Nutshells Land Law by Haley Michael

Author:Haley, Michael [Неизвестный]
Language: eng
Format: epub
Publisher: Sweet & Maxwell
Published: 2016-03-23T22:00:00+00:00

SALE OF TRUST LAND

Trustees’ Power to Sell

Trustees have wide powers of sale should they choose to exercise them. If the trustees cannot agree as to whether the land should be sold they, or any interested party, may apply to the court for it to make such order as it thinks fit (s.14 of TOLATA). If the trustees choose to exercise the power to sell, they have all the powers of an absolute owner. On a sale the proceeds are held for the beneficiaries whose interests in the land are likely to be overreached by the purchaser. Before exercising any power of sale, the trustees must obtain any consents required by the trust instrument and have consulted with the beneficiaries. After consultation the trustees should normally give effect to the wishes of the beneficiaries.

Sale by Court Order

Disputes

On the breakdown of a relationship, for example, one co-owner might want to sell the land and distribute the proceeds of sale between them. Another co-owner may not wish to sell and may seek to continue in residence. Section 14 of TOLATA caters generally for the court to resolve disputes as between co-owners themselves and as between co-owners and trustees (e.g. as to the exercise of the trustees’ functions). Subject to certain considerations, the court can make such order as it thinks fit in relation to the exercise by the trustees of any of their functions. In Kyaw v Claassen (2015), for example, it was accepted that the court had the power to order a co-trustee to join in an application for the renewal of a business lease. The court’s power is, however, discretionary, but despite its breadth it does not allow the court to appoint or remove a trustee (s.14(3)).

KEY CASE

BAGUM V HAFIZ (2015)

Facts: the land in issue was a four-bedroomed house in Islington, owned as tenants in common in three equal shares by the claimant, Mrs Bagum, and her two sons, the defendants Mr Hafiz and Mr Hai. The purpose of this trust was to secure a home for Mrs Bagum, Mr Hafiz and their families and to secure a financial interest in the property for Mr Hai. A dispute arose between them as to the use, enjoyment and disposal of the property and Mrs Bagum sought an order for the purchase by Mr Hafiz of his brother’s one-third share in the property. A further issue raised was whether the court could order that Mr Hafiz should have the opportunity to purchase the property at a price to be set by the court and if that could not be done, the property be sold elsewhere.

Held: Briggs LJ determined, first, that the court had no power under s.14 of TOLATA simply to order one beneficiary under a trust of land to sell or transfer his beneficial interest to another. Section 14(2) provides that, “the court may make any such order ... relating to the exercise by the trustees of any of their functions ... as the court thinks fit”. Briggs LJ noted that, except

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