Co-ownerships and Trusts of Land
Trusts of land -
Trustees hold land on behalf of beneficiaries
Beneficiaries rights are enforceable against the trusts
What is a trust -
Trust property refers to assets that have been placed into a fiduciary relationship between a trustor
and trustee for a designated beneficiary. Trust property may include any type of asset such as cash,
securities, real estate, or life insurance policies.
Purpose of a trust -
Ownership of the land to be separated from the right to enjoy the land or any income
generated by it
Used to be used when the owner was going abroad to fight in the crusades
Trust for sale -
Trust where the trustees are directed to sell the trust property and hold the sale proceeds in trust
for the beneficiaries. Although the trustees are obligated to carry out the provisions of the trust
document, they usually have the discretionary power to postpone the sale as long as the deem
necessary.
If there is co-ownership there is a trust
TOLATA 1996 S.1(1) -
(1)In this Act—
(a)“trust of land” means (subject to subsection (3)) any trust of property which consists of or
includes land, and
(b)“trustees of land” means trustees of a trust of land.
(2)The reference in subsection (1)(a) to a trust—
(a)is to any description of trust (whether express, implied, resulting or constructive), including a trust
for sale and a bare trust, and
(b)includes a trust created, or arising, before the commencement of this Act.
,LPA 1925 -
S.34 (2) - Where, after the commencement of this Act, land is expressed to be conveyed to any
persons in undivided shares and those persons are of full age, the conveyance shall
(notwithstanding anything to the contrary in this Act) operate as if the land had been expressed to
be conveyed to the grantees, or, if there are more than four grantees, to the four first named in the
conveyance, as joint tenants [F1in trust for the persons interested in the land]:
S.36 -
(1) Where a legal estate (not being settled land) is beneficially limited to or held in trust for any
persons as joint tenants, the same shall be held [F1in trust], in like manner as if the persons
beneficially entitled were tenants in common, but not so as to sever their joint tenancy in equity.
(2) No severance of a joint tenancy of a legal estate, so as to create a tenancy in common in land,
shall be permissible, whether by operation of law or otherwise, but this subsection does not affect
the right of a joint tenant to release his interest to the other joint tenants, or the right to sever a
joint tenancy in an equitable interest whether or not the legal estate is vested in the joint tenants:
(3) Without prejudice to the right of a joint tenant to release his interest to the other joint tenants
no severance of a mortgage term or trust estate, so as to create a tenancy in common, shall be
permissible.
One legal owner and one beneficiary
Trustee – legal title
Beneficiary – equitable/ beneficial title
Trustees -
Legal title to the land and their duties
Dictated by TOLATA, general law of trusts
Trusts of Land and Appointment of Trustees Act 1996
TOLATA 1996-
S.6 -
(1) For the purpose of exercising their functions as trustees, the trustees of land have in relation to
the land subject to the trust all the powers of an absolute owner.
, (2) Where in the case of any land subject to a trust of land each of the beneficiaries interested in the
land is a person of full age and capacity who is absolutely entitled to the land, the powers conferred
on the trustees by subsection (1) include the power to convey the land to the beneficiaries even
though they have not required the trustees to do so; and where land is conveyed by virtue of this
subsection—
(a)the beneficiaries shall do whatever is necessary to secure that it vests in them, and
(b)if they fail to do so, the court may make an order requiring them to do so.
(3)The trustees of land have power to [F1acquire land under the power conferred by section 8 of the
Trustee Act 2000.]
F2(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5)In exercising the powers conferred by this section trustees shall have regard to the rights of the
beneficiaries.
(6)The powers conferred by this section shall not be exercised in contravention of, or of any order
made in pursuance of, any other enactment or any rule of law or equity.
“all power of an absolute owner” (eg. Sell, lease)
Limitation - have to regard the rights of the beneficiaries
S.7(2) -
The trustees shall give effect to any such partition by conveying the partitioned land in severalty
(whether or not subject to any legal mortgage created for raising equality money), either absolutely
or in trust, in accordance with the rights of those beneficiaries.
Partition land
S.9(1) - Delegate powers
The trustees of land may, by power of attorney, delegate to any beneficiary or beneficiaries of full
age and beneficially entitled to an interest in possession in land subject to the trust any of their
functions as trustees which relate to the land.
Beneficiaries -
Beneficial or equitable rights in the property
TOLATA -
S 11 – right to be consulted (restriction -adults, interest in possession currently have beneficial
interest)
S.12 - right to occupy the land (restrictions under s.13) (limitations, land has to be suitable for
occupation, suitable for the beneficiaries)
Trusts of land -
Trustees hold land on behalf of beneficiaries
Beneficiaries rights are enforceable against the trusts
What is a trust -
Trust property refers to assets that have been placed into a fiduciary relationship between a trustor
and trustee for a designated beneficiary. Trust property may include any type of asset such as cash,
securities, real estate, or life insurance policies.
Purpose of a trust -
Ownership of the land to be separated from the right to enjoy the land or any income
generated by it
Used to be used when the owner was going abroad to fight in the crusades
Trust for sale -
Trust where the trustees are directed to sell the trust property and hold the sale proceeds in trust
for the beneficiaries. Although the trustees are obligated to carry out the provisions of the trust
document, they usually have the discretionary power to postpone the sale as long as the deem
necessary.
If there is co-ownership there is a trust
TOLATA 1996 S.1(1) -
(1)In this Act—
(a)“trust of land” means (subject to subsection (3)) any trust of property which consists of or
includes land, and
(b)“trustees of land” means trustees of a trust of land.
(2)The reference in subsection (1)(a) to a trust—
(a)is to any description of trust (whether express, implied, resulting or constructive), including a trust
for sale and a bare trust, and
(b)includes a trust created, or arising, before the commencement of this Act.
,LPA 1925 -
S.34 (2) - Where, after the commencement of this Act, land is expressed to be conveyed to any
persons in undivided shares and those persons are of full age, the conveyance shall
(notwithstanding anything to the contrary in this Act) operate as if the land had been expressed to
be conveyed to the grantees, or, if there are more than four grantees, to the four first named in the
conveyance, as joint tenants [F1in trust for the persons interested in the land]:
S.36 -
(1) Where a legal estate (not being settled land) is beneficially limited to or held in trust for any
persons as joint tenants, the same shall be held [F1in trust], in like manner as if the persons
beneficially entitled were tenants in common, but not so as to sever their joint tenancy in equity.
(2) No severance of a joint tenancy of a legal estate, so as to create a tenancy in common in land,
shall be permissible, whether by operation of law or otherwise, but this subsection does not affect
the right of a joint tenant to release his interest to the other joint tenants, or the right to sever a
joint tenancy in an equitable interest whether or not the legal estate is vested in the joint tenants:
(3) Without prejudice to the right of a joint tenant to release his interest to the other joint tenants
no severance of a mortgage term or trust estate, so as to create a tenancy in common, shall be
permissible.
One legal owner and one beneficiary
Trustee – legal title
Beneficiary – equitable/ beneficial title
Trustees -
Legal title to the land and their duties
Dictated by TOLATA, general law of trusts
Trusts of Land and Appointment of Trustees Act 1996
TOLATA 1996-
S.6 -
(1) For the purpose of exercising their functions as trustees, the trustees of land have in relation to
the land subject to the trust all the powers of an absolute owner.
, (2) Where in the case of any land subject to a trust of land each of the beneficiaries interested in the
land is a person of full age and capacity who is absolutely entitled to the land, the powers conferred
on the trustees by subsection (1) include the power to convey the land to the beneficiaries even
though they have not required the trustees to do so; and where land is conveyed by virtue of this
subsection—
(a)the beneficiaries shall do whatever is necessary to secure that it vests in them, and
(b)if they fail to do so, the court may make an order requiring them to do so.
(3)The trustees of land have power to [F1acquire land under the power conferred by section 8 of the
Trustee Act 2000.]
F2(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5)In exercising the powers conferred by this section trustees shall have regard to the rights of the
beneficiaries.
(6)The powers conferred by this section shall not be exercised in contravention of, or of any order
made in pursuance of, any other enactment or any rule of law or equity.
“all power of an absolute owner” (eg. Sell, lease)
Limitation - have to regard the rights of the beneficiaries
S.7(2) -
The trustees shall give effect to any such partition by conveying the partitioned land in severalty
(whether or not subject to any legal mortgage created for raising equality money), either absolutely
or in trust, in accordance with the rights of those beneficiaries.
Partition land
S.9(1) - Delegate powers
The trustees of land may, by power of attorney, delegate to any beneficiary or beneficiaries of full
age and beneficially entitled to an interest in possession in land subject to the trust any of their
functions as trustees which relate to the land.
Beneficiaries -
Beneficial or equitable rights in the property
TOLATA -
S 11 – right to be consulted (restriction -adults, interest in possession currently have beneficial
interest)
S.12 - right to occupy the land (restrictions under s.13) (limitations, land has to be suitable for
occupation, suitable for the beneficiaries)
