Tenancies

TENANCIES

If you own a property with someone else, it is important to know the details of the title under which you own it as this can affect your capacity to sell, rent or mortgage the property. The two most common types of co-ownership of real property (that is land and buildings) are joint tenancies and tenancies-in-common.

Joint tenancy is distinguished by the ‘four unities’:

With a tenancy-in-common, both co-owners have a right to possession of the entire property, although they may not have equal shares. For example, one person may be entitled to two thirds of the property, while the other owns the remaining one third. With a building or land, there is an obvious difficulty in deciding who owns what. Often the only solution in case of a dispute is to sell the property and divide the proceeds in the appropriate proportions.

The most important distinction between the two types of tenancy relates to survivorship: in the case of a joint tenancy, the surviving co-owner automatically succeeds to the share of a joint tenant who dies. Although the 1965 Succession Act prevents a person from inheriting the estate of anyone they have murdered, if the murderer and the victim have a joint tenancy in a property, the killer is entitled to the property on the death of the co-owner. (Part 5 of the Courts and Civil Law (Miscellaneous Provisions) Bill 2017 will close this loophole in cases of murder, attempted murder and manslaughter.) With a tenancy-in-common, the tenant’s share will pass under a will or intestacy on that person’s death.

While the common law prefers joint tenancies (to avoid the division of land), equity favours tenancies-in-common. The law of equity recognises that a joint tenancy may become a tenancy-in-common by severance, by the elimination of any of the four unities. If a joint tenant behaves in such a way that he appears to regard himself as holding under a tenancy-in-common, equity may imply a severance on the basis of a “course of dealing” (Wilson v Bell (1843) 5 Ir Eq R 501).

If co-owners contribute to the purchase price of a property in different amounts, there is a rebuttable presumption that they share the equitable estate as tenants-in-common, in proportion to the amounts of their contributions.

Co-ownership may be ended by partitioning the property (which is not a very practical solution), or by sale in lieu of partition. On the request of one of the co-owners, the court will order the sale, “unless it sees good reason to the contrary”. In Sheehy v Talbot [2008] IEHC 207, Edwards J ordered the sale of a disputed property in lieu of partition, and distribution of the proceeds on a 50/50 basis, pursuant to s.4 of the 1868 Partition Act.

Alternatively, the court may decide that the legal owner of property is holding it in trust for someone else. A resulting trust may be presumed where one person provides the money to buy property, but it is conveyed in another person’s name. The court may also decide that a person holds a property under a constructive trust, a device which can be imposed by the court in any situation – no matter how novel – to achieve justice.

Where two owners of real property are married to one another, they will also have to consider the terms of the Family Home Protection Act 1976 if they wish to sell or mortgage the property. The Act requires that, before such a property is sold or used as security for a loan, the written consent of both parties is required in advance – even if the property is registered in the name of only one of the parties.

This article is provided solely as a guide to the topic of tenancies. No responsibility is accepted for the current accuracy of the information.


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