Consolidation Flashcards
(22 cards)
What is a summary of the approach to take when identifying the status of third party rights in land?
- Identify the interest
- Is the interest capable of being legal, or is it equitable by nature?
- Have the correct formalities been used?
- If the interest is capable of being legal, but there is no deed, will equity intervene?
- Identify whether the interest is legal, equitable or statutory (ie home rights)
- How should the right be protected in unregistered or registered land?
- Has the interest been protected? If a beneficial interest under a trust has overreaching happened?
- If registered land, could an unprotected equitable interest be upgraded to overriding status under Sch 3, para 2?
Give a general overview of co-ownership and trusts of land
Interest of a beneficiary under a trust of land – where land is owned by two or more parties, but at least one of them is not a legal owner of land
- This means they have an equitable interest which is being held for them on trust by the legal owner
- Express trust = in writing and signed
- Implied trust = no formalities
This interest can be overreached by a buyer, whether it is registered or unregistered land – buyer takes the land free of the trust interest
- If completion hasn’t yet occurred, buyer can ask seller to appoint a second trustee in order to overreach; purchase money must be paid to both
How is a beneficial interest under a trust protected in unregistered land?
If overreaching has not happened, the doctrine of notice applies
- This means the buyer is bound unless they are a bona fide purchaser of legal estate for value without notice of the interest
How is a beneficial interest under a trust protected in registered land?
1) The beneficiary under the trust can place a restriction in the proprietorship register, which will prevent a sale being registered without that restriction being complied with
- The restriction acts as a warning to a buyer of a need to pay their purchase money to a minimum of two trustees to overreach
2) For registered land, if there is no restriction and overreaching has not happened, beneficiary under the trust may have an overriding interest at date of disposition, if:
- (1) There is obvious actual occupation (on a reasonably careful inspection of land); or
- (1a) The buyer has actual knowledge of the interest; and
- (2) The beneficiary under the trust disclosed their interest when they were asked, if it was reasonably expected to do so
- Need 1 + 2 or 1a + 2 for overriding interest
2a) If this applies, it means the interest will bind a buyer until the beneficiary is given their proportion of the trust value
When will a buyer get the property free of someone’s interest under a trust, aside from when they overreach?
When they are equity’s darling, a bona fide purchaser for value of the legal estate without notice of the trust interest
Notice may be actual, imputed or constructive.
- Where, the client had no actual notice, was not represented or the solicitors were unaware, so did not have imputed notice and the client made appropriate enquiries and inspections of the property, they also cannot be fixed with constructive notice
- If they had noticed signs of occupation when inspecting and made no further enquiries, this could have amounted to constructive notice
What are home rights?
These don’t create an interest in land, but can be binding on a buyer
Statutory right of occupation, of a matrimonial home, for a non-owning spouse or civil partner
They exist independently of any equitable interests arising under a trust
For a home right to exist:
- The parties must be legally married or civil partners
- Home is, has been, or is intended to be the matrimonial home
How are home rights protected in unregistered land?
In unregistered land, a home right must be protected by registration as a class F land charge and, if registered before completion, this charge is deemed to be actual notice and binds the buyer
- If not registered before completion, it is void against a buyer
How are home rights protected in registered land?
In registered land, a home right must be protected by entry of a notice in the charges register
An unprotected home right cannot be an overriding interest
How are easements protected in unregistered land?
1) A legal easement, created expressly, impliedly or by prescription, will bind the world
2) An equitable easement after 1926 will need to be registered as a land charge to be protected
- If not protected via land charge, it is void against a buyer
3) An equitable easement pre 1926 is protected by doctrine of notice, so binds unless B is a bona fide purchaser of legal estate for value without notice
How are legal and equitable easements created pre 12th October 2003 protected in registered land?
All legal easements and equitable easements created before 12 October 2003, openly exercised and enjoyed, continue to be overriding interests
How are express legal easements protected in registered land?
Express legal easements are registrable dispositions where the easement has been created after 12 October 2003 – must be created by deed and entered on charges register
How are implied and prescriptive legal easements protected in registered land?
Implied and prescriptive legal easements created after 12 October 2003 take effect as overriding interests if one of the following is satisfied:
- (i) B has actual knowledge of the easement; or
- (ii) the existence of the right would have been apparent on a reasonably careful inspection of the land over which the easement is exercisable; or
- (iii) the easement has been exercised at least once in the year prior to the disposition
Examples are easements by necessity, common intention, Wheeldon v Burrows (quasi easements), s62 LPA (elevating existing privilege through conveyance) or by prescription
How are equitable easements protected in registered land?
Equitable easements created after 12 October 2003 must be entered onto the charges register to bind the buyer
- They cannot be overriding interests as there won’t be actual occupation
They can arise where:
- Created by deed, but not registered
- In signed writing, incorporating all expressly agreed terms + clean hands (contract for easement)
- Easement of uncertain duration cannot be legal, so is equitable
Are restrictive covenants legal or equitable? How does the burden of a restrictive covenant pass?
Restrictive covenants are equitable and must be created by signed writing
Burden only runs in equity for restrictive covenants if the Tulk v Moxhay criteria are met:
- (a) the covenant must be negative in substance;
- (b) the covenant must, at the time of the creation of the covenant, have been made to benefit dominant land retained by the covenantee;
- (c) the covenant must touch and concern the dominant land;
- (d) the covenant must be made with the intent to burden the servient land; and
- (e) the owner of the servient land must have notice of the covenant for it to bind them
Rules on notice differ between unregistered and registered land
How are restrictive covenants protected in unregistered land?
Restrictive covenants pre-1926 are protected by doctrine of notice, so bind B unless they are a bona fide purchaser for value of the estate without notice
Restrictive covenants post-1926 must be protected by a Land Charge
- Deemed to constitute actual notice
- If not registered, it is void against B
How are restrictive covenants protected in registered land?
Restrictive covenant must be protected by registration of a notice in charges register
- Can be done without consent of registered proprietor
Cannot be protected as an overriding interest if not registered in charges register
Are mortgages legal or equitable?
Capable of being legal interests if created by deed
May be an equitable mortgage if no deed, but there is a signed written document, incorporating all expressly agreed terms + clean hands
How are mortgages protected in unregistered land?
When a first legal mortgage is granted, the lender usually takes deposit of title deeds as part of their security
- Creating first mortgage on unregistered land will also trigger first registration (2 months to do so)
A legal mortgage protected by deposit of deeds is binding against the world
A legal mortgage not protected by deposit of deeds (a puisne mortgage) must be protected by Land Charge – usually a second mortgage
- Deemed to constitute actual notice
- If not registered, it is void against B
How are mortgages protected in registered land?
Mortgage over registered title is a registrable disposition and becomes legal mortgage when entered on charges register
- More than one charge – priority given to first one registered (not created)
3rd party interests created before date of registration of mortgage may bind the lender if they are:
- A registered charge
- Subject of a notice in the register
- An overriding interest, created before date of completion of mortgage, not date of registration
Are leases legal or equitable?
Capable of being a legal estate if created by deed
Parol leases are legal, but not created by deed:
- 3 years or less
- At market rent
- No premium
- Immediate possession
May be an equitable lease, if no deed, if:
- There is signed writing, which incorporates all expressly agreed terms + clean hands
A licence doesn’t bind a buyer of unregistered or registered land
How are leases protected in unregistered land?
Legal lease (deed or parol) is binding against the world
Equitable lease created post-1926 must be protected by estate contract Land Charge
- If protected, deemed to be actual notice, so binds B
- If not protected, void against B
Equitable lease created before 1926 is protected by doctrine of notice, so B bound unless they are a bona fide purchaser of legal estate for value without notice
How are leases protected in registered land?
1) Legal leases of more than seven years – registrable disposition
If not registered, will only take effect as an equitable lease
2) Legal leases for seven years or less – automatically protected as overriding interests
Equitable leases can come about by:
Failing to register a lease of more than seven years properly
Failing to use a deed to make a legal lease (estate contract)
3) Equitable leases are protected by a notice in the charges register
3a) If an equitable lease is not protected by a notice, it may be protected as an overriding interest if there is:
- obvious actual occupation and T discloses interest; or
- the buyer has actual knowledge of the interest; and
- the tenant disclosed their interest on enquiry (when reasonably expected to do so).
