LLB/LLB HONS
LAND LAW - 5304LAWCL
2pm
- 1st May 2024 2 HOURS
INSTRUCTIONS TO CANDIDATES
You
must answer ONE question from Section A and ONE question from
Section B
In
Section A you need to answer ONE essay question from a choice of
three
and
In
Section B you need to answer ONE problem style question from a
choice of four.
You
must therefore answer TWO questions in total, one essay and one
problem style question.
Students
are permitted to take into the examination one clean un-annotated copy of a
property/land law statute book. No prints or photocopies of statutes are
permitted in the examination room in any circumstances. Each question carries
equal marks.
__________________________________________________________________
Section A: Please answer one of the
following essay questions:
1. Critically
discuss the extent to which the Land Registration Act 2002 has reduced the
number of overriding interests for both registered and unregistered land,
ensuring that you discuss the core principles behind Land registration.
Principle of the LRA 2002
To simplify conveyancing – it
is far less time consuming to inspect title deeds to property if there is an
electronic version of them, rather than having to inspect the paper deeds each
and every time land is bought and sold. The Land Register is a central database
which gives a prospective purchaser an overview of the land, the name of the
registered legal owner and discloses MOST 3rd party rights.
As we will see, however, many 3rd
party rights are not disclosed on the register – these are named overriding
interests.
Mirror-Curtain-Insurance Principle
Mirror
The registered title is supposed to
be a mirror of all a the interest existing in or over any piece of registered
land. One of the original aims of land registration was simplify the
conveyancing process so that all the purchaser would need to do in order to
discover which interests would bind him on completion of this purchase was to
look at the registered title- because he would take the land subject only to
all and any entries on the registered title.
This refers to the aim of the
Register, which is to “give certainty to the title to real estates”.
This is echoed by the stated
fundamental objective of the LRA 2002 which is “to enable an effective system
of electronic dealing with land, the register should be a complete and accurate
reflection of the state of the title to land at any given time, so that it is
possible to investigate title to land on-line, with the absolute minimum of
additional inquiries and inspections.”
However, the Register does not always
achieve this mirror image. In particular it may not show 3rd party
unregistered interests which may over-ride first registration (listed under
Schedule 1) or override a registered disposition (Schedule 3).
This has been described as the ‘crack
in the mirror’ and we will examine the significance of this shortly.
One crack in this mirror was the
qualification introduced with the concept of overriding interests – interests
which bound the purchaser even though they were not registered. The LRA 1925, there overriding interest were set
out in S70(1).
The more significant rights set out
in S70(1) included – legal easements, profits related rights, rights acquired
or in the course of being acquired by adverse possession, the rights of those
in actual occupation, local land charges and leases not exceeding 21 years. Any
examination answer on overriding interest should say how these rights have been
affected by the 2002 Act.
Curtain
This encapsulates the idea that
beneficial interests under a trust of land should remain hidden behind the
‘curtain’ – thus a purchaser of land held under a trust should not be concerned
with the beneficial interests behind the trust and does not need to worry abut
the nature or extent of those beneficial interests.
Simply he should make sure that he
overreaches the beneficial interests by securing legal title to the land. If
you remember, he does this by payment of capital monies to the trustees, of at
least two in number.
Williams and Glyn’s Bank v Boland [1981]
A husband and wife each contributed
to the purchase of a matrimonial home. The husband was registered as sole
proprietor under the LRA 1925. The wife had an equitable interest in the home
as she had made some contribution to the purchase. The husband therefore held
the house on trust for himself as legal owner and himself and his wife as
equitable tenants-in-common.
Later, the husband, without the
wife’s consent, mortgaged the property. He defaulted on the repayments and the
bank sought possession. The question was whether the wife’s interest was valid
against the bank as an overriding interest under LRA 1925 s.70.
The House of Lords held that the
wife’s beneficial tenancy in common was an overriding interest under s.70 and
that, being in actual occupation, she had an overriding interest which bound
the bank.
‘In actual occupation’
Lord Wilberforce in Williams and Glyn’s Bank v Boland [1981]:
“These words are ordinary words of
plain English, and, should…be interpreted as such.”
Abbey National BS v Cann [1991] – It was held in this case that acts preparatory to moving into a
property (in this case the laying down of carpets and the moving of furniture
into the property) were NOT sufficient to show actual occupation.
Chhokar v Chokhar [1984] – held that where a tenant had keys to a London flat that he and his
family/friends used as a rendezvous or place to stay at weekends, this did not
constitute actual occupation.
Lloyd’s Bank v Rosset [1989] CA – a generous interpretation of ‘actual occupation’ was given in this
case (although the claimant lost due to other factors later on) – in this case
the CA held that where the claimant was supervising the refurbishment of a
semi-derelict property, she was held to be in actual occupation, even though
she was not living there.
Insurance
This principle dictates that if an
interest is duly registered, the State guarantees the accuracy of the Register.
Naturally, mistakes may occur at the Land Registry and therefore an indemnity
(ie. compensation for mistakes) is provided by the State in the event of a
mistake which causes loss to a citizen.
Where an alteration is made to a
register which involves the correction of a mistake which has prejudicially
affected the title of a registered proprietor, it is known as RECTIFICATION. A
person is entitled to compensation where RECTIFICATION has occurred.
If rectification is ordered, the
person who has suffered loss can claim an amount up to the value of the claimed
estate or interest at the time the rectification took place. Not that the 6
year period in the Limitation Act 1980 applies.
Schedule 8 of LRA 2002 governs the
application of indemnities (ie. compensation for loss caused by incorrect
information contained on the Register)
There are two major caveats to the
insurance principle:
i)
No compensation will
be given if a registered proprietor suffers loss due to his own fault through
fraud or lack of care;
ii)
More significantly,
IF the register is altered to record an ‘interest that overrides’ first
registration, this is treated as mere administrative change and NOT
RECTIFICATION. Thus, no compensation is available for such changes.
Differences between LPA 1925 s.70 and LRA 2002
The Land Registration Act 1925 listed
overriding interests in s.70 and further additions were made in later
enactments. The wide scope of overriding interests was subject to criticism and
the LRA 2002 has reduced their number and extent in furtherance of the aim to
ensure the Register is an accurate a mirror of the true position as possible.
Some of the old categories of overriding interests are abolished, while others
will be phased out after ten years (2012). Still others are reduced in extent
or otherwise modified.
Interests which override first registration or registered
dispositions
In basic terms, we are concerned here
with unregistered 3rd party interests that bind a purchaser when he
buys land and it is registered for the first time, or when there is a
subsequent disposition (see above) and certain unregistered interests then have
priority against the purchaser despite not being protected by the entry of a
notice on the register.
Those interests which override first
registration are found in LRA 2002 (Schedule 1):
2. Legal leases not exceeding 7 years
3. Legal easements and profits
4. Interests of a person in actual occupation
5. Squatter’s rights – Adverse possession
However, as some 80% of land is
already registered, and eventually ALL land in England and Wales will be
registered, those interest which override a registered disposition are more
significant.
Interests that override a registered disposition
These interests bind a purchaser of registered land irrespective of
whether those interests have been registered
General points:
-
The list is a
‘policy’ list and recognises that in some cases it is undesirable or
impractical to require protection of all interests on the register.
-
The list is much reduced from the list of
overriding interests that was found under the Land Registration Act 1925 s.70
-
This is not the same
as that in Schedule 1 which only applies at FIRST REGISTRATION. THE LIST UNDER
SCHEDULE 3 CONTINUES TO APPLY IN SUBSEQUENT CHANGES TO THE REGISTER, NOT SIMPLY
FIRST REGISTARTION.
They are those found under Schedule 3
of the LRA 2002:
We are concerned mainly with 3 types of
overriding interests:
1. Certain Short leases – legal leases NOT exceeding 7 years – these
are allowed to override because of practicality – there are thousands of short
leases (eg. Student leases) which will not have been registered against
premises
2. Interests of persons in actual occupation
2 elements here – an interest in land
AND actual occupation:
What constitutes an interest in land?
It must be a PROPRIETARY interest ie.
legal or equitable and NOT a personal one such as a licence or the right of a
non-legal owning spouse to occupy the matrimonial home. The occupation of a
trust beneficiary is included.
This has an important consequence-
namely, that this category of interest that overrides can operate as a
‘fall-back’ position for a person who as interest protectable by entry and has
failed to protect it but nonetheless remains in actual occupation.
Simply put:
Unprotected equitable interest PLUS actual
occupation CAN = an interest that overrides and therefore binds a later
purchaser
Rationale: “...when people occupy
land they are often unlikely to appreciate the need to...register rights in it.
They...regard their occupation as the only necessary protection...” – Land
Registration for the Twenty-First Century, Law Commission, 1998
Protection of occupiers is subject to
2 qualifications:
i)
It is unavailable if
the occupier fails to disclose the interest on enquiry made before the
disposition to the purchaser and in circumstances where disclosure could
reasonably have been expected;
ii)
When the land was
purchased the occupation was not obvious on a reasonably careful inspection of
the land at the time of the disposition AND the purchaser had no actual
knowledge of the interest at that time
Prospective purchasers should now inspect the premises and should ask anyone in
occupation on what grounds he is there. He will thereby be able to discover the
rights and interests of persons in occupation and it seems right therefore to
subject a purchaser to those rights and interests rather than simply being able
to disregard them because someone had forgotten to add them to the register.
The paragraph is therefore a safety net for occupiers of property. All claims
of interests in relation to property should be registered under the LRA 2002,
except the special cases under paragraph 2 ie. the interest of a person in
actual occupation.
Please note that whether someone has
an interest and whether they are in actual occupation is determined through
caselaw, much of which was decided prior to the LRA 2002.
3. Legal easements and profits
-
Equitable easements
are excluded
-
Expressly created
legal easements are excluded
-
Thus, the easements
protected are those which arise from the operation of s.62 LPA, or those
acquired via prescription.
These interests are given over-riding
status despite the fact that it will be difficult for purchasers to discover
their existence. There are 3 qualifications to the overriding status:
-
The person who
bought the land that had the right over it knew about the right; or
-
The right would have
been obvious on a reasonable careful inspection of the land;
-
The right had been
used in the last year prior to sale
Thus, there are safeguards in place – in essence, it is for the
purchaser to find out about the land they are purchasing.
Limitations to the Mirror Principle
As we have seen, the desire of
Parliament has been to create a Register which accurately reflects the
character of the land in question and overriding interests compromise this
accuracy.
However, any criticisms of overriding interests must be viewed in
light of the following:
Some interests CANNOT be registered eg. easements and profits
acquired via prescription
Parliament has, rightly, protected those who may be unaware that a
restriction on the Register may be required for their interest to be otherwise
effective eg. the wife in Williams and
Glyn Bank v Boland.
It is impracticable to require the registration of ALL short
tenancies eg. student leases?
Many overriding interests DO appear on the Register, and more will
continue to be added.
2. The
law on adverse possession was reformed by the Land Registration Act 2002. Discuss
the changes made and why they were deemed necessary. In your answer, make reference
to relevant case law and statute.
·
Intro - what is AP?
No statutory definition of ‘adverse’
It is now interpreted as the claimant must be acting as a trespasser
i.e. the claimant must not have permission to be there.
Buckinghamshire CC v
Moran [1990] Ch 623 per Slade LJ:
“Possession is never ‘adverse’ …if it is enjoyed by lawful title.
If, therefore , a person occupies or uses land by licence of the owner with the paper title and his licence has not
been duly determined , he cannot be treated as having been in ‘adverse
possession’ as against the owner of the paper title”.
·
Requirements
for AP
Heaney v Kirkby [2015] UKUT 178
1. A claimant must be in possession of the land:
a) must in factual
possession of the land –and possession must be exclusive
b) must have
intention to possess the land
See
2. Possession must be ‘adverse’.
3. The adverse possession must be for the prescribed time period.
·
Why
was reform necessary?
1. Adverse possession undermined registered title- registration of
title provided no protection from ‘land theft’
2. Rules were based on an unregistered system of title –
inappropriate in a system which encouraged land registration
3. Difficulty in justifying adverse possession in registered land-
one of the reasons that adverse possession may be considered to be in public
interest is because it simplifies investigation of title however this obviously
does not apply to registered land
·
Law
before 2002
Rule under the old Limitation Act?
Unregistered Land
The Limitation Act 1980 s.15 regulated adverse possession before the
Land Registration Act 2002 was enacted and still regulates adverse possession
of unregistered land even post the LRA 2002.
The Limitation Act dictates that the claimant must be in adverse
possession for 12 years. During these 12 years occupation must be continuous
The idea behind having a limitation period was to ensure that land
owners do not ‘go to sleep’ on their claims
RB
Policies at Lloyds v Butler [1950] 1 K.B. 76.
If the paper owner does not bring an action to recover possession
within 12 years they lose the right to bring proceedings (s.15) If all the
elements of a claim are established the title owner not only loses the right to
sue he also loses title to the land in question (s.17 LA) Importantly the
Limitation Act 1980 allows an extension of the necessary time period where the
dispossessed (true title) owner is:
·
Subject to a
disability
·
Where there are
beneficiaries with life interests who are not yet in possession. (
s.15(2))
·
Registered Land
·
Just like with
unregistered land, before the LRA 2002 adverse possession of registered land
was dealt with by the Limitation Act 1980
·
Just like with
unregistered land, if all elements of a claim were established and the occupant
had been in possession for the requisite 12 years the title owner lost his
right to recover the land.
·
The difference is s.
75 LA which states that: in the case of registered land the owner’s
title was not automatically extinguished at the end of 12 years occupation (as
the register would need to be changed to reflect this) but that , at the end of
the prescribed period the true owner would hold the estate on trust for the
squatter who could then apply for registration in place of the dispossessed
owner (s.75(2)). Once an occupant had
been in possession for 12 years the dispossessed owner’ held the estate on
trust for the squatter until the squatter applied for registration. Until this
happened the squatter had an overriding interest as per the Land Registration
Act 1925 s. 70 1 (f)
·
To come under this
Act the Adverse Posessor needs to show that they were in occupation of the land
at least 12 years before the LRA 2002.
·
Law
after 2002
·
Registered land is now dealt with under the LRA 2002 Sch 6. para 1 (1) states that
an application to change the register can only be made if someone has been in
occupation for a minimum of ten years. Para 1 :
The applicant may apply if he has been in adverse possession of the land
for the prescribed time ending on the date of application
·
Under the LRA 2002
when someone in adverse possession makes an application for alteration of the
register the title owner is informed of this claim. Anyone with any legal
rights over the property are also informed , for e.g. the bank if the property
is subject to a mortgage.
The new rules under the LRA 2002
apply to any squatter who has not occupied the premises for 12 years before the
13th October 2003 (the date that the LRA 2002 came into force). This means that, where land in question is
registered – it doesn’t matter how long the squatter has been in occupation –
they have no rights over the land unless they make a successful application to
be registered as the proprietor. Under the new system, after a minimum period
of 10 years he can apply for registration of title. If the person in adverse
possession does apply for registration of title the registered proprietor is
notified, therefore made aware (if they are not already) of the situation and
given the opportunity ( to object to this change. This means that, unlike under
the previous system the registered proprietor can’t lose title with no
knowledge of the occupation – or against his will. If the reg proprietor
objects, as one would expect the application to change the register is
rejected.
Dixon calls this the ‘emasculation’ of adverse
possession in regards to registered land.
If there is no objection this will be because the property is unwanted
/abandoned then there is an argument that this is promoting land use.
It means that adverse possession only likely to be successful when
land genuinely isn’t in use. Also supports the ideal that all land becomes
registered- encourages voluntary registration of land to protect against claims
of adverse possession – large charities.
There are however exceptions where the requisite period of
occupation may be extended, similar to those previously discussed under the
Limitation Act:
·
Disabilities –
cannot apply for a change is registered proprietor if the ‘true owner’ the
registered proprietor is mentally ill and so cannot understand the implications
of proceedings or act to object.
·
Trusts (unless the beneficiaries have interests in possession) . Furthermore it has been
suggested in the land registry practice guide (4) that this may mean that
applications will be refused if they are made within 10 years of the following
events, as in each circumstance the property is subject to a form of trust:
·
The registered
proprietor died and the estate was being administered
·
The registered
proprietor has gone bankrupt and their estate is being administered by the
trustee in bankruptcy.
·
A company is being
wound up.
Sch 6 also states that periods of adverse possession can be added up
as long as they are continuous (sch 6 para 11 (2)
Where the land in question is registered it does not matter how long
the squatter has been in occupation – they have no rights over the land unless
they make a successful application to be registered as the proprietor. This
means that, unlike under the previous system the registered proprietor can’t
lose title with no knowledge of the occupation – or against his will.
Adverse possession only likely to be successful when land genuinely
is not in use
Also supports the ideal that all land becomes registered- encourages
voluntary registration of land to protect against claims of adverse possession
Regarding human
rights I would expect students to discuss J.A Pye (oxford) Ltd v Graham
[2002] UKHL 30. in some detail: KEY CASE!!!
u 1st Instance- [2000] Ch 676, found in favour of Graham- adverse possession had been established.
u Court of Appeal [2001] Ch 804 held that Graham did not have the necessary intention to possess
the land to the exclusion of the true owner, Pye. The COA felt that there was
not the necessary intention to possess the property as, by requesting a grazing
licence Graham was acknowledging that he would be willing to pay for this right
if necessary.
u House of Lords –however in the HOL
they reversed the CoA decision- held that Pye had both of the necessary
elements for a successful claim. In their judgement the House of Lords
clarified the requirements for adverse possession, affirming those previously
set down in Powell v McFarlane (1979) 38 P & CR 452
Pye v UK (44302/02) (2008) 46 E.H.R.R. 45
Pye lost at the
European court – as Graham had been there 12 years without consent. Pye lost
land worth £20-£25 million pounds. Under article 1 peaceful enjoyment of
possessions interference with this right may be justified on the grounds of
public interest, or of ‘general interest’ such as land control . This case is
not so much about loss of land itself,
more about lack of compensation for the loss of land
u The chamber concluded that the rules of adverse possession:
‘imposed upon [the
applicants] … an excessive burden and upset the fair balance between the
demands of public interest, on the one hand, and the applicants’ right to the
peaceful enjoyment of their possessions on the other. ‘chamber held that applicants right under
art of the first protocol had been
violated by the UK government. They were thus entitled to compensation under
article 41 of the convention – the chamber said they would deal with this if
the parties did not come to some agreement.
u The UK government then appealed to the grand chamber of the ECHR –
[2007] ECHR 700
u Same discussion – has the UK government struck the right balance
between protecting the true title owner and the public interest in land being
used rather than building lying empty? In contrast to the chamber, the grand
chamber found the UK government’s argument compelling noting that a fair balance had been struck as the
limitation period was quite long and that adverse possession was a very well
established doctrine – Pye could have easily taken steps to stop Graham being
in possession for the requisite time.
How has Pye
in the ECHR affected domestic law?
u The consequences of both Pye and then the UK government appealing to
the ECHR was discussed in Ofulue v Bossert [2009]
The dispossessed owners the Ofulue’s said that
following the judgement in Pye v Graham the English court should make its own
assessment of whether the law of adverse possession struck a fair balance in
terms of general interest and the interests of the dispossessed
individual. They also asked the court of
appeal to distinguish their case from Pye’s and find that dispossession
violated their rights under the convention, contrary to the grand chamber
finding against Pye.
The COA predictably
refused Ofulue’s appeal- held no
violation of article 1 of the first protocol. COA affirmed that the current law
does indeed strike a fair balance between protecting individual title owners
and the general interests of the public . The court also stressed they would
need very good reason to depart from the judgements of the ECtHR.
3. A
mortgagee has a number of remedies available. The most important are the right
to take possession of property and the power of sale.
It is a loan from a
bank/BS usually which is used to purchase a property over which the bank/BS has
security by way of a legal charge (do not discuss equitable mortgages) sec
87 LPA ‘25
-
Who is the mortgagor and
mortgagee?
Mortgagor =
Borrower
Mortgagee = Lender
(usually a Bank or BS)
-
How does a mortgage work?
It is a loan
usually repaid over 25 years (can be longer or shorter than this). Common to
have a repayment mortgage (where the borrower pays back both capital and
interest over the mortgage term)
-
When can the mortgagor start
repaying?
At common law - on
the legal date of redemption HOWEVER:
In equity - due to
the equity of redemption can pay back after the contractual redemption date up
until the end of the term
Main Body of essay:
-
Explain what is the equity of redemption?
This should be
distinguished from the ‘equitable right to redeem’ which is a narrow concept
and which arises after the common law date for redemption has passed. ‘The
equity of redemption’ is a wider concept and arises as soon as the mortgage
deed is executed. Basically, it encompasses all the protections for the
mortgagor (borrower).
Includes being free
to redeem at any time, free from clogs and fetters etc. Moreover, the equity of
redemption is an equitable interest in property as equity still regarded the
mortgagor as the true owner enabling the mortgagor to sell, lease or devise the
property, subject, of course, to the mortgage.
-
Explain what are clogs or
fetters on the equity of redemption?
A clog or fetter is
anything which prevents the right to redeem or renders the right to redeem
‘illusory’. Santley v Wilde – a
‘repugnant condition’ upon a mortgage.
The equitable right
to redeem referred to equity’s willingness to recognise the mortgagor’s right
to redeem the mortgage after the date that had been fixed for repayment had
passed. Any restriction on this right to redeem, if oppressive and
unconscionable, would not be enforced in equity, particularly if it meant that
the equitable right to redeem was rendered illusory.
-
Explain what are collateral
advantages?
These are
additional terms put into the mortgage as part of the bargain between the
parties when negotiating the mortgage.
The essence of a
mortgage is a loan made on the provision of security against which the loan can
be enforced if it is not paid. Sometimes, additional terms are included in the
mortgage as part of the bargain between the parties.
At one point, these
collateral advantages were automatically void; but, after 1854, the position is
that collateral advantages are only objectionable if they are oppressive and
unconscionable. Basically, they are ‘added extras which make the mortgage more
valuable to the mortgagee. If not oppressive and unconscionable, they are valid
up until the mortgage is redeemed but not generally afterwards. Exceptionally,
equity will allow collateral advantages to outlive the mortgage – Kreglinger.
-
Explain when does the
mortgagor’s right to redeem arise?
The right to redeem
at common law is usually 1 to 6 months after the date of the Deed.
The mortgagor
always had the right to redeem the mortgage at common law but the date for
repayment was traditionally fixed at six months from the date of the mortgage.
If the mortgage involved a transfer of the freehold to the mortgagee, once the
date for repayment had passed, at common law the property became the
mortgagees.
Equity,
nevertheless, recognised that the transaction was one where property was
pledged as security for the original loan and therefore permitted repayment,
and the recovery of the property in question, after the common law date for
repayment had passed. This was known as the mortgagor’s right to redeem the
mortgage. In order to defeat the mortgagor’s right to redeem, the mortgagee had
to foreclose on the mortgage.
-
Explain what is the
mortgagee’s statutory power of sale and right to possession?
The mortgagee has
the right to take possession from the date of the Deed – 4 Maids v Dudley.
Usually there is a
restriction in the Deed that the mortgagee will not take possession until the
mortgagor defaults upon payment/another breach.
This applies where
the mortgage was made by Deed - see ss.
101 – 107 of the LPA 1925 – and all legal mortgages must be made by Deed.
And, the legal date for redemption must have passed. If the mortgage repayments
are to be made by instalments, the power of sale arises as soon as any
repayments are missed.
Sec 101 – power to sell is implied into every mortgage made by Deed. The
power arises when the mortgage becomes due i.e. the contractual redemption date
but it only becomes exercisable when sec
103 applies:
Sec 103 - The power becomes exercisable when:
(a) notice has been
served requiring payment of the mortgage money has been served and default has
been made in its repayment (in part or whole) for three months thereafter; or,
(b) some interest under the mortgage is two months or more in arrears;
or
(c) there has been a breach of some provision in the mortgage which the
mortgagor had to observe.
The mortgagee’s
right of sale is exercisable without any order of the court – although, in many
cases, the mortgagee will need an order for possession in order to sell with
vacant possession.
-
Explain what are the duties
of a selling mortgagee?
The mortgagee’s
conduct in exercising his power of sale is governed by principles of equity and
not by any common law duty of care. The duty is to act in good faith and to use
his powers for a proper purpose; he is not a trustee of the power of sale as the
power is his to use for his own benefit in order to realise his security more
effectively – such as choosing the moment to sell. That said, the mortgagor’s
interest cannot be sacrificed, and the mortgagee must behave fairly towards the
mortgagor.
On sale, he must
take reasonable care to obtain ‘the true market value of’, or a ‘fair price
for’, the property or ‘the best price reasonably obtainable for the property’ –
which requires the property to be properly advertised for sale.
He cannot sell to
himself; any sale that is not a ‘true sale’ is liable to be set aside. The
selling mortgagee is, on the other hand, a trustee of the net proceeds of sale.
Explain
how these remedies operate. Do you think a fair balance is achieved by the law
in protecting the interests of both the mortgagor and mortgagee?
Section
B: Please answer one of the following problem
questions:
4. In
December 2023 Barry owned a large 3 storey eight bed–sitting room property. Barry
had initially bought the property to let out the rooms so he could supplement
his income as a teacher. Barry started going out with his current girlfriend
Wiki and offered her the right to occupy one of the bedrooms for 6 months
starting in January 2024.
However,
unfortunately for Barry the eight bed-sitting rooms were already occupied by
other residents. The first 2 floors were
occupied by students who had approached Barry as a group in September 2023 and
asked to rent the bed-sitting rooms paying £300 a month in rent. Each of the
students held their respective rooms under similar but separate written
agreements signed on the same day. Each document contained a clause stating
that “nothing in this document shall be construed as creating a tenancy” and a
further clause allowing Barry to move anyone else into each of the bed–sitting
rooms so they could be shared by two people. Barry also retained a key to
access the properties between 10am – 2pm and said it was so that he could clean
the rooms and charged the students an additional £50 each for cleaning services
which he carried out.
The
basement flat was occupied by Gloria who signed a similar agreement to the one
signed by the students, but was not charged the additional sum for cleaning.
Gloria has always cleaned the basement flat herself and Barry has never entered
the flat to do this.
Wiki
is now insisting Barry keeps his promise to allow her to move into the
property.
Advise
Barry on whether he can obtain possession of one of the bed-sitting rooms or
the basement flat using relevant statute and case law.
Why is the lease licence distinction important?
Lease gives rise to an
interest in land – proprietary can be enforced against anyone whereas a licence
is merely personal , can only be enforced against the grantor
Lease – one of the two
interests in land under the Law of Property Act 1925 s.1 – can be transferred
to 3rd party, licences can’t
Certain statutes give lots
of rights to tenants i.e. those who have leases but far less protection for
licensees. So generally in these cases owners argue someone has a licence and
the occupant argues that they have a lease!
Students:
4 unities and 3
hallmarks JT of the two flats combined?
4 unities: time:
assume interest
Issue: Possession
and Title – separate agreements and 2 flats.
Not got
4 unities AG Securities and Vaughan
Have
they got individual leases of their bedrooms?
Certainty
of term: periodic?
Certainty
of premises: yes, if bedroom licence over communal areas
Exclusive
Possession: cleaning issue, introduce third party; separate rent : no EP so not
a lease
All have licences
over bedrooms – discuss notice period
The same clauses
apply to Gloria as to students so you would again refer to the above case law
however we now have a one bed flat with the intention of adding in a stranger-
applying Stribling v wickham this would appear that it is a sham. Follow
Antoniadias v Villiers – in reality Gloria has EP
Daily access to Gloria’s
flat however may negate exclusive possession if this is actually acted upon and
not a sham depending on the extent that this interferes with belle’s control
over the premises. I would hope that they would compare and contrast Aslan v Murphy with Markou v De Silvesca. If mark actually
enters the property daily then this negates Gloria’s EP, if he doesn’t then she
could well have exclusive possession and therefore would be a tenant. Advice
needs to follow whichever conclusion the student draws. (ie licencee- 28 days
PFEA, tenant assured shorthold tenancy –
6m plus two months under section 21).
Remember Section 21 is the preferred option
for a landlord to regain possession of a property. Section 8 cannot be used
here as the criteria to trigger it are not in effect such as rent arrears least
2 months, criminal activity etc – if do trigger section 8 then its minimum of
14 days notice period but have to serve notice.
5. Ashley,
Janet, Francesca, Dawn and Teddy all decide to pool together their savings and
buy a property together as they are such good friends. They find a large house
for sale that they all love but needs a bit of modernisation, and duly go ahead
and purchase it.
Unfortunately,
Ashley had made some bad investments shortly after buying the property and is
declared bankrupt. A Trustee in Bankruptcy is appointed to deal with her
financial affairs.
Not
long after this, Janet is involved in a freak accident while skiing in the
Austrian Alps and dies of her injuries. She had left her share of the house in
her will to her brother Leo.
Dawn
is not happy with all the bad vibes in the house after the death of Janet and the
bankruptcy of Ashley and sells her share to her friend John. The Trustee in
Bankruptcy wants to sell the property to recoup all of Ashley’s debts and
Francesca agrees, but Leo, John and Teddy want to keep the property.
Advise
on the devolution of both the legal and equitable interests in the property and
whether you think the court will grant an order for sale and why?
What is the question
dealing with?
Trusts of land - where the legal estate is
held by more than one person (sec 36 LPA’25) and where the beneficial interests
are owned by more than one person (sec 34 LPA’25).
Who owns the land in a T
of L?
Trustees – first 4 persons of full age &
capacity
(sec 34(2) TA’25)
Therefore:
Ashley (A), Janet (B), Francesca (C) & Dawn
(D) would hold legal estate (assuming of full age & capacity) for Ashley, Janet,
Francesca, Dawn & Teddy (E).
How is the legal estate
held by the trustees?
A B C & D hold as joint tenants in law –
right of survivorship applies
How can the beneficiaries hold the land?
1)
Joint tenants in equity OR
2)
Tenants in Common in equity
What do you need for a JT
in E?
4 unities – Time, Title, Interest &
Possession
i)
Time – vests in co-owners at the same time
ii)
Title – acquire title by the same means e.g. conveyance
iii)
Interest – same duration e.g. FH or possessory title
iv)
Possession – no specific portion to particular co-owner
Is there anything you
would need to show a T in C?
Possession – even if only has 30% share it
is not a defined share as such
How is the land held in
the question at law & in equity?
i)
At law – as JT by A, B, C & D
ii)
In equity – would appear to be as JT in E as all 4 unities are present
(but could it be argued a commercial venture and so would indicate as T in C?).
Argue both?
Lake v Gibson 1729 – a commercial venture or partnership = T in C
If argue a JT in E – what could happen to it and what is the effect?
Could
sever the JT in E (Sched 2 Para 4(3) TOLATA’96)
Sever:
i)
Notice in writing – express OR
ii)
‘ Such other acts or things as would in the case of a personal estate
sever the tenancy in equity’ – implied
1) Express: Simplest way – should be sent to
the regd address of other JTs or by recorded delivery
2) Implied: i) Acting with own share - severance of that share only ii) mutual
agreement – all would become T in C iii) any course of dealing indicating as T
in C – all would be T in C iv) bankruptcy of any JT
What happens in the question?
|
Joint Tenants in Equity |
|
|
|
Law |
Equity |
|
|
(A B C D) |
(A B C D E) |
|
|
|
|
|
|
A bankrupt |
|
|
|
( B C D) |
T in B (B C D E) |
|
|
|
1/5 (4/5) |
|
|
B dies |
|
|
|
( C D) |
T in B ( C D E) |
|
|
|
1/5 (4/5) |
|
|
D sells |
|
|
|
( C
D) |
T in B John (C E) |
|
|
|
1/5 1/5
3/5 |
|
What happens if Fran (C) and Trustee in Bankruptcy wants to sell?
Under
TOLATA’96 – no duty to sell (unless specifically imposed by settler – N/A here)
but is a power of sale but implied power to postpone (sec 4 TOLATA’96)
Re
Mayo 1943 – have power to keep land but if disagreement should sell
1)
To sell would need to get all 3 Trustees to sign. Problem as John and
Teddy don’t want to sell.
Trustees
should also obtain consents (sec 11 TOLATA’96) – give effect to those wishes or
the majority (If originally JT in E – T & E would be less than 50%
beneficial ownership, if originally T in C – if could get X to agree to the
sale then would have more than 50% i.e. a majority in agreement)
In
question – if JT in E (far more likely) – T in B & Fran want to sell, John
and Teddy don’t want to sell
2)
As D not signing, likely would need a court order in circums (sec 14
TOLATA’96) – any person with an interest in the property (whether legal or
equitable – which is both T & E’s position) but subject to sec 15 guidance
What will court consider?
Purpose
land was bought for – Re Buchanan-Wollaston’s Conveyance 1939 up to court to
decide.
If sec 14 order not granted –
what could E do?
Would need to get at least 2 T’ees to sign
to overreach beneficial interests which become an interest in the sale
proceeds.
However – would have to deal with all T’ees
so no good.
6. Crystal
intends to sell her registered 2-bedroom house in Essex. She decides to enter
into a contract for the sale and purchase of the property with Rod. Rod needs
to take a loan to proceed with the purchase and has offered Crystal £450,000.
a)
Advise Rod on what steps he and his Solicitor should take before exchanging
contracts. Pre-contractual stage – NO binding contract, just a subject to
contract agreement.
Rod must;
- Arrange finances. Take into account following expenses:
- Land Registry Fee
- Tax to be payable on the Property.
- Deposit to be paid on exchange (usually 10%)
- Arrange for mortgage
- Arrange a survey of the property
Steps his solicitor needs to take:
·
Take client’s instructions and check
ID.
·
Need to send out the client care
letter with details of costs in advance and ensure that Rod is aware of all the
financial expenditure involved in the conveyancing transaction as listed above.
- Investigation
of Title - Ensure that the seller is able to transfer what he has
contracted to sell. Identify whether there are any defects in, or problems
raised by the title which would adversely affect the interests of the
buyer
- Registered Land - Thorough examination of official copies of
entries on register and title plan; Buyer needs to carry out
investigations to discover if there are any overriding interests
affecting the property;
- Unregistered Land - Good root of title (15 years). Examine
carefully each document in the abstract or epitome, checking for any
deficiencies or omissions. Check description of property. Ensure that
there are no incumbrances disclosed by the deeds. Carry out search at
Land Registry.
- Put in place various Searches and Enquiries before contract
- Local Authority search and enquiries
- Coal Mining Search
- Index Map Search
- Land Charges Search
- Other searches dependent upon the location of the property
- Physical search or inspection of property
- Environmental Searches
- Water and Drainage searches
b)
While Rod is acting on your advice, Crystal has been offered a higher price for
the house by Sophie. Is there anything Rod can do to prevent this? No – Gazumping has
occurred. At pre-contractual stage there is no contract so Crystal can accept Sophie’s
offer. Rod can offer a higher price for the house or pull out of the agreement,
c)
Sophie then finds a house that is nearer to her work so decides not to proceed.
Crystal decides to sell the house to Rod, but he says that the market has now
slowed down and is now offering only £420,000. Does Crystal have to accept
this? No this is Gazundering - if house prices
are falling, the purchaser may reduce his offer and Crystal can either accept
or sell to another.
d)
Crystal decides she will accept the new offer of £420,000 provided Rod can
proceed quickly, which he says he can, and the contract is drawn up. Advise
the parties on the formalities required in order for the contract to be valid.
Formation of
Contract:
s.2 Law of Property
(Miscellaneous Provisions) Act 1989:
a) contract must be in writing
b) incorporating all the terms
Wright v Robert
Leonard Developments Ltd [1994] NPC 49
Record v Bell
[1991] 1 WLR 853
c) single document signed by both parties
or two identical documents
e) Four
days after exchanging contracts, the house is extensively damaged by a fire
caused by lightning hitting an electrical out socket. Explain who must bear
the cost of the damage caused by the fire.
No, Rod cannot. When the
contracts are exchanged the party contracted to purchase the estate is referred
to as the CONTRACTUAL PURCHASER and he/she now holds the equitable estate.
The vendor holds the legal
title and the purchaser has a beneficial interest, and a quasi trust is imposed upon the vendor under
the rules in Lysaght v Edwards (1876) 2 Ch D 499
Passing of the risk (Paine v Mellor)
The purchaser bears the risk
if any accident happens to the estate after the exchange of contracts and
should therefore insure against such a possibility.
At the same time,
the vendor cannot treat the estate as entirely their own. If the vendor does
not take reasonable care of the estate, or wilfully damages it, they are liable
to the purchaser in damages ( Clarke v Ramuz (1891) 2 QB 456).
Condition 5.1 of the Law
Society Standard Conditions of Sale provides that the purchaser retains the
risk. The vendor however still owes a duty of care to the purchaser and is
obliged to “transfer the property in the same physical state as it was at the date
of contract.” This duty continues as long as the vendor is entitled to
possession of the property and does not terminate if the vendor vacates the
property before completion.
f)
Following completion, what steps must both Crystal and Rod’s Solicitors take
next?
Seller’s Solicitors following receipt
of the monies on the day of completion need to:
·
telephone the Estate Agents to release the keys to the Buyers.
·
They also need to contact the Buyer’s Solicitors and acknowledge
receipt of the monies and
·
send to them all the relevant documentation such as the Transfer
deed and any other documents of title.
·
Any mortgages over the property need to be discharged and upon
receipt of evidence of discharge, this is to be sent to the Buyer’s Solicitors.
Finally,
·
any Estate Agents fees need to be paid and a letter sent to client
confirming completion has taken place together with the balance sale proceeds (if
any).
Buyer’s Solicitors after sending the
purchase monies needed to complete, they should then:
·
complete the mortgage deed (if applicable) and date it.
·
Payment of stamp duty together with the Stamp Duty Land Transaction
return needs to be sent to HMRC within 14 days of completion.
·
HMRC will then send back a certificate confirming receipt of this
and at that point the Buyer’s solicitor should deal with Registration of title which
will be by submitting an AP1 form within 30 days to HMLR if registered Land or
an FR1 if unregistered land within 2 months
·
Once registration has taken place, a Title information document
showing the registers is sent to the Buyer’s solicitors showing their client’s
title to the property together with any mortgage over it. After checking all
the details are correct, a copy should be forwarded to the buyers and a copy to
the mortgage lenders, if any.
7. Answer
parts a), b) and c) by considering whether the rights claimed are capable of
existing as easements and if so, how were they created. Use relevant case and
statute law to substantiate your answers.
a)
Joel has a lease of a flat on the second floor of a house. He owns a motorbike
and his landlady, Ellie, has always allowed him to store his motorbike in her
garage. Joel’s lease was renewed last month. This week, he received an email
from Ellie saying that there is no longer room in her garage for his motorbike,
so he must remove it. Can Joel argue that he has an easement to store his cycle
in the shed? For each possible easement
b)
Jen is in the process of buying her first home. Rochelle who is selling Sycamore
house to Jen, owns the field next door. There is a clear pathway that runs from
Sycamore house through to Rochelle’s field and out on to the main road. Is
there any way that Jen can argue that she has a right of way over Rochelle’s
field?
c)
Chrishell owned two adjoining plots of land, named La Paz and La Vida. In
January 2023, Chrishell let La Paz to Christine who intended to carry out a
Mexican restaurant business from there. Christine recently discovered that in
order to carry out the business she will need to install a ventilation shaft
that would have to go through Chrishell’s property, La Vida. Is Christine able
to claim an easement to use a ventilation shaft in this scenario?
For each possible easement above go through and
discuss:
i)
Is it capable of
being an easement?
ii)
If so – has it been
acquired?
Is it capable of being an
easement?
For both we need to apply the Re
Ellenborough Park Criteria
·
There must be a
dominant and servient tenement (land)
·
The easement must
accommodate (benefit) the dominant tenement
·
The dominant and
servient tenements must be owned by different persons
·
The easement must be
capable of being the subject of a grant
So we apply the criteria to each
issue
1) Storage in Garage, Right of way over pathway and ventilation shaft
·
Is there a dominant
and servient tenement? Yes DT (land that has
the benefit) ST (land that bears the burden).
·
Does it accommodate
the Dominant tenement? Yes the easement
does Benefit the DT.
o Proximity – the 2 premises land need to be reasonably
close to each other. The plots of land need not be adjacent/ neighbouring –
there needs to be sufficient connection between the right in question and the
particular properties. The greater the separation the more difficult it is to
establish that the right actually does accommodate the dominant tenement. IN
this case the plots of land are sufficiently close.
o Nature of the claim - – One has to
look at whether the dominant tenement has some natural connection with the
estate or whether it confers a personal advantage for the current owner of the
estate. Right to Storage has been recognised as a valid easement.
o
– One has to look at
whether the dominant tenement has some natural connection with the estate or
whether it confers a personal advantage for the current owner of the estate.
With ventilation shaft would seem here that it is more of a personal advantage
for the owners UNLESS you can argue that
land was used for the purposes of a
business such as a restaurant and therefore one could not divorce the land from
the business. Moody v Steggles.
o
·
Owned by different
people? Yes and discuss who owns what
·
Is it capable of
forming subject matter of the Grant? Must ensure that the
right is not excessive.
o Copeland v Greenhalf [1952] Ch 488
o Wright v Macadam [1949] 2 KB 744
o London and Blenheim Estates Ltd v Ladbroke Retail Parks Ltd [1992] WLR 1278
A claim to an easement could be defeated if
the claim amounts to an excessive use of the ST. In Copeland v Greenhalf a
person claimed to have an easement to store vehicles on adjoining land.
Although a right to deposit trade goods on another person’s land had previously
been recognised as constituting an easement, in the present case the claim
failed because, on the facts, it was regarded as being too extensive a use of
the servient land to amount to an easement. On the other hand, in the case of
Wright v Macadam which was not cited in Copeland v Greenhalf, the right to
store coal in a shed was held to be an easement. The case of London and
Blenheim Estates Ltd v Ladbroke Retail Parks Ltd sought to reconcile the inconsistency of the
previous cases where Judge Baker QC concluded that the matter was one of
degree and that the more extensive the use, the less likely it is that the
claim would be upheld as being an easement.
Provided the use is not extensive then the right
to park is capable of existing as an easement.
If capable of being an easement
then need to ask - Has the easement been acquired?
Easements can be created either
expressly or impliedly.
When it is created expressly,
it can either be by express grant or express reservation
1. Express grant and Express reservation
An easement is expressly granted when
the owner of the potential ST gives (grants) an easement over that land to the
owner of what will become the dominant tenement. An easement is expressly
reserved when the owner of the potential dominant land keeps (reserves) an
easement for the benefit of the land kept, operating over other land.
If the grant is by deed or reg’d
disposition (unreg’d/reg’d land), the easement is legal. If it is by
enforceable written contract, the easement is equitable.
So SOME FORM of formality
needed. No evidence of this here.
2. Where there is no such formality,
easement can be created impliedly in 4 ways:
a)
Easement A – Storage - S62 LPA
1925 – On conveyance s.62 transfers with the land all benefits which are
attached to it.
“A conveyance of land shall be deemed
to include and shall by virtue of this Act operate to convey with the land, all
buildings, erections, fixtures…liberties, privileges, easements, rights and
advantages whatsoever, appertain or reputed to appertain to the land, or any
part thereof…”
·
Operates on
conveyance and lease.
·
Only if the right is
capable of existing as an easement (so must fulfil Re Ellenborough)
·
When lease was
renewed - s62 would operate and the Storage
easement would be read into the lease unless there was a contrary intention or
unless operation of s.62 has been excluded in the lease
B) Rule
in Wheeldon v Burrows – Would apply here
The rule states that where a person
transfers part of his land to another, that transfer impliedly includes the
grant of all rights in the nature of easements (quasi-easements) which the
seller enjoyed and used prior to the transfer for the benefit of the part
transferred, providing that those rights are either continuous and apparent or
reasonably necessary for the enjoyment of the part transferred.
This rule is subject to conditions:
1) they were continuous and apparent–
The quasi easement must have been either continuous and apparent or necessary
for the reasonable enjoyment of the part granted. A QE is continuous and
apparent if it is visible on inspection of the servient land over which it
exists, or so obvious that its use for the benefit of the part sold is beyond
doubt.
2) were necessary to the reasonable
enjoyment of the land sold
3) had been and were in use by the
seller for the benefit of the part sold.
Rule can be expressly excluded, where
the seller stipulates that the only easements granted are those expressly
mentioned in the sale or lease. (exclude implied grant of easements in a
conveyance)
C) Easement C - Common
Intention - the easement has arisen because of the joint agreement of the
seller and purchaser at the time of the purchase. Was this easement agreed to
at the beginning of the lease?
3. Prescription – Won’t apply here
as permission has been given.
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