Notice of severance Joint Tenancy

I have always thought that when you serve a notice to sever a joint tenancy you cannot specify that the resulting shares (held as tenant in common) can be anything other than equal and that thereafter a Declaration of Trust is required to evidence any unequal division. I would be grateful for confirmation or correction.

sharon edelstyn
Phoenix Legal Group

Why is it that the questions that appear simplest can sometimes be the most difficult to answer. I am not sure on the correct legal position, and stand to be corrected by the more experienced members, but I would have thought that serving a notice of severance does not necessarily preclude one from claiming a greater than 50% beneficial ownership. For example if you are acting for one of two joint owners, say H, and there is a breakdown in the relationship between H and W, then an immediate step would be to sever the equitable joint tenancy, and perhaps later argue/claim a greater beneficial share. Severing the tenancy does not mean that you accept a 50:50 split.
Haroon Rashid
I Will Solicitors Ltd

I would have thought that as all joint tenants collectively own the whole, both legally and beneficially, a unilateral severance can only result in them holding as tenants in common in equal shares. There cannot be “shadow” beneficial shares lurking in the background awaiting a severance.

When it comes to contributions (say mortgage payments), I would have thought that any made other than equally are simply a gift to the other person and so on the day of severance, neither party can claim a beneficial share other than an equal share.

The only way I can see for providing for different shares would be a severance by mutual agreement in which the parties agree the shares that apply from that date; or for the “severing” party to argue that the joint tenancy has already been severed by prior conduct and the different shares have arisen due to events since that severance occurred (which is really a different matter altogether).

Andrew Goodman
Osborne Clarke LLP

I had to think about this too. I think the severance is a different action to the claim to a specific beneficial share. Normally the notice is given and then the default of an equal split between the owners applies. There is nothing to stop a joint tenant serving notice of severance PLUS an assertion of a claim to more than an equal share, but as I say they are two separate things. The first takes effect by the simple act of service the second is only effective if the joint owner(s) accept the assertion of an unequal split.

Simon Leney
Cripps LLP

I would always advise a declaration of trust if the shares on severance are to be otherwise than equal

Simon Northcott

Isn’t the act of severance in itself a reframing of the original beneficial joint interests in trust - thinking of the wording of the severance that I have, it specifically states that it is in equal shares – presumably that wording can be changed without a separate trust declaration (whether this is advisable or not).

I presume that if the notice is served by one party on the other, that would not effectively create an unequal share, as there is no agreement. But if both parties together decide that they own in unequal shares, then I don’t see why that does not work – effectively it is a reframing of the trust of land by both trustees and beneficial owners.

I understand that from the point of view of the land registry, they are not interested in the beneficial ownership, and if no evidence can be found to show otherwise, then the division of discrete shares is equal. A jointly executed severance would achieve that level of evidence, surely?

Vicky Burdett
Colemans Solicitors LLP

I think the point is that service of a notice of severance, without any response from the party served, effects severance. Anything other than the default equal split of the beneficial interest would require action by the party served. So if you have a notice specifying an unequal split, and if that is acknowledged by the party served, then the unequal split would apply. So yes both parties decide/agree on the unequal split, thus providing evidence of that outcome.

My other observation is that to make the agreement enforceable I would rather it was by deed than by hand.

Simon Leney
Cripps LLP

That was my understanding too Vicky. A severance could be effected in unequal shares by virtue of the wording of the severance itself. However enforcing this unequal division by one party against the other will be difficult unless both parties consented to the unequal severance in the first place - hence Simon’s comment about service.

On the basis that those who seek equity must do equity I presume a unilateral severance will only ever effect an equal division.

Craig Delaney
Calthrops LLP