Manchester Conveyancing Solicitors | Ford Banks Irwin Solicitors

Manchester Conveyancing Solicitors | Ford Banks Irwin Solicitors - The Property Lawyers in Manchester on Transfer, Equity and Trusts of Land

Please note: Not to be used or relied upon without legal advice. These notes are for illustrative purposes ONLY.

. . . continued from page 1

Private Trusts of Land / Property

The nature of a trust of Land / Property:

Since 1925, it has been impossible for a legal estate to be held as a tenancy in common (section 1(6) and 34 Law of Property Act 1925). Joint owners must hold the legal estate as joint tenants, but their beneficial interests may be held either as joint tenants or as tenants in common.

This was intended to simply conveyancing for Property Lawyers and Conveyancing Solicitors. Purchasers of unregistered Land from joint owners are not concerned with the beneficial interests. They do not need to know - and re not entitled to know - whether the proprietors of the legal estate hold on trust for themselves as beneficial joint tenants, or as beneficial tenants in common, or on trust for other persons altogether. Provided the Purchasers pay the purchase price to at least two trustees of Land / Property, the beneficial interests are overreached, and the trust attaches to the proceeds of sale, freeing the Purchasers estate from it.

Furthermore, if one or more of the joint proprietors has died, a Purchaser can safely deal with the survivors in the knowledge that the legal estate has passed automatically to them, whatever may be the case with the beneficial interests. If there is only one survivor, then one or more additional trustees must be appointed by the Property Lawyers and Conveyancing Solicitors for the Seller so that the beneficial interests can be overreached in favour of a Purchaser.

The appointment of one or more additional trustees will trigger compulsory first registration if the legal estate is an unregistered freehold estate or an unregistered leasehold estate with more than seven years to run.

Beneficial Joint Tenants:

An anomaly arises when two (or more) persons hold the legal estate on trust for themselves as beneficial joint tenants. This situation was unusual in 1925; it is now very common indeed. When the number of joint tenants has reduced to one, they are the sole legal and beneficial owner and the trust has come to an end. But the Property Lawyers and Conveyancing Solicitors for the Purchaser will not know this unless the equitable title is deduced - the very problem that the 1925 legislation was designed to avoid. The choice was therefore either to deduce the equitable title, or to appoint a second trustee purely to give a good receipt for the purchase money.

A third, simpler solution for solicitors was provided by the Law of Property (Joint Tenants) Act 1964. The survivor is deemed, in favour of a Purchaser, to the sole beneficial owner if:
- they convey as beneficial owner, or the Conveyance / Transfer Deed contains a statement that they are solely and beneficially interested in the Property
- no memorandum of serverance is endorsed on the Conveyance that vested the legal estate in the joint tenants
- no bankruptcy petition or order is registered as a Land Charge against any of the joint tenants.

At the time this Act was passed, a Conveyance as 'beneficial owner' imported various standard covenants for title, so the phrase was commonly used. Unfortunately, since 1 July 1995 (when the Law of Property (Miscellaneous Provisions) Act 1994 came into force) the standard covenants for title have been imported by the phrase 'with full title guarantee'. Property Lawyers and Conveyancing Solicitors will in appropriate cases involving unregistered Conveyancing, include a statement that a sole surviving joint tenant is solely and beneficially interested.

Trusts of Land / Property in registered Conveyancing:

In registered Conveyancing, the position is simpler. The register (Property Title Deeds) records the ownership of the legal estate, not the beneficial interests, and the Registrar is not affected with notice of a trust. As far as possible, references to trusts should be kept off the register (Property Title Deeds). Property Lawyers and Conveyancing Solicitors dealing with registered proprietors can normally assume that they have unlimited power to dispose of the estate or charge (mortgage) concerned, free from any limitation affecting the validity of the disposition, unless there is a restriction or other entry in the register (Property Title Deeds) limiting their powers, or a limitation imposed under the Land Registration Act 2002. So for example, if two or more persons are registered as joint proprietors, a Purchaser can safely acquire the legal estate from the survivor of them, unless there is a restriction to the contrary on the register (Property Title Deeds).

(All italics in this page are Crown Copyright and reproduced here for your information with permission from HM Land Registry)

. . continued on page 3 (Property Lawyers and Conveyancing Solicitors in Manchester - Transfer, Equity and Trusts of Land page 3)

Please telephone Paul on 0161 866 8999 if you require any further information.

Ford Banks Irwin Solicitors
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Manchester
M32 9HB

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Manchester Conveyancing Solicitors | Ford Banks Irwin Solicitors - The Property Lawyers in Manchester on Transfer, Equity and Trusts of Land