How to sever a joint tenancy

Meg Edwards, Trainee Solicitor, and Roman Kubiak, Partner and head of the Contested Wills, Trusts and Estates team discuss how people can sever a joint tenancy of their home.

There are many aspects to consider when co-owners buy a property, whether as spouses, friends or business partners. From a legal standpoint, one of the key elements to consider is how the property will be held as properties can be owned both “legally” and “beneficially” meaning that, while the legal title to a property may be held by one person, the benefit of that property may be held for another.

What is a Joint Tenancy?

At its simplest that means that co-owners own the “whole” of a property together, rather than owning separate, distinct shares.

Joint tenants therefore hold an indivisible share in a property which cannot be apportioned between them.

On the death of one co-owner, their share automatically passes to the survivor(s) under the doctrine of ‘survivorship’, rather than passing under a will or on intestacy. As such, a joint tenancy is generally seen in cases where properties are owned by spouses and civil partners.

In fact, in these types of relationships, without an explicit declaration as to how the beneficial interest should be held, the legal presumption (which can be overturned) is that the property is held beneficially on a joint tenancy. This assumption was confirmed in the case of Stack v Dowden [2007] UKHL 17 and later in the case of Jones v Kernott [2011] UKSC 53.

What are tenants in common?

Holding a property as tenants in common means that each co-owner has a distinct share in the property. It is more typical to hold a property as tenants in common in the context of a business relationship or where one co-owner has contributed significantly more to the purchase price of a property than the other(s). The principle of survivorship does not apply to tenancies in common and, therefore, co-owners may leave their interest in a property by will.

Tenants in common can therefore benefit from greater flexibility and it’s not surprising for some joint tenants to wish to convert their interest into a tenancy in common. This process is called a ‘severance’ of the joint tenancy. Some reasons for severing a joint tenancy may include:

1. divorce or breakdown of a relationship;
2. tax and estate planning; and
3. to protect an interest from creditors.

How to sever a joint tenancy

There are four main ways of severing a joint tenancy.

Three were highlighted in the case of Williams v Hensman (1861) 70 ER 862. They are:

1. by acting on a joint tenant’s own share;
2. by mutual agreement; and
3. by mutual conduct.

Perhaps the most common way is by serving a notice of severance of joint tenancy on a co-owner under section 36(2) Law of Property Act 1925.

Notice of severance

A notice can be served unilaterally by a joint tenant without the need for consulting the other joint tenant(s). The only necessity of this means of severance is that that notice is ‘given’ to the joint tenant(s). Notice will be validly ‘given’ provided it complies with section 196 Law of Property Act 1925 which states that a notice:

• shall be in writing;
• shall be sufficiently served if it is left at the last-known place of abode or business in the United Kingdom of the person to be served; and
• shall also be sufficiently served, if it is sent by post in a registered letter addressed to the person to be served, by name, at the aforesaid place of abode or business, office, or counting-house, and if that letter is not returned; and that service shall be deemed to be made at the time at which the registered letter would in the ordinary course be delivered.

So, provided a notice of severance is addressed accordingly and is not returned undelivered by the postal carrier, it will be deemed served on the recipient (Fantini v Scrutton and others [2020] EWHC 1552 (Ch)). However, what happens in the event that the intended recipient is incapacitated or in hospital when the notice is served?

Given that there is no requirement for the recipient of the notice to have had sight of or known about the severance, capacity shouldn’t affect service, and neither should the fact that the recipient is in hospital at the deemed date of service. This was confirmed in Kinch v Bullard [1999] 1 WLR 423, where a wife served a notice of severance on her husband while he was in hospital. The notice was deemed served in accordance with section 196(3) Law of Property Act 1925 even though the husband didn’t see the notice at the time (given his hospital stay) and even though the wife had changed her mind about the notice.

The recent High Court decision in Dunbabin v Dunbabin [2022] EWHC 241, a case in which Hugh James acted for the successful claimants, is reflective of the approach the courts will take in this area even if a notice of severance has been misplaced.

However, the situation may be more complicated if the recipient of the notice has an appointed attorney or deputy for instance to manage their affairs. In this case it’s advisable for the notice of severance to be served on the attorney or deputy rather than the person who has lost capacity.

Having said this, if the person intending to serve the notice of severance is the spouse of the joint tenant or a loved one, it’s possible that they will also be their acting deputy or attorney. In that case, a conflict of interest may arise as the person severing the joint tenancy would essentially be serving the notice of severance on themselves. Although the severance may be in the best interests of both parties and therefore allowable, there may be instances where severance is not in the best interests of the incapacitated joint tenant. This may cause a conflict of interests between a person’s role as deputy/attorney and in their personal capacity. As such, it may be prudent for such a person to seek authority from the Court of Protection to authorise a severance.