Form JO – Law Society Issues Practice Note

Mr Jaggers: No nonsense about joint ownership in his day.

Mr Jaggers: No nonsense about joint ownership in his day.

Following the publication by the Land Registry of Form JO, which I covered in my previous post here, the Law Society has now issued a practice note advising conveyancing solicitors on a number of matters to be taken into account when dealing with joint purchasers. It’s all good, sensible stuff and can be found here. Of course there are some problems that Form JO cannot solve, most notably the concealed or phantom purchaser and the “ambulatory trust” whose existence was confirmed in Kernott. But it’s a start.

Form JO — A Potentially Important Development

You may remember that at the time of the House of Lords judgment in Stack v Dowden, Hale LJ dropped a very heavy hint to the Land Registry that it would be useful if it was to review its practice of not requiring joint owners to set out their interests in the equity, or their expectations of such interest, at the time of the conveyance. The mills of the Registry run slow, it appears, but there is finally some movement. Last Thursday, 1 November 2012, the Registry introduced a new form “JO” which is intended to make a significant difference to conveyancing of titles where there is more than one beneficial owner. This development is of particular interest to those advising cohabitees and others entering into a joint purchase of property.

Form “JO” is a voluntary form – it does not have to be completed, and joint owners can still rely on the relevant tickbox sections of TR1, FR1 and other forms. Where all relevant names appear on the title, purchasers will probably still take that course. However, the really important development in Form JO is that it directs the purchasers’ intentions to what is to happen if one of the joint purchasers is not on the title, as, for example, where the house is bought in the name of one partner but it is agreed that the other partner will have a half-share.

It was always possible to record an agreement like this by executing a separate deed of trust and referring to it at Box 10 of the TR1, but it was hardly ever done. Now, the conveyancer has an opportunity — indeed, it is more or less an obligation, since the careful conveyancer must direct the attention of the parties to the existence of this form — at the time of the transfer to point out to both parties that there is a very easy way to record this agreement for posterity. Parties should have their attention directed to Form JO and their instructions as to what to do about it should be carefully recorded. It is likely that in due course, the question of whether or not a Form JO was completed at the time of purchase will assume quite a lot of importance.

Form JO is an important opportunity for those who do not intend equity to follow the law, or who have unusual arrangements about the equity — it is to be shared with someone not on the title, for example, or the beneficial tenancy in common is to be held either in unequal shares or by a formula which is agreed now but will be calculated later — to put that in writing at the very earliest opportunity. It is also, incidentally, a good opportunity to look at whether the completion of Form JO should be part of making a cohabitation agreement.

Women with children who are living with their partners but who are not on the title should in my view be strongly advised to put any agreement about their eventual share of the equity into Form JO at the time of transfer.

Conveyancers will no doubt already be aware of this development. They may be underwhelmed and tell you that what can be done by Form JO was already possible under, for example, box 10 of the TR1. That is true, but the important thing about Form JO is that it is a specific stage in the conveyancing process which should be considered by the conveyancer and the parties should be advised about it. Whatever they decide to do (as I have said, completion of the form is voluntary), a careful record of the advice and instructions should be kept on the file.

There is a link to the relevant page on the Land Registry website here.

A Familiar Tale of Woe

charmkin family

By Merwing Little Dear from Flickr

I’ve just got back from a week away and will be rounding up some interesting developments over the past few days, but thought I would start by directing the attention to this very familiar tale from the Times. If you’ve come to this blog looking for information about your rights when living together, I urge you to read this story, which is very typical, to see what can go wrong. The moral, as always, is get proper legal advice. My professional legal readers will note the all too common aside that this couple congratulated themselves on holding on to their money for fixtures and fittings, and keeping it out of the clutches of the lawyers. Note also the womanly attitude, sadly very typical in my experience, that it isn’t romantic to discuss these things: Mills and Boon have a lot to answer for in the opinion of your humble servant. Still, fortunately for them, these two managed to sort it out in the end, which was just as well given the amount of equity in the property. On this topic, there is an interesting comment in the Times here to the effect that over the next few years, the nation will become divided into the equity-haves and equity-have-nots. It’s already happening, I think, with serious consequences for the unwary cohabitee. More on that anon …