The Presumption To Be Beneficial Tenants In Common Of Commercial Property

Property can be owned one of two ways, either as joint tenants or tenants in common:

On jointly purchasing property the purchasers may not always prepare an accompanying document detailing the terms of their ownership and respective shares. Failing to set out a person’s beneficial interest in purchasing property may lead to a dispute in the event the property is to be sold or on the death of a co-owner.

Common disputes involve the sale of property on the breakdown of a relationship where one party contributed more towards the property or on death where one party does not wish for their share of the property to pass to the other.

Stack v Dowden [2007] UKHL 17

Facts

In the event of a dispute the guidance set out in Stack v Dowden will apply. Stack v Dowden confirms the starting position is that a person’s beneficial interest follows their legal interest and there is a presumption that property owned jointly is as joint tenants. In order to rebut that presumption the person seeking to do so must provide evidence to the contrary. With Stack v Dowden relating to domestic property it raises the question as to whether the same should apply to commercial property, including any property purchased for business purposes.

Williams v Williams [2024] EWCA Civ 42

Facts

The recent case of Williams v Williams involved commercial property and a Claimant’s claim seeking that the property was held as joint tenants, as per the presumption established in Stack v Dowden. In this case the Claimant had purchased farming land with his mother and father. Following their death, the Claimant’s father left the land to his children in differing shares and the Claimant pleaded the land is to pass to him absolutely in accordance with the rights of survivorship. This required the Court to consider whether the land was owned as joint tenants or tenants in common.

On initially hearing the claim the Court rejected the Claimant’s claim and held the property was held as tenants in common and the Claimant therefore owned a 1/3 share of that property. This was based on the appeared intention between the parties. The Claimant appealed the decision.

On appeal, the Court considered whether the initial judge had erred in law when reaching that decision. The appeal was dismissed and the Court confirmed the presumption in favour of joint tenants did not apply to property purchased for business purposes, which is a longstanding principle. The Court further considered the intention of the parties, and deemed the actions taken by the Claimant’s parents to confirm it was not intended the property would be held as joint tenants as they sought to deal with their share outside of the legal ownership.

Comment

This case confirms the presumption set in the case of Stack v Dowden does not apply to property acquired for business purposes and instead, the presumption for commercial property is that the property is owned as tenants in common.