Legal or Equitable Estates
Explain to Lionel and Michael how the legal and equitable estate in 6 and 7 High St. is held and whether or not Lionel could force Michael to sell the freehold estate in the premises.
Before establishing who holds the legal or equitable estate, it’s important to understand what either of these roles incurs. The person in charge of the legal estate is responsible for the maintenance and administration of the land. They have the right to sell or lease the land and are also responsible under Occupier’s Liability, Health and Safety legislation for the safety and welfare of people on the land.
The owners of the equitable estate enjoy the benefits of use and occupation of the land. Michael and Lionel are partners and both hold an equal amount of the freehold, they are considered to be in a co-ownership but will be treated as one owner (s34(6) Law of Property Act 1925). There are two different types of co-ownership: Joint tenancy and tenancy in common. Tenancy in common provides an alternative way co-owners can hold the beneficial interest in their property. Only one of the four unities needs to be present (that of possession) and the tenant in common is only entitled to a notional share of the property. “Joint Tenancy is a method of ownership in which the co-owners are not regarded as having ‘shares’ in the land but as together owning the whole estate.” (Mackenzie, 2012). Joint tenants must also honor all four of the unities (Possession, Interest, Title, Time) and there can be no presumption in favor of a tenancy in common
Taking this into account, I have identified that Michael and Lionel are in a joint tenancy because the stakes the own in 6+7 High Street are considered to be equal. It’s possible to get confused and assume Lionel and Michael are in fact “tenants in common” due to the fact that Michael purchased the freehold at a different date – therefore breaking one of the four unities (time). This is indeed true, however when Lionel purchased his share
Before establishing who holds the legal or equitable estate, it’s important to understand what either of these roles incurs. The person in charge of the legal estate is responsible for the maintenance and administration of the land. They have the right to sell or lease the land and are also responsible under Occupier’s Liability, Health and Safety legislation for the safety and welfare of people on the land.
The owners of the equitable estate enjoy the benefits of use and occupation of the land. Michael and Lionel are partners and both hold an equal amount of the freehold, they are considered to be in a co-ownership but will be treated as one owner (s34(6) Law of Property Act 1925). There are two different types of co-ownership: Joint tenancy and tenancy in common. Tenancy in common provides an alternative way co-owners can hold the beneficial interest in their property. Only one of the four unities needs to be present (that of possession) and the tenant in common is only entitled to a notional share of the property. “Joint Tenancy is a method of ownership in which the co-owners are not regarded as having ‘shares’ in the land but as together owning the whole estate.” (Mackenzie, 2012). Joint tenants must also honor all four of the unities (Possession, Interest, Title, Time) and there can be no presumption in favor of a tenancy in common
Taking this into account, I have identified that Michael and Lionel are in a joint tenancy because the stakes the own in 6+7 High Street are considered to be equal. It’s possible to get confused and assume Lionel and Michael are in fact “tenants in common” due to the fact that Michael purchased the freehold at a different date – therefore breaking one of the four unities (time). This is indeed true, however when Lionel purchased his share
References: – Question 4 1 - Planning Policy Statement 6: Planning for Town Centres – Section 1.1 2 – Planning Policy Statement 6: Planning for Town Centres – Section 1.2 3- Our Common Future, also known as the Brundtland Report 4 - http://www.sd-commission.org.uk/pages/what-is-sustainable-development.html 5 - http://ezproxy.bcu.ac.uk:2073/docview/230640066 6 - http://www.pas.gov.uk/pas/core/page.do?pageId=12520 7 – Understanding Land Law – Bryn Perrins – Third Edition – 2000