Five friends decided to invest in a property together. Each one of them contributed £50,000 to purchase the property. Four of the friends are over 18 years old, while one of them is just 17. The 17-year-old friend used the money inherited from her grandmother to contribute her share. However, the friends did not make any agreement regarding the co-ownership of the property.
Which of the following statements accurately describes how the legal estate will be held?
Five friends decided to invest in a property together. Each one of them contributed £50,000 to purchase the property. Four of the friends are over 18 years old, while one of them is just 17. The 17-year-old friend used the money inherited from her grandmother to contribute her share. However, the friends did not make any agreement regarding the co-ownership of the property.
Which of the following statements accurately describes how the legal estate will be held?
The four friends who are over 18 will hold the legal estate as joint tenants on trust for all of them.
(D) If multiple people purchase land, the Trusts of Land and Appointment Act 1996 (TLATA) automatically creates a trust of land for the benefit of all buyers. According to TLATA, the first four buyers listed in the transfer deed who are over 18 years old will hold the legal estate as joint tenants on trust for all buyers. The trust is limited to the first four because more than four trustees cannot hold the legal estate.
Option A is incorrect because the legal estate can only be held by a maximum of four trustees as stated above.
Option B is incorrect because, under TLATA, the first four buyers over 18 years old will hold the legal estate as joint tenants, not the first two.
Option C is incorrect because TLATA specifies that no more than four people can hold the legal estate, and it must be held as a joint tenancy.
Option E is incorrect because the legal estate must be held as a joint tenancy, as stated above.