When buying a land that was co-owned by several people and when all but one survivor is left, the buyer will have to ascertain if the survivor has the power to sell the property or would he need to appoint a second trustee to overreach the trust. We explain below how a sale by the surviving co-owner is affected when they are:
Tenants in Common:
When property is owned as tenants in common, a second trustee is to be appointed. Such a trustee can be appointed either before the contract of the sale is made or at any time before the completion of the transaction. If he is appointed before the contract of sale, he should be appointed as a party to the contract and his name should appear as one of the selling parties. This is because, he now becomes a trustee in the legal estate and must act jointly along with the other trustees. The second trustee need not be a beneficiary of the equitable interest and can be any third party (even the seller’s solicitor). It is important for the buyer to obtain a copy of the death certificate of the deceased tenant in common.
Joint Tenants:
On an apparent glance, this is the least complicated of all as the sole survivor in a joint estate becomes the absolute owner and has the power to sell the property. But a buyer has to always make sure that the person from whom he is buying the property is indeed the only surviving joint tenant. This is because it is always possible to severe a joint tenancy by converting it into a tenancy in common.
When the land sought to be purchased is registered, the buyer can check the register of the title to ascertain if the property is held in joint tenancy. Even if a severance has been served, but not recorded by lodging a restriction, the buyer is safe to take free of the beneficial interest that remains. Such an assumption is however subject to the law on overriding interests. As previously noted, it is important that the buyer obtains a death certificate of the deceased joint owner.
When the land is unregistered, it is protected under the provisions of the Law of Property (Joint Tenants) Act 1964. The buyer should refer to the conveyance under which the co-owners bought the property to determine the type of tenancy. When the same is not mentioned, the buyer can assume that the property is held under joint tenancy and he is buying from the sole survivor. But again, he should obtain a death certificate of the deceased joint tenant. And if these conditions are not met, the buyer cannot rely on the Act, and should ask the seller to appoint a second trustee so that the equitable interest can be overreached. Such a provision applies only to unregistered land and not registered land.
Also read:
Shared ownership of Property: Joint Tenancy and Tenancy in Common
Shared ownership: Land Registry Practice and Severance of Joint Tenancy
Photo courtesy: Alex E. Proimos
