If property is registered as a tenancy in common, the LR will put the Standard Form A restriction on the title, stating there can be no disposition by a sole co-owner under which capital money arises. This then protects the coowner's position since one of them cannot give a valid receipt and sell without the other's co-operation. The problem for PRs, however, is that they are not necessarily protected by that arrangement.

Problems can arise if the co-owners were estranged at the time of the death of one of them. In practice, it is very easy for the surviving co-owner to overreach the interests of the PRs or beneficiaries and thus the interests of the deceased co-owner and the terms of the trust of land. This is because the LR is not interested in the underlying trust of land; the restriction on title is not there to protect co-owners but to protect potential purchasers. Accordingly, when a co-owner dies (whether a joint tenant or tenant in common) the LR will automatically remove their name from the title on production of the death certificate. At that stage the PRs are still protected by the restriction which cannot be removed by a sole co-owner. However, there is nothing to stop the surviving co-owner appointing their own cotrustee without reference to the PRs. Those trustees can then transfer the property into the names of themselves, and this will not be prevented by the restriction (since no money changes hands). Once the new co-trustee is on the title, there will then be the requisite two co-owners to give a valid receipt and sell the properties (and the PRs may know nothing about this). If that happens, the PRs would then find themselves in a position of having to sue the surviving co-owner for breach of trust (but that could prove worthless in practice).

What can be done to avoid this problem? PRs could ask the co-owner to agree to transfer the property into their joint names, so as to be sure they would be involved in any disposition of the property in order for the buyer to get a good receipt. If that cannot be agreed then they could apply to enter a restriction on the title seeking to prevent the surviving co-owner from disposing of the property without their consent. This could be an agreed restriction with the co-owner, but if the only option is a unilateral application by the PRs then the LR will refuse the application, on the basis that the PRs (and beneficiaries) do not have a sufficient beneficial interest in the property and therefore have no right to apply for a restriction.

The important point for PRs to appreciate is that they are not protected at all by the standard form of restriction on tenancies in common, and there is little in practice they can do to protect the beneficial interest after the death of the co-owner. In practical terms, there is no way they can force the surviving co-owner to agree to a restriction (or to agree to the PRs becoming co-owners). The best way of avoiding this problem is for all co-owners to agree to an added restriction on the title before either of them dies. Indeed, given this fundamental weakness in the protection of the interests of the deceased co-owner we should all consider giving this clear advice to all tenants in common - or run the risk of potential indemnity insurance claims when it all goes horribly wrong at a later date.

For more on this see excellent article in [2005] 150 Property Law Journal 11. © Practical Lawyer