Shared equitable ownership

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Basic Introduction

The previous topic notes on joint tenancies and tenancies in common explained the situation where you have more than one legal owner (shared legal ownership), and the beneficial interest (i.e. equitable interest) those co-owners can have.

In addition to shared legal ownership, the equitable title can be shared even when the legal title is vested in one person.

For example, where a couple share a home, but one of them is the sole legal owner, his or her partner may be able to establish an equitable proprietary interest → the issue of who owns the equitable interest in property, where the legal ownership is held by one person, usually arises in cases where a couple are separating.

Equity follows the law

As previously mentioned, land may be deliberately conveyed to two or more people e.g. where a couple purchase a house. In such circumstances, the persons to whom the legal title is transferred will be the legal owners.

In the abesnce of any statement to the contrary, these legal owners will also be taken to be the equitable owners too (this is because 'equity follows the law'). In other words, where two people take joint legal ownership in a property, if there is no statement to the contrary they will also take joint beneficial ownership in the property.

This presumption (i.e. that the legal owners are the only equitable owners) may be challenged by proof of a 'resulting' or 'constructive trust'.

However, before mentioning these trusts, it is important to note that it is possible to expressly declare who the equitable owners of property are.

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CONTENT

Express Trust

The legal owner may, at the time of purchase or after, declare in writing that he/she holds the property on an express trust for another person or for him/herself and another as joint tenants or as tenants in common.

A declaration of trust of land 'must be manifested and proved by some writing' (Law of Property Act 1925, section 53(1)(b)).

  • In other words, an express declaration by the legal owner as to who owns the beneficial (equitable) interest in the property can only be relied upon to establish ownership if such declaration is 'manifested and proved by some writing' i.e. an oral declaration of the beneficial interest will not be effective.
  • If the beneficial interests are expresly declared in writing (or evidenced in writing) this is conclusive as to the beneficial ownership for the parties to that express declaration (Goodman v Gallant (1986)) → i.e. persons who are parties to the writing that establishes the trust cannot, thereafter, plead a resulting or constructive trust to establish different interests.
  • The exception to this is where the express written declaration of the beneficial/equitable interest is made fraudulently or there is some other vitiating factor or a party can rely on proprietary estoppel.

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