Land Law SBAQs Flashcards

Question

Which ONE of the following statements is CORRECT? A. The relevant date for assessing actual occupation for the purposes of Schedule 3 paragraph 2 LRA 2002 is the date of registration of the purchase. B. The relevant date for assessing actual occupation for the purposes of Schedule 3 paragraph 2 LRA 2002 is the date of completion of the purchase. C. The relevant date for assessing whether an interest protected by Schedule 3 paragraphs 1 or 3 LRA 2002 is enforceable against a buyer is the date of exchange of contracts. D. The relevant date for assessing whether an interest protected by Schedule 3 paragraphs 1 or 3 LRA 2002 is enforceable against a buyer is the date of registration of the purchase.

Answer 1

The correct answer is B The relevant date for Schedule 3 paragraph 2 is completion (see Abbey National v Cann). The relevant date for the other overriding interests under paragraphs 1 and 3 is also the date of completion of the purchase.

Answer 2

The statement is False The conditions are alternatives, so the easement must EITHER be within the actual knowledge of the buyer OR obvious on a reasonably careful inspection of the land OR used within the past year.

Answer 3

The correct answers are D and E The lease in statement D is equitable because it does not fall within the parol lease exception, being for more than three years, but is created in accordance with s2 LP(MP)A 1989 - an estate contract. It is an interest affecting a registered estate and is protected by a notice on the charges register. If it is not so protected, it may be elevated to overriding status under Schedule 3 paragraph 2 as it is sufficiently proprietary in nature (and if the other requirements of Schedule 3 paragraph 2 are met). Statement E is a registrable disposition. Statement A is wrong as a legal lease for exactly 7 years will be overriding under Schedule 3 paragraph 1 LRA 2002. Statement B is wrong as a right under s 30 Family Law Act 1996 cannot be protected by Schedule 3 paragraph 2 LRA 2002 - see s 31(10)(b) FLA 1996. Statement C is wrong as a legal easement for 30 years should be registered as a registrable disposition but cannot be protected by Schedule 3 paragraph 2 LRA 2002 as the dominant owner is not in actual occupation of the land affected.

Answer 4

Option E is the correct answer. The expressly granted easement by deed is a registrable disposition which will only bind your client if it was completed by registration. Option A is wrong because schedule 3 para 1 relates to short leases. Option B is wrong because it is applying the rules which govern unregistered land when the farm has a registered title. Option C is wrong. An easement is a proprietary interest in land which can bind a purchaser of the land even though they were not party to it. Option D is wrong because schedule 3 para 3 does not apply to expressly granted easements.

Answer 5

The correct option is E. The lender paid capital money to two trustees (the married couple). This had the effect of lifting the beneficial interests of the parents (as a consequence of their contribution to the purchase price) from the property and to the proceeds of sale (ie the loan advance from the lender). Option C is, therefore, wrong. Option A is wrong because although the parents may have a beneficial interest under a trust protected as an overriding interest, such an interest has been overreached by the lender. Option B is wrong as occupation alone does not create an overriding interest. This must be coupled with a proprietary interest in land. Option D is wrong because the facts clearly indicate that the parents were in occupation prior to the advance by the lender.

Answer 6

The correct option is E. A lease is capable of being legal. In order to be legal it must be created by deed (s 52(1) LPA 1925). The facts state that the lease is made by deed. Options B and C are, therefore, wrong. The lease is for five years and, therefore, cannot be registered as a registrable disposition. Option A is, therefore, wrong. A five-year legal lease is automatically protected as an overriding interest (Sch 3, para 1 LRA 2002). Option D is, therefore, wrong as it relates to unregistered land and the facts state that the Property is registered.

Answer 7

The correct answers are A, B, C and D Statement E is wrong because only the wishes of creditors secured on the property are taken into account. Statement F is wrong because the court does not give any greater weight to the wishes of the trustees than it does to the wishes of the beneficiaries.

Answer 8

The correct answers are B and D purchasers of the legal estate do not automatically take the property free of the equitable interests. However, provided that the purchaser pays the money to all the trustees being at least two in number, in this case to both Tracy and Teresa, he or she will overreach all the beneficial interests even where there is a restriction on the register or where the beneficial interest is an overriding interest. If overreaching does not occur, a restriction will prevent registration of the buyer as the new proprietor.

Answer 9

The statement is False. On the assumption that the four unities are all present, the express declaration will override the equitable presumption- see Goodman v Gallant.

Answer 10

The correct answer is B Only Keith becomes a beneficial tenant in common (as to one-quarter) when he serves the notice, and the remaining three-quarters are held by the other three original parties as joint tenants. When Keith dies, his property passes to Nicola, so she becomes a tenant in common in his place.

Answer 11

The statement is False. Beneficial interests held on a joint tenancy cannot pass by will. So, Jessica's lifetime gift will be effective as an example of severance by alienation which complies with s53(1)(c) LPA 1925, but Lionel's gift in his will does not pass his share to Nicola.

Answer 12

Statement C is correct. Nicola took Keith's share after he severed his beneficial interest and she gets Jessica's share under her life-time gift. Margaret already had her own interest in the property and she acquired Lionel's when he died by right of survivorship.

Answer 13

statement C is correct The only way for Margaret to sell is for her to appoint a second trustee. Statement A is false as Nicola is not on the legal title; she has an equitable interest only. Statement B is incorrect as the title is unregistered so the LRA 2002 will not apply (if this were registered title, note that it is possible to overreach an overriding interest under Schedule 3 para 2 LRA 2002 if it is protecting an interest under a trust).

Answer 14

The correct statement is Statement E. In the absence of a restriction on the proprietorship register in a co-ownership situation the beneficial interest is held as joint tenants and the rule of survivorship applies. Options B and E are both correct but Option E is the best answer as evidence of death will be needed to prove who is the sole surviving legal and beneficial owner. Options A and D are therefore wrong. Option C is also wrong as even if it were held as a tenant in common the deceased’s beneficial interest would need to be overreached.

Answer 15

The correct answer is Option A. The man and his partner hold the legal estate as trustees as joint tenants (s 1(6) LPA 1925). The four unities are present which would indicate a joint tenancy (or a tenancy in common). Option E is correct but is not the best answer as it does not reflect the express declaration. There is an express declaration that the man and his partner hold the equitable interests as joint tenants. Option C is, therefore, correct, but not the best answer as it does not take account of how the legal estate is held. The express declaration is conclusive, notwithstanding the unequal contributions made to the purchase price. Options B and D are, therefore, wrong.

Answer 16

Option B is correct. When the biologist sold her interest in the house to the chemist six months ago this had no effect on the legal estate, which cannot be severed (s1(6) LPA 1925). When the engineer died last week the legal estate passed by survivorship to the biologist and the chemist, who are now the trustees. The beneficial joint tenancy was severed by alienation because the formalities for a disposition of an equitable interest in s.53(1)(c) LPA 1925 were satisfied when the biologist sold her share to the chemist six months ago. This left the chemist and the engineer as joint tenants of 2/3rds and the chemist as tenant in common of 1/3rd. When the engineer died last week her interest passed by survivorship to the chemist (her will was of no effect in relation to the house), leaving the chemist as the sole beneficial owner.

Answer 17

Option D is correct. The wife and husband were joint tenants of both the legal estate and the equitable interest so, on the husband’s death, both passed by survivorship and the wife became the absolute owner of the house. All that you will need to see is the husband’s death certificate.

Answer 18

C is correct. Neither positive nor restrictive covenants can be enforced against successors in title to the original covenantor at common law. Restrictive covenants can only be enforced in equity under the rule in Tulk v Moxhay.

Answer 19

Statement B is wrong. The annexation of the benefit of a covenant attaches the benefit of the covenant to the land of the covenantee at the TIME OF CREATION OF THE COVENANT. Such annexation can be express in the deed in which the covenant is created or implied into the deed under s 78 of the Law of Property Act 1925. Express assignment of the benefit of the covenant may take place at the time of the transfer of the land to a successor covenantee.

Answer 20

the statement is False. In Smith & Snipes Hall Farm Ltd v River Douglas Catchment Board [1948] 2 KB 500, the Court of Appeal considered that as s.78 of the Law of Property Act 1925 provided for a covenant relating to the land of the covenantee to be deemed to be made not only with the covenantee's successors in title, but also with "persons deriving title under him or them", so tenants holding a leasehold estate are included.

Answer 21

statement C is correct. Specific performance is not an available remedy because X does not want A to take a positive action to comply with the covenant; they want to prevent A from breaching a restriction, so an injunction to stop the breach of covenant and/or damages are the appropriate remedies.

Answer 22

B is the correct answer This question relates to freehold covenants, so privity of contract exists between A and X. Privity of estate only exists between landlord and tenant.

Answer 23

B is correct. Whilst at common law the burden of the covenants will not pass to B, in equity Y obtains the benefit of the covenants and B takes the burden of covenant (a) (the restrictive covenant) under Tulk v Moxhay, but not (b) which is a positive covenant.

Answer 24

A is correct. A restrictive covenant is classified in registered land as an interest affecting a registered estate.

Answer 25

Statements C and E are correct By application to lands tribunal and by express agreement (Note: from 1 June 2009 the Lands Tribunal became the Lands Chamber of the Upper Tribunal, but is still referred to as the Lands Tribunal).

Answer 26

The correct option is D. The architect is the original covenantor. Option C is, therefore, wrong. The friend now owns the land burdened by the covenant – the Property. The original covenantee was the barrister. Option B is, therefore, wrong. The vet now owns the land that benefits from the covenant. Option A is, therefore, wrong. Option E is wrong as, although the architect is the original covenantor, the barrister no longer

Answer 27

Option B is correct. The burden of a covenant can only pass (in equity) if it meets the requirements laid out in Tulk v Moxhay: it is restrictive, it was made to benefit land retained by the covenantee, it touches and concerns the covenantee’s land, there was an intention that the burden would run with the burdened land and the owner of the burdened land had notice of the covenant. The covenant not to use the land for business purposes satisfies all these requirements. The covenant to build and maintain the fence is positive, however and so the burden of that covenant does not pass (despite its registration). It cannot therefore be enforced directly against the dentist. Option A is wrong. As explained above, although the burden of the covenant not to use the land for business purposes passes to the dentist, the covenant to maintain the fence is positive and the burden of that covenant does not pass. Option C is wrong. A covenant that is expressed as personal would not touch and concern the covenantee’s land but the facts indicate that this covenant was given by the developer on his own behalf and on behalf of his successors in title. It was not, therefore, expressed to be personal to the developer. Option D is wrong because, as discussed at Option B above, the burden of a restrictive covenant does run with the land if the requirements laid out in Tulk v Moxhay are satisfied. The client can sue the dentist for breach of the restrictive covenant even though the dentist was not a party to the original covenant. Not being a party to the original covenant would, however, preclude the direct enforcement of the positive covenant against the dentist. Option E is wrong. Although we are told that the dentist gave an indemnity covenant to the developer, this simply means that if the client sues the developer, then the developer can in turn sue the dentist under the indemnity covenant. An indemnity covenant given by a successor covenantor does not allow direct action to be taken against them. The client can still sue the developer directly because the client has the benefit of both of the covenants and the developer is still liable as the original covenantor.

Answer 28

The correct option is C. A covenant is not capable of being legal (s 1(3) LPA 1925). Creation by deed does not alter this. Options A and D are, therefore, wrong. The covenant in question is positive as it will require effort or expenditure to perform it. Option B is, therefore, wrong. Option E is wrong as a covenant has clearly been created, not an easement.

Answer 29

The correct option is B. There is nothing in the facts to suggest that there has been express assignment. Option A is wrong. There is no express annexation as words of annexation have not been used and the land to benefit from the covenant is not identified in the clause creating the covenant. Option D is wrong. Option C is accurate as the benefit will have passed to the teacher at common law. However, at common law, the burden of covenants does not run and if (as here) the covenant is restrictive then the burden will only pass in equity. In order for the teacher to pursue a claim, they must show that benefit of the covenant has passed to them in equity . Option C is, therefore, not the best answer. There is nothing on the facts to suggest a mutual benefit and burden. This only applies to positive covenants and here the covenant is restrictive. Option E is, therefore, wrong. For these reasons, the only way in which the benefit of the covenant can pass to the teacher is by way of statutory annexation.

Answer 30

Option D is the correct answer. The obligation in question is a restrictive covenant (not positive) and therefore B, C and E must be wrong. The burden of restrictive covenants appears as a notice in the charges register and not the property register and so A is wrong.

Answer 31

Option D is the correct option. The covenant is restrictive, there appears to have been identifiable land owned by the covenantee at the time the covenant was created, the covenant touches and concern the benefited land (see below), the intention for the burden to run will be implied by s79 LPA 1925 (as it has not been expressly shown) and the owner of the burdened land has notice of the covenant through its registration. Consequently, the burden of the covenant does run with the land. Option A is wrong because the covenant does “touch and concern” the land. The covenant benefits only the owner of the benefited land for the time being (if separated from the land, it would cease to be advantageous to them), it affects the value of the benefited land (the value could drop if the burdened land was not used for residential purposes) and the covenant is not expressed to be personal. Option B is wrong because this covenant would be interpreted as being restrictive in nature despite being worded in a positive fashion. It is the substance and not the wording which determines the nature of the covenant. Option C is wrong because the intention for the burden of a covenant to run with the land can be implied by virtue of s79 LPA 1925, as indicated above in the explanation supporting Option D. Option E is wrong because registration of the covenant does not of itself confirm that the burden of it would run with the land.

Answer 32

Option A is correct This is a restrictive covenant and the benefit and burden can pass to successors of the original parties to the covenant. The requirements for the benefit and the burden of the covenant to pass automatically have been satisfied. The wording in the transfer deed means that the benefit of the covenant has been expressly annexed and shows an intention for the burden to run. The facts shows that the covenant was registered on the title to the farmhouse before the date of registration of the current owner and so the current owner had notice. Option B is wrong - it is not true to say that the benefit and burden of all freehold covenants will pass. As explained above, certain requirements must be satisfied for the benefit and burden of freehold covenants to pass with the land (including registration of the covenant on the title register of the burdened land in registered land) and only the burden of restrictive covenants can directly pass to the successors of the burdened land. Option C is wrong - this is not a positive covenant. Option D is wrong - actual knowledge of the covenant is not required in order to bind the buyer of the burdened land – the registration of the notice on the register of title of the farmhouse amounts to notice of the covenant to the current owner. Option E is wrong - the benefit of the covenant does not remain solely with the original covenantee and has passed to the current owner of the field.

Answer 33

D is correct despite being worded in a positive way, the substance of the covenant is restrictive, so A and B are wrong. In the registered system a restrictive covenant must be protected by a notice on the Charges Register in order to bind successors in title. As regards the seller’s mother, she may have a trust interest if she invested money in the house. This trust interest may be overriding if she is also in actual occupation of the house and the conditions of paragraph 2 of Schedule 3 of the Land Registration Act 2002 are satisfied. Overriding interests bind even though there is no mention of them on the registered title therefore, option C is wrong. Finally, whilst a beneficiary can register a restriction on the Proprietorship Register, this does not protect the trust interest, instead, it alerts a potential buyer of the need to overreach the trust interest. So option E is wrong.

Answer 34

Options A, C and E are correct. To be legal, an expressly created easement must satisfy s1(2) LPA 1925 as to duration, be created by deed (s52 LPA 1925) and be completed by registration (s27 LRA 2002). Registration also makes the easement enforceable against a buyer of the land. Sch 3 para 3 LRA 2002 only applies to easements created impliedly on a sale of part or by prescription and deals with enforceability against a buyer, not whether the easement is legal in the first place.

Answer 35

Option C is wrong. To create an express legal easement it must be granted by deed.

Answer 36

Option B is correct. Megarry has used the right of way for 45 years and may successfully claim that he has the benefit of an easement by prescription. Megarry may have acquired an easement by lost modern grant already or he can claim under both periods in s.2 Prescription Act 1832 (20 and 40 years) if he brings a court action. The right is capable of being an easement and it has been enjoyed as of right, that is, without force, secrecy or permission. There seems to have been continuous use and the right is exercised by one fee simple owner against another. There is no evidence that there has been a sale of part and so the easement has not be created by implication nor is there evidence of an express agreement between the parties by deed.

Answer 37

Option B is correct. To "lie in grant" Megarry must claim the right to receive light through a specific opening or window. The amount of light that can be claimed as an easement is limited to that required for the use of the building for the ordinary purpose for which it was constructed. A greenhouse is a building (see Allen v Greenwood) and is entitled to the amount of light needed to cultivate plants. Megarry will be able to claim under lost modern grant if he fulfils all the common law conditions. If not, as an alternative, he could bring a court action under s3 Prescription Act 1832 if the right has been used for 20 years without written consent. The claim cannot be defeated because of force, secrecy or by verbal consent and neither does the user need to be by one fee simple owner against another. This relaxation of the common law conditions only applies to easements of light. There is no evidence that there has been a sale of part and so the easement has not be created by implication nor is there evidence of an express agreement between the parties by deed.

Answer 38

Option D is correct. The new owner of House A has acquired the rights as a result of implied grant. You have been told that the transfer did not mention these rights so they have not passed to the owner of House A by virtue of an express grant and, as all the land was owned and occupied by Andrew prior to the sale, prescription cannot apply in this case as Andrew cannot acquire easements over his own land.

Answer 39

Options B, C and D are correct. Strict necessity is unlikely to apply as there would be alternative methods of drainage and sewerage (such as cess pits/soak-aways) and so the land could be used without the easement. The use of the drains and the sewers may have been in the intention of the parties and so common intention could be available (Wong v Beaumont Property Trust Ltd) - if a common purpose if known to the parties, the right claimed is needed in order for the common purpose to be fulfilled. Also, as Andrew used the drains before the sale of part, the right was a 'quasi easement' which is then converted into an implied easement in the sale of part transfer in favour of the buyer, provided that the use was continuous, apparent (by means of manhole covers, for example) and necessary for the reasonable enjoyment of the land. S62 may also apply as, although there has not been diversity of occupation immediately before the sale of part, if the use is continuous and apparent (as it appears to be on the facts), s62 will have the effect of converting the right or privilege into an easement.

Answer 40

the statement is True. As a seller on a sale of part Andrew can only rely on the implied reservation methods of strict necessity or common intention. Although, it is unlikely strict necessity would apply, it seems more likely common intention might work here (for the reasons set out in Question 7). A seller cannot rely on Wheeldon v Burrows because the court will not allow the seller to 'derogate from his grant'.

Answer 41

Options C, D and E are correct. All legal easements, however created, bind the world in the unregistered system. As we saw in question 1, in the registered system an expressly created legal easement must be protected by registration and can never be overriding.

Answer 42

The correct Option is D. The right to light is a recognised negative easement (therefore, Option C is wrong) but there is no general right to light (therefore, Options A and B are wrong). A right to light must be via a defined aperture and it is hard to see how this would be a garden generally without a specific aperture benefiting from the right. Option E is wrong as there can be no easement for an uninterrupted view.

Answer 43

Option B is correct. The second lease in February 2020 counts as a sale of part and Sarah's pre-existing licence to park can be elevated to the status of an easement (see Wright v Macadam) as it had all the necessary characteristics of a valid easement, by being implied into the lease deed. Easements cannot be created orally and prescription will not work, as she has not used the right for 20 years and has been using it with permission, hence not satisfying the common law conditions.

Answer 44

Option C is correct because the rule in Wheeldon v Burrows will imply an easement on a sale of part where there is a continuous and apparent quasi-easement which is necessary for the reasonable enjoyment of the dominant tenement and which is in use at the time of the sale of part of the dominant tenement. All of these elements are present on the sale to the client. Option A is wrong as there was no diversity of occupation at the time of the transfer to the client. The cottage was owned and occupied by the seller. In any event, diversity of occupation is only needed to create an easement under s62 LPA where there is a licence or privilege in favour of the dominant land, which then becomes an easement on completion of the sale of that dominant land. (Note that an easement may have been created under s62 LPA 1925 in the circumstances in this question as there was a continuous and apparent quasi easement in use at the time of the sale for the benefit of the land being sold – see P&S Platt Ltd v Crouch and Wood v Waddington). It is, however, the reference to there being diversity of occupation at the time of the transfer that makes this option wrong). Option B is wrong because an easement of drainage is not a strict necessity here. It is possible to use the cottage without the easement of drainage by installing a septic tank or cesspit. Option D is wrong because a common law prescriptive easement is based on a presumption of continuous use since 1189 where the easement has been used continuously for 20 years. However the presumption is rebuttable here because the cottage was only built 20 years ago. It can therefore be confirmed that use of the easement did not run all the way back to 1189. Option E is wrong as the period of the seller’s use is not relevant here when deciding if there is a prescriptive easement. The client would need to use the drains for 20 years before such an easement could be considered.

Answer 45

Option B is the best answer. For the buyer to have an indefeasible easement the easement must be expressly created by deed and registered at the Land Registry. It is not possible to grant a legal easement orally so Option C is wrong. Option A is wrong because for a deed to be valid an individual's signature must be witnessed. Option D is wrong because the witness must be a third party. Option E is correct but for the easement to retain its legal status it must be registered as a registrable disposition at the Land Registry.

Answer 46

The correct Option is C. This cannot be an easement of necessity as there is an alternative means of access and therefore, the Barn is not landlocked. Option A is, therefore, wrong. There is no indication of a common purpose or intention in the facts, so Option B is wrong. The transfer to the woman contained an express grant only in relation to the main point of access, not the Track. Option D is, therefore, wrong. This cannot be an easement by prescription as, although the use started in 1999, it could not become an easement until there was a separate dominant and servient owner. This only happened when the Barn was sold last year. Option E is, therefore, wrong. The man exercised a quasi-easement over his own land. On the transfer to the woman, this became a legal easement on the basis that the easement was clearly continuous and apparent, necessary for the reasonable enjoyment of the land (to avoid the busy junction) and in use at the time of the sale. Option C is, therefore, correct.

Answer 47

The correct Option is A. The easement in relation to the sign was created by implication by s 62 LPA 1925. There was an existing privilege (the freehold owner’s informal permission to erect the sign), there was diversity of occupation (the freehold owner owning the servient land and the tenant occupying the Property) and there was a conveyance (the transfer of the freehold to the tenant). The effect of the conveyance is to create a legal easement in relation to the sign. There is no mention of the easement in the transfer of the Property. Option B is, therefore, wrong. Although the easement has been exercised for over 20 years, most of this period was whilst the Property was let. A prescriptive right can only be created as between two freehold owners. Option D is, therefore, wrong. It is hard to consider any circumstances in which an easement relating to a sign could be an easement of necessity. Option C is, therefore, wrong. Option E is wrong as the right is capable of being an easement as it does accommodate the dominant tenement.

Answer 48

Option B is correct because the seller is likely to have impliedly reserved an easement by common intention. The client knew that the seller intended to continue to live in the house and therefore the seller’s easement of drainage would be necessary to give effect to the intended use of the seller’s retained land. The seller does not have to divert the drains. Option A is wrong. A right of drainage is unlikely to be considered an easement of necessity but as Option B indicates, an easement can be implied by common intention and the seller does not have to divert the drains. Option C is wrong. Whilst the seller will not have an easement by prescription (because she has not used the drains for at least 20 years). As Option B indicates, the seller will be likely to have an easement by common intention so the seller does not have to divert the drains. Option D is wrong because it is not possible to have an implied reservation of an easement under the rule in Wheeldon v Burrows. It only works to grant easements to buyers (and their successors) on a sale of part. Option E is wrong because whilst there appears to be no express reservation, as Option B indicates, an easement of drainage is implied by common intention and the seller will not have to move the drains.

Answer 49

Option B is correct. Once a right of way exists, the servient owner (the owner of the land over which the easement exists) is under no obligation to maintain or repair it. Similarly, the dominant owner (the owner of the land who can exercise the rights attaching to the easement) has no obligation to maintain or repair the right of way. The liability to maintain or to repair the right of way once constructed primarily depends upon the terms of the grant or reservation. In the absence of express stipulation or special circumstances, neither the servient owner nor the dominant owner is liable to maintain or repair it. In this situation, there is no express stipulation nor any special circumstances and so neither the freehold owner as servient owner, nor the man/the other local residents as dominant owners are liable or obliged to repair the track. Accordingly, Option B is correct and the other options are necessarily wrong.

Answer 50

Option C is the correct answer. Section 85 provides that a mortgage may be created by way of a charge by legal mortgage over freehold land (the main method of creation nowadays) and section 86 over leasehold land.

Answer 51

Option A is correct. A legal mortgage over a registered title is a registrable disposition, so for the mortgage to be a legal mortgage it must be completed by registration - s27 LRA 2002.

Answer 52

The statement is True. The second mortgage should be protected in exactly the same way as the first mortgage i.e. protected as a registrable disposition in the Charges Register of Hector's title. Failure to take this step will result in the mortgage being treated as an interest affecting a registered estate (only recognised by equity) which would still require protection by registration of a notice (s32 LRA 2002).

Answer 53

Options A and C are correct. On a sale by a mortgagee the buyer takes the property subject to incumbrances that bind the mortgagee who is selling the property (s 104(1) LPA 1925). In this case the Bank's mortgage is entered on the register before Paul's mortgage, so it ranks before Paul's mortgage (s 48 LRA 2002).

Answer 54

Option B is correct. A mortgage by deed must be registered against the title to become legal and to take priority over later mortgages (s 48 LRA 2002). In this case we need to know whether or not the Building Society protected its mortgage before the Bank's mortgage was entered on the register.

Answer 55

The correct answers are options B and C. In order to transfer title to a new owner, the Bank does not technically need to take possession of the property. If the Bank wants to sell the property with vacant possession, it will have to take possession of the property from David, or he will have to give up possession. If the Bank applies to the court for a possession order the court may postpone the order to give David time to repay the arrears. It is not necessary to obtain a court order, but it is safer to do so. The benefit of obtaining a court order first is that the Bank will avoid any risk of committing an offence under the Criminal Law Act 1977.

Answer 56

Option C is correct - S104(1) LPA 1925. However the debt will still be owed by David to Paul

Answer 57

Option B is correct. The Bank will rank first as its mortgage is entered on the register first. The Building Society's mortgage is unenforceable against the Bank because the Bank is a purchaser for value (s 29 LRA 2002). As the Building Society never registered its mortgage, it will also rank behind Paul's mortgage, as again Paul has registered (s48 LRA 2002).

Answer 58

The statement is False. An overriding interest must exist at the date the mortgage is completed, not the date the mortgage is registered. s.29 LRA applies to Registrable Dispositions and Interests Affecting a Registered Estate. These must be registered before the date the mortgage is registered in order to bind a mortgagee.

Answer 59

The correct Option is B. Exercise of the power of sale will end the mortgage. As the value of the Property is lower than the debt, the Bank can pursue a debt action against the owner for the difference. Taking possession, pursuing only a debt action and appointing a receiver do not end the mortgage. Therefore, Options A, C and E are wrong. Foreclosure would end the mortgage. However, it is not in the Bank’s interest to foreclose as this would extinguish the mortgage and leave the Bank with no remedy to recover any shortfall from the owner. Option D is not therefore the best answer.

Answer 60

Option B is the best answer. The power of sale in respect of the second mortgage has arisen, as the legal date of redemption has passed, and is exercisable, as there are arrears of interest. Accordingly, the second mortgagee can exercise the power of sale. The fact that the second mortgage was created second in time does not prevent the second mortgagee from exercising the power of sale. If the first mortgagee were to exercise the power of sale, it is correct that the proceeds of sale would be applied first in the discharge of the second mortgage under s105 LPA 1925. However, the power of sale has not arisen on the first mortgage. Priority between mortgages is governed by the LRA 2002 and the first to appear on the register takes priority. The date of creation is irrelevant. The second mortgage was registered first and therefore has priority over the first mortgage and can sell free from it. Therefore, Option B is the best answer and Options A, D and E are wrong. The lease is an overriding interest under Schedule 3 paragraph 1 LRA 2002, a legal lease for a term not exceeding 7 years. This will have priority over the second mortgage as it was in existence at the date of creation of the second mortgage. The second mortgagee will have to sell subject to the remaining term of the lease. Therefore, Option C is wrong.

Answer 61

The correct Option is D. The power of sale exists (the mortgage was made by deed) and has arisen (the mortgage was made four years ago so the legal date for redemption will have passed). Therefore, Option C is wrong. The power of sale is not exercisable as the borrower has only failed to pay one monthly payment, not two. Option B is, therefore, wrong. Option A correctly states the legal position but does not answer the question and is, therefore, wrong. Option E is wrong. A buyer would take free of the Bank’s mortgage upon the Bank exercising the power of sale. Although the power of sale exists and has arisen, the power is not yet exercisable as there is not yet two months’ arrears. Option D is, therefore, correct.

Answer 62

The correct Option is B. The power of sale exists (the mortgage was created by deed), has arisen (the mortgage was created five years ago and the date for redemption should have passed) and is exercisable as the owner is in two months arrears of interest payments. Option E is, therefore, wrong as only two months of arrears are needed. The Bank do not need to obtain a possession order as this is not a dwelling house and the Property is vacant. Therefore, Option A is wrong. The owner cannot apply to the court to adjourn the proceedings as (i) there are no such proceedings and (ii) the Property is not a dwelling house. Option C is, therefore, wrong. The Bank can choose the timing of the sale but do not need to obtain a court order for possession. Option D is, therefore, wrong.

Answer 63

Option D is the best answer as a debt action would mean that the mortgage continued in force and the borrower remained in possession. Options B and C are not the best answers. Taking possession would mean that the borrower no longer remained in occupation and appointing a receiver would mean that the borrower was no longer entitled to any income from the property. Sale or foreclosure would bring the mortgage to an end and so, Options A and E are wrong.

Answer 64

Option A is correct. The lease is a legal lease and it was created prior to the building society’s mortgage. As a legal lease for a term not exceeding seven years which was in existence when the building society’s mortgage was created, it would be classified as an overriding interest under Schedule 3 para 1 LRA 2002. This is why the lease will have priority over the building society’s mortgage and why the buyer of the property will be bound by the lease. Option B is wrong. The length of the lease term does not dictate whether the lease will bind a buyer from the building society. As the lease was created prior to the mortgage, the application of the enforceability rules will determine whether the lease has priority. Option C is wrong. Since a legal lease for a term not exceeding seven years is an overriding interest under Schedule 3 para 1 LRA 2002, it is enforceable even though it does not appear on the register of title. Option D is wrong because a lease cannot be overreached. Option E is wrong. The lease has priority over the building society’s mortgage, as indicated above, so the tenant does not have to consent to the sale for the lease to bind the buyer.

Answer 65

Option B is the correct answer. As the building society’s mortgage was created by deed, the power of sale is implied into the mortgage by s101 LPA 1925. The power of sale has arisen, as the legal date of redemption has passed and the power is exercisable, as there are more than two months arrears of interest (see s103(ii) LPA 1925). Accordingly, the building society can exercise its power of sale. Priority between mortgages is governed by s48 LRA 2002 and the first to appear on the register takes priority. The building society’s mortgage was registered first and therefore has priority over the bank’s mortgage and the building society can sell free from it. The lease was created by deed and as it was granted for a term not exceeding seven years, it would be classified as an overriding interest under Schedule 3 para 1 of the LRA 2002. As it was in existence at the date of creation of the building society’s mortgage, it will have priority over it and the building society will have to sell subject to it (see s104 LPA 1925). Option A is wrong because it suggests that the building society’s mortgage has priority over the lease. Option C is wrong because it suggests that the bank’s mortgage has priority over the building society’s mortgage. Option D is wrong because it suggests that both the bank’s mortgage and the lease have priority over the building society’s mortgage. Option E is wrong because the fact that the lease was created before the building society’s mortgage does not prevent the power of sale being exercised but, if the lease takes priority, the building society will sell subject to the lease, i.e. the buyer from the building society will not get vacant possession.

Answer 66

The correct option is B. The document creating the lease does not meet the requirements for a deed. However, certain leases do not require a deed. Therefore option C is wrong. Equity would not intervene as the document does not contain all the expressly agreed terms. Therefore, option D is wrong. The tenant immediately took possession and paid a monthly rent at market rate with no fine or premium, thus, creating a monthly periodic tenancy. Therefore, option E is wrong and option B is correct. A fixed term five-year lease cannot be created informally. Therefore, option A is wrong.

Answer 67

Option B is the best answer. A legal lease must be created by deed unless it falls within the s.54 parol lease exception (3 years or less, market rent, no fine or premium and right to immediate possession). So, B is the best answer as it correctly describes the parol lease exception and the position of these leases under Schedule 3 para 1. A legal lease of over 7 years is a registrable disposition (s27 LRA 2002) and must be completed by registration in order to bind a buyer by the date of registration of the buyer’s interest (s 29 LRA 2002). A legal lease of 7 years and under is an overriding interest under Schedule 3 paragraph 1 LRA 2002 if the lease is in existence at the time of completion of the buyer’s purchase of the property. Therefore, Option A is wrong as there could be a legal lease affecting the property even though it is not on the register. Option C is also wrong as legal leases of over 7 years should be registered in order to be binding (prior to LRA 2002, the term of years for a lease to be overriding was 21 years or less so this answer could potentially be correct but the question asks for the “best” description). Option D is wrong as, although legal leases are overriding if 7 years or under, those over 3 years can only be legal if created by deed. Option E is wrong for two reasons – all legal leases are not automatically binding and the date by which a lease has to be created for the purposes of an overriding interest under Schedule 3 paragraph 1 is the date of completion of the purchase not the day of registration.

Answer 68

Option B is the correct option because the burden of this covenant will have passed to the new tenant as the covenant was not expressed to be personal. Option A is wrong because this lease is a “new” lease and therefore the benefit of the covenant will pass as all covenants pass to the successor except those that are expressly stated to be personal. Option C is wrong because this lease is a “new” lease and therefore the burden of the covenant will pass because all covenants pass to the successors except those that are expressly stated to be personal rather than being determined by an assessment of whether they touch and concern the land or not. Option D is wrong because an authorised guarantee agreement will ensure that the original tenant guarantees that the new tenant will perform the lease covenants, not that the new tenant guarantees that the original tenant will perform the lease covenants. Option E is wrong because whether the original landlord retains the benefit of the leasehold covenants will depend upon whether the original landlord was released from the burden of his leasehold covenants by the original tenant or the court.

Answer 69

The correct option is A. The lease was created after 1 January 1996 and is, therefore, governed by the LT(C)A 1995. This means that, upon each assignment, the outgoing tenant is released from liability under the lease unless they have provided an AGA (ss 5 and 16 LT(C)A 1995). The benefit and burden of all covenants pass to the assignee (s 3). An AGA only guarantees the immediate assignee. Upon a further assignment the AGA ceases to have effect (s 16(4) LT(C)A 1995). The result is that the AGAs given by the clothes retailer and the sweetshop are no longer of any effect and the freehold owner can only pursue the bookseller (the current tenant) and/or the newsagent as a consequence of the AGA. Options B, C, D and E are, therefore, wrong.

Answer 70

Option D is the best answer. This is an old lease so the position on privity of contract applies. Option D is the best answer as it establishes that the shopkeeper may only be sued if they gave a direct covenant to the freehold owner. The developer will have acquired the benefit of the covenants under s41 LPA 1925 so Option E is wrong in that they can sue someone. The pharmacist will always be liable under privity of contract and the florist will be liable under privity of estate so Options C and E are wrong. Options A and B are on the face of it correct but only if we know whether or not the shopkeeper gave a direct covenant to the freehold owner to enable privity of contract to subsist.

Answer 71

Option D is correct. This is a ‘new lease’ granted after 1 January 1996. In relation to these leases, the original tenant is bound by the covenants of the lease only whilst the lease is vested in them. Upon an assignment, all covenants pass to the incoming tenant and the outgoing tenant is released from any liability under the lease (unless the outgoing tenant has signed an authorised guarantee agreement and the facts indicate that no such agreement has been signed). Option A is wrong. Under a ‘new lease’, the original tenant is released from its promises under the lease upon assignment. Option B is wrong. Once a lease has been assigned, there is no privity of estate between a landlord and the assignor. (In any event, the concepts of ‘privity of contract’ and ‘privity of estate’ are best ignored when considering new leases, having been replaced with the statutory regime under the Landlord and Tenant (Covenants) Act 1995.) Option C is wrong. The newsagent will not need to seek an indemnity against the clothing retailer in this case because the newsagent will not be liable for the unpaid rent in the first place. Option E is not the best answer. The newsagent will not remain liable for any covenants under the lease, save for those which are expressed to be personal. The covenants do not need to touch and concern the land for the burden to pass to the assignee.

Answer 72

Option C is correct. The question is asking about the remedies available against the original tenants under the lease. The lease was granted in 1995 and is therefore an old lease. Under the rules governing enforceability of covenants in old leases, the married couple, as original tenants, will remain liable on the tenant’s covenants for the duration of the lease. The covenant that the brothers have breached is a non-rent restrictive covenant. The only remedy available for breach of a non-rent covenant against the original tenant under an old lease is damages. Therefore, all the remaining options are wrong. In addition, option D is wrong because specific performance would only be a remedy potentially available in relation to the breach of a positive covenant. Option E is also wrong because a debt action is a remedy that is pursued in relation to a breach of the covenant to pay rent.

Answer 73

Option E is the correct answer because the formalities and requirements for creating a legal lease and, in the alternative, an equitable lease have not been satisfied on these facts. The occupier therefore has a licence rather than a lease. Options A and B are wrong. Although a deed is not required to create a legal lease for a fixed term of three years, the requirements of s54(2) LPA 1925 need to be satisfied for such a lease to be legal (this is called the parol lease exception). The lease is for a term not exceeding three years, the lease has taken effect in possession and the rent payable is the best rent reasonably obtainable (i.e. a market rent) but the tenant has paid a premium and the payment of the premium prevents this lease from falling within the parol lease exception. There is also another reason why Option B is wrong. Had the requirements of s54(2) LPA 1925 been satisfied on these facts, the lease would have been a legal lease for fixed term of three years rather than a legal periodic lease for one month. Option C is wrong. The lease cannot be an equitable fixed term lease for three years because the document was signed by the jewellery designer only and not by the freehold owner. This is one of the formalities stipulated in s2 LP(MP)A 1989 (the other required formalities have been satisfied: the document is in writing and records the agreed terms).

Answer 74

The correct option is E. The freehold owner does not wish to end the lease so forfeiture is not a good option. Option A is, therefore, wrong. The warehouse business does not have the resources to pay for the repairs so it is not sensible to pursue it either via privity of estate or a Jervis v Harris self-help remedy. Options B and D are, therefore, wrong. The freehold owner can pursue a damages claim against the original tenant via privity of contract. As the business expanded, the original tenant seems a better target to recover the cost of repair. Option E is, therefore, the best answer. The distributor was only responsible for the covenant to repair whilst the lease was vested in him. Option C is, therefore, wrong.

Answer 75

The statement is False. There is no certainty to the term. (Note: a tenancy may still arise where there is certainty of duration and exclusive possession, even where no rent is payable Ashburn Anstalt v Arnold [1989]).

Answer 76

Only statement A is correct. Legal leases granted for a term not exceeding 7 years are unregistered interests which override under Schedule 3 paragraph 1 LRA 2002: a legal monthly tenancy would fall within this category. Statement C is therefore wrong as a legal lease of 7 years or less would also come within Schedule 3 paragraph 1 and it would not be necessary for the tenant to satisfy the conditions in Schedule 3 paragraph 2 LRA 2002 for the lease to be an overriding interest. An equitable lease can bind a successor landlord as an overriding interest if the conditions in Schedule 3 paragraph 2 LRA 2002 are satisfied, therefore statement B is also wrong. Legal leases of more than 7 years require registration as a registrable disposition and so statement D is wrong as if the lease is not registered, it will not be legal but can only be equitable (note that if it is equitable, it can bind a successor landlord as an overriding interest if the conditions in Schedule 3 paragraph 2 LRA 2002 are satisfied).

Answer 77

Correct - statement A is correct. Paula will acquire the benefit of the tenant covenant under s.3(3)(b) of the Landlord and Tenant (Covenants) Act 1995. Sandra will acquire the burden of the covenant under s.3(2)(a) of the Landlord and Tenant (Covenants) Act 1995. Troy is liable on the promise in the AGA given to Paula. Paula can therefore sue both Troy and Sandra.

Answer 78

The correct option is B. There is nothing in the facts to suggest that there has been express assignment. Option A is wrong. There is no express annexation as words of annexation have not been used and the land to benefit from the covenant is not identified in the clause creating the covenant. Option D is wrong. Option C is accurate as the benefit will have passed to the teacher at common law. However, the covenant is restrictive and, therefore, the burden will only pass in equity. In order for the teacher to pursue a claim, they must show that benefit of the covenant has passed to them in equity. Option C is, therefore, not the best answer. There is nothing on the facts to suggest a mutual benefit and burden. This only applies to positive covenants and here the covenant is restrictive. Option E is, therefore, wrong. For these reasons, the only way in which the benefit of the covenant can pass to the teacher is by way of statutory annexation.

Answer 79

Option A is correct. The covenant is positive so the burden will not have passed to the barber. The teacher will only be able to bring an action for damages at common law against the nurse, so will have to show that the benefit of the covenant passed from the property developer to the teacher under the common law rules. Option B is wrong because the benefit of a covenant can pass on a sale of the benefitted land. Option C is wrong. The burdened land has changed hands and the burden of the positive covenant will not have passed to the barber, however the teacher can still bring an action against the nurse so it will be necessary to show that the benefit passed to the teacher. Option D is wrong. The burdened land has changed hands and the burden of the positive covenant will not have passed from the nurse to the barber (equity only allows the burden of a restrictive covenant to pass). The positive covenant is therefore no longer enforceable in equity, so there is no point showing that the benefit passed to the teacher in equity. Option E is wrong because the benefit of a covenant does not pass under s.62 Law of Property Act 1925.

Answer 80

Option E is correct as an order for specific performance would be unenforceable against an original covenantor that has no control over the land; the only available remedy would be damages. Option B therefore is wrong. Option A is not the best answer as the source of the veterinarian’s obligations is contractual. The veterinarian was the original covenantee. Option C is wrong as the burden of positive covenants cannot pass in common law or in equity. Option D is wrong as the veterinarian remains liable for the covenant after she has sold the land and the farmer’s son is likely to have the benefit of the covenant at common law.

Answer 81

Option D is correct because the burden of a positive covenant cannot pass to a successor, therefore, the doctor is only able to take action against the dentist as the original covenantor. If the doctor does sue the dentist, the dentist can take action against the nurse for breach of the personal indemnity covenant. Option A is wrong because the indemnity covenant is a personal covenant between the dentist and the nurse. It does not allow the doctor to take direct action against the nurse. It merely means that the nurse is indemnifying the dentist for any losses resulting from the nurse’s breach of covenant. Option B is wrong because only the benefit of a positive covenant can pass to a successor. Option C is wrong because although the dentist does remain liable, this is due to privity of contract, not the indemnity covenant. Option E is wrong because positive covenants can always be enforced against the original covenantor, regardless of a change of ownership.

Answer 82

Option A is correct. The benefit of the positive covenant has passed to the new owner at common law (the covenant touches and concerns the land, there will be express or implied intention that the benefit should run, the original covenantee and the buyer of the benefitted land had/have a legal estate in the land) and in equity (through annexation or assignment). The covenant is a positive covenant and the burden of this does not pass at common law (Austerberry v Corporation of London) nor in equity (Tulk v Moxhay), however the doctrine of mutual benefit and burden under Halsall v Brizell applies. There is an alternative way of enforcing the burden of the positive covenant. The right to use the drains benefits the company’s land and the use of this is conditional on it contributing towards the cost of its maintenance. It enables the owner with the benefit of the covenant to prevent the exercise of the right if the costs of maintenance have not been paid. Option B is wrong. As per the answer to Option A the benefit of the positive covenant has passed to the new owner. The burden of the positive covenant will not pass at common law nor in equity regardless of registration (Austerberry v Corporation of London and Tulk v Moxhay). Option C is wrong. As per the answer to Option A, the benefit of the positive covenant has passed to the new owner and although the burden of the positive covenant has not passed to the company at common law nor in equity, it can be enforced through the doctrine of mutual benefit and burden under Halsall v Brizzell. Option D is wrong for the same reasons as in Option A.

Answer 83

Option B is correct. The covenant not to install floodlights is a restrictive covenant and the principal remedy that a covenantee would be likely to seek for breach of a restrictive covenant is an injunction. The client could also make a claim for damages for the loss suffered and although a court may award both remedies, it will award damages instead of an injunction in certain circumstances (see Shelfer v City of London Electric Lighting Co and also Coventry v Lawrence. Option A is wrong because it does not matter that the sports club did not originally enter into the covenant. The burden of a restrictive covenant can run with the land and be enforceable against successors to the original covenantor. The facts make it clear that the requirements for the burden to run with the sports field have been satisfied. Option C is wrong because there is no automatic right to an injunction on the breach of a restrictive covenant. An injunction is an equitable remedy awarded at the discretion of the court. Option D is wrong because specific performance is a remedy that might be sought (and would be appropriate) for breach of a positive covenant. The covenant here is restrictive. Option E is wrong because the client would not be limited to claiming damages only. The client could seek (although may not ultimately be awarded) an injunction in addition to claiming damages.

Answer 84

Option D is correct. Whether a covenant is positive or negative is determined by its substance rather than its wording. Although worded negatively, the covenant is a positive one as the substance is that the fence must be kept in repair. The burden of a positive covenant cannot pass directly to a successor but the original covenantor will remain liable. The couple can therefore sue the developer for this breach and because the builder entered into an indemnity covenant with the developer, the developer will claim under that indemnity if it is successfully sued by the couple. The possibility of the developer enforcing the indemnity could encourage the builder to repair the fence. Option A is wrong because the reason why the couple cannot take action against the builder is that the burden of the covenant has not passed to the builder directly. Option B is wrong for two reasons: first, as above, because the burden of the covenant has not passed to the builder directly and secondly, because an injunction is a remedy relevant to the enforcement of restrictive, rather than a positive covenant. Option C is wrong because the burden of the covenant has not passed to the builder directly so damages would not be available against the builder. Option E is wrong because even though there is a notice of the covenant on the Charges Register, this does not pass the burden of a positive covenant to a successor to the original covenantor.

Answer 85

The correct option is B. The power of sale exists (the mortgage was created by deed), has arisen (the mortgage was created five years ago and the date for redemption should have passed) and is exercisable as the owner is in two months arrears of interest payments. Option E is, therefore, wrong as only two months of arrears are needed. The Bank do not need to obtain a possession order as this is not a dwelling house and the Property is vacant. Therefore, option A is wrong. The owner cannot apply to the court to adjourn the proceedings as (i) there are no such proceedings and (ii) the Property is not a dwelling house. Option C is, therefore, wrong. The Bank can choose the timing of the sale but do not need to obtain a court order for possession. Option D is, therefore, wrong.

Answer 86

Option B is correct. The power of sale is implied into every mortgage created by deed (s.101 Law of Property Act 1925) if not provided for expressly in the mortgage deed. However, the power of sale must have arisen and become exercisable. The power arises as soon as the legal date of redemption is passed and becomes exercisable either in accordance with an express term in the mortgage deed or when one of the circumstances set out in s.103 LPA25 is present. On the facts the mortgage was created last year so likely the legal date of redemption has passed, as it is usually set one month after the mortgage is created or on the date the mortgage is created. Interest payments on the mortgage have not been made for five months so the power is exercisable as per s.103(ii) LPA 1925 (any interest due under the loan is 2 months or more in arrears). Option A is not the best answer. Whilst it is correct that the power of sale is implied into every mortgage created by deed (s.101 LPA 1925), that power must have arisen and become exercisable. Option C is wrong. As per the answer to Option B above the power of sale has become exercisable under s.103(ii) LPA 1925 as interest payments on the mortgage have not been made for five months. Option D is wrong. It is not a requirement that the selling mortgagee obtains permission from any other mortgagee to exercise its power of sale. Option E is wrong. It is not a requirement that the selling mortgagee obtain a court order to exercise its power of sale.

Answer 87

Option A is correct. The power of sale is implied into every mortgage made by deed (s101 Law of Property Act 1925 (LPA 1925)). It has arisen because the legal date of redemption has passed and one of the conditions in s103 LPA 1925 for the power to be exercisable has been satisfied (no repayments of interest for two months). This is now the third period of default and it has lasted longer than the other two periods and the power of sale will terminate the mortgage. Neither suing the borrower for the debt nor taking possession will terminate the mortgage. Options C and D are therefore wrong. Option C also wrongly states that there will be no duty on the bank to act with due diligence. Option E is wrong. The trigger for the bank to foreclose has been satisfied but foreclosure requires two court orders to be obtained. Foreclosure is also a more rarely encountered remedy due to the court’s power to order a sale of the property instead of allowing a lender to foreclose. Option B is wrong. Forfeiture is not a remedy available to a lender. It is a landlord remedy for breach of covenant by a tenant but is often confused with foreclosure.

Answer 88

The power of sale in respect of the second mortgage has arisen, as the legal date of redemption has passed, and is exercisable, as there are arrears of interest. Accordingly, the second mortgagee can exercise the power of sale. The fact that the second mortgage was created second in time does not prevent the second mortgagee from exercising the power of sale. If the first mortgagee were to exercise the power of sale, it is correct that the proceeds of sale would be applied first in the discharge of the second mortgage under s105 LPA 1925. However, the power of sale has not arisen on the first mortgage. Priority between mortgages is governed by the LRA 2002 and the first to appear on the register takes priority. The date of creation is irrelevant. The second mortgage was registered first and therefore has priority over the first mortgage and can sell free from it. Therefore, option B is the best answer and options A, D and E are wrong. The lease is an overriding interest under Schedule 3 paragraph 1 LRA 2002, a legal lease for a term not exceeding 7 years. This will have priority over the second mortgage as it was in existence at the date of creation of the second mortgage. The second mortgagee will have to sell subject to the remaining term of the lease. Therefore, option C is wrong.

Answer 89

Option D is the best answer as a debt action would mean that the mortgage continued in force and the borrower remained in possession. Options B and C are not the best answers. Taking possession would mean that the borrower no longer remained in occupation and appointing a receiver would mean that the borrower was no longer entitled to any income from the property. Sale or foreclosure would bring the mortgage to an end and so, options A and E are wrong.

Answer 90

Option E is correct. The Charges Register of a registered title contains notices of any third-party rights registered against the title which burden the land. This will include legal mortgages. Option A is wrong because the Property Register contains entries relating to rights which benefit the land in the registered title (as well as a description of the land and confirmation as to whether the legal estate registered is freehold or leasehold. Option B is wrong because an entry on the Proprietorship Register in relation to a mortgage will be a restriction registered on the mortgagee’s behalf providing that no disposition of the land in in the registered title can take place without the lender’s consent. This is a restriction on the registered proprietor’s ability to dispose of the land registered in that title. Option C is wrong because restrictions, when registered, appear in the Proprietorship Register. As noted above in the explanation for Option B, the restriction is one on the registered proprietor’s ability to dispose of the land in the title. Option D is wrong because land charges are only registered against titles which are unregistered. Note, however, that Class C(i) would be the relevant category for a puisne mortgage, which is a legal mortgage over unregistered land which is not protected by the deposit of title deeds.

Answer 91

Option A is correct. Both mortgages were created by deed and registered, so they are legal mortgages. Priority between registered legal mortgages is governed by s48 LRA 2002 and the first to appear on the register takes priority. The bank’s mortgage was registered first and therefore has priority over the building society’s mortgage. The application of sale proceeds following a sale by a mortgagee is governed by s105 LPA 1925 and, firstly, requires the redemption of any prior mortgage to which the sale is not made subject, that is any mortgage which has priority over the selling mortgagee’s mortgage – here the mortgage in favour of the bank. Secondly, the selling mortgagee’s (here the building society) expenses of sale will be paid. Thirdly, the selling mortgagee’s mortgage (here the building society) will be redeemed and, finally, any surplus will be paid to the owner. Options B and C are wrong. Note that the order of application of the sale proceeds is not affected by the fact that it is the mortgagee with second ranking priority (the building society) that is the selling mortgagee. The suggested order of application is wrong in both answers. Options D and E are wrong. The suggested order of application is wrong in both answers

Answer 92

Option A is correct. The lease is a legal lease – it was created for a fixed term of five years and was created by deed – and it was created prior to the building society’s mortgage. As a legal lease for a term not exceeding seven years which was in existence when the building society’s mortgage was created, it would be classified as an overriding interest under Schedule 3 Paragraph 1 LRA 2002. This is why the lease will have priority over the building society’s mortgage and why the buyer of the property will be bound by the lease. Option B is wrong. The length of the lease term does not dictate whether the lease will bind a buyer from the building society. As the lease was created prior to the mortgage, the application of the enforceability rules will determine whether the lease has priority. The application of those enforceability rules appears above in the explanation for Option A. Option C is wrong. Since a legal lease for a term not exceeding seven years is an overriding interest under Schedule 3 Paragraph 1 LRA 2002, it is enforceable even though it does not appear on the register of title. Option D is wrong because a lease cannot be overreached. It is only an interest under a trust that can be overreached. Option E is wrong. The lease has priority over the building society’s mortgage, as indicated above, so the tenant does not have to consent to the sale for the lease to bind the buyer.

Answer 93

The correct option is C. The husband has a beneficial interest under a constructive trust as he made a direct financial contribution (paying the mortgage) and this conduct would be sufficient to infer a common intention to share the Property beneficially. Option E is, therefore, wrong. A beneficial interest under a constructive trust is equitable and, therefore, option B is wrong. The facts indicate that there was nothing on the register of title to indicate the husband’s interest meaning that there was no restriction in the proprietorship register. The buyer, therefore, had no actual knowledge of the husband’s interest and option D is wrong. The buyer paid the purchase money to only one trustee and, therefore, has not overreached the husband’s beneficial interest under a constructive trust. Option A is, therefore, wrong. The husband has an overriding interest under Schedule 3 para 2 as he has a proprietary interest (a beneficial interest under a constructive trust) and is in actual occupation (the facts state that the husband has occupied the Property since his marriage to the seller). The husband’s occupation was obvious on a reasonable inspection as the buyer noted both his presence and that of his possessions at the Property. The overriding interest was capable of being overreached but, as stated above, the buyer paid the purchase money to only one trustee.

Answer 94

The correct option is A. Interests that benefit a registered title are found in the property register. Interests that burden the registered title should appear as a notice in the charges register. Restrictions appear in the proprietorship register.

Answer 95

The correct option is B. The parties’ beneficial interest as tenants in common will be protected on the register of title by a restriction and the proprietorship register. A restriction is used to prevent any dealing with the land otherwise than in accordance with the terms of the restriction. Option A is wrong because a restriction protects of interest arising under a trust but it does not appear on the charges register. Options C and D are wrong because a notice is an entry in respect of the burden of an interest affecting a registered estate or registrable disposition which is not appropriate here. Option E is wrong because a restriction appears on the proprietorship register, not the property register.

Answer 96

Option D is correct. The Commonhold and Leasehold Reform Act 2002 s. 168 prevents a landlord from serving an effective S.146 notice in respect of any breach by a tenant under a long lease of a covenant or condition unless either the tenant has admitted the breach or it has been finally determined that the breach has occurred by the appropriate tribunal, a court or an arbitral tribunal. As we know that the client has had no dealings with the landlord apart from the payment of rent and service charges, this cannot have occurred here. Options A and B are therefore wrong as taking possession or bringing proceedings must be preceded by a valid S.146 notice (s.146 Law of Property Act 1925). In any event, taking physical possession of premises occupied as a residence is prohibited by Protection from Eviction Act 1977 s.2. Option C is wrong because the fact that the alleged breach relates to repairs alone does not bring a case within Commonhold and Leasehold Reform Act 2002 s.168. Special provisions apply to repair cases under Leasehold Property (Repairs) Act 1938 but they do not preclude the service of a S.146 notice. Option E is wrong because there is no prohibition on serving a S.146 notice merely because the premises are residential.

Answer 97

The correct option is D. The document creating the lease does not meet the requirements for a deed. However, certain leases do not require a deed. Therefore option E is wrong. Equity would not intervene as the document does not contain all the expressly agreed terms. Therefore, option B is wrong. The tenant immediately took possession and paid a monthly rent at market rent with no fine or premium, thus, creating a monthly periodic tenancy. Therefore, option C is wrong and option D is correct. A fixed term five-year lease cannot be created informally. Therefore, option A is wrong.

Answer 98

Option E is the best answer. The facts indicate that the lease contains a Jervis v Harris self-help clause, enabling the landlord to enter the office-space to undertake the repairs. An advantage of the landlord pursuing this remedy is that the cost of the repair work can be recovered as a debt from the tenant thus avoiding difficulties associated with securing damages for breach of repair covenants (see below). Option A is not the best answer. Forfeiture will bring the lease to an end, and we are told that the landlord would prefer the lease to continue. Option B is not the best answer. Specific performance is rarely ordered in respect of a repairing covenant as damages will usually be an adequate remedy. Option C is wrong. Any claim for damages for disrepair is limited to the amount by which the reversionary interest has diminished in value as a consequence of the disrepair, which will not necessarily equate to the cost of undertaking the repair works. In any event, bringing a claim in damages is likely to be a timely process, and the landlord wants to address the disrepair as quickly as possible. Option D is wrong. Foreclosure is a remedy available to a mortgagee and should not be confused with the landlord’s remedy of forfeiture.

Answer 99

Option A is correct. A lease requires exclusive possession and certainty of duration (Street v Mountford) - characteristics which are present on the facts. It is capable of being a legal estate in land, s.1(1)(b) Law of Property Act 1925. A legal lease should be created by deed, s.52(1) LPA 1925, which complies with s.1 Law of Property (Miscellaneous Provisions) Act 1989. On the facts there is no deed. However, this is a legal lease under the parol lease exception, s.54(2) LPA 1925 as the exclusive possession and regular payment of the £200 monthly rent give rise to an implied monthly periodic tenancy. The requirements of s.54(2) LPA 25 are therefore met: a lease of three years or less, without a premium, at best (market) rent taking effect on possession. Option B is wrong. To be a legal fixed-term lease of more than three years, it should have been created by deed, s.52(1) LPA 1925 and on the facts there is no deed. Option C is wrong. An equitable lease must meet the requirements of an estate contract under s. 2 LP(MP)A 1989 and be in writing, signed by or on behalf of both parties and containing all the agreed terms. On the facts the agreement was signed only by the freeholder and so the requirements for an estate contract are not met. Option D is wrong. On the facts the agreement gives the neighbour the right to occupy the garage exclusively, which is a characteristic of a lease. An easement is a right attached to one piece of land that burdens another piece of land and cannot give exclusive or substantial possession of the servient tenement. Option E is wrong. For the reasons given in option A the neighbour has a legal periodic tenancy.

Land Law SBAQs Flashcards

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