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Question: Property Law Assignment
Problem Question: A few years ago Elijah, Mitchell, Anisah, Dirk and Shabaz bought a country cottage together to use as a Bed & Breakfast. Shabaz was going to move in, with her boyfriend Julius, and run the business, whilst it was an investment for the others. Elijah contributed 20% of the purchase price, Mitchell 20%, Anisah 25%, Dirk 25% and Shabaz 10%. They were registered as joint tenants and declared that they held title in trust for themselves as joint tenants.
Last year Elijah was posted abroad and sold his beneficial interest in the cottage to Mitchell.
In January Mitchell told Shabaz and Dirk that he wanted to move away too, and offered to sell his interest in the cottage to them. Shabaz replied that she and Julius “would immediately start saving so that they can take him up on his offer”.
In February Dirk decided to begin a new life in Australia and wrote to the Mitchell, Anisah and Shabaz saying he has decided to leave the rat race and wanted to get his money as soon as possible. He wanted them to send his money on as soon as they could. He sent the letters by registered post. The postman met Shabaz whilst walking to the cottage and gave her the letters. She put them in her bag but then forgot to open them. Sadly Dirk was killed on his way to the airport and he left all his property to Anisah.
(a) Advise parties as to their interests in the cottage.
(b) If the cottage was sold now, how would the proceeds of sale be divided?
(c) How, if at all, would your advice differ in EACH of the following ALTERNATIVE circumstances:
(i) The property was conveyed into their joint names but no reference to any trust was made in the conveyance;
(ii) Mitchell was adjudged bankrupt.
NB The word limit is strict. Declare your word count on the front sheet of your answer, including footnotes but not bibliography.
Answer: In land law, when a property is purchased by more than one person, it is classed as a co-ownership. The interest of the co-owners would automatically be held under a trust, making it necessary to consider both the legal and equitable title. There are two types of co-ownership; joint tenancy (JT) and tenancy in common (TIC). Joint tenants are mutually entitled to the whole estate, but individually entitled to nothing whereas tenants in common have their own specific share of the estate which need not be equal. The effect of s36(1) of the Law of Property Act 1925 (LPA) is that that only joint tenants can have a legal title, whereas JT and TIC can both have an equitable title, s34(2) also makes it clear that with regard to the legal title of the trust, only the first four names mentioned in the conveyance can be the joint tenants. For a valid trust to have been created in the first place, i...(short extract)
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- Subject: Law
- Course: Property Law
- Level: Degree
- Year: 2nd/3rd
- Mark: Not available
- Words: 2813
- Date submitted: April 17, 2016
- Date written: November, 2015
- References: Yes
- Document type: Essay*
- Essay ID: 7299
