Unregistered Land: Enforcement MCQs Flashcards
A proprietor of unregistered land has today granted a lender a legal mortgage by deed. There is already a charge by way of legal mortgage over the land.
Which of the following statements best describes the legal position in respect of how this interest should be protected?
The interest must be protected by a notice in the charges register of the title to bind future purchasers for valuable consideration.
The interest does not need protecting as will be binding under the rule ‘legal interests bind the world’.
The interest must be substantively registered to bind future purchasers for valuable consideration.
The interest does not need protecting as will be binding as an overriding interest.
The interest must be protected by a land charge to bind future purchasers for valuable consideration.
The interest must be protected by a land charge to bind future purchasers for valuable consideration.
This is correct. You are told on the facts the land is unregistered. This is a second legal mortgage - a puisne mortgage - and must be protected by a Class C(i) land charge to bind a purchaser for valuable consideration of any interest in the land. See s2(4)(i) and s4(5) Land Charges Act 1972.
If this were a first legal mortgage over unregistered land, it would be a trigger for first registration of the land (s 4 LRA 2002).
If this second legal mortgage were granted over registered land, it would need to be substantially registered in order to take effect as a legal interest.
A solicitor is investigating the title to a piece of unregistered land.
Which of the following is the best answer to determine what matters will need to be investigated on behalf of the client?
The solicitor will need to review a search carried out of the Land Charges Register, and investigate the possibility of overriding interests that may affect the property.
The solicitor will need to review a search carried out of the Land Charges Register, and investigate the possibility of interests that are subject to the doctrine of notice.
The solicitor will need to review the Land Registry title to the property and investigate the possibility of interests that are subject to the doctrine of notice.
The solicitor will need to determine whether there are any legal interests at the property as those that are registered at the Land Registry may still affect the property.
The solicitor will need to review the Land Registry title to the property and investigate the possibility of overriding interests that may affect the property.
The solicitor will need to review a search carried out of the Land Charges Register, and investigate the possibility of interests that are subject to the doctrine of notice.
This is the correct answer. Title to unregistered land has no register at the Land Registry to review. As such, when investigating unregistered land, solicitors must investigate the possibility of any Land Charges that are registered on the Land Charges Register and will bind the land, but also consider whether there are any other interests (predominantly pre-1926 interests or beneficial interests under a trust that have not been overreached) that could also bind the property subject to the doctrine of notice.
Your client has the benefit of a right of way for 20 years created by valid deed over adjoining land. The adjoining land is unregistered and the new owner has blocked your client from using the right of way.
Will the neighbour be bound by your client’s interest?
The right of way will be binding if it has been protected by land charge registered against the name of the new owner
The right of way will be binding as an implied legal easement overriding interest
The right of way will be binding if it has been protected by land charge registered against the land
The right of way will be binding under the rule ‘legal interests bind the world’
The right of way will be binding if it has been protected by land charge registered against the name of the grantor
The right of way will be binding under the rule ‘legal interests bind the world’
This is correct. A legal interest over unregistered land will be binding under the principle ‘legal interests bind the world’. We know the right of way is a legal easement because it is granted for term equivalent to a freehold or leasehold estate (20 years - a certain term) and is granted by way of valid deed.
If the easement was for an uncertain term or was granted by way of a failed deed, it could be equitable. In this situation, it would need to be protected by a land charge against the name of the grantor.
A couple are the legal owners of some unregistered development land. A man has a beneficial interest under an implied trust in the land. Last week, the man heard a rumour that the couple were in the process of selling the land to your client. The man wrote to your client informing it of the trust interest. Your client read the letter but ignored it and completed the purchase yesterday.
If your client bound by the man’s trust interest?
Your client is bound by the interest because it remains in the land and your client had actual notice of it.
Your client is not bound by the interest because it has been overreached.
Your client is bound by the interest as it remains in the land and binding on your client as the man is in actual occupation.
Your client is not bound by the interest as it should have been protected by a Land Charge against the names of the couple and as this has not been done, the interest is now unenforceable.
Your client is bound by the interest as it remains in the land and your client had constructive notice of it.
Your client is not bound by the interest because it has been overreached.
This is correct. Your client paid the money to two trustees, thus overreaching it and moving it into the sale proceeds. The couple, as trustees must pay the man the sum which represents the man’s share of the land.
The sole legal owner of an unregistered freehold property granted a second legal mortgage to a lender bank. Before loaning the money, the lender bank instructed their surveyor to inspect and value the property. The surveyor spoke to the owner’s partner, who lives at the property, and has an interest in it by way of an express trust of the land, which they informed the surveyor of. The surveyor failed to pass this information onto the lender bank. The lender bank proceeded to loan the money to the sole legal owner, who is now in default of their repayments.
Is the bank bound by the partner’s interest and therefore unable to enforce the mortgage and recover possession of the property?
The bank is bound by the interest because it had imputed notice of it
The bank is not bound by the interest because it is a purchaser for value and the interest has not been protected
The bank is bound by the interest because it had constructive notice of it
The bank is bound by the interest because it had actual notice of it
The bank is not bound by the interest because it was overreached on payment of the loan monies
The bank is bound by the interest because it had imputed notice of it
This is correct. The surveyor has actual notice, and the surveyor is the bank’s agent. The bank will be bound by the actual or constructive notice of their agents, which is imputed notice. Overreaching has not occurred because the bank only paid the loan monies to the sole legal owner. It is therefore bound by the partner’s equitable interest because it is not equity’s darling.
Question 1
A solicitor is acting for the seller of a freehold unregistered property. The solicitor is preparing for deduction of title to the property to the buyer’s solicitor. They examine the deeds and documents relating to the property.
Which of the following is the best candidate for a good root of title when deducing title to the property?
A An assent of the property, dated 3 March 1983.
B A Land Charges certificate, dated 1 March 1983.
C A gift of the property, dated 10 June 1984.
D A conveyance of the property, dated 13 April 1985.
E A planning permission for the property, dated 5 August 2017.
Answer
The correct option is D. The conveyance would show the legal and equitable interests, is likely to contain a recognisable description and is unlikely to cast doubt on the title. Prior to the date of the conveyance in 1985, the purchaser’s solicitor will have investigated title for the previous 15 years giving assurance to the buyer.
Title will not have been investigated in relation to the gift or the assent and therefore the conveyance is to be preferred over the assent. Options A and C are, therefore, incorrect.
Neither the Land Charges certificate nor the planning permission deal with the legal or equitable title to the property and are, therefore, not good roots of title. Options B and E are, therefore, wrong.
Question 2
A buyer recently completed the purchase of an unregistered freehold property (‘the Property’). Yesterday, the buyer moved into the Property and was confronted by the neighbouring landowner who claimed to have a right of way over the Property for 20 years. The neighbouring landowner produced a deed evidencing the right of way. The buyer checked the document and discovered that the signatures had not been witnessed.
Will the buyer be bound by the neighbouring landowner’s right of way?
A Yes, because the right of way is a legal right and, therefore, binding on the buyer.
B No, because the right of way is equitable by nature and, therefore, not binding on the buyer.
C No, because the right of way is legal but only binding if a Land Charge is registered.
D Yes, because the right of way is equitable and the buyer is bound by the equitable doctrine of notice.
E No, because the right of way is equitable and the buyer will only be bound if a Land Charge has been registered.
The correct option is E.
An easement for a fixed duration (20 years) is capable of being legal. A deed is required to create a legal easement. The document does not comply with the formalities for creating a deed because the signatures have not been witnessed. The easement is, therefore, equitable and would need to be protected by registration of a Land Charge.
Option A correctly states the legal principle but does not relate to the facts. The answer is, therefore, wrong.
Option B is partially correct in that it identifies that the easement is equitable but wrong in stating that an equitable easement cannot bind the buyer.
Option C is wrong as a legal easement in unregistered land would bind the world. A Land Charge is only required to protect an equitable easement.
Option D correctly states the legal principle applying to equitable easements created prior to 1926 but the easement in question was created recently and, therefore, the answer is wrong.
Question 3
A buyer purchases a freehold unregistered property (‘the Property’) from a husband and wife. Following completion of the purchase, the buyer is confronted by the wife’s mother who claims that she has an interest in the Property. When the husband and wife originally bought the Property, the mother paid the deposit and has lived in the Property since the husband and wife bought it. The buyer recalls meeting the mother when inspecting the Property, but had no idea she had an interest in the Property.
Which of the following best describes whether the buyer will be bound by the mother’s interest?
A The buyer will be bound as they have actual notice of the mother’s interest.
B The buyer will not be bound as payment of the deposit is insufficient to create an interest in land.
C The buyer will be bound as they have constructive notice of the mother’s interest.
D The buyer will not be bound as they have overreached the mother’s interest.
E The buyer will be bound as the mother holds a legal interest which binds the world.
Answer
The correct option is D.
The mother made a direct financial contribution to the purchase price (the deposit) and this is unlikely to have been a gift. The mother holds a beneficial interest under a resulting trust. This is an equitable interest. Options B and E are, therefore, wrong.
The facts do not indicate that the buyer had actual knowledge of the mother’s interest and option A is, therefore, wrong.
The buyer was likely to have constructive notice of the mother’s interest on the basis that the buyer saw the mother when inspecting the property. This should have prompted the buyer to ask questions of the mother. However, the buyer paid the purchase monies to two trustees (the husband and wife) and this would overreach the mother’s equitable interest. Option C is, therefore, not the best answer.
Question 2
A solicitor acts for the buyer of an unregistered property. Last year, the seller granted the adjoining owner the right (by deed) to use their property as a shortcut to reach the nearby village for a period of 10 years.
Which of the following best describes the buyer’s position in relation to this interest?
A The buyer will not be bound by the interest as it is for a fixed duration and, therefore, not a legal easement.
B The buyer will not be bound by the interest unless it has been registered as a D(iii) Land Charge.
C The buyer will be bound by the legal interest as it is binding against the whole world.
D The buyer will not be bound unless the easement has been registered on the seller’s title.
E The buyer will be bound as they have notice of the easement under the doctrine of notice.
Answer
The correct option is C.
The interest is an easement. An easement must be equivalent to a freehold (forever) or a term of years absolute (a fixed ascertainable duration). The period of 10 years complies with this. Therefore, option A is wrong.
An easement is capable of being legal but, in order to be legal, must (unless created by implication or prescription) be created by deed. The facts state that this is the case. In unregistered land a legal easement is binding against the whole world.
A D(iii) Land Charge protects an equitable easement. The easement is legal. Therefore, option B is wrong.
The doctrine of notice applies only to equitable easements. Option E is, therefore, wrong.
Option D is wrong as it relates to registered land and the question relates to unregistered land.
