Land Law PDF Past Paper

Land Law Contents Land Law................................................................................................................................................. 1 Unit 1: Third Party Rights and Interests & Fixtures and Chattels................................................. 3 Definition of Land............................................................................................................................ 3 Bernstein of Leigh v Skyviews & General Ltd QB 479...................................................... 4 Fixtures and Chattels....................................................................................................................... 4 Berkley v Poulett & Ors | 1 EGLR 86................................................................................ 4 D’Eyncourt v Gregory LR 3 Eq 382................................................................................... 5 Leigh v Taylor AC 157....................................................................................................... 6 Elitestone Ltd v Morris and another 2 All ER 513............................................................ 6 Botham v TSB Bank plc (1997) 73 P & CR D1.............................................................................. 6 Ownership of Land.......................................................................................................................... 6 Freehold Estate........................................................................................................................... 7 Leasehold Estate......................................................................................................................... 7 Trusts and Equitable Interests in Land............................................................................................ 7 Types of Equitable Interests Where No Trust is Involved............................................................ 8 Third Party Rights........................................................................................................................ 8 Statutory Rights in Land............................................................................................................ 10 Third Party Rights Explained......................................................................................................... 11 Legal Rights............................................................................................................................... 11 Equitable Rights:....................................................................................................................... 11 Statutory Rights:........................................................................................................................ 12 Summary of Key Differences:.................................................................................................... 12 Practical Example:..................................................................................................................... 13 Transfer of Land............................................................................................................................. 13 Structure for written answers................................................................................................. 14 Unit 2: Enforceability of Third-Party Interests.......................................................................... 16 The Unregistered System.............................................................................................................. 16 Unregistered Conveyancing...................................................................................................... 16 Disadvantages of the unregistered system............................................................................... 16 Enforceability of Third-party Rights.............................................................................................. 16 Land Charges System (since 1926):........................................................................................... 17 Pre1926 Rules........................................................................................................................... 18 Removal of Third-Party Interests.............................................................................................. 20 Enforceability under the unregistered system.......................................................................... 22 Summary....................................................................................................................................... 22 The Registered System.................................................................................................................. 23 Unit 3: Registered System (Including Overriding Interests)....................................................... 25 Registered Land System................................................................................................................ 25 Conveyancing in Registered Land.............................................................................................. 25 Proof of Ownership and the Register........................................................................................ 25 Third-Party Interests and Their Categories................................................................................... 25 (a) Registrable Dispositions....................................................................................................... 25 (b) Interests Affecting a Registered Estate (IAREs).................................................................... 25 (c) Overriding Interests............................................................................................................. 26 Overriding Interests in Detail........................................................................................................ 26 Legal Leases (Schedule 3, Paragraph 1)..................................................................................... 26 Legal Easements (Schedule 3, Paragraph 3).............................................................................. 26 Interests of Persons in Actual Occupation (Schedule 3, Paragraph 2)...................................... 26 Important Cases:....................................................................................................................... 27 Overreaching................................................................................................................................. 27 Practical Considerations................................................................................................................ 27 Impact on Mortgages and Disputes:......................................................................................... 27 Summary....................................................................................................................................... 27 Chapter 11 of the Law Commission Consultation Paper 2016 (No 227)....................................... 28 Explanation of Schedule 3 Paragraph 2 of the Land Registration Act 2002 (LRA 2002)............... 29 Case Law on the Meaning of "Actual Occupation"................................................................... 29 Conclusion................................................................................................................................. 31 Unit 4: Co-ownership.............................................................................................................. 32 Trust Basics and Key Roles............................................................................................................. 32 Statutory Rules under Trusts of Land and Appointment of Trustees Act (TLATA) 1996................ 32 Trustees’ Powers....................................................................................................................... 32 Beneficiary Rights...................................................................................................................... 32 Court Resolution of Disputes.................................................................................................... 32 Co-ownership................................................................................................................................ 33 Definition................................................................................................................................... 33 Express and Implied Trusts of Land........................................................................................... 33 Forms of Co-ownership: Joint Tenancy vs. Tenancy in Common.............................................. 33 Legal and Equitable Interests in Co-ownership......................................................................... 33 Severance of Joint Tenancy (Equitable Interest Only)............................................................... 33 Implied Co-ownership: Resulting and Constructive Trusts....................................................... 34 Sale and Overreaching.............................................................................................................. 34 Summary of Key Points............................................................................................................. 34 Unit 1: Third Party Rights and Interests & Fixtures and Chattels Definition of Land "Land includes land of any tenure, and mines and minerals, whether or not held apart from the surface, buildings or parts of buildings (whether the division is horizontal, vertical or made in any other way) and other corporeal hereditaments". (Law of Property Act 1925, section 205(1)(ix)). "Land includes land of any tenure": This means that "land" covers all types of ownership or rights to land. Whether the land is freehold (you own it outright) or leasehold (you have it for a set period), it’s all considered "land" under the law. "Mines and minerals, whether or not held apart from the surface": This means that the definition of "land" also includes what’s beneath the surface, like mines or minerals, even if they are owned separately from the land on the surface. So, someone could own the ground above and someone else could own the resources below. o Most unworked coal belongs to the Coal Authority (Coal Industry Act 1994). o Treasure found on or after September 24, 1997, belongs to the Crown (Treasure Act 1996). "Buildings or parts of buildings (whether the division is horizontal, vertical or made in any other way)": Land also includes buildings or sections of buildings. Whether the building is divided horizontally (like different floors) or vertically (like different apartments in a block), it still counts as part of the land. "Other corporeal hereditaments": This covers any other physical, tangible things that come with the land, like trees or fences. "Corporeal hereditaments" are things you can see and touch that are permanently attached to the land. o Corporeal = tangible. o Incorporeal = intangible. Bernstein of Leigh v Skyviews & General Ltd QB 479 Issue: Did Skyviews & General Ltd commit trespass by flying over Bernstein’s property to take an aerial photograph of his home without his consent? Rule: In English law, trespass to land involves unlawful interference with land in the possession of another. However, the rights of a landowner do not extend indefinitely into the airspace above their land. According to Lord Bernstein, a landowner’s rights in the airspace are limited to the height necessary for the ordinary use and enjoyment of their land. Application: In this case, Skyviews & General Ltd flew an aircraft over Lord Bernstein’s land to take aerial photographs for commercial purposes. Bernstein claimed this was a trespass. However, the court ruled that the overflight was at a height that did not interfere with Bernstein’s use or enjoyment of his land. The court established that a landowner’s rights in the airspace above their property are restricted to what is necessary for the reasonable use of the land. Conclusion: The court concluded that Skyviews & General Ltd did not commit trespass because the flight was conducted at a height that did not infringe upon Bernstein’s rights to the reasonable use and enjoyment of his property. Thus, Bernstein's claim for trespass failed. Fixtures and Chattels Fixtures Chattels Part of the land or building e.g. toilets Item of moveable property e.g., sofa, car (LoPA 1925) o Fixtures and chattels are normally dealt with within the contract between a buyer and seller. o An item cannot be removed by the seller unless agreed upon by the buyer & contract provides for the removal. ▪ If the contract is silent on this, there are 2 tests that must be considered to decide if the item is a fixture or chattel (Berkley v Poulett ). The method & degree of annexation. The object and purpose of the annexation. Berkley v Poulett & Ors | 1 EGLR 86 Issue: Were certain items on the estate, such as a statue, paintings, and a sundial, considered fixtures (part of the land) or chattels (personal property) under property law? The buyer (Berkley) argued that these items were fixtures and should remain with the property, while the seller (Lord Poulett) considered them chattels and sought to remove them. Rule: The distinction between fixtures and chattels depends on two factors: 1. Degree of annexation: How firmly is the item attached to the land or building? Items more firmly attached are likely to be considered fixtures. 2. Purpose of annexation: Why was the item placed or attached? If it was attached to improve the property’s enjoyment, it’s likely a fixture. If it was placed for the item's own enjoyment (such as decoration), it is more likely a chattel. Application: Statue and Sundial: Although both were physically attached to the land, the court considered their purpose. The statue and sundial were placed for decoration, not to improve the land itself. Therefore, they were determined to be chattels, not fixtures. Paintings: The paintings were hung on the walls, but not integrated into the structure of the building. The court applied the same reasoning: their purpose was to display art rather than improve the house itself, making them chattels. The court emphasized that purpose of annexation is more significant than the degree of attachment. Conclusion: The Court of Appeal ruled that the statue, sundial, and paintings were chattels, not fixtures. Therefore, they did not form part of the property and could be removed by Lord Poulett. The key takeaway is that the purpose of attachment, rather than just the physical attachment itself, is critical in determining whether something is a fixture or a chattel. For a chattel to become a fixture, there must be some degree of physical annexation to the land. If there is some attachment, a presumption arises that the chattel has become a fixture. This presumption can be rebutted by applying the Poulett tests. 2 main exceptions to the rule that you cannot remove fixtures: 1) A person who is selling land may include a provision in the contract for sale that gives a right to remove fixtures. 2) The person who has affixed the object is a tenant. o A tenant does have the right, in certain circumstances, to remove fixtures known as ‘tenant’s fixtures’, that is, trade, agricultural or ornamental fixtures. Further case law on fixtures and chattels: D’Eyncourt v Gregory LR 3 Eq 382 Issue: Were certain items, such as statues and tapestries, considered fixtures or chattels in the context of property law? Specifically, whether the decorative items in a stately home should be considered part of the land (fixtures) or personal property (chattels). Application: In this case, the statues and tapestries were considered part of the overall design and character of the home, even if they were not physically attached in the same way as fixtures like doors or windows. The court held that items which contribute to the architectural design and ornamental character of the property should be considered fixtures. Leigh v Taylor AC 157 Issue: Were valuable tapestries hung on the walls of a house considered fixtures or chattels? The executors of the tenant’s estate argued that the tapestries were chattels, while the landlord claimed they were fixtures and part of the property. Application: The tapestries were hung on the walls by the tenant for their own enjoyment and not as a permanent improvement to the house. Although they were attached to the walls, they were hung for decorative purposes and could be removed without damaging the property. Thus, chattels Elitestone Ltd v Morris and another 2 All ER 513 Issue: Was a bungalow resting on concrete blocks (but not fixed to the land) a fixture (part of the land) or a chattel (movable property)? Application: The bungalow was built in such a way that it could not be removed without being destroyed. This meant it was intended to be a permanent structure, even though it rested on concrete blocks and was not fixed to the land in the usual sense. Therefore, fixture. Botham v TSB Bank plc (1997) 73 P & CR D1 Issue: Were various items in a repossessed home, such as kitchen appliances, carpets, and curtains, considered fixtures or chattels? Application: The court considered the purpose and degree of attachment of various household items: Fixtures: Items like bathroom fittings, kitchen units, and sinks were considered fixtures because they were permanently attached to the property and were intended to remain in place. Chattels: Items like carpets, curtains, and white goods (e.g., washing machines, refrigerators) were considered chattels because they were easily removable and not intended to be part of the property. The distinction was based on the degree of attachment and the intended permanence of each item. Ownership of Land o Land law dates back to medieval times – 1066 and William the Conqueror – as this was a landbased economy. o Presently, all land in England and Wales is actually owned by the Crown – if you ‘own’ land, you simply have the right to enjoy it for a period of time. o Period = ‘the estate’. ▪ Longest estate = freehold (forever) Owner of a freehold can create shorter estates, called leaseholds ▪ Leaseholds last for the duration agreed by the freeholder and leaseholder at the outset. Freeholder = Landlord. Leaseholder = tenant. Law of Property Act 1925 Designed partly to make ownership and transfer of land simpler. Protects individuals’ rights of land they do not own. Section 1, Subsection 1: the only estates in land that can be created or conveyed at law are: o An estate in fee simple absolute in possession (freehold). o A term of years absolute (leasehold). Freehold Estate ‘Fee’ = can be inherited. ‘Simple’ = by any class of heir (male or female). o If no will, land is passed on via intestacy rules. ‘Absolute’ = not determinable or conditional. ‘In possession’ = for enjoyment now, not future. If you have a ‘fee simple absolute in possession’, you have outright ownership of the land. Freeholds only come to an end if someone dies leaving no will and no heirs to pass it onto; then it passes to the Crown (treasury department) and sold. Leasehold Estate Inferior to freeholds as for limited duration. Length of term of lease may be anything e.g. 1 week, 1 year or 999 years – during this time, the land can be sold, given away by tenant or inherited by tenants’ heirs. Once the lease ends, the land goes back to landlord (freehold owner). ‘Absolute’ does not add anything to the meaning of the term of years – a lease can be terminated so not absolute in the same way as above. Possible to have 2 legal estates in the same piece of land at the same time. o When landlord creates leasehold, he retains his freehold estate but loses right to occupy and use land. o In return, tenant pays rent. Trusts and Equitable Interests in Land Trusts are a common structure in land ownership, where two types of ownership exist: legal ownership and equitable ownership. The person who holds the legal title is called the trustee, while the person who benefits from the property (i.e., the beneficial owner) is the beneficiary. Trustee (Legal Estate): The trustee has formal legal ownership. They manage the land but must do so in the best interests of the beneficiary. The trustee’s rights are recognised under common law. Beneficiary (Equitable Interest): The beneficiary doesn’t own the land legally but has a right to benefit from it. This is an equitable interest, meaning it is recognised by equity (a body of law concerned with fairness). The beneficiary may receive income from the land or have the right to use it. The legal owner’s rights are stronger in terms of enforceability against third parties, whereas equitable interests are more about fairness and can be harder to enforce in certain situations. Types of Equitable Interests Where No Trust is Involved Equitable interests in land can arise in other situations, even without a trust. Here are the main types: Restrictive Covenants: This is an agreement where one landowner (the covenantor) agrees not to do something on their land for the benefit of another landowner (the covenantee). These are typically created during the sale of a piece of land. o Example: If a landowner agrees not to build any commercial buildings on their land, benefiting the neighbor’s property, this would be a restrictive covenant. o Importantly, restrictive covenants are equitable interests, meaning they are only enforceable in equity and not considered full legal interests. Estate Contracts: This is a contract for the purchase or lease of land. Once the contract is signed, the buyer has an equitable interest in the land, even though they do not own it legally until the sale is completed. o Example: Jim signs a contract to sell his house to Bill. Even before the final sale, Bill has an equitable interest in the house. Legally, Jim is still the owner until the sale is completed, but Bill’s equitable interest ensures that he is protected in equity. Equitable Easements: An easement is a right to use someone else’s land, such as a right of way. Some easements can be legal (if they meet certain formalities), but if they don’t meet these formalities, they are recognised as equitable easements. o Example: If Jim gives Andy the right to use a pathway across his land, but the formalities to create a legal easement are not followed, Andy will have an equitable easement, recognised only in equity. Purely equitable rights require signed writing s53(1)(a) LPA 1925. No formalities are required to create an implied trust interest. Third Party Rights Rights that one person has over land of another. The right is a ‘burden’ on the landowner’s land = an “incumbrance”. Easement = a right over a neighbour’s land. Covenant = a promise which is normally contained in a deed. o Restrictive covenants = limitations e.g., “not to use property except as a dwelling and not to cause any nuisance”. ▪ Do not cost owner anything to comply with them, but normally restrict the owner’s enjoyment of the land in some way. o Positive covenants = normally cost money to comply with them e.g. to maintain fences and contribute to maintenance of estate roads. Estate contract = equitable interest – can be enforced in court for specific performance (e.g. give him the house he has bought). Mortgage = “a charge by way of legal mortgage” – gives bank/building society third party rights over land – an incumbrance. Married couples – statutory right of occupation for a spouse or civil partner in matrimonial home while both parties are still married (Section 30, Family Law Act 1966) Not a proprietary right (e.g. no right to money from house) but has right not to be made homeless. Spouse will be entitled to money if they have made a financial contribution towards it (e.g. paid towards mortgage). Classification of Third Party Rights Legal, equitable or statutory. Only 5 interests that are capable of being legal (listed in S1, subsection 2 of LoPA 1925). o 2 most important – an easement and a mortgage. ▪ Easement: Only capable of being legal if they are for a duration equivalent to one of the two legal estates, ie an estate in fee simple absolute in possession (freehold) or for a term of years absolute (leasehold). Only easements lasting forever or for a fixed duration are capable of being legal (i.e., an easement for an uncertain duration is not capable of being legal). It is only an equitable interest if no time is stated (S1, subsection 2). Only those easements that comply with the requirements of s1(2) LPA will be capable of being legal. o An easement for an uncertain duration (e.g., until the land is needed for development) can never be legal – they fall within s1(3) LPA and are only equitable. o Easements for a set term (either forever/freehold or a fixed term/leasehold) can be legal. ▪ These required to be created in signed writing (S.53 LPA). Statutory right of occupation (Section 30, Family Law Act 1996). If an estate or interest in land does not fall under a legal interest, it is an equitable interest. There are two types of equitable interests 1) The rights of beneficiaries under a trust 2) Equitable interests in land where no trust is involved. Where there is a conflict between common law and equitable rules, the equitable rules will prevail. Where there is a trust of land, the legal estate is held by the trustee and the equitable interest is held by the beneficiary. Statutory Rights in Land Statutory rights arise from laws created by Parliament, rather than through agreements between private parties. One significant example in the context of land law is: Home Rights (Family Law Act 1996): A nonowning spouse may have the right to occupy the family home even if they don’t legally own it. This right is called a home right and gives a spouse the right to live in the property as long as the couple is married, and the home is considered the matrimonial home. These statutory rights are different from equitable interests because they are created by legislation rather than private agreements or courtimposed fairness. Licenses in Land A license gives someone permission to use land but does not grant any legal or equitable interest in it. Licenses are more temporary and personal. They don’t "bind" the land, meaning they don’t pass to new owners if the land is sold, and they can be revoked. Types of Licenses: o Bare License: This is a license given without any payment or other form of consideration. It’s essentially just permission to do something on someone’s land, such as allowing a neighbour to walk across your property. ▪ Example: If you allow your friend to come into your garden to retrieve a ball, that’s a bare license. You can revoke it at any time. o Contractual License: This type of license is supported by a contract, usually in exchange for money or other benefits. If you buy a movie ticket, you have a contractual license to enter the cinema and watch the movie. If the license is revoked without reason (e.g., you are thrown out without cause), you may be entitled to compensation. ▪ Example: Staying at a hotel is a contractual license. You pay for a room, and the hotel permits you to stay in it for a specific period. Creating and Transferring Legal and Equitable Interests Legal Interests: To create a legal interest in land (such as transferring ownership or granting a lease), certain formal steps must be followed. This typically involves the use of a deed. A deed is a formal legal document that transfers ownership and must be signed, witnessed, and delivered to be valid. o If these formalities aren’t followed, the interest may not be legally valid and may only be recognised in equity (meaning it has less legal protection). Equitable Interests: Equitable interests don’t require as many formalities but still need to be documented. For instance, creating an equitable interest in a trust or easement generally requires written documentation that is signed by the involved parties. If a legal interest is created without the proper deed, equity can "save" it, meaning it can still be valid as an equitable interest. o Exception for Short Leases: A lease for three years or less doesn’t always need a deed. It can even be created orally, provided that the tenant has immediate possession and pays a reasonable rent. In land law, the concept of "clean hands" is part of the broader principle of equity. It refers to the idea that if someone is seeking an equitable remedy (such as an injunction or specific performance), they must have acted fairly and in good faith in the matter at hand. If the person seeking the remedy has acted unethically or in bad faith, they are said to come to the court with "unclean hands," and the court may refuse to grant them equitable relief. __________________________________________________________________________________ _______ Third Party Rights Explained Land law has three types of third-party rights: legal, equitable, and statutory. Each type of right affects how land can be used, transferred, or occupied, and each has different requirements for creation and enforcement. Legal Rights Definition: Legal rights are rights that are fully recognised and enforceable under common law (law passed by courts or statutes). They have the highest level of protection and bind everyone, including future owners of the land. Examples: o Freehold and leasehold estates: Ownership or leases over land for a certain number of years (e.g., 99year lease). o Legal easements: Rights of way or rights to use another's land, such as a right of passage over a neighbour’s property. o Mortgages: A legal interest held by a lender over a borrower’s property as security for a loan. Creation: Legal rights must usually be created by a formal legal document called a deed, which is signed, witnessed, and delivered. The key formalities are set out in the Law of Property Act 1925 (LPA 1925). Enforceability: Legal rights are enforceable against everyone, including third parties and future landowners. Once registered, they automatically "bind the land." Equitable Rights: Definition: Equitable rights arise when strict legal requirements aren't fully met but fairness dictates that the rights should be recognised. These rights are enforceable in the courts of equity, which focus on fairness rather than the rigid application of law. Examples: o Restrictive covenants: Agreements where one landowner restricts the use of their land for the benefit of another (e.g., no building or using land for commercial purposes). o Equitable easements: Easements that do not meet the strict formalities required for legal easements. o Estate contracts: Rights gained when a person has a contract to purchase or lease land but hasn’t yet completed the transaction. The buyer has an equitable interest in the land even before the sale is finalised. o Equitable mortgages: Where the formal requirements for a legal mortgage haven’t been met, but equity recognizes the lender's interest in fairness. Creation: Equitable rights do not need the same strict formalities as legal rights. A contract or written agreement is often sufficient, but it must generally comply with certain requirements (e.g., be in writing and signed). Enforceability: Equitable rights are enforceable against future landowners, but only if they are aware of the rights or if the rights are registered. They offer less protection than legal rights because they are not automatically binding on everyone. Statutory Rights: Definition: Statutory rights are rights granted or imposed by legislation, such as rights under family law or housing acts. These rights are created by statutes (laws passed by Parliament) rather than through agreements or contracts. Examples: o Home rights (under the Family Law Act 1996): A spouse who does not own the family home may have a statutory right to live in the property as long as the marriage subsists, even if they don’t legally own or have a share in it. o Rights under the Civil Partnership Act 2004: Similar to home rights for civil partners. o Tenants' rights (under housing acts): Tenants may have statutory rights regarding rent, eviction, and repairs that affect the land they occupy. Creation: Statutory rights are created automatically by law and do not require a deed or contract. They come into existence because the law says they do, often to protect vulnerable parties like nonowning spouses or tenants. Enforceability: These rights are enforceable as long as the statutory requirements are met. For example, a spouse’s right to occupy the family home is enforceable as long as they are married, and the home remains the matrimonial home. Summary of Key Differences: Legal Rights: Most secure and enforceable rights in land, created through strict legal formalities like deeds. They bind everyone, including third parties. Equitable Rights: Rights recognised in fairness where legal formalities were not met. They are binding but offer less protection than legal rights and often require notice or registration to be enforceable against third parties. Statutory Rights: Rights created by specific laws to protect certain groups or ensure fairness (e.g., home rights for spouses). They are automatically enforceable when statutory conditions are satisfied. Practical Example: Legal Right: Alice buys a house and receives a deed transferring ownership. Her legal ownership of the property is fully enforceable against anyone who tries to claim it. Equitable Right: Bob signs a contract to buy a house from Carol but hasn’t yet completed the purchase. Bob has an equitable interest in the property, meaning the courts would treat him as the owner in equity, even if the legal title hasn't been transferred yet. Statutory Right: Dave lives in a house owned by his wife, Emily. Even though Dave's name isn't on the deed, he has a statutory right to stay in the home under the Family Law Act as long as they are married, and it remains their family home. In short, legal rights are the strongest and most enforceable, equitable rights offer protection based on fairness, and statutory rights provide specific protections established by law. __________________________________________________________________________________ _______ Transfer of Land Process is called conveyancing. 2 distinct stages: 1) Leads up to the exchange of contracts. o This is when the buyer and seller agree to the sale, and the contract becomes binding. At this point, the buyer has an equitable interest in the property. 2) Leads up to completion. o This is when the legal ownership of the land is transferred through a deed, and the buyer takes full possession of the property. Agreement between buyer and seller isn’t legally binding until they’ve signed contract, so either can withdraw prior to this. Buyers will often want to know in their preagreement searches: Ownership of fences & walls around the property. Whether property is connected to the public water supply & public drains. Whether there is gas, electricity & cable TV. What rights the neighbours have over property (e.g. rights of drainage, rights to light). Whether the roads are public or private. If there was planning permission for any building or extensions. If the building is structurally sound. When contracts are exchanged, ownership of the property does not pass to the buyer; this simply shows an agreement that the buyer will buy the property for a set price on a specified date the date of completion. o Normally 4 weeks after exchange of contracts. o Deposit gets paid with exchange of contracts. o Contract gives buy a claim on the land which can be enforced by courts if seller refuses o sell on completion date. o Deed is given on completion date. Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 Ensures that no one can enter into a contract for the sale of land by mistake. You cannot make a binding verbal contract for the sale of land. A binding contract for the sale of land can only be created in writing. It must contain all the terms agreed between the parties (e.g., address of the property, price, completion date, and it must be signed by both the buyer and the seller). Deeds A valid deed must: Comply with section 1 of the Law of Property (Miscellaneous Provisions) Act 1989. The document must clearly state that it is intended to be a deed. It must be signed by the parties, and the signatures must be witnessed. It must be delivered. o A deed used at completion is a transfer. Structure for written answers Step 1: Identify the type of third-party right being claimed. Step 2: Decide whether the right is capable of being legal. This is dependent on whether the rights have been created correctly. Step 3: Decide whether the right has been created by the correct formalities. Even if it is capable of being legal, it is only recognised as such if it has been created using the correct formalities. o S52 LPA 1925: “All conveyances of land or any interest therein are void for the purpose of conveying or creating a legal estate unless made by deed”. Step 4: Classify the right as either legal, equitable or statutory. Legal – s1(1) or 1(2) of LPA 1925 Equitable – s1(3) LPA 1925 Statutory s30 FLA 1996 For chattel vs fixture arguments, you do not have to have a definitive answer. Use case law and argue both sides if appropriate. Unit 2: Enforceability of Third-Party Interests The Conveyancing process is divided into two stages: 1. Contract Stage: The parties agree to sell/buy land. 2. Deed Execution: Transfer of ownership through a deed. The Unregistered System Before 1925, land in England and Wales was part of the unregistered land system. Even today, 40% of land remains unregistered. The Land Registration Act (LRA) 1925 introduced the registered system and the LPA 1925 codified it. Unregistered Conveyancing Proof of Ownership: Buyers need to see a chain of title (a set of documents called an epitome of title) to prove ownership. o Typically, sellers must show 15 years of unbroken title deeds to prove legal ownership. The deed that transfers land from seller to buyer is called a conveyance. Disadvantages of the unregistered system Risk of forged title deeds. Missing documents or important information. Timeconsuming and costly to verify ownership through old documents. Enforceability of Third-party Rights How you decide whether a third-party right binds the land (and therefore anyone who buys that land) differs depending on whether you are dealing with an unregistered or a registered title. Generally, all that is necessary is to consider the statutory rules found in the Land Charges Act (LCA) 1972 (replaced LCA 1925). LCA 1972 does not apply to all third-party interests. If it is not covered, you must apply the rules that operated before the LCA 2925 came in “pre1926 rules”. Land Charges System (since 1926): Some third-party rights (like estate contracts, restrictive covenants, equitable easements) must be registered in the Land Charges Register (a register of 3rd party rights not the same as the Land Registry). Failure to register these rights means a buyer may not be bound by them. Effect of Registration: Once registered, third-party rights are enforceable, even if the buyer doesn’t know about them. If not registered, the buyer may take the land free of those rights. o The person with the interest should register it against the owner of the land who will be burdened by it (LCA 1972, S3). o To bind a purchaser, the land charge must be registered by the date of completion of the sale. ▪ ‘Purchaser’ does not include someone who has been gifted the land; a giftee is subject to all third-party rights, whether registered or not. The third-party rights that are registrable at the Land Charges Department are listed in s 2 of the LCA 1972. The key classes are as follows: C(iv) an estate contract D(ii) a restrictive covenant D(iii) an equitable easement F a home right C(i) puisne mortgage Midland Bank Trust Co Ltd v Green 1 AC 513 Issue: The main issue was whether a family arrangement and the sale of a farm by the father to his wife, at a significant undervalue, was valid and enforceable against the son who had an option to purchase the farm but had not registered the option under the Land Charges Act 1925. Rule: The key legal rule revolves around Section 13(2) of the Land Charges Act 1925, which provided that an option to purchase land, such as the one held by the son, must be registered as a land charge to be enforceable against a purchaser of the land. If it was not registered, the purchaser could take the land free from the option. Application: In this case, the son had an option to purchase the farm, which he failed to register as a land charge. The father sold the farm to his wife for a nominal sum, which was clearly below the market value, in what was argued as a family arrangement. The son challenged this sale, arguing that it was not done in good faith because of the extremely low price. However, the court applied the principle under the Land Charges Act 1925 strictly. The House of Lords held that even though the price paid for the farm was nominal and the sale seemed like a family arrangement, it was not fraudulent in law. The court reasoned that the Land Charges Act made no distinction between a bona fide purchaser for full value and one for nominal value. Since the son's option had not been registered, the sale was valid, and the wife took the land free from the son’s option. Conclusion: The House of Lords concluded that because the option was not registered as required by the Land Charges Act, the son’s option to purchase was not enforceable against the wife. Thus, the wife took the land free from the unregistered option, and the sale was upheld despite the fact it was made at a nominal price. This case reaffirmed the strict application of land registration laws, emphasising the importance of registering interests in land to protect them against future purchasers. Pre1926 Rules Legal Interests: Always bind the purchaser, regardless of knowledge of it. Equitable Interests: Bind the purchaser unless they are "equity’s darling" (a bona fide purchaser for value without knowledge of the right). If an interest is listed in the LCA 1972 then it must be registered and if it isn’t, it does NOT bind the purchaser, even if they are aware of it. If it is not capable of being registered, it will bind everyone except Equity’s Darling. Equity’s Darling To have equity’s darling: 1. Bona Fide Buyer: The buyer must act in good faith, meaning they should not commit fraud. 2. Purchaser Definition: A purchaser receives property through a transaction, like buying or receiving it as a gift. They aren't considered purchasers if they inherit it through the rules of law (e.g., intestacy or bankruptcy). 3. Bought for Value: The buyer must give something valuable in return, like money, land, stocks, marriage, or paying a debt. It doesn’t have to be full value. 4. Legal Estate: The buyer must acquire a specific legal interest in the property, such as owning it outright (fee simple) or for a set number of years (lease). 5. No Notice: The buyer must not know about any conflicting equitable interest in the property. This ensures that a buyer has acted correctly and in good faith when purchasing the property. The consideration of this is also known as doctrine of notice. Types of Notice o Actual Notice: Buyer knows about the third-party right (not counted if they have heard vague rumours of it). o Constructive Notice: Buyer should have known about the right by making reasonable inquiries (LPA 1925, s199(1)). o Section 44(1) of the LPA 1925 gives the purchaser the right to inspect the seller’s title deeds back to a good root of title, which is, unless otherwise provided in the contract, at least 15 years old. o Imputed Notice: Buyer’s solicitor knows about the right, which counts as the buyer knowing. Kingsnorth Finance Co Ltd v Tizard 1 WLR 783 Issue: The issue was whether a purchaser (Kingsnorth Finance) was bound by the beneficial interest of Mrs. Tizard (the estranged wife), even though her interest was not registered, and she was not living fulltime at the property. Specifically, the case addressed whether the purchaser had actual or constructive notice of her interest. Rule: The case applied the principle that a purchaser will be bound by an equitable interest in land if they have actual or constructive notice of the interest. Under Section 199(1)(ii)(a) of the Law of Property Act 1925, constructive notice is the knowledge that a reasonable person would have discovered by making proper inquiries. Application: In this case, Mr Tizard held the legal title to the house, but Mrs Tizard had a beneficial interest due to contributions she made to the household. Although the couple was estranged and Mrs. Tizard did not live there fulltime, she frequently visited the house, leaving belongings behind. Kingsnorth Finance failed to conduct thorough inspections and inquiries about Mrs Tizard’s situation. Despite observing signs that another person lived there (e.g., children’s belongings and other evidence of Mrs. Tizard's presence), they did not follow up properly. The court found that Kingsnorth Finance had constructive notice of her interest because a more diligent inquiry would have revealed her beneficial interest. Conclusion: The court held that Kingsnorth Finance was bound by Mrs. Tizard’s equitable interest because they had constructive notice of her presence. This case highlights the importance for purchasers or lenders to conduct thorough inspections and inquiries into who might have a beneficial interest in the property, even if the legal title is held by another party. The LCA 1972 does not cover all third-party incumbrances, including: (a) equitable interests arising under a trust. (b) most legal interests (e.g. legal leases, legal easements, legal mortgages protected by title deeds); and (c) pre1926 equitable interests (including restrictive covenants and equitable easements created before 1 January 1926). So far as these are concerned, the old rules as to enforceability must be applied. Removal of Third-Party Interests If a buyer finds out about a third party’s interest in the property before buying, they may try to remove it before completing the purchase. If the interest is a lease, easement, mortgage, or covenant, the buyer can negotiate with the person who holds that interest to have it removed, often in exchange for payment. For example, the seller may pay off a mortgage, or the buyer may pay to remove a covenant. If the third-party refuses to remove their interest, the buyer may need to rethink purchasing the property. Overreaching If a buyer finds an equitable interest in a property under a trust, they can use overreaching to remove that interest. While a legal owner can sell the property, the beneficiaries' interests under the trust must be considered. When a buyer meets the conditions for overreaching, they take the property free from the beneficiaries' interests. Instead, the beneficiaries' rights are transferred to the sale proceeds. To overreach a beneficial interest: 1. The buyer must buy the legal estate in the property. 2. The buyer must pay the purchase money to all trustees (with a minimum of 2 trustees/2 legal owners). 3. There must be at least two trustees or a trust corporation. Not possible to overreach where there is only 1 owner. Overreaching is a legal concept in property law that allows certain rights (usually rights held by beneficiaries under a trust) to be moved from the property itself to the sale proceeds when the property is sold. Scenario: Suppose you have a property held in trust for two beneficiaries. This means the beneficiaries have rights over the property, such as the right to live in it or receive money from its use. Selling the Property: If the property is sold, normally the beneficiaries' rights could make the sale difficult or impossible without their consent. However, overreaching allows these rights to be "moved" away from the property. Effect of Overreaching: Instead of the beneficiaries having rights over the property itself, their rights now attach to the money made from the sale. So, the buyer gets the property free of the beneficiaries' rights, and the beneficiaries receive the money from the sale instead. Conditions for Overreaching: For overreaching to happen, the sale usually needs to be made by two trustees or a trust corporation. This protects the beneficiaries by ensuring that their rights are properly transferred to the sale proceeds. Overreaching allows certain rights (like beneficial ownership) tied to a property to be transferred to the money made from selling the property. This helps ensure that buyers get a clear, unencumbered title to the property. Enforceability under the unregistered system Summary Proving ownership in unregistered land relies on title deeds. Third-party rights need to be registered as land charges to bind buyers. Some rights, like legal interests, bind everyone, while others (equitable interests) depend on the buyer's knowledge. The Registered System Here’s a simplified summary of the content provided: Land Registration System Overview: 1. Registered Conveyancing: Involves two stages – exchange of contracts and completion of the transfer of ownership. Registered land must be transferred through an official deed, which is governed by the Land Registration Act (LRA) 2002. 2. Proof of Ownership: For registered land, proof of ownership is shown via the Land Registry, which has three parts: Property Register: Describes the land and any associated rights. Proprietorship Register: Lists the landowners and any restrictions on selling the land. Charges Register: Records third-party rights (e.g., covenants, easements) and any mortgages on the land. 3. Transfer of Title: Ownership isn't transferred until the buyer's name is entered in the Land Registry, unlike unregistered land where the conveyance passes ownership directly. 4. First Registration: When unregistered land is sold, it must be registered with the Land Registry. This rule applies to certain legal estates (like freeholds and long leases) and legal mortgages. 5. Enforceability of Third-party Interests: The register reflects who owns the land and any third-party rights that burden it. Not all interests are visible on the register, but some can still bind a purchaser, depending on how they're classified: Registrable Dispositions: These include legal easements, mortgages, and long leases, which must be registered to take effect. Interests Affecting a Registered Estate: Rights like restrictive covenants, estate contracts, and equitable leases are not enforceable unless registered. Overriding Interests: Certain unregistered interests (e.g., someone in actual occupation) can bind a purchaser, even if not registered, as long as they are discoverable. 6. Overreaching: This allows a buyer to take land free of any equitable interests under a trust by paying the purchase price to two or more trustees, shifting the beneficiaries' interest to the sale proceeds. Key Points: Land registration ensures clarity of ownership and third-party rights. Overreaching protects buyers by allowing them to avoid certain equitable claims if the purchase process is correctly handled. Some unregistered interests (like someone living on the land) can still bind buyers under specific circumstances. Unit 3: Registered System (Including Overriding Interests) Registered Land System Conveyancing in Registered Land Stages: The conveyancing process involves the exchange of contracts and then completion through a deed (transfer of ownership). Land Registration Act (LRA) 2002: Governs the system, requiring the registration of certain interests to ensure they bind future buyers. The legal estate only transfers upon registration. Proof of Ownership and the Register The register is divided into three sections: Property Register: Describes the land, easements, and rights benefiting the land. For example, a right of way might appear here. Proprietorship Register: Lists legal owners, any restrictions on dealings, and the price paid for the land. Charges Register: Records burdens on the land such as mortgages, restrictive covenants, or leases. Third-Party Interests and Their Categories Third-party interests in land may be either registered or unregistered. The LRA 2002 distinguishes between three key categories: (a) Registrable Dispositions Definition: Dispositions listed under Section 27 of the LRA 2002 must be registered to take effect. Examples: o Leases over 7 years. o Express legal easements. o Legal mortgages. Effect: These dispositions are only effective against future buyers if registered. (b) Interests Affecting a Registered Estate (IAREs) These are non-registrable dispositions that must still be protected through a notice in the Charges Register to bind future buyers. Examples: o Restrictive covenants. o Equitable leases. o Rights under the Family Law Act 1996 (e.g. matrimonial occupation). Notices can be agreed (with the owner’s consent) or unilateral (without consent, typically in cases of dispute). (c) Overriding Interests Overriding interests do not need to be registered but still bind buyers. Categories of overriding interests are defined in Schedule 3 of the LRA 2002, and include: 1. Short legal leases (7 years or less). 2. Legal easements created without express deeds (e.g., implied or prescriptive easements). 3. Proprietary interests where the holder is in actual occupation. Overriding Interests in Detail Legal Leases (Schedule 3, Paragraph 1) Leases for 7 years or less are overriding interests and need not be registered to be enforceable. Buyers should not solely rely on the register; they must inspect the property and ask the seller about any short-term leases that might exist. Legal Easements (Schedule 3, Paragraph 3) Implied and prescriptive easements are overriding if: 1. The buyer knew of the easement. 2. It was obvious upon inspection. 3. It was used within the year preceding the transaction. Case Study Example: A greenhouse enjoying a right to light across neighbouring property might create an easement of light, binding the buyer under these conditions. Interests of Persons in Actual Occupation (Schedule 3, Paragraph 2) This category covers any proprietary interest where the holder is in actual occupation of the property. Requirements for overriding status: 1. The occupation must be obvious on inspection or known to the buyer. 2. If asked, the occupant must disclose their interest unless it is unreasonable to expect them to do so. Important Cases: Williams & Glyns Bank v Boland (1981): Mrs. Boland’s beneficial interest in her matrimonial home (resulting from financial contributions) was an overriding interest because she was in actual occupation. The bank failed to discover her interest and was bound by it. Abbey National v Cann (1991): Merely moving furniture into a property before the transaction was not enough to establish "actual occupation." Overreaching Overreaching occurs when a buyer pays purchase money to two trustees of the legal estate, thereby shifting any beneficial interest from the land to the sale proceeds. City of London Building Society v Flegg (1988): Overreaching allowed the mortgage to take priority over the Fleggs’ beneficial interest, forcing them to vacate the property, but giving them a claim over sale proceeds. Practical Considerations Buyers need to inspect the property and ask questions to identify potential overriding interests. Failing to investigate can leave buyers bound by interests they did not discover from the register, like short leases or equitable interests in occupation. Impact on Mortgages and Disputes: Overriding interests often impact banks or lenders when mortgages are secured without full awareness of existing rights (e.g., Williams & Glyns Bank case). Summary The Land Registration Act 2002 has streamlined conveyancing but retained the concept of overriding interests, which can bind buyers despite not being listed on the register. It’s essential to understand the three types of third-party rights: registrable dispositions, IAREs, and overriding interests. Buyers can mitigate risk by thorough property inspections, questioning occupants, and ensuring proper registration where necessary. Chapter 11 of the Law Commission Consultation Paper 2016 (No 227) 1. Current Law on Adverse Possession The Land Registration Act 2002 introduced significant reforms to adverse possession. Under the 2002 Act, adverse possession no longer automatically gives rise to ownership after 12 years, as was the case under the previous law. Instead, the squatter must apply to the Land Registry after 10 years of possession, and the registered owner is notified and given the chance to object and take action. If the owner objects within a set time (usually two years), the adverse possession claim will fail unless the squatter can prove specific circumstances that justify their claim. 2. Problems with the Current System The Consultation Paper highlights concerns that the 2002 Act's rules are too favourable to registered proprietors, making it very difficult for a squatter to successfully acquire land through adverse possession. It notes that while the law protects landowners, it may be unjust in cases where land has been abandoned or where the squatter has a strong claim due to long-term use of the land. The complexity and costs associated with making an adverse possession claim are also discussed, making it burdensome for squatters and leading to delays. 3. Proposed Reforms Rebalancing the Rights of Owners and Adverse Possessors: The Consultation Paper seeks to address whether the law should be reformed to strike a fairer balance between protecting the interests of landowners and recognising legitimate claims by long-term possessors. Threshold for Possession: It questions whether the threshold for proving adverse possession is too high and asks if it should be easier for long-term squatters to succeed in acquiring ownership. Procedure for Notification: The process of notifying landowners about an adverse possession claim is considered. Suggestions are made for streamlining the process to ensure fairness but also to avoid undue complexity and cost for both parties. Special Categories of Land: The Paper discusses whether special rules should apply to certain types of land, such as land owned by the government or local authorities, which may require additional protections against adverse possession. 4. Specific Issues Raised The Consultation Paper examines cases where adverse possessors are unable to perfect their claim, such as where the registered owner cannot be located or where the squatter has made significant investments in the land. The impact on third parties, such as mortgagees and lessees, is also considered, as their rights can be affected by adverse possession claims. Explanation of Schedule 3 Paragraph 2 of the Land Registration Act 2002 (LRA 2002) Schedule 3 paragraph 2 of the LRA 2002 deals with the overriding interests of persons in actual occupation of land. An overriding interest is a right or interest in land that binds a purchaser or registered proprietor even though it is not mentioned on the land register. Under Schedule 3 paragraph 2, the interest of a person in actual occupation can override a registered disposition (such as a sale or transfer of registered land) if the following conditions are met: 1. The person has a proprietary interest in the land (e.g., a lease, equitable interest, or right under a trust). 2. They are in actual occupation of the land at the time of the disposition. 3. The interest is not obvious on a reasonably careful inspection of the land, or the person in actual occupation has not disclosed the interest when reasonably asked about it before the disposition. In simple terms, if someone is in actual occupation of the land (and they have a proprietary right to it), that right can bind anyone who later buys or takes an interest in the land, even if that interest is not formally registered. This principle protects those with rights in the land who may not have formally registered their interest but who are physically present or using the land. However, if the actual occupation is not apparent on a reasonably careful inspection of the land, and the person did not disclose their interest when asked, then their overriding interest may not bind a purchaser. Case Law on the Meaning of "Actual Occupation" The concept of actual occupation has been extensively examined in case law, both under the Land Registration Act 1925 (the predecessor to the LRA 2002) and since the introduction of the LRA 2002. Here are some significant cases that help define "actual occupation": Case Law under the Land Registration Act 1925 (Section 70(1)(g)) Williams & Glyn's Bank Ltd v Boland AC 487 o Facts: In this case, Mrs. Boland was in physical occupation of her home, which was registered in her husband’s name. The bank had a mortgage over the property, but Mrs. Boland claimed an overriding interest because she had a beneficial interest under a trust and was in actual occupation. o Held: The House of Lords held that Mrs. Boland was in actual occupation, and her beneficial interest under a trust of land was an overriding interest. "Actual occupation" was held to be a question of physical presence and intention to occupy, not necessarily whether it was the registered proprietor's spouse. o Significance: This case established that actual occupation is a factual matter and that the spouse's physical occupation could override a registered disposition. Abbey National Building Society v Cann 1 AC 56 o Facts: In this case, a mother claimed to have an overriding interest due to actual occupation, based on the brief occupation of a property before a mortgage was completed. o Held: The House of Lords held that actual occupation must be determined at the time of the disposition (e.g., when the mortgage was completed). A mere preparatory step to occupation, such as moving furniture into the property, was not sufficient to constitute actual occupation. o Significance: This case clarified that actual occupation must exist at the date of the disposition and cannot be based on preparatory steps. Case Law since the LRA 2002 (Schedule 3 Paragraph 2) Link Lending Ltd v Bustard EWCA Civ 424 o Facts: Mrs. Bustard was involuntarily absent from her property due to being sectioned under the Mental Health Act. Despite her absence, she still visited the property regularly, intended to return, and made arrangements to manage the property. o Held: The Court of Appeal held that Mrs. Bustard was in actual occupation, even though she was physically absent for a significant period. The court considered factors like the intention to return, the continuity of presence, and the nature of the absence. o Significance: This case shows that actual occupation can be established even without continuous physical presence, as long as the intention to occupy and some form of connection to the property exists. Thompson v Foy EWHC 1076 (Ch) o Facts: In this case, a mother moved out of her home and was in the process of selling the property to her daughter. She claimed that she retained an interest in the property despite her absence. o Held: The court ruled that the mother was not in actual occupation because she had already decided not to return to the property. Although she had some possessions there, her intention not to return was key. o Significance: The case highlights the importance of intention and the mental element of occupation when determining whether someone is in actual occupation. AIB Group (UK) Plc v Turner EWHC 399 (Ch) o Facts: Mrs. Turner claimed to be in actual occupation of a property owned by her husband. She lived abroad for much of the year, but had returned to the property for occasional visits. o Held: The court held that Mrs. Turner was not in actual occupation because her occupation was intermittent, and there was no clear intention to reside permanently. o Significance: This case reaffirms that regular, physical presence is crucial for establishing actual occupation. K v K (2016) EWCA Civ 93 o Facts: A husband had transferred the property to his ex-wife, but the transfer was delayed. The wife claimed she was in actual occupation because she regularly visited the property. o Held: The Court of Appeal held that occasional visits did not amount to actual occupation. There must be a degree of permanence or continuity. o Significance: This case emphasises that sporadic or occasional presence is not sufficient for actual occupation. Conclusion The concept of actual occupation under both the Land Registration Act 1925 and the LRA 2002 is primarily a factual issue, based on physical presence and intention to occupy. The courts have consistently stressed that it is a question of degree, looking at factors such as continuity, regularity of presence, and the intention to remain or return to the property. Unit 4: Co-ownership Trust Basics and Key Roles Settlor: The creator of the trust who transfers property into it and designates a trustee to manage it. Trustee: Manages the trust and holds legal title to the property, acting in the best interest of the beneficiaries with fiduciary duty. Beneficiary: Holds equitable title, meaning they benefit from the property but don’t control it directly. A trust relationship is established where one party (the trustee) holds property for the benefit of another (the beneficiary). Trust details, such as the property and beneficiary names, are set out in a trust instrument or deed. Statutory Rules under Trusts of Land and Appointment of Trustees Act (TLATA) 1996 Trustees’ Powers Section 6 of TLATA grants trustees the powers of an absolute owner, enabling actions like selling, mortgaging, or reinvesting in property, provided they consider beneficiary rights and duties of care. Section 11 mandates that trustees must consult beneficiaries (18 or older with an immediate interest) and consider their majority wishes when consistent with the trust’s interests. Beneficiary Rights Section 12 allows a beneficiary with an immediate interest to occupy the property if available and suitable. Section 13 authorises trustees to manage occupancy by excluding beneficiaries, setting reasonable conditions (e.g., payment of utility bills), or requiring compensation if certain beneficiaries are excluded. Court Resolution of Disputes Section 14 enables trustees or beneficiaries to apply to the court to resolve disputes over trustee decisions. Section 15 lists factors (e.g., trust purpose, settlor intent, minor occupants, secured creditors) the court considers when ruling on trust disputes. Impact on Mortgages and Creditors Creditors can seek orders under TLATA to enforce the sale of a property to recover debts, but the court balances this with the interests of other beneficiaries. Co-ownership Definition Co-ownership occurs when two or more people hold concurrent interests in the same property, such as a family home, shared investment property, or jointly held business property. This shared interest can create either an express or implied trust of land, governed by the Trusts of Land and Appointment of Trustees Act (TLATA) 1996. Express and Implied Trusts of Land Express Co-ownership: Formed when there is a formal declaration in property documents. This arrangement provides clarity about co-ownership intentions. Implied Co-ownership: May arise without explicit documentation, as in resulting or constructive trusts. Implied trusts typically reflect contributions made or intentions understood by the parties. Forms of Co-ownership: Joint Tenancy vs. Tenancy in Common Joint Tenancy o Viewed as a single ownership unit without individual shares. o Survivorship: On a joint tenant’s death, their interest passes automatically to surviving co-owners. o Sale Proceeds: Divided equally among joint tenants, regardless of individual contributions. Tenancy in Common o Co-owners hold distinct, undivided shares, which can be equal or unequal, often reflecting initial contributions. o Inheritance: Each co-owner’s share passes according to their will or intestacy, not automatically to the others. o Sale Proceeds: Reflect the proportionate share held by each co-owner. Legal and Equitable Interests in Co-ownership Legal Estate: Must always be held as a joint tenancy under LPA 1925, s1(6), meaning all trustees act collectively, without individual division. Equitable Interest: May be held as either a joint tenancy or tenancy in common, which co- owners can declare or modify based on their arrangement. Severance of Joint Tenancy (Equitable Interest Only) Severance changes a joint tenancy in the equitable interest to a tenancy in common, achieved through methods such as: Notice (LPA 1925, Section 36(2)): Written notice showing intent to sever, served by hand or post. Alienation: Selling, gifting, or mortgaging the equitable interest to a third-party results in severance. o Bankruptcy: Automatically severs a joint tenancy, transferring the interest to the trustee in bankruptcy. Mutual Agreement or Conduct: An oral agreement or implied actions (e.g., treating shares as separate) can also sever the tenancy. Homicide: Prevents a joint tenant from benefiting if they murder another joint tenant, thus severing the tenancy. Effects of Severance Converts joint tenancies to tenancies in common, applying equal shares regardless of initial contributions. Only the severing party becomes a tenant in common if multiple joint tenants remain. Implied Co-ownership: Resulting and Constructive Trusts Implied co-ownership safeguards equitable interests when no formal co-ownership exists: Resulting Trusts: Reflect beneficial interest based on financial contributions, typically proportional to the investment. Constructive Trusts: Established from implied intentions or agreements, with the claimant relying on this understanding to their detriment. Sale and Overreaching Overreaching (LPA 1925, Sections 2 and 27): o Allows a buyer to acquire trust land free of equitable interests by paying two trustees, moving beneficiaries’ rights to sale proceeds. o If only one trustee survives, a second trustee must be appointed to enable overreaching. Registered and Unregistered Titles: Overreaching applies in both systems, with specific conditions (e.g., title register restrictions) requiring additional trustee appointments. Summary of Key Points Trusts of Land: Trustees hold legal title and manage property under TLATA, while beneficiaries hold equitable title. Co-ownership Forms: Joint tenancy and tenancy in common affect inheritance, sale proceeds, and severance rights. Severance Methods: Joint tenants can sever their interest through notice, alienation, agreement, or conduct. Implied Trusts: Resulting or constructive trusts support equitable claims in informal co- ownership situations. Buyer Protections: Overreaching ensures equitable interests transfer to sale proceeds, securing a clear title for buyers. Co-Ownership Question Approach When preparing your answer, you will find it helpful to refer to the flowchart para 4.5 Chapter 4 of the Land Law Textbook. This sets out a structure for dealing with a co-ownership problem question. When approaching the question you need to : Ascertain how the legal estate and equitable interest are held at the outset. Deal with ownership of the legal estate and equitable interest separately. Note : the legal estate can ONLY be held as a joint tenancy. The equitable interest can be held as either a joint tenancy or a tenancy in common. To determine this, apply the following tests : Are the four unities present? If so… Is there an express statement? If so this prevails over all else. If not… Are there any words of severance? If not… Can a tenancy in common be implied? If not, then Equity follows the law Then go through the facts in a chronological order and discuss the effect of subsequent events on both the legal estate and the equitable interest : The legal estate will pass by survivorship on death but cannot be severed The equitable interest can be served by: Written notice Alienation Mutual agreement/course of dealing Homicide Where severance has occurred, try to work out the shares as fractions. Conclude how the legal and equitable interests are held at the end of the scenario. Unit 5: Leases and Leasehold Covenants Leases Introduction Two legal land estates: freehold and leasehold (fixed duration). Leases create both contractual terms (e.g., rent, repairs) and land estates, potentially binding third parties. Reasons for creating leases: o Income generation. o Retaining property interest. o Enforcing covenants on successors. Terminology Key terms: lease, tenancy, demise. Parties: lessor/landlord and lessee/tenant. Types: o Head lease: Primary lease from freeholder to tenant. o Sublease: Lease by a tenant to another party. Essential Characteristics 1. Certainty of Duration: o Fixed-term or periodic leases. o Must have a definite start and duration. o Invalid if for an uncertain period (e.g., "until the end of war"). 2. Exclusive Possession: o Tenant controls the property; landlord access is limited. o Distinguished from licenses where exclusive possession is absent. 3. Rent: o Payment of rent is not mandatory for lease creation. Licenses Lack certainty of duration or exclusive possession. Permission-based occupation without creating proprietary interest. Examples: o Family arrangements without legal intent. o Temporary lodgings. Types of Leases 1. Fixed Term: o Created by express agreement, defined term duration. o Ends by effluxion of time, forfeiture, surrender, or merger. 2. Periodic Tenancies: o Implied through regular rent payments. o Renewed automatically until terminated by proper notice. o Residential properties require written notice (Protection from Eviction Act 1977). Security of Tenure Legal protections for residential (e.g., Housing Act 1988) and business tenancies (Landlord and Tenant Act 1954). Protections vary based on tenancy type and duration. Formalities for Lease Creation Legal leases (term >7 years): Require deeds, registration under the Land Registration Act 2002. Short-term leases (7 years) require registration. o Unregistered leases can override if tenant occupies the property visibly. Unregistered Titles: o Legal leases bind buyers, equitable leases require specific registration. Leasehold Covenants 1. Implied Covenants by Landlords: o Quiet enjoyment. o Repair obligations for structural issues (Landlord and Tenant Act 1985). 2. Express Covenants by Tenants: o Rent payment. o User restrictions (e.g., residential only). o Alienation controls (assignment or sublease restrictions). 3. Enforcement of Covenants: o Determined by the covenant type (personal vs. real) and whether successors are involved. o "Old" leases (pre-1996): Original parties remain liable post-assignment. o "New" leases (post-1996): Limited liability based on statutory reforms. Unit 6: Freehold Covenants Covenants restrict or mandate certain uses of land, typically created during the sale of part of a property. Example: A seller restricting commercial use in residential estates. Two main types: o Positive Covenants: Require action (e.g., building a wall). o Restrictive Covenants: Limit actions (e.g., not allowing commercial use). Re Vince’s Application Case Background: o Mr. Nangle sold part of his property with covenants in 1978. o Covenants: Single dwelling use, prohibition of nuisances, and preservation of light and air. o By 2007, properties had changed hands, and the new owners (Vinces) sought to modify covenants for redevelopment. Passing Covenants Passing the Benefit 1. At Common Law: o Conditions: "Touch and concern" the land, held by legal estate owners, and intent for benefit to run with the land (e.g., annexation). o Statutory Basis: Section 136 of the Law of Property Act 1925 (assignment rules). 2. In Equity: o Benefit passes similarly but relies on intent and annexation. Passing the Burden Common law does not allow burden transfer; equity does, under Tulk v. Moxhay (1848): o Negative nature. o Benefit land association. o Annexation to land. o Buyer awareness of the covenant. Enforceability Registered Titles: Requires proper notice under the Land Registration Act 2002. Unregistered Titles: Land Charges Act 1972 governs enforceability. Modification and Discharge Section 84, Law of Property Act 1925 Land Tribunal can modify covenants if: o They impede reasonable land use. o Changes render covenants obsolete. Case Outcome (Re Vince’s Application) Application for covenant modification denied due to adverse impacts (e.g., increased traffic, noise, and reduced light) on neighboring property. Easements Definition and Characteristics Rights benefiting one property (dominant) over another (servient). Must meet four criteria: o Dominant and servient tenements exist. o Right benefits the dominant land. o Tenements owned by different parties. o Right "lies in grant" (historically recognised). Creation 1. Express Grant: Deeds and proper registration create legal easements. 2. Implied Grant: Necessity inferred during a sale of part (e.g., rights of way). 3. Prescription: Long-term use establishes rights. Remedies for Breach 1. Damages: Compensation for loss. 2. Specific Performance: Court order for covenant compliance. 3. Injunctions: Stop covenant breaches, particularly restrictive ones. Unit 7: Easements Easement: A proprietary right benefiting one parcel (dominant) and burdening another (servient). Types: o Positive Easement: Allows use of the servient land (e.g., right of way). o Negative Easement: Restricts servient land use (e.g., right to light). Essential Characteristics (Re Ellenborough Park ) 1. Dominant and Servient Tenements: o Dominant benefits; servient is burdened. 2. Accommodation: o The easement must benefit the dominant land. 3. Separate Ownership: o Dominant and servient tenements must not be fully owned/occupied by the same person. 4. Capable of Grant: o The right must be specific, not vague, and must not confer joint occupation. Types of Easements 1. Express Easements: o Created explicitly by agreement, often via deed. 2. Implied Easements: o Formed without explicit agreements, based on necessity, common intention, or long use. 3. Prescriptive Easements: o Acquired through continuous, open, and unchallenged use over time (20+ years). Creation Methods 1. Express Grant: o Must comply with formalities, including a deed. 2. Implied Creation: o Methods include: ▪ Necessity: Essential for land use. ▪ Common Intention: Implied based on intended land use (e.g., Wong v Beaumont Property Trust Ltd ). ▪ Wheeldon v Burrows: ▪ Rights must be continuous, apparent, and necessary for enjoyment. ▪ Section 62, Law of Property Act (LPA) 1925: ▪ Converts licenses into easements when ownership changes. 3. Prescription: o Through long-term, unopposed use: ▪ Common Law: Usage since "time immemorial." ▪ Lost Modern Grant: Assumes a lost deed after 20 years of use. ▪ Prescription Act 1832: Formalizes claims, often for light or access. Enforceability 1. Against New Landowners: o Depends on title type: ▪ Registered Land: Legal easements must be registered. Unregistered easements can override if apparent during inspection. ▪ Unregistered Land: Easements bind the new owner if legal and properly documented. 2. Legal vs. Equitable Easements: o Legal: Created via deed and compliant with LPA formalities. o Equitable: Non-compliant with formalities but recognized in equity. Termination of Easements 1. Express Release: Easement is terminated via deed. 2. Merger: Easement ends when dominant and servient lands merge. 3. Abandonment: Prolonged non-use with intent to abandon (e.g., Moore v Rawson ). Problem-Solving Strategy 1. Diagram land parcels, ownership, and dates. 2. Apply Re Ellenborough Park criteria to validate rights. 3. Analyze easement creation method: o Express, implied, or prescriptive. 4. Consider whether easements pass to successors (via s62 LPA 1925). 5. Assess enforceability (legal or equitable). Unit 8: Legal Mortgages Creation of Legal Mortgages Definition: A legal mortgage is one of the five legal interests in land under the Law of Property Act (LPA) 1925, Section 1(2). Methods of Creation: 1. Charge by Deed: ▪ Most common method since the Land Registration Act (LRA) 2002. ▪ Requires a deed stating it is a charge by way of legal mortgage. 2. Lease for a Term of Years Absolute: ▪ Rarely used. Leasehold Estates: o Mortgage of leasehold is often by charge, but can also involve sub-leases (e.g., lease for 99 years minus one day). Registration Requirements: o Registered Titles: Must register the charge for it to be a legal mortgage. o Unregistered Titles: First legal mortgage triggers compulsory registration. B. Remedies for Mortgagees 1. Debt Action: o Sue for repayment if arrears exist. o Limited by the Limitation Act 1980: ▪ 12 years for principal. ▪ 6 years for interest. 2. Possession: o Can take possession once the mortgage is executed (e.g., collect rent or sell the property). o Must comply with: ▪ Criminal Law Act 1977 (no threats/violence). ▪ AJA 1970/1973: Courts can delay possession if arrears can be repaid within a reasonable time. 3. Appointment of a Receiver: o Receiver collects income but avoids personal liability. o Income distribution order (LPA 1925, Section 109): 1. Outgoings. 2. Prior mortgage interest. 3. Current mortgage interest and capital. 4. Remaining balance to mortgagor. 4. Power of Sale: o Sell the property to recover the debt. o Duties: ▪ Act in good faith. ▪ Obtain market value. o Proceeds Distribution: 1. Costs of sale. 2. Prior mortgages. 3. Current mortgage debt. 4. Surplus to mortgagor or lower-priority lenders. 5. Foreclosure: o Rarely used; vests ownership of the property in the lender. o Borrower may apply for a court-ordered sale under LPA 1925, Section 91(2). Protection of Mortgages 1. Registered Titles: o Mortgage must be registered as a charge under LRA 2002, Section 27 to be enforceable. 2. Unregistered Titles: o Mortgagee has the right to hold title deeds (LPA 1925, Section 85(1)). o First legal mortgage triggers compulsory first registration. D. Priority Rules 1. Priority Between Mortgages: o Determined by order of registration (LRA 2002, Section 48). o Earlier registered charges take priority. o Unregistered mortgages hold equitable status and rank lower. 2. Mortgages vs. Third-Party Interests: o Interests created before the mortgage may bind it if registered or overriding. o Interests created after the mortgage require lender consent to bind. E. Case Studies and Examples 1. Multiple Mortgages: o Lenders rank based on registration order. o Example: Three mortgages registered; proceeds distributed to lenders in priority. 2. Sale of Mortgaged Land: o Purchaser takes free of interests subordinate to the selling mortgage but subject to higher-priority ones. 3. Tenant Occupation: o Legal leases of 7 years or less override mortgages (Schedule 3, LRA 2002). o Post-mortgage leases require lender consent. 3. Practical Guidance Identify remedies based on lender’s goals (e.g., recovering arrears vs. entire debt). Analyse priority disputes with timelines and determine enforceability based on creation and registration dates. Consider impact of third-party interests such as tenants or equitable claims. 4. Key Cases to Remember Cuckmere Brick Co Ltd v Mutual Finance Ltd (1971): o Duty to advertise and sell at market value. Four Maids Ltd v Dudley Marshall (Properties) Ltd (1957): o Right to possession arises immediately upon mortgage execution. Williams & Glyn’s Bank Ltd v Boland (1981): o Trust interests may bind mortgagees unless overreached.

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