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Conduct Determines Legal Ownership

PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.

When a property is owned by two people as joint tenants (where the title to the property is owned by each of them, so that if one dies, the other inherits the property by survivorship), each of them is considered to be the legal owner of the property.

A man and woman bought a house in 1992, having used the proceeds of a house they had owned for many years as joint tenants to finance the purchase. They separated in 2001, leaving the man in occupation. The woman and her daughter moved out.

The man issued a notice severing the joint tenancy and sent copy notices to his ex-partner. The effect of this would be to change the ownership to a ‘tenancy in common’, in which each of them would own a 50 per cent share of the house. However, the copy notices were never received by his ex-partner. Later, the man began to suffer from mental incapacity and his daughter was appointed his deputy, to look after his affairs. His ex-partner applied to the Court of Protection for permission to sell the house so that his share could be used to pay for his long-term care, but before this could take place, the man died and his deputy was then appointed the personal representative over his estate.

The question then arose as to whether or not the joint tenancy had been severed. If not, the house would not form part of the man’s estate, but would pass to his ex-partner by survivorship. The personal representative argued that the tenancy had been severed, by virtue of the mutual conduct of the man and his ex-partner. The court disagreed, but concluded that the joint tenancy had been severed by his ex-partner’s application to sell the house and to divide the net proceeds.

What this case shows is that where by their actions people demonstrate a clear intention to sever a joint tenancy (as will normally be the desired outcome on divorce or separation) but the formalities are not completed, the court will look at their conduct overall to determine the correct position.

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