Severing a joint tenancy through written notice
Fantini v Scrutton & Ors
The High Court have recently published a case exposing a pitfall where one party attempted to change their co-ownership in a property from a ‘joint tenancy’ to a ‘tenancy in common.’
You can co-own a property with other people in two ways. You can own it as 'joint tenants', where all the owners own 100% of the property jointly with the others. On the death of the co-owner, the property passes to the other co-owners by survivorship.
Alternatively, you could co-own a property and hold a share of that property as a 'tenant-in-common'. On the co-owner's death, the property would pass under the terms of the co-owners Will or via the intestacy rules.
We recommend co-owning a property as a ‘tenant in common’ if you need to make sure your share passes to a person who is not the co-owner. It is very useful where one or both persons in a couple have children from a previous relationship.
The difference between the two types of co-ownership is crucial. The wrong type of shared co-ownership may lead to a beneficiary of a Will not receiving what the deceased intended.
In order to change ownership from a joint tenancy to a tenancy in common, if the co-other owners do not agree to the change, a co-owner needs to send a notice of severance to the other co-owner(s) The legislation relating to the severance of joint tenancies can be found in the Law of Property Act 1925, s36, which provides that:
Provided that, where a legal estate (not being settled land) is vested in joint tenants beneficially, and any tenant desires to sever the joint tenancy in equity, he shall give to the other joint tenants a notice in writing of such desire or do such other acts or things as would, in the case of personal estate, have been effectual to sever the tenancy in equity and thereupon the land shall be held in trust on terms which would have been requisite for giving effect to the beneficial interests if there had been an actual severance.
Essentially, a joint tenancy can be severed by written notice, agreement or through conduct.
In the case of Burgess v Ransley it was held that a notice of severance which has not been communicated to the other joint tenant, or is in some way unclear or conditional, will not sever the joint tenancy.
In the recently published case of Fantini v Scrutton & Ors, the High Court ruled that a joint tenancy was not severed as the notice of severance (sent by registered post) had returned undelivered.
As it was not actually received by the other co-owner, the solicitor’s application to Land Registry to sever the title was incorrect (they were not aware of this at the time). The High Court did not agree to the argument that the Land Registry’s standard letter to the surviving co-owner confirming the severance of the property was sufficient to constitute a severance of the joint tenancy.
This was unfortunate as the co-owner died shortly after they made their Will and had given their notice of severance to their solicitor to forward. This meant that at the time of the co-owners death, the co-owner still legally held their share of the property on a joint tenancy, and therefore it could not pass through their estate. Had Royal Mail delivered the post, and not returned it, the result would have been entirely different.
The courts have in other recent cases, taken a lenient view in imputing a severance of a joint tenancy. In Chadda v HMRC  UKFTT 1061, the First Tier Tribunal found a joint tenancy held between a married couple had been severed despite no-one being able to locate the written record of the notice of severance.
This recent case is a reminder that, while courts can take a liberal approach, there are still certain pitfalls with the notice of severance procedure, and it may be best performed with legal assistance.
At Garden House Solicitors we can help you with determining how you co-own your property. If you would like to know more, please call us on 01992 422128.