Can a joint tenancy be severed after the registration of a judgement mortgage ?
Before dealing with the substantive topic of this article it is important to understand that when two or more parties own property there are two forms of ownership by which they can own:
- Joint tenancy – This is the usual type of ownership for a husband and wife and in which case the right of survivorship applies i.e. if one joint owner dies the property automatically reverts in its entirety to the other joint tenant. This means that a joint tenant cannot leave the property to anybody other than the other joint tenant(s).
- If on the other hand the parties own the property as tenants in common, then they own separate interests in the property and the right of survivorship does not apply. When a tenant in common dies his or her interest in the property passes under his or her Will or on intestacy.
In a very interesting Irish case of ADM Mursey PLC -v- Bergin and another in early 2020 a dispute arose in relation to the entitlement of a father and son to sever i.e. end the joint tenancy after the Plaintiff (formerly known as Londis) obtained a judgement mortgage against the son’s interest in lands which was owned as joint tenants by the son and the father.
What happened in this case was after the judgement mortgage was registered the father signed a Will in which he left his interest in the property to two grandchildren and he then entered into a Deed with his son to sever i.e. end the joint tenancy and create an interest in the property as tenants in common in equal shares. This meant he was now an owner of one half of the property which, in accordance with his Will, went to his grandchildren on his death.
Londis brought an application stating that he was not entitled to sever the joint tenancy and on the father’s death the property should revert to the son by survivorship and this would have then formed part of the security obtained by Londis on foot of their judgement mortgage.
However, Mr. Justice Allen disagreed, and he stated that the judgement mortgage did not attach to the lands but rather only an interest in the lands i.e. the son’s interest in the land.
He said that the affect of the judgement mortgage was not to sever the joint tenancy but neither did it affect the entitlement of the son and the father to enter into a Deed severing the joint tenancy.
The Court held that the severing of the joint tenancy did not affect the Bank’s interest as against the son’s interest in the land.
For any advice on this or similar topic do not hesitate to contact Brendan Dillon ,Donna Phelan or Conor White on 01 2960666
