served written notice of severance on Alan. Alan has now died. Advise Bella as to the ownership of the legal and equitable interests in the house.

1. Standard: Tom and Uma hold a house on trust for themselves as beneficial joint tenants. Tom is declared bankrupt. His trustee in bankruptcy applies under s 14 TOLATA for an order for sale. Uma opposes sale, as she and the couple's two young children live in the property. Eighteen months have elapsed since Tom's estate vested in the trustee. Advise the court on the likely outcome.

1. Challenge: 'The doctrine of overreaching protects purchasers but sacrifices the interests of beneficial co-owners. TOLATA 1996 has done nothing to remedy this imbalance.' Discuss with reference to Williams & Glyn's Bank Ltd v Boland, ss 2 and 27 LPA 1925, and the current law on registration and overriding interests.

Primary materials

• Trusts of Land and Appointment of Trustees Act 1996 (full text at legislation.gov.uk)
• Law of Property Act 1925, ss 1, 2, 34, 36 (as amended)
• Insolvency Act 1986, s 335A
• Land Registration Act 2002, schs 1 and 3 (overriding interests)

Textbooks

• M. Dixon, Modern Land Law (11th edn, Routledge 2023), ch 9 ('Co-ownership')
• M.P. Thompson, Modern Land Law (7th edn, Oxford University Press 2019), ch 10
• K. Gray & S.F. Gray, Elements of Land Law (5th edn, Oxford University Press 2009), Part 7 (detailed doctrinal treatment)
• S. Bright & N. Hopkins (eds), Modern Studies in Property Law (Hart Publishing, periodic volumes on TOLATA reform)

Journal articles and essays

• S. Pascoe, 'Section 15 of the Trusts of Land and Appointment of Trustees Act 1996—A Change in the Law?' [2000] Conv 315 (critical appraisal of s 15)
• M. Dixon, 'Trusts of Land, Bankruptcy and Human Rights' [2005] Conv 161 (on s 335A and ECHR Art 8)
• S. Bright, 'Co-ownership and the Reform of the Law on Matrimonial Property' in Cohabitation: Law, Practice and Precedents (Family Law, 2002)
• Law Commission, Sharing Wales: A Discussion Paper (Law Com No 278, 2002) (comprehensive review declining major reform)
• G. Ferris & G. Battersby, 'The General Principles of Overreaching and the Modern Legislative Reforms 1996–2002' (2003) 119 LQR 94 (interaction of TOLATA and LRA 2002)
• N. Piska, 'Intention, Fairness and the Presumption of Resulting Trust after Stack v Dowden' (2008) 71 MLR 120 (on the move to constructive trust analysis)

Case notes

• A. Briggs, note on Stack v Dowden (2007) 123 LQR 511
• S. Gardner, note on Jones v Kernott [2012] CLJ 14 (on imputation of intention)
• M. Pawlowski & J. Brown, note on Mortgage Corporation v Shaire [2001] Fam Law 582 (s 15 discretion)

Comparative and policy materials

• S. Gardner, An Introduction to Land Law (4th edn, Hart Publishing 2018), ch 8 (policy critique and comparative references)
• Law Commission, Land Registration for the Twenty-First Century: A Conveyancing Revolution (Law Com No 271, 2001), paras 5.68–5.80 (overreaching and co-ownership)