Land - Enforcing interests

Question 1

Formalities for a valid land contract

Answer 1

must be in writing, must contain all the expressly agreed terms and must be signed by both parties

Question 2

Formalities for varying a material term in a land contract

Answer 2

Same as for creating the contract - in writing, contains all terms, signed by both parties

Question 3

Effect of a binding land contract

Answer 3

to pass an equitable interest in the land to the buyer

Question 4

Obligation to the seller if the buyer enforces their option to purchase

Answer 4

they must sell the land to the buyer

Question 5

Key types of land contract

Answer 5

Agreement for lease
Option to Purchase
Pre-emption right

Question 6

Benefit of a preemption right

Answer 6

gives another party a right of first refusal in the event the land owner decides to sell their land. the land owner cannot sell the land without first offering it to the party holding the right.

Question 7

Who will be bound by a properly created estate contract, regardless of registration?

Answer 7

a donee (receives property as a gift, ie not a purchaser for value)

Question 8

When will the courts recognise a failed legal interest?

Answer 8

The courts will recognise an equitable interest in the land providing:
There is a document that complies with LP(MP)A 1989, s 2; and
The remedy of specific performance is available

Question 9

Remedies for breach of a land contract

Answer 9

Common law - damages
Equity - specific performance and injunctions

Question 10

3 categories of estates/interests under LRA 2002

Answer 10

Registrable dispositions
Interests protected by entry
Overriding interests

Question 11

LRA - basic rule of priority

Answer 11

an interest of whatever kind will take priority over later dispositions

Question 12

does a restrictive covenant have to be registered when created?

Answer 12

no

Question 13

a purchaser for valuable consideration is only bound by

Answer 13

properly protected interests

Question 14

When does the basic rule of priority apply?

Answer 14

whenever there is not ‘a disposition of a registered estate for valuable consideration’ (eg a donee)

Question 15

What is a “registrable disposition”?

Answer 15

a transaction which must be completed by registration

Question 16

Where would a properly registered express legal easement appear?

Answer 16

on the property register of the dominant land and in the charges register of the burdened land

Question 17

Where would a grant of a legal mortgage appear?

Answer 17

in the charges register of mortgaged land

Question 18

Examples of registrable dispositions

Answer 18

Express legal easements
Grant of a legal mortgage
Right of forfeiture

Question 19

All equitable interests (other than a beneficial interest in a trust of land) must be protected by

Answer 19

the entry of a notice in the Charges Register of the burdened land

Question 20

appropriate method to protect an interest which is intended to last beyond a change of ownership

Answer 20

a notice

Question 21

interests which cannot be protected by notice

Answer 21

beneficial interests under trusts (use a restriction) and;
short legal leases for a term of three years or less (binding as overriding interests)

Question 22

What does a notice mean?

Answer 22

It brings the interest to the attention of a prospective buyer (eg caveat emptor) - it will only be binding if properly created

Question 23

Equitable interests protected by entry of a notice

Answer 23

Restrictive covenants affecting freehold land
Estate contracts
Equitable easements
Equitable leases
Legal leases between 3-7 years (optional)

Question 24

How is a restriction re a beneficial interest under a trust useful to a purchaser?

Answer 24

instructs a purchaser to pay the capital money to at least 2 trustees, ensuring that the beneficiary’s interest is overreached and converted into an interest in the sale proceeds

Question 25

Where would you document a restriction?

Answer 25

in the Proprietorship Register

Question 26

Can you pay the money directly to beneficiaries to successfully overreach their interest?

Answer 26

No, it can only be paid directly to the beneficiaries if they are also trustees

Question 27

What length of lease is binding?

Answer 27

Legal leases which are shorter than 7 years will bind a new freehold owner as overriding interests. Legal leases for over 7 years are registrable dispositions so will only bind if properly registered.

Question 28

Interest in Land + Actual occupation =

Answer 28

Overriding interest (subject to exceptions)

Question 29

Factors impacting whether someone has "actual occupation"

Answer 29

degree of permanence and continuity of presence; intentions and wishes of that person; length of absence from the property and the reason for it; nature of the property and personal circumstances

Question 30

to claim an overriding interest, the person must be in actual occupation at the time of

Answer 30

the transfer deed and possibly also at the time of registration

Question 31

An implied legal easement will be binding as an overriding interest if:

Answer 31

a) The new owner knew about it or b) The new owner did not know about it, but it was obvious on a reasonable inspection of the land or c) It has been exercised within the 12 months immediately before the disposition.

Question 32

Exception to principle that 'legal rights bind the whole world”

Answer 32

a 'puisne' mortgage (a second legal mortgage) must be registered as a Land Charge

Question 33

Doctrine of notice continues to apply to which equitable rights?

Answer 33

Equitable easements and restrictive covenants created pre-1926. Equitable interests in a trust of land that have not been overreached.

Question 34

How is a Land Charge entered?

Answer 34

The Land Charge is entered against the NAME of the landowner when the interest is granted, not entered against the property's address

Question 35

Equity's darling

Answer 35

a purchaser of the land who has acted in good faith and does not have notice of the interest

Question 36

Land Charge for puisne mortgage

Answer 36

Class C(I)

Question 37

Land Charge for estate contract

Answer 37

Class C(IV)

Question 38

Land Charge for restrictive covenant created post-1926

Answer 38

Class D(II)

Question 39

Land Charge for equitable easement

Answer 39

Class D(III)

Question 40

Land Charge for Spouse's matrimonial right of occupation

Answer 40

Class F

Question 41

only equitable interests that cannot be protected by way of a land charge

Answer 41

interests in a trust of land equitable easements and restrictive covenants created pre-1926.

Question 42

What is the legal position on a spouse's matrimonial right of occupation?

Answer 42

NOT an interest in the land. It is a statutory right for a non-owning spouse to occupy the family home under the Family Law Act 1996.

Question 43

Advice to a purchaser of unregistered land to avoid discovering unknown equitable interests after purchase

Answer 43

do a full search of the Land Charges Register against the full names of all estate owners as spelt in the title deeds in order to discover the existence of any equitable interests

Question 44

Under the doctrine of notice, an equitable interest over the land is binding on anyone except

Answer 44

Equity's darling

Question 45

To be equity’s darling, the purchaser of the land must be

Answer 45

“without notice”

Question 46

Actual notice

Answer 46

purchaser actually knows of the equitable interest

Question 47

Imputed notice

Answer 47

notice received by the buyer’s agent e.g. the solicitor on a land purchase. Where the agent has notice, whether actual or constructive, of an interest, that knowledge is imputed to the buyer.

Question 48

When will a purchaser be fixed with constructive notice of an interest?

Answer 48

if they fail to pursue a line of enquiry which ought reasonably to have been made

Question 49

A purchaser's obligation to make enquiries is limited to

Answer 49

making a proper investigation of the title and of the land, and enquiry of all occupiers of the land

Question 50

Can a donee be equity's darling?

Answer 50

NO, even if they do not have notice of the interest

Question 51

if a bona fide purchaser for value of a legal estate without notice purchased the land, what happens to the equitable interest in the unregistered land?

Answer 51

extinguished forever

Question 52

Which category of rights may need protecting by way of a Land Charge?

Answer 52

Equitable interests created post-1926