Jointly owned property Form JO
The recent cases of Stack v Dowden [2007] UKHL 17 and Jones v Kernott [2011] UKSC53 demonstrate how complicated the law is in this area and how essential it is to ensure that conveyancing documentation reflects the express intentions of the parties.
Where a property is purchased in joint names without a declaration of trust, there is a general presumption that the parties hold the property as joint tenants. However, Stack v Dowden and Jones v Kernott created considerable uncertainty in this area. In Stack v Dowden the House of Lords brought other factors into account. These were exceptional and unusual facts which led the Court to find that the parties intended to hold the property in unequal shares. That approach was broadly followed by the Supreme Court in Jones v Kernott and both cases emphasise the complications that arise where a declaration of trust is not made at the time of a purchase.
Land Registry and the Law Society have now published a practice note on joint ownership of property following criticisms by the House of Lords and later the Supreme Court in the above cases.
Form JO enables conveyancers to arrange for joint purchasers to make speedy declarations of trust when time is short. It could be in those stressful days prior to exchange of contracts or possibly between exchange and completion. It may encourage those conveyancers acting on a fixed fee (most High Street conveyancers) to encourage their clients to give some thought to their respective interests in property.
This involves completion of clients’ intention in Form JO. If clients intend to hold unequal shares in the property, it is possible to record the size of those shares using the Land Registry form. If this is completed Land Registry will automatically enter a Form A restriction in the register whenever two or more persons apply to be registered as joint proprietors. It will still be possible for clients to later change the position jointly or unilaterally by giving notice.
Inevitably this will lead to further costs arising in respect of the advice given. Any advice should be carefully recorded or it will lead to complaints of misconduct or negligence. In my view Form JO is a poor alternative to a separate, more detailed declaration of trust and all joint purchasers, particularly cohabitants, should be encouraged to see the long term benefit of these compared with the horrors of litigating in this complex area of law.