Trusts of Land

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  • Created by: ag0319
  • Created on: 19-05-16 11:45


Where land is co-owned it is held by way of trust. However, trusts can be expressly and impliedly created. An express trust can be created by a person who is known as the settlor (e.g. simply the person who makes the trust) and they appoint the trustees who hold the property on trust for the elected beneficiaries. 

Trustees hold the legal title of the trust property and therefore are in charge of maintenance of the property. There can only be a maximum of four legal title holders, and where there are more, it will be the first four named on the trust: s.34 Trustees Act 1925. Only people of full age can be a trustee. The trustees have the powers of an absolute owner (s.6 Trusts of Land and Appointment of Trustees Act (TOLATA ) 1996). They have the power, but no longer a duty post-1997, to sell the trust property (s.4). They can partition the land between the benefciaries (s.7), they can delegate functions to the beneficiaries (s.9) - although in doing so they owe a duty of care in making sure these functions are reviewed and exercised accordingly (s.9A). They also have a duty to consult the beneficiaries when making decisions (s.11), but they do not need to get the consent of the beneficiaries unless this is provided for in the trust document.

The equitable title is held by the beneficiaries, there is no maximum number that can be on the equitable title. Unlike the legal title, equitable title can be held by way of joint tenancy or tenancy in common. Joint tenancy can only be held where the 'four unities' are present - unity of possession, interest, time, and title: AG Securities v Vaughan. Where the four unities are present the land is held by way of joint tenancy unless there is express writing to contradict this: Goodman v Gallant. If there is no express writing, then it is presumed that 'equity follows the law' and the equitable title is supposed to mirror the legal title = joint tenancy. However, the presumption of joint tenancy is not taken where is seems inappropriate for the right of survivorship (explained below) to apply. So where there is a commercial relationship (Malayan Credit v Jack Chia-MPH), the co-owners are mortgagees, or there was unequal contributions to the purchase price (Bull v Bull), there is presumed to be a tenancy in common. The only time unequal contributions to the purchase price will not be presumed to be a tenancy in common is where the property is bought in the family home context: Stack v Dowden (approved in Jones v Kernott). 

A joint tenancy is held to be held as a single unit/ single share. The beneficiaries do not have individual shares in which they can deal independently. Joint tenancy is subject the the right of survivorship, which means…


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