A property owned by more than one person is held in two ways; as joint tenants or tenants in common.
The distinguishing factor between them is what happens when a co-owner dies. If you are joint tenants then the share is automatically transferred to the surviving co-owner(s) (this is known as ‘survivorship’). If you are tenants in common then the share is transferred according to the Will of the deceased co-owner (or the rules of intestacy if there is no Will).
This will be extremely relevant if a relationship/partnership has broken down and you obviously do not now wish for your co-owner(s) to benefit on your death.
There is a simple procedure to change the ownership of a property from joint tenants to tenants in common known as ‘severance’.
A Notice of Severance normally has to be served in writing on the other co-owner(s) (as set out in section 36 of the Law of Property Act 1925).
Following service, you would then apply (on form SEV) to the land registry to formally convert the title ownership and a Form A restriction is then noted on the title by the land registry to reflect this.
What happens when service of the notice goes wrong?
This was considered by the court recently.
Fantini v Scrutton and others (2020)
The case related to a property in Dorset which was owned jointly by mother (Iris Fantini) and daughter (Gloria Fantini) since 2003.
Gloria died (in December 2013) and then Iris (in April 2017). The property was sold and 50% of the proceeds (some £211,000) was to be determined by the court as to whose estate it fell within.
On 5 December 2013, solicitors prepared both a Will for Gloria and a Notice of Severance. A letter enclosing the Notice was sent by registered post to Iris by the solicitors. The solicitors applied to change the register and this was duly completed by the land registry on 11 December 2013 with entry of a Form A restriction.
Unfortunately on 3 January 2014 the letter with the Notice was returned undelivered.
Section 196 (4) of the Law of Property Act 1925, deals with the service of notices by post:
“Any notice required or authorised by this Act to be served shall also be sufficiently served, if it is sent by post in a registered letter addressed to the lessee, lessor, mortgagee, mortgagor or other 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 by the postal operator (within the meaning of Part 3 of the Postal Services Act 2011) concerned undelivered; and that service shall be deemed to be made at the time at which the registered letter would in the ordinary course be delivered.”
In WX Investments v Begg  it was held that “If the letter is returned undelivered section 196(4) expressly provides that it is not to be treated as ‘sufficiently served'”.
In Burgess v Rawnsley , it was held that a declaration that is not communicated to the other joint tenant or is in some way conditional or unclear will not sever the joint tenancy.
The judge therefore concluded that “On the factual matrix before me I cannot see how a notice that was not served on the other co-owner can constitute an act operating on Gloria’s share. It was not communicated to the other joint tenant and there are no other acts that could be relied upon. So I am satisfied that the notice alone is not an act operating on Gloria’s share; it falls within Burgess v Rawnsley.”
The court did not accept the alternative argument that the standard notification letter from the land registry (normally sent upon receipt of the form SEV) could constitute a Notice of Severance.
This case obviously highlights the perils of getting not only the Notice of Severance right, but the service of the same.
The solicitors were probably a bit hasty in their application to the land registry – they could have easily tracked and checked that the Notice of Severance had in fact been received in the first instance. This may give rise to potential negligence against those solicitors given that Gloria’s estate has now lost out on over £200,000.