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Sole survivor – joint attorneys

The LR has clarified that a transfer executed by joint attorneys on behalf of a sole surviving proprietor will not satisfy a Form A restriction.

A Form A restriction typically applies when property is held by tenants in common (to prevent a sale by one of the proprietors). Under a tenancy in common, if one dies then their beneficial interests will pass to their PRs, whereas the legal title will pass to the other proprietor(s). The point of a Form A restriction is to alert a buyer to the existence of the beneficial interests (typically held by the PRs). 

Where a sole proprietor wants to sell subject to a Form A restriction, it can overcome the problem by appointing a second trustee of the legal title. But, what happens if the sole proprietor appoints joint attorneys to act for it? The answer is that execution by joint attorneys (on behalf of a sole proprietor) will not be sufficient to override the Form A restriction and overreach any beneficial interests. The way this problem is solved is for a new trustee to be appointed, to act with the attorneys. Alternatively, it may be possible to remove the Form A restriction if the surviving proprietor is now solely legally and beneficially entitled to the property. But, transfer by joint attorneys on behalf of a sole proprietor will not satisfy the Form A restriction. See LR Practice Guide 9. Source: http://www.practicallaw.com/ (subscription service).

 

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