Under English law co-ownership must take place by way of trust, this being the trust of land. It is an equitable right which divides the legal ownership of property from equitable. While the trustee enjoys legal ownership and also holds land on behalf of the beneficiaries, the beneficiaries are the equitable owners and are entitled to the value of the property. Although at common law the trustee is the absolute owner of trust property and beneficiaries have no right at all.
Concurrent ownership of land arises in a situation where two or more people are simultaneously entitled to enjoy the rights of land, either leasehold or freehold. The law of co-ownership is to be found in the Law of Property Act 1925 and the Trust of Land and Appointment of Trustees Act 1996, at common law, which significantly amended the 1925 Act in relation to co-ownership. Prior to the 1925 reforms the legal relationship between individual co-owners could take several forms subsequently causing numerous problems.
However since 1926, co-ownership is recognised ether by way of joint tenancy or a tenancy in common. These two forms regulate the sharing of ownership; however they essentially differentiate in the aspects of the nature of rights that are conferred on the owners. 1 When land is subject to a joint tenancy, each owner is treated as being entitled to the whole of that land. There is only one formal title to it which is jointly owned and no single co-owner can claim a greater right over the land.
A joint tenancy, stated by Lord Brown- Wilkinson, "operates so as to make them, vis- a- vis the outside world, one single owner. "2 The two principle features of a joint tenancy are the right of survivorship and the four unities. Before a joint tenancy can exist the four unities, which are possession, interest, time and title, must be present and must exist at the same time, which was established in the case of AG Securities v Vaughan. 3 It is the absence of these factors that distinguishes a joint tenancy from a tenancy in common.
Under the concept of survivorship when one tenant dies the interest automatically go the remaining surviving tenants irrespective of any disposition made by a will. The deceased joint tenant never actually had a share capable of disposition so they simply just drop out the picture and the remaining tenants continue. This process is repeated until there is only one survivor who becomes the sole owner of the interest in the property. However survivorship may be excluded by severance of the joint tenancy converted into a tenancy in common. 4
Severance of a tenancy is crucial if a joint tenant wishes to deal with there interests separately. However as mentioned previously the only form of co-ownership that exists at law is the joint tenancy and under s. 36(2) Law of Property Act 1925, this legal tenancy is unseverable, otherwise a tenancy in common would result but obviously this is not possible under s. 1(6) Law of Property Act. Clearly set out in LPA, the equitable co-ownership that exists behind the joint tenancy at law can take either form, so equitable joint tenancy can be turned into a tenancy in common under the principle of severance.
In essence where a joint tenant severs his share of ownership of land from the other joint tenants, that share ceases to be a joint tenancy and becomes a tenancy in common. The party who severs his share will be entitled to beneficial ownership proportionate to the number of tenants even if the initial contributions where unequal. Although no longer enjoys the concept of survivorship of the interests of the remaining joint tenants. There are several methods by which a joint tenant may sever their interest, three of these principle methods where established in the case of Williams v Hensman (1861).
Firstly the act of a joint tenant operating on his own share, by mutual conduct or by mutual agreement. The 1925 Act introduced notice in writing as a fourth type of severance under s. 36 (2). However the relationship between mutual conduct and agreement has give rise to differences of opinion. In Nielson-Jones v Feddon (1975), Walton J referred to a course of dealing as "merely being material from which an agreement is to be inferred".
By contrast Lord Denning in Burgess V Rawsley asserted that a course of dealing "need not amount to an agreement expressed or implied, for severance". 7 It is therefore difficult to see why a failed attempt to agree should be treated as effective to sever even though there is no agreement to sever. If this is possible as indicated in the case of Nielson-Jones v Fedden, it seems the difference between mutual agreement and mutual conduct would become non existent. The view expresses by Lord Denning appears to be inconsistent with the requirement of mutually inherent in both methods.