In this article, we discuss co-ownership, This is a subject which typically comes up in the land law and equity law modules of a GDL. As examples in this article, we will use the fictional example of Sam and Jenny, who own 9 Rosemark Gardens.
Co-ownership is when more than one person owns the same property. There are two different way of owning a property jointly, either by a joint tenancy and/or by a tenancy in common.
The Joint Tenancy
This is where the owners are not regarded as having separate shares in the property. In this case, the owners are considered to be one legal entity, both in law and in equity. So, Sam and Jenny will be considered in law as one person owning 9 Rosemark Gardens.
As a joint tenancy is about people being one entity, there is an emphasis on unity in this form of ownership. For a joint tenancy to exist, the ‘four unities’ must be present:
Possession – owners must be equally entitled to the possession of all the land (Bull v Bull).
Interest – each owners interest must be the same, i.e. in duration nature and extent
Title - the owners must have acquired their interest through the same document
Time – the owners must have acquired their interest at the same time
If these unities are exist, then the property is capable of being held as a Joint Tenancy.
The next stage is to look at whether the document creating the co-ownership included words of severance, indicating that the parties are to take the land in separate shares. This might be explicit or implicit. Words such as ‘in equal share’ (Payne v Webb) indicate a tenancy in common is created, despite the presence of the four unities.
If no words of severance are present, then a joint tenancy may exist. If so, then the right of survivorship applies. Where this happens, when one party dies, then the interest is passed equally to the other owners. The last person left alive retains the whole interest in the property, and the joint tenancy falls away. Any will a joint tenant makes is invalid, as their part of the property passes to the other joint tenants before any will takes effect.
The Tenancy In Common
Tenants in common allows the parties to have separate shares of the property in equity. This may be assumed where the parties have contributed differently to the purchase price (Bull v Bull)(and will have shares corresponding to their contribution to the purchase price), or where business is involved (Re Fullers Contract). So in this case, Sam and Jenny would each own a portion of 9 Rosemark Gardens each.
At law, the parties remain joint tenants (Law of Property Act 1925 (LPA) s34(1)) up to a maximum of four trustees (LPA s34(2)) who must be of full age. In equity, any number of parties may hold the land as tenants in common.
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In practice, this means that where one party contributes half the purchase price and 4 parties the other half, then the first four parties hold the property as joint tenants at law, on trust for half a share as a tenant in common in equity for the person who paid half the price, and the remaining four parties, who split the other half of the asking price will each own 1/8th as tenants in common in equity.
The trick with understanding co-ownership is to think of 'legal entities' rather than individual people. So two people can choose to be one legal entity, and the law will treat them as such. This is joint tenancy. Alternatively, those same two people can choose to act as two separate entities, in which case the law will treat each person as having their own distinct share of a property. This is a tenancy in common.
 Download: co-ownership - a begginers guide
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