Enforcement of interests

Question 1

What are the requirements for a land contract?

Answer 1

• Must be in writing, must contain all expressly agreed terms, must be signed by both parties
• must be capable of specific performance

It can also be created where parties fail to create a valid legal interest in the land by deed.

Question 2

What is created when a binding land contract is established?

Answer 2

An equitable interest in the land, called an estate contract

This gives it proprietary status.

Question 3

What is the standard conveyancing process regarding contracts?

Answer 3

Exchange contracts, where one copy is signed by the seller and the other by the buyer

Question 4

What happens if a material term of the contract is varied?

Answer 4

The same requirements of creating a contract must be followed

Question 5

What are some example uses of land contracts?

Answer 5

• Buying/selling land (conveyancing)
• Agreements for lease
• Option agreements
• Right of pre-emption

Question 6

When are land contracts binding against 3Ps?

Answer 6

When they are protected by entry/land charge

Question 7

What remedies are available for breach of a land contract?

Answer 7

• Damages - common law remedy available as of right (probably loss they suffered as a result of the breach i.e legal fees)
• Specific Performance and Injunctions

Question 8

What is the basic rule regarding interests over registered land?

Answer 8

An interest of whatever kind will take priority over later dispositions

s28 LRA 2002

Question 9

What is a registrable disposition?

Answer 9

A transaction that must be completed by registration (s27(2))

Question 10

What are examples of registrable dispositions?

Answer 10

• Transfer of freehold or leasehold estate (s 27(2)(a))
• Grant of a new lease for a term of more than seven years (27(2)(b))
• Grant or reservation of an easement (s 27(2)(d))
• Grant of a legal mortgage (s 27(2)(f))
• Grant of a landlord’s right of entry (s 27(2)(e))

Question 11

How do registrable dispositions affect the general rule?

Answer 11

A registrable disposition of a registered estate made for valuable consideration will take priority over any pre-existing rights in the land except those which have been protected on the register

Question 12

What happens if a registrable disposition is not registered?

Answer 12

Any subsequent owner of the land will take free of the rights that have not been protected and are not overriding interests

Question 13

What is required for an equitable interest to be binding against a third party purchaser?

Answer 13

It must be protected by entry of either a notice or a restriction

Question 14

What is the purpose of entering a notice in the Charges Register?

Answer 14

To protect an interest intended to last beyond a change in ownership

Question 15

List 5 equitable interests

Answer 15

• Freehold restrictive covenants
• Estate contracts
• Equitable easements
• Equitable leases
• Legal leases more than 3, up to 7 years (optional)

Question 16

What is meant by ‘overreaching’?

Answer 16

How a buyer/lender ensures they are not bound by pre-existing interests held by beneficiaries

Question 17

What must purchasers do to ensure overreaching occurs?

Answer 17

Pay capital money to at least two trustees (not beneficiaries unless they are also trustees)

Question 18

What is the consequence of overreaching?

Answer 18

The beneficiary’s equitable interest is detached from the land and is transferred into money paid by a buyer

Question 19

What are overriding interests?

Answer 19

Interests that will bind a purchaser for value of registered property, even if not protected by registration

Question 20

What are three types of overriding interests?

Answer 20

• Leases for Seven Years or Less
• Equitable Interests held by People in Actual Occupation
• Implied Legal Easements if:
  a. the new owner knew about it
  b. it was obvious on reasonable inspection of the land
  c. it has been exercised in the 12 months prior to the disposition

Question 21

What is required to be in actual occupation?

Answer 21

• physical presence on the land
• need to have possession and furniture in the home
• need an intention to return home

Question 22

When will an interest in land held by someone in actual occupation not be binding as an overriding interest?

Answer 22

• if it is an interest held by someone who failed to disclose the right when they could reasonably have been expected to do so
• when the interest belongs to a person whose occupation would not have been obvious on reasonable inspection
• when the person to whom the disposition is made does not have knowledge of the occupation at the time

Question 23

what is the rule regarding the enforceability of legal rights over unregistered land?

Answer 23

Legal rights bind the world

Question 24

What is the rule regarding enforceability of equitable rights over unregistered land pre 1926?

Answer 24

Binding on everyone except equity’s darling

Question 25

What is the rule regarding enforceability of equitable rights over unregistered land after 1926?

Answer 25

- most need to be protected by Land Charge entered against the name of the landowner (must be same as the name in the title deeds) - doctrine of notice continues to apply to restrictive covenants and equitable easements created before 1926, and trusts of land which have not been overreached

Question 26

What is the doctrine of notice?

Answer 26

An equitable interest over the land is binding on anyone except 'Equity's Darling'

Question 27

Who is equity's darling

Answer 27

a bonad fide purchaser for value of a legal estate without notice

Question 28

What are the three types of notice?

Answer 28

* Actual notice - purchaser actually knows of the equitable interest * Implied notice - the agent knew (e.g solicitor) * Constructive notice - they failed to pursue a line of enquiry which ought reasonably to have been made

Question 29

What happens if an equitable interest becomes void for want of notice?

Answer 29

It cannot be revived to bind a subsequent buyer who has notice

Question 30

What is required for equitable interests to be overreached?

Answer 30

Payment of purchase money to at least two trustees or a trust corporation

Question 31

What is the effect of a legal right created before 1926?

Answer 31

Enforceable against new owners (legal interests bind the world)

Question 32

What must be done to protect equitable rights created after 1926?

Answer 32

They must be protected by way of a Land Charge

Question 33

What is a land charge?

Answer 33

An entry against the name of the landowner in the Land Charges Register