Class 5.1 – Co-ownership – Introduction/creation

• Two types of co-ownership are joint tenancies and tenancies in common – but these have not been adequate to regulate the rights of multi-occupancy in modern days

• Attempts have been made to do so – e.g. ‘company title’ where people bought shares to possess units until the shares were sold; these would require payment of annual sums to carry out repairs – but restrictions on the right to sell were problematic

  • Hence strata title was developed which provides that owners collectively own property as a ‘body corporate’ and each owner has title in their own unit and can distribute rights freely

  • Legislation and by-laws have additional duties that are imposed

• Other similar communal ownership arrangements are seen in retirement villages and ‘community tite’

Joint tenancy – essential features

The NSWLRC, Unilateral Severance of a Joint Tenancy Report No 73 (1994)

• There are two distinguishisng features of a joint tenancy: the right of survivorship and the four unities

• The right of survivorship (jus accrescendi) – when one joint tenant dies the remainder of the estate vests in the surviving joint tenant not through succession but rather death frees the property from control of one owner

  • A joint tenant cannot dispose of their interest by will or otherwise; survivorship cannot be defeated but severance of a joint tenancy can occur to make the co-owners own as tenants in common

• The four unities

  • Unity of possession – each owner is entitled to possession of the whole of the property, not exclusively but to be enjoyed with the other joint tenants

  • Unity of interest – interests of each must be the same in nature, extent and duration

  • Unity of title – all must derive their interests from the same document or the same act

  • Unity of time – all of their interests must vet at the same point in time

    • Except in the case of a conveyance executed to a trustee for beneficiaries or;

    • Any disposition in a will

      • Either can give rise to a joint tenancy in the grantees even if unity of time doesn't exist (M’Gregor v M’Gregor’)

• The distinguishing feature with tenancy in common is in that arrangement each have a distinct yet undivided share in the property that can be dealt with as they want. There is also no right of survivorship, the rules of intestacy or wills will govern the passing of title by a person on death

The position at common law

• There is a presumption that an interest given to two or more persons either by way of legacy or otherwise is joint unless there are words of severance (Morley v Bird)

  • This arises from the feudal origins of the arrangement – feudal dues were easier to extract for laws and furthermore incidents connected with inheritance wouldn’t have to be paid because of survivorship. Also purchasers could investigate title easily since ownership will be concentrated, not dispersed like in TIC

• The courts of the common law preferred tenancies in common but were always constrained by ancient law which favoured joint tenancies – hence dispositions were interpreted liberally and the slightest indication of TIC was seized upon or courts would be ‘driven to rely on minute grounds for holding a severance to have taken place’ (Williams v Hensman)

• Equity always preferred the certainty and equality of tenancy in common hence even though a legal estate passed in survivorship, circumstances indicating a severalty of interests would make the survivor in equity hold the estate on trust for themselves and legal representatives of the deceased co-owner

• The popularity of joint tenancies – because of the smooth transition of ownership it tends to be preferred by married couples purchasing property together

• Joint tenants are said to hold per my et per tout (for nothing and for all) since neither has an individual share but each has a right with the others to the whole of the property – they are bound in a “thorough and intimate union of interest and possession (Blackstone)

• The right of survivorship precedes the operation of a will

• At common law corporations were incapable of being ‘joint tenants’ since they didn’t die but the s 25 of the Conveyancing Act (NSW) provides that they may become joint tenants – dissolution of the company equating to death (allowing corporations to hold as trustees)

• Survivorship generally makes it unnecessary to determine which joint tenant died first.

  • Some jurisdictions say that where the order is uncertain – seniority is said to govern the rules

  • In the ACT, WA and NT if there is uncertainty the property devolves as if the joint tenants had held the property as tenants in common in equal shares

Tenancy in common – essential features

Creation of co-ownership – joint tenancy or tenancy in common

At Law

• Generally common law said there was a joint tenancy unless the four unities weren’t present or ‘words of severance’ were used in the instrument – this applies to Torrens land too unless statutory provisions say otherwise

• Words of severance are those which show an intention that co-owners take a distinct share in the property including – ‘in equal shares’ ‘share and share alike’ ‘amongst...

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