Head 6: Transfer of land (problems) Flashcards
(25 cards)
The nemo plus rule is repeated in statute in:
LRA 2012 s 49(4) and 50(2)
For good faith acquirers of registered land there is…
Virtually full protection under LRA 2012 s 86
Even when s 86 protection does not apply…
The acquirer, if in good faith, is likely to be eligible for compensation under the Keeper’s warranty (mud or money)
S 86(1) provides that
S 86 applies where a person ‘A’ who is not the proprietor of a registered plot of land but is entered in the proprietorship section of the title sheet as proprietor and is in possession of the land. ‘B’ acquires ownership of the land provided that the conditions in subsection (3) are met
What are the two most important conditions in s 86(3)?
1) That the transferor (or transferor and transferee taken together) were in possession for a year (s 86(3)(a)) and
2) That the transferee is in good faith (s 86(3)(a))
Compensation for expropriation where s 86 applies is provided for by…
ss 94 and 95
If Betty doesn’t acquire good title under s 86, despite being entered on the title sheet as owner, then…
Betty may or may not be compensated under the Keeper’s warranty.
What is a caveat?
This places a warning on the Land Register that litigation is taking place in relation to the property - this will put any potential purchasers off buying until the litigation has been resolved.
What happens if the transferor does not own at the time of registration but becomes owner later?
Ownership passes at that moment to the original transferee by ACCRETION
For accretion to operate the disposition must contain either:
- A grant of absolute warrandice, or
2. A clause conveying granter’s whole right, title and interest present and future.
Accretion cannot operate…
Where LRA 2012 s 86 applies.
Accretion cannot take place if, in the time between the original transfer and the original transferor acquiring ownership if
He becomes sequestrated in the meantime
How might a title be voidable?
If there is a defect in the method by which a person acquired a property in the first place.
Examples of voidable titles include:
- Transfer by fraud or undue influence
- Prejudicial transaction of 16-18 year old
- Gift to defeat creditors
- Gift to defeat spouse
- Transfer in breach of an obligation not to do so
- Original transferor’s title was voidable (only in certain circumstances like bad faith)
A voidable title is…
A good title, unless or until the disposition is reduced and the decree of reduction is registered in the Land Register of Register of Sasines
If a person with a voidable title transfers to another person, in what circumstances will the transferee obtain unchallengeable title?
- Transferee in good faith AND
2. Transfer a sale
If the missives are void, can a transfer still be valid?
Yes - since Scotland operates on an “abstract” basis of transfer, even if the contract is invalid, the conveyance can still be valid.
What are the two problems relating to encumbrances?
- Not all encumbrances are registered
2. Sometimes an encumbrance which ought to be on the register is not registered.
What types of encumbrances are not registered?
- Short leases (<20 years)
- Many servitudes
- Floating charges
How are good faith acquirers protected from encumbrances which ought to have been registered but haven’t been?
LRA 2012 s 91 - good faith acquirer on becoming owner by registration in the Land Register, acquires “free of any encumbrances” which exist but are not listed on the title sheet.
S 91(2)(b)
S 91 does not apply if there is a caveat on the title sheet
S 91(4)
lists some encumbrances
What is the effect of s 91?
If s 91 applies then the encumbrance(s) are extinguished, leaving the holder to claim compensation from the Keeper under ss 94 and 95.
What is the default rule on the passing of risk?
Risk passes on conclusion of missives (Sloan Dairies)
