INTRODUCTION
Land Law can be seen as a technical subject -a series of rules and regulations. However, how we regulate the use and ownership of such a basic commodity as land must say something fundamental about our society. We need not only to see what the rules are but why they are and the effects they have. Running through the subject are a number of interesting dilemmas: the right to make private arrangements as opposed to the need for public regulation, the reality as opposed to the appearance of the law, and conflicts between the use and ownership of land. Much of Land Law starts from a contract law base but has some quite different characteristics. It is fundamentally linked to Equity and Trusts. It also overlaps and conflicts with Family Law. Land Law is a "core" subject in a very real sense in that it lays the basis for other important practical topics such as Housing Law, Landlord and Tenant Law and Conveyancing.
Traditionally Land Law has always had something of a reputation amongst students as a "difficult" subject. This is partly because students have found it, at least initially, rather abstract and this may have something to do with the rather aesthetic approach of traditional land law teachers. This course attempts to address this problem by anchoring it firmly in reality: the subject is after all essentially about relationships between people, which concern land.
The first difficulty to overcome is the terminology of Land Law. It often appears archaic but this is usually the result of judicial honing to achieve precision.
Another difficulty can be the fact that there appear to be a large number of unconnected topics. We will be emphasising a number of ideas and themes that run through the subject and as you master them, we hope you will find there is a coherence and logic in the subject!
However, like French grammar, this is not always the case and some faults may be with reality rather than you or us. As the Law Commission has suggested with some regularity, there is ample scope for improvement in the law.
The only real answer to initial difficulties is of course reading. Perhaps the best book is Kevin Gray's Elements of Land Law. It is rather large and expensive but it is very interesting and good at putting the law into context. Unfortunately it is out of date and consequently cannot be relied on as a sole recommended textbook. Smith's Property Law and Steven & Pearce's Land Law are up-to-date comprehensive guides.
As a starter, quicker reads might help you to get a grip on the subject. I would recommend Kate Green's Land Law which is cheap and excellent for this purpose and would be useful during the rest of the year. It is also worth getting a statute book early on to help you get to grips with the law first hand. You can also take an unmarked copy into the exam with you in June. Check the reading list
LECTURE PROGRAMME
THE OWNERSHIP OF LAND
WHY STUDY LAND LAW?
DIFFERING CONCEPTS OF LAND OWNERSHIP
WHAT DOES WESTERN OWNERSHIP INVOLVE?
DIFFERENT CONCEPTS OF LAND OWNERSHIP
NATIVE AMERICANS -
Chief Seattle's Testimony (Pax Christi and Friends of the Earth, London, 1976).
"Richard Nerysoo of Fort McPherson: It is very clear to me that it is an important and special thing to be an Indian. Bemg an Indian means being able to understand and live with this world in a very special way. It means living with the land, with the animals, with the birds and fish, as thought they were your sisters and brothers. It means saying the land is an old friend and an old friend your father knew, your grandfather knew, indeed your people have always known... we see our land as much, much more than the white man sees it. To the Indian people our land really is our life. Without our land we cannot -we could no longer exist as people. If our land is destroyed, we too are destroyed. If your people ever take our land you will be taking our lives."
The Report of the Mackenzie Valley Pipeline Inquiry, 1977 quoted in Richard H. Bartlett Indian Reserves and Aboriginal Lands In Canada, ~4 Homeland (1990).
NEW MEXICO W. deBuys Enchantment and Exploitation (U. of New Mexico Press, 1985) pp. 9-10
"Culture provides a filter through which people perceive the environment around them and their relationship to it. It screens out certain influences or possibilities while allowing others to pass on to awareness, sometimes greatly intensified. For the Pueblos the landscape was manifestly spiritual in certain locations and at certain times. The mountain peaks were sources of spiritual energy; the lakes were doors to the underworld. The land and sky were living things which the Pueblo people supplicated through elaborate ritual to ensure the orderly progression of the seasons and the stability of their communities.
To the Hispanics of New Mexico the land was not a sacred thing as it was for the Pueblos but it was still not altogether inanimate. It was the mother and protector of their traditional subsistence pastoralism. In many cases it was a communal thing, belonging not to individuals but to whole villages as a collective possession."
AUSTRALIA
"Every resource that they're using in Australia belongs to the Aboriginal. You know, we're really askin' for something we already own. We're a part of the land and the land owns us and we own it and we're morally right when we ask for things." (Alice Briggs) [ibid., p.52]
"We part of that soil.... That's how we love our land. What more these old people what lived and had to struggle and go out huntin' and that for their food and that. They feel they fought for their bit of land, in their own way, you see? It's their birthright." (Gladys Elphick). [ibid., p.99]
SO WHAT IS ENGLISH LAND LAW ABOUT?
"Initially in the Anglo view the land possessed neither spiritual nor communal qualities. Land was simply a commodity, which like wheat or iron ore might be advantageously bought and still more advantageously sold. At the end of the nineteenth century this view yielded somewhat to a kind of scientifically oriented communalism that argued that certain lands, particularly the high mountain forests, should be held in trust for all members of society in order to protect water quality, timber supplies, and other resources. The Forest Reserves, later renamed National Forests, were the result. Never entirely separate from this communalism was the notion that the wild country contained in the National Forests possessed a spiritual quality of vital importance to our national way of life."
Alan Ryan, Property and Political Theory (Basil Blackwell, Oxford, 1984) pp. 128-129:
"British political thinkers [are] accustomed to a form of property law [which] discourages a question which Roman Law encouraged, namely, 'What is it to be the owner of something?' or "How does a thing become Mine?'. The English legal inclination to enquire what gave a man good title to possession and no more than that, seems to have diverted a certain psychological or metaphysical interest into other channels. It was left to a different philosophical tradition to enquire into the relationship of owner and owned." (p.7).
"Hegel is not in any doubt that property is, in essence, individual private property, and that as the modern world becomes clearer about this, so ownership becomes lodged in individual hands. Abolishing the estates of the monasteries is no injustice, because monasteries no longer serve purposes which cannot be left to individuals or the state. Again, the modern state does not own anything, though it may tax anything and has eminent domain - so individuals are left as the sole true proprietors. This unfettered individuality, moreover, has a natural support in the fact that appropriating, choosing, making and so on are all of them relations between individual persons and the material world; where artificial persons and bodies co-operate to own things, it is only because individuals create them.
We must not exaggerate Hegel's acceptance of individualism in economic and legal matters. When Hegel declares that feudal restrictions are vanishing because they are at odds with the truth about property, he is not defending the right of anyone to do exactly as he chooses with his property. Hegel's acceptance of Roman Law notions of property is heavily qualified, and although he takes for granted Roman Law assumptions of absolute ownership in the strict sense that someone or other can always be picked out as the owner, and all lesser interests attributed to his will, he has no time for the idea that we are absolute owners in the sense of being able to do absolutely anything we choose with what we own. Capricious exercises of freedom, contra Bentham, simply are not exercises of freedom but of mere whim. A society may have to accept a certain amount of such behaviour as the price it pays for diversity and openness, but it is not itself an exercise of freedom.
English law seemed to Hegel to be utterly scandalous in this respect. The English had an uncontrolled chaos and cherished it as ancient liberty. So, in discussin g testamentary dispositions, Hegel is very emphatic that freedom does not involve being able to leave your property to absolutely anyone or anything you like; England struck him as a scene of family strife where fathers could bully children with the threat of disinheriting them, and where disappointed heirs had to waste their energies recovering their estates from lunatic charities."
INTRODUCTION TO EQUITY
DEFINITION
"Equity is the branch of the law which, before the Judicature Act of 1873 came into force, was applied and administered by the Court of Chancery.... Equity is the body of rules which evolved to mitigate the severity of the rules of the Common Law." (Hanbury & Maudsley)
HISTORY
Injured plaintiffs could only sue at common law if their complaint came within the scope of an existing writ. The range of writs was narrow, and the Provisions of Oxford 1258 forbade creation of new writs without approval of the King in Council. Medieval plaintiffs sent petitions to the Chancellor to request relief in hard cases where the common law did not provide a just remedy. From this evolved the separate Court of Chancery.
From the late 17th to the early 19th century, equity was transformed from a jurisdiction based on the personal influence of the Chancellor into a system of established rules and authorities. It was especially important during and after the Industrial Revolution when new legal principles were needed to govern the administration of companies and the change in emphasis from wealth based on land to wealth based on business profits, stocks and shares.
THE JUDICATURE ACTS 1873, 1875
Abolished the old separate courts of Queen's Bench, Exchequer, Common Pleas, Chancery, Probate, Divorce and Admiralty. They created the Supreme Court of Judicature, with a High Court divided into three divisions: Queen's Bench; Chancery; and Probate, Divorce and Admiralty. The Family Division was created in 1970. Each division exercises both legal and equitable jurisdiction. (But are common law and equity fused?)
s.25(11) of the 1873 Act provides that where "there is any conflict or variance between the rules of equity and the rules of common law with reference to the same matter, the rules of equity shall prevail". See WALSH v. LONSDALE [1882] 21 Ch.D 9
ROLE OF EQUITY
(a) New rights and interests
(b) New remedies
(c) The Maxims of Equity (canons of justice)
in personam.
HISTORY OF THE TRUST
Feudalism
In pre-feudal times, land was owned absolutely. Landowners got together for protection and bound themselves to an overlord. The land was held on condition that tenants rendered homage, services and material benefits to the lord (tenure). After 1066, William I confiscated all land, later restoring it to the lords in return for similar services. So all land came to belong to the crown and the king was at the top of a pyramid of landlords, tenants, sub-tenants and so on.
Quia emptores 1290
No further sub-tenancies could be created.
The Use
Among the benefits payable to a tenant's overlord were incidents, payments due on certain occasions e.g. when a tenant succeeded to land on the death of a former tenant, or when the land was held by a minor. (Until 1540 freehold estates could not be left by will.) Some of these incidents still exist e.g. tenant's rights of common, or lord's liability for fairs, markets and sporting rights on a particular piece of land.
The use developed as a way of avoiding these incidents. Suppose Tenant A wanted to pass his land to his children, avoiding the payment of an incident on his death. He would convey the land to C and D, as feoffees (modern trustees), "to the use of himself as beneficiary", then to such uses as he should appoint. In his will, he indicated such uses. For example, his eldest son B might be beneficiary of the land, and the rest of his estate could be split up among his other sons, daughters, the parish, creditors etc. Since B did not inherit directly by descent, but by transfer from C and D, the payment of an incident was avoided. Moreover, this device enabled A to dispose of his assets other than by strict primogeniture. From about 1400 the Chancellor's equitable jurisdiction ensured that feoffees, though the legal owners of property, could only hold it for the beneficiaries i.e. the beneficiaries were the owners in equity, the legal owners having only a paper title.
Statute of Uses l 535
Henry VIII tried to stop avoidance of incidents. This Statute provided that the creation of a use should not operate to give the beneficiary rights against the feoffees (and others deriving title from them), but actually to confer legal title (seisin) on the beneficiary to the exclusion of the trustees. The use was then said to be executed.
However, there were exceptions. Uses declared on property other than freehold estates (e.g. Ieaseholds and personal property) were not regarded as executed. Any uses under which the trustees had active duties to perform (e.g. managing the fund) were also outside the scope of the Act. Finally, dispositions drafted as "to A to the use of B to the use of C" were not regarded as executed, and came to be interpreted as "to B to the use of C".
This form developed around 1700 into the modern trust.
Tenures Abolition Act l660
abolished most remaining feudal incidents and converted almost all free tenures into "socage" (freeholds).
Doctrine of estates
Thanks to feudalism, no one except the reigning monarch can truthfully say s/he owns land in English law.
Virtually all land belongs to the crown. What ordinary people are concerned with is title to land. An estate is the right to hold tenure for a period of time, and a number of estates could exist in the same piece of land.
The trust after the Industrial Revolution
The 18th and 19th centuries saw a fundamental change in the nature of wealth-holding in England, which ceased to be primarily an agricultural country, with private wealth mostly in the form of land, and became one in which wealth from trade, industry and finance dominated.
The trust developed in this period to meet three main needs:
(a) Investment. It became possible to participate in the ownership of these new forms of wealth (and in landed wealth) indirectly, through investment in stocks, shares and mortgages. Because funds needed to be managed, new rules of equity developed to regulate the conduct of trustees with respect to investment guidelines, standards of skill and care, etc.
(b) Strict settlements of land. The aim of these was to prevent the disposal of family estates by the descendants of the settlor.
(c) Married women's property. In common law, a woman's property became her husband's upon marriage. To protect a woman against a rogue husband, and to ensure that wealth remained in her family of origin, wealthy fathers settled property (managed by trustees) on their daughters for their use while married. This practice declined after the passing of the Married Women's Property Acts 1870 and 1882.
The Land Law Legislation of 1925
As more and more people began to participate in land-owning, legislation was introduced to make land easier to sell and buy. The number of estates in land was reduced to two and the number of legal interests to five. All other interests in land can only exist in equity and, in general, are binding on purchasers only if registered.
The trust today
In the twentieth century, the main emphasis of the trust has shifted away from averting the break-up of family estates by spendthrift heirs, back to its original function of avoiding levies imposed from outside -today, taxes. Nevertheless, it remains very important in Land Law. The main contexts in which we find the trust today are:
(a) Preservation of family wealth (including by inheritance);
(b) Finance and commerce: as a medium for collective investment (e.g. pensions and Unit Trusts); as a device for securing commercial debt; and as a way of imposing standards of honesty and good faith on individuals engaged in business (by the doctrine of the constructive trust);
(c) Voluntary or non-profit activity (e.g. charities and unincorporated associations);
(d) Family breakdown: implied trusts are used to reach a fair result in the allocation of property between estranged partners;
(e) Co-ownership of land.
ADVERSE POSSESSION
TITLE TO LAND IS A RELATIVE CONCEPT
TITLE BASED ON A DEED CAN BE DEFEATED BY A SQUATTER
ORIGINS, RATIONALES AND MORAL DIFFICULTIES
relativity of title
necessity?
SOUTHWARK LBC v. WILLIAMS [1971] Ch 743
Law Reform Committee Report on Acquisition of Easements and Profits by Prescription (1966):
"Certainty of title to land is a social need and occupation of land which has long been unchallenged should not be disturbed." See also Monbiot, One man's home is someone else's castle The Guardian 18/7/96
STATUTORY RULES
s.15(1) Limitation Act 1980:
This statute enforces the notion that Land is not owned in English- there is only title, which can be lost through time. Most adverse possession cases are to do with gardens etc. It can also protect in cases where documentation is lost. Squatters and diggers (sic – historical) are an example of where adverse possession has lead to a perhaps fairer \ more efficient use of land.
When does the time limit start?
What happens to your title after the expiration of the time limit? See below
s.75 Land Registration Act 1925
INTERPRETATION BY THE COURTS
There are 3 main points to look for when testing for adverse possession.
MULCAHY v. CURRAMORE PTY. LTD. [1974] 2 NSWLR 464
RAINS v. BUXTON (1880)
- Occupier of cellar; was it concealed? Not if owner could see the door.
Animus Possiendi
OCEAN ESTATES v. PINDER [1969] 2 AC 19
LITTLEDALE v. LIVERPOOL COLLEGE (1900)
POWELL v. MCFARLANE (1979) 38 P&CR 452
LEIGH v. JACK (1879)
WALLIS'S CAYTON BAY HOLIDAY CAMP LTD. v. SHELL-MEX AND BP LTD. [1975] QB 94
BUCKINGHAMSHIRE CC v. MORAN [1989] 3 WLR 152
other cases: HAYWARD v. CHALONER [1968] 1 QB 107 WILLIAMS v. USHERWOOD (1982) 43 P&CR 235 COLCHESTER BC v. SMITH [1991] 2 All ER 2 SQUATTERS' RIGHTS(?)
ACTION AGAINST SQUATTERS
Peaceable repossession is possible using no more force than is reasonably necessary. See HEMMINGS v. STOKE POGES GOLF CLUB [1920] I KB 720
Civil possession proceedings under o. l 13 RSC/o.24 CCR. Interim Possession Orders.
Criminal action under Criminal Law Act 1977 and Criminal Justice and Public Order Act 1994.
UNREGISTERED TITLE AND THE 1925 LEGISLATION
The Aims Of The 1925 Legislation Legal And Equitable Interests Registered And Unregistered Title Protecting Equitable Interests
Unregistered Title and the 1925 legislation
NB This was Consolidating legislation. Much of the law already existed in disparate forms accross the statute books.
Legislation to solve problems, especially with buying and selling land.
Problem
Equitable interests
There are two major types of equitable interests.
Commercial - Easements and proffits
Familly - Resulting trusts
Pre 1925, the doctrine of notice determined whther the buyer would have these interests enforced against him or not.
Post 1925, Notice is efected by registration. This is registered as a charge, either on the land charges registry in plymouth for unregistered title or in the Land registry. Registration only works for Commercial Interests
familly equitable easements are still governed by the doctrine of notice as they are not registerable. On a purchase they can be overreached if the purchassor pays the money to two or more strustees (as they should be paying the beneficiaries of the trust off)
Notice and Commercial equitable interests.
NB Relevant to the Land Charges Act 1972 (does not apply to registered legal interests)
Land Charges Act 1972 Section 2 (2)
(a)Class a = rent or annuity not created by deed
(3)Class b= forget
(4)Class C (i)= puisne mortgage (mortgage where deeds for property are not deposited as collateral)
(ii) limited owners charge (equitable charge acquired by a tenant for life or stat reasons)
(iii)general equitable charge (equitable charge not secured by deposit of documents re legal estate, does not affect an interest arising under a trust, and is not a charge given by way of indemnuty against rents equitable apportioned or charged exclusively on land in exoneration of other land against the breach or non observance of covenants or condidtion and is not included in any other class of land or charge.
(iv)and estate contract.(conveyance of legal estate)
(5)Class D = (i) IR Charge re death duties
(ii) restrictive covenant (on land entered post 1/1/1926)
(iii)equitable easement, merely an equitable interest, post 1/1/1926
(6)Class E = unregistered annuities
(7)Class F= charge affecting any land by virtue of the matrimonial homes act 1967
If the chrge is not registered it can be ignored, but there are different attitudes to different interests. If it is registered it will be binding notwithstanding the problems regarding the indexing system - Dilligent Properties v Alame
THE SITUATION BEFORE 1925
The doctrine of estates
The strict settlement
Conveyancing - the abstract of title
The doctrine of notice
OBJECTIVES OF THE 1925 LEGISLATION
How were these apparently contradictory objectives achieved?
By the ingenious application of established legal practices to current needs.
To promote alienability:
To protect owners of fragments of benefit in land:
Legal rights bind the world.
Equitable rights bind everyone except the bona fide purchaser for value of the legal estate without notice. But since 1926,
MAIN STATUTES
THE SETTLED LAND ACT 1925
An earlier SLA of 1882 gave the Life Tenant unfettered power of sale over the land. Lesser estates and future estates could only exist in equity, behind a trust. The SLA 1925 vested the fee simple absolute in possession in the Life Tenant. S/he holds it on trust for the remainder. If the LT sells the land, the proceeds must be paid to the Trustees of the Settlement and the capital held on trust for the remainder.
REGISTERED AND UNREGISTERED TITLE
The SLA, LPA and LCA modified traditional practices of property transfer by title deeds. The LRA introduced a new system of registered conveyancing, which aimed to speed up and simplify the process of land transfer by making it easier for the buyer to investigate title, and to find out other interests in the land.
Registered title: the Land Registry records all relevant details of ownership relating to a particular piece of land in an area of registered title definitively on a central Register maintained. The Register is kept permanently updated. The prospective buyer need only consult the Land Register in order to find out all necessary information about interests in the land that s/he hopes to buy.
Unregistered title: There is no central Register covering all details of a particular piece of land. The buyer must investigate title by studying the title deeds of previous owners. To get a "good title", the buyer must find a chain of ownership going back at least fifteen years up to the current seller. Charges are centrally recorded on the Land Charges Register.
Compulsory registration of title was intended to replace unregistered title within ten years of the LRA 1925. It is still not completed.
The existence of two sets of rules is not only complex and confusing; it leads to situations where identical factual problems in registered and unregistered land throw up diametrically opposed solutions. It may therefore also be unjust.
LAND CHARGES ACT 1972
A person with a registerable claim under the LCA I 972 may make an appropriate entry in the relevant section of the Land Charges Register. An interest once registered is deemed to constitute notice, and is binding on everyone.
Objectives
MAIN CATEGORIES OF LAND CHARGE
s.2 LCA 1972
EFFECT OF NON-REGISTRATION
Classes A,B,C(i),C(ii),C(III) and F: these land charges are made void for want of registration 'as against a purchaser of the land charged with it, or of any interest in such land' - LCA 1972 s4.
"Purchaser" is defined as any person (including a mortgagee or lessee) who has given 'valuable consideration'
sl 7(1). Valuable consideration includes marriage, and may be nominal.
Classes C(iv) and D: these charges are made void for want of registration as 'against a purchaser for money or money's worth of a legal estate in the land charged'.
PROBLEMS WITH THE SYSTEM
Hollington Bros V. Rhodes [1951] 2 All Er 578
Midland Bank Trust Co Ltd V. Green [1981] Ac 513
Lloyds Bank V. Carrick (1996) 140 Nlj 402
omission, e.g. defective registrations; defective searches; spite registrations; not realising you are dealing with a sub vendor.
Oak Co-Operative Building Society V. Blackburn [1968] Ch 730
Diligent Finance Co Ltd V. Alleyne [1971] 23 P & Cr 346
conclusive and official and takes precedence over the reality of registration i.e. the equitable right is lost. LCA 1972, s10(4)
If the person with that interest suffers loss, s/he may sue the Registry.
Shiloh Spinners Ltd V. Harding [1973] AC 691
Caunce V. Caunce [1969] 1 All ER 722
Kingsnorth Finance V. Tizard [1986] 2 All ER 54
For these, the doctrine of notice is invoked.
LAW OF PROPERTY ACT 1925 S.199:
(1) A purchaser shall not be prejudicially affected by notice of -
(ii) any other instrument or matter or any fact or thing unless
. HOLLINGTON BROS v. RHODES (above)
ATTEMPTS TO INTRODUCE A MORAL CRITERION
Midland Bank v. Green, it is "not fraud to take advantage of legal rights, the existence of which may be taken to be known to both parties".
Do both parties have equal bargaining power?
The registration of title became obligatory following transfers of all property after December 1990.
REGISTERED TITLE 1
Registered Title (Introduction)
Torrens title - Australian idea.
Central principles of Registered Title
The land certificate should be a mirror reflection of all of the rigths in a particular property. Each registered property has its own certificate and Certificate number. It is not a perfect mirror, however- for example, Family equitable rights and interests.
certain rights are to be kept off the title (such as a resulting Trustee since these are not the concern of a purchaser)
The state guarantees the accuracy of the registry and will compensate any losses from the public purse.
There are 19 land registry offices. The registry has 3 sections
The Land Register is open to the public. There is a system of direct access for some solicitors; the "Office Copy Entry will be certified as being correct at a particular date.
It is possible to have the registry changed to rectify errors, usually this will only be done by court order. The courts have the power to grant compensation.
Organisation of Title Types at the Land Registry
Registerable Interests
Grades of Freehold Title
Grades of leasehold title
Minor Interests - equitable interests should be registered for protection.
Can be protected by
Overriding Interests
some interests can bind a purchasor even though they have not been registered.
See - Non legal owners who have rights behind a resulting or constructive trust
There are 12 different Categories re rights of every person in actual occuaption of the land
(a) rights of common, draingage rights, customary rights(until extinguished)public rights, profits a prendre, rights of sheepwalk, and other easments not being eqitable easements required to be protected by notice on the register
(b) Liability to repair highways by reason of tenure, quit-rents, crown rents, heriots and other rents and charges (until extinguished) having their origin in tenure
(c) liabilty to repair the chancel of any church
(d) liability in respect of embankments, and sea and river walls
(e) land tax, tithe rentcharge, payments in lieu of tithe, and charges or annuities payable for the redemption of tithe rentcharges
(f) subject to the provisions of this act, rights acquired or in the course of being acquired under the limitation acts
(g) the rights of every person in actual occupation of the land or in receipt of the rents and profits thereof save where enquiry is made of suc person and the rights are not disclosed.
(h) In the case of a possesory, qualified, or good leasehold title, all estates, rights, interests and powers excepted from the effect of registration
(i) rights under local land charges unless and until registered or protectedon the register in the repscribed manner
(j) rights of fishing and sporting, seignorial and manorial rigths of all descriptions (until extinguished) and franchises
(k) leases for any term or interest not exceeding 21 years granted at a rent without taking a fine
(l) In respect of land reistered before the commencement of this act, rights to mines and minerals, and rigths of entry, search and user, and otehr rigths and reseravtions incedental to or required for the purpose of giveing full effect to the enjoyments of rights to mines or minerals, being rights which, where the title was first registered before 1/1/1898, were created before that date, adn where the title was first registered after the 31/12/1897, were created before the date of first registration.
Pint of transfer of title is at the registration stage. Up to that point, post contractual completion the land is held on trust by the vendor
OVERRIDING INTERESTS- Further
Interests which are binding notwithstanding their abscence on the register. Most are minor (equitable) interestsbut in some cases these can be "upgraded" to the status of major or overriding interests. See Section 70(1) of the Land Registration Act 1925. Note that tehre are overtones of the doctrine of notice in section 70(1) a, with the reference to easements and profits "openly exercised and enjoyed"
Williams v Glynns bank v Boland
Unregistered investement in a property becomes an overriding interest. sub s70(1)[g] but only for persons in Actual Occupation of the land.
Actual Occupation - What the courts say.
Abbey National v Cann [1990] - Must be occupation on completeion date.
Abbey National v Cann [1990] - Access is not equal to occupation or acts "of preparatory nature"
Mortgage and Conveyance have been ruled as taking place simultaneously in terms of assigning rights to involved parties. The date for the existence of the "right" of occupation must exist on the date of the 3rd parties name on the register.
Williams v Glynns Bank - Actual Ocupation is a question of fact, not a question of law, and consequently a question of common sense (per denning)
Chhokar v Chhokar
In occupation notwithstanding temporary absence.
Strand securities v caswell
not in occupation or receiving rent, she not tenant but licencee, not agent, therefore evictable.
Enquiries
Have to quesion people to avoid notice.
Hdgson v marks - wrong person asked. Still bound
caunce v caunce - Spouses rights needed be queried, but
Williams & Glyn v VBoland - need to check rights of spouse
But, overreaching as in City v Flegg - overreaching over rides overriding
This creates an anomoly in the law as there clearlyis not a true mirror. Land registry can't compensate for overriding interests, case law makes it very important as does estoppel. Also note that cases with similar facts will be decided in different ways depending on the number of owners.
THE SIGNIFICANCE OF THE LAND CERTIFICATE
THE CONTENTS OF THE LAND CERTIFICATE
Title to land is investigated only once, at the time the Chief Land Registrar is converting it converted from unregistered to registered land.
PRINCIPLES
METHOD
There are Land Registries in London and other districts. A number identifies each title; registration is
effected against the piece of land, not against the name of the owner of the interest.
The Register has three parts:
The Land Certificate has details of all three parts and is issued to the registered owner; the Land Register is open to the public.
RECTIFICATION
Although a title may be described as "absolute", an entry in the register may be rectified in special
circumstances, e.g. fraud -s.82(1) LRA 1925.
Argyle Building Society v. Hammond [1985] 49 P & Cr 148
Norwich And Peterborough Building Society v Steed (No 2) [1992] 1 All ER 330
CLASSIFICATION OF INTERESTS IN REGISTERED LAND
Registerable Interests
those capable of subsisting as legal estates - s.2(1) LRA 1925.
Law of property act 1925
Legal Estates and Equitable interests.
Limited to a. Fee Simple, and
b, Lease for a term of years absolute
(2).Only interests capable of being or assigning are:
a. easements
b. rentcharges
c. legal mortgage charges
d. land tax or Similar charges not created by an instrument.
e. rights of entry in cases of leasehold or annex to a rentcharge
(3) Anything that falls outside 1 and 2 can only be an equitable interest,
(4) Estates, interests and charges authorise to subsist become "legal estates"
(5) legal estates co-existing before the act still do
(6) legal estates cannot exist in an undivided share in land, or be held by a minor
(7) powers not covered by the act can only be equitable
(8) estates, interests and charges over land which are not legal estates are equitable, as are any related powers
(9) conveyance to uses shall on majority be conveyed to a person of full age upon the requisite trusts.
(10) repeal of the statute of uses not affective against dealings started before the start of this act.
Grades of title
N.B. When land is being conveyed, it is the registration of the new name that confers full legal title, not the conveyance. Thus, full legal title will be gained by a buyer even if the conveyance is forged - s.69(1) LRA
Minor Interests
i.e. those which are neither registerable nor overriding. Includes such matters as those capable of protection in unregistered land under the LCA; the rights of beneficiaries under trust s for sale or strict settlements; the rights of those entitled to be registered, before registration. Minor interests take effect as equitable interests. They are not registered, but are protected by means of an
"entry" in the Register. There are four types of entry:
Minor interests in the same piece of land rank in order of creation, not in order of registration.
If a minor interest is not entered in the Register, it will be void against third parties - s.20(1), s.59(6) LRA 1925.
Notice is irrelevant.
S.20(1 ) LRA I 925: In the case of a freehold estate registered with an absolute title, a disposition of the
registered land or of a legal estate therein for valuable consideration shall, when registered, confer on the transferee or grantee an estate together with all rights, privileges, and appurtenances belonging thereto, subject
(b) unless the contrary is expressed on the register, to the overriding interests, if any, affecting the estate transferred or created, but free from all other estates and interests whatsoever. But a buyer who seeks to take advantage of a failure to enter minor interests, who acts fraudulently, will not be allowed to take the land free of them.
Fraud has no clear definition; its identification depends on the facts of the case.
PEFFER v. RIGG [1977] 1 WLR 285; [1978] 3 All ER 745
LYUS v. PROWSA DEVELOPMENTS LTD [1982] 1 WLR 1044
Dillon J: "It seems to me mat the fraud on the part of the defendants in the present case lies not just in relying on the legal rights conferred by an Act of Parliament, but in the first defendant reneging on a positive stipulation in favour of the plaintiffs in the bargain under which the first defendant acquired the land. This makes, it seems to me, all the difference."
Overriding Interests
These will be dealt with in the second lecture on Registered Title.
Note also: Registered Charges
These are a fourth type of right capable of registration under the LRA 1925.
The standard method of mortgaging registered land is by means of the registered charge. The mortgagee's name is entered as proprietor of the charge on the relevant register of title. (The mortgage will be equitable if the charge is not registered.) While the charge remains in effect, the mortgagor's land certificate is deposited in the Land Registry as security against further dealings with the land.
Registered charges on the same piece of land rank in order of entry on the Register.
BUYING AND SELLING HOUSES
FORMALITIES REQUIRED FOR THE SALE OF FREEHOLD PROPERTY
THE CONVEYANCING PROCESS: NEGOTIATIONS ~ CONTRACT ~ COMPLETION
Conveyancing (Buying and selling houses)
Negotiations, Contract, Completion
Point of exchange creates and estate contract; in theory this is an interest that should be registered with the registrry to protect it as a minor interest. Very few people do this. This is because although the contract is binding, it can still be broken. Insurance should be taken out at this point. On completion the final title is checked(?)
Completion
There is a 28 day period post completion "the priority period" during which your interest is protected notwithstanding the fact it is unregistered. Official title passes when formally registered at the land registry.
Formalities of the Contract
Since 1677 there have been formalities regarding conveyancing- there has to be written evidence.
There have been recent major changes. In the 1989 law of property (misc. provisions)Act; before this the law was that for a contract to be binding it had to be written
S2(i) Contract Must be in writing and incorporate all of the terms in one document.
S2 (ii)terms may be incorporated by reference to a second document.
S2 (iii) Contract must be signed by each party
Without compliance with all of the above, there is not enforceable contract.
Interpretation of 1989 Law of Property (Miscellaneous Provision Act) by the Courts
S2(i) "A contract for the sale or other disposition of an interest in land can only be mde in writing and only by incorporating all the terms which the parties have expressly agreed in one document, or where contracts are exchanged, in each"
Record v Bell [1991] 1 WLR 853
Purchasor pulls out after being asked to prove title as equired by negotiations. Vendor sues for specific performance. Purchasor claims no contract. Held ther was a contract and the proof of title was collateral to this.
Firstpost Homes v Johnson [1995] 4 All ER 355
Mrs Fletcher signed letter, purchasor didn't, bith sides signed the plan . Mrs F carps it 2 days later. Action fails as they hadn't fulfilled 1989 LP(MP)Act 2(3) "the document incorporating the terms...must be signed on or on behalf of each party to the contract.
Pitt v Phh Asset management - lock out clause.
Remedies for Breach of contract
Damages for expenses
Damages for loss of expectation
Specific performance
Recission (if the other side cannot prove title)
Injunction to prevent active breach
Declaration
Law Of Property Miscellaneous Provisions Act 1989 Section 1(2)
"An instrument shall not be a deed unless-
(a) it makes clear on its face that it is intended to be a deed by the person making it or, as the case may be, by the parties to it (whether by decribing itself as a deed or expressing itself to be executed or signed as a deed or otherwise);and
(b) it is validly executed as a deed by that person or, as the case may be, one or more of those parties
"
Valid execution requires a witness
A. Negotiations
Agreeing price, fittings, deposit; doing the local search; buyer arranges survey & finance; seller draws up draft contract; seller answers buyer's questions on the draft contract.
B. Contract
Contracts are exchanged. Equitable title is transferred to the buyer. "Equity regards as done that which ought to be done." The seller remains the legal owner until completion. PAINE v. MELLOR [1801]
C. Completion
Final checks of title & searches for land charges; deed (s52 LPA 1925); if registered 1andj assignment recorded at Land Registry. If title is unregistered, legal title passes with the conveyance; if registered, on registration.
Note that s.40 LPA 1~5 was abolished from September 1989
LAW OF PROPERTY (MISCELLANEOUS PROVISIONS) ACT 1989
s2(1) A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where documents are exchanged, in each.
s2(2) The terms may be incorporated in a document either by being set out in it or by reference to some other
document.
s2(3) The document incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not necessarily the same one) must be signed by or on behalf of each party to the
contract.
Interpretation of the Act:
TOOTAL CLOTHING LTD v. GUINEA PROPERTIES MANAGEMENT LTD [1992] The Times
RECORD v BELL [199l] I WLR 853
FIRSTPOST HOMES v. JOHNSON [l995] 4 All ER 355
The courts will uphold lock-out agreements (i.e. prior collateral contracts that during a short stipulated period a seller will not negotiate for a higher price from other prospective buyers)
PITT v. PHH ASSET MANAGEMENT LTD [1994] 4 All ER 961
LAW OF PROPERTY (MISCELLANEOUS PROVISIONS) ACT 1989 S.l
DILLWYN v. LLEWELLYN [1862]
WALTON v WALTON AND OTHERS (1994) LEXIS or see Lim and Green, Cases and 11Jaterials p.54
MORTGAGES 1
Mortgages
Generally a Mortgage is a legal interest in land protectable by entrance on the Land Register (or on the land charges register)
Mortgagor is the borrower
Mortgagee is the lender
failure to redeem the mortgage as required could traditionally lead to forfeiture. This is very harsh, and Equity has intervened to reduce this penalty.
Equitable rules re Mortgages / Forfeiture
If money is paid post the redemtion date, the property is conveyed back to the mortgagor
Date of redemption is becomeing a nominal thing wil little effect (except in the case of locked in mortgages)
Foreclosing happens when the Cts decide that the mortgagor has lost the rights to the property.
Forfeiture orders
Rarely granted by the courts
Mortagagor's Right to Occupy the Property
Equity - If possession is taken, Mortgagee must account to the mortgagor for any proffits
Creation of A Mortgage
Charge by way of deed, sometime granting a lease by way of a mortgage, more often a charge over the land. Standard for in LPA 1925 s85-120
There are 2 types of legal Mortgage
There are also Equitable Mortgages (esp.with regard to unregistered title)
Further Protection for Borrowers
Cts have regard to potential exploitation of a dominant position, staus of the borrower and interest conflicts.
Right to redeem
- "no cloggs or fetters"
terms preventing redemption will be struct out (penalty clauses?)
Samual v Jarrah
Reeve v Lisle
Knightsbridge Estates v Byrne
Collateral Advantages
Such clauses are valid only if they cease on redemption, and are not unfair, unconscinceable or in restraint of trade.
Kreglinger v New Patagonia Meat packaging
Oppressive and Unconscienable Terms
Cts rarely intervene in these situations.
Cityland v Dabrah
i. Regulation of Credit agreements
ii. Extortionate Credit bargains - Cts have power to reopen an agreement; covers "grossly exhorbitant payments" or agreements which "contravene the ordinary principles of fair trading"
Burden of Proof is on the lender - not many success stories in this one...
Ketley v Scott 1980 - 12% over 3 months not exhobitant
Woodstead v Petrou - 46% Not extortionate.
Note that the courts look at the normal rates of interest for that type of loan, AND look at the type / level of risk.
success stories- Barcabe v Edwards 1983 - 140% reduced to 40%
Lexis cases -research these.
Undue Influence
No longer liberally interpreted
Natwest v Morgan
BCCI v Aboody
Repossession - - - paucity of Information
C&G v Norgan - Reasonable period defined;
i. ability to make payments now and in the future
ii. likely duration of any temporal financial difficulty
iii. the reason for the arrears
iv. the period remaining of original mortgage / amount left to pay
v. adequacy of the security to support the loan arrears over the repayment period
vi. would it be reasonable to expect the Building Society to Reschedule
Note the Date of Redemption is the earliest time at which a mortgage can be paid off completely (discharged). The Term of Years is just the length of the mortgage; the two are rarely the same.
POLICING THE MORTGAGE TERMS
PETTIT v. PETTIT [1970] AC 777 per Lord Diplock:
"...the real-property-mortgaged-to-a-building-society owning democracy..."
WHAT IS A MORTGAGE?
A disposition of some interest in land or other property as security for payment of a debt or discharge of
some other obligation for which it is given.
MORTGAGOR = borrower
MORTGAGEE = lender
CREATION OF LEGAL MORTGAGES
LPA 1925 ss. 85-6
N.B.
PROTECTION FOR THE BORROWER
SAMUEL v. JARRAH TIMBER & WOOD PAVING CORPORATION LTD [1904] AC 323 c.f.
REEVE v. LISLE [1902] AC 461
FAIRCLOUGH v. SWAN BREWERY CO LTD [1912] AC 565
KNIGHTSBRIDGE ESTATES TRUST LTD v. BYRNE [1939] Ch 441
Such clauses are valid only if they cease on redemption and are not unfair, unconscionable, or in restraint of trade. NOAKES & CO v. RICE [1902] AC 24 G & C KREGLINGER v. NEW PATAGONIA MEAT AND COLD STORAGE LTD [1914] AC 25
CITYLAND & PROPERTY (HOLDINGS) LTD v. DABRAH [1968] I Ch 166
MULTISERVICE BOOKBINDING v. MARDEN [1974] 1 Ch 84
Consumer Credit Act 1974
Empowers the court to re-open extortionate credit bargains. KETLEY v. SCOTT [1980] CCLR 37 WOODSTEAD FINANCE LTD v. PETROU [1986] The Times 23 January DAVIES AND ANOTHER v DIRECT LOANS LTD [1986] 2 All ER 783 BARCABE LTD v. EDWARDS [1983] CCLR 11
General equitable doctrine of undue influence
Court may set aside a bargain. No longer liberally interpreted.
NATIONAL WESTMINSTER BANK plc v. MORGAN [1985] AC 686 BARCLAYS BANK plc v. O'BRIEN & ANOTHER [1993] All ER 417 MASSEY v. MIDLAND BANK [1995] 1 All ER 929 TSB v. CAMFIELD [1995] 1 All ER 951
MORTGAGES 2
THE RIGHTS OF THE BORROWER AND LENDER IN REPOSSESSION CASES
MORTGAGE REPOSSESSIONS
FOUR-MAIDS LTD v. DUDLEY MARSHALL (PROPERTIES) LTD [1957] CH 317
WESTERN BANK v. SCHINDLER [1977] CH 1
QUENNELL v. MALTBY [1979] I WLR 318
r.7, o.88 RSC
BIRMINGHAM CPBS v. CAUNT [1962] Ch 883
s.36 AJA 1970:
s.8 Administration of Justice Act 1973:
in considering whether to defer possession to allow the mortgagor time to pay, the court may treat as due "only such amounts as the mortgagee would have expected to be required to pay if there had been no such provision for an earlier payment". Applies to both repayment and endowment mortgages
CENTRAX TRUSTEES LTD v. ROSS [1979] 2 All ER 952
HASTINGS BS v. GODDARD [1970] I WLR 1544
What does likely to be able within a reasonable period to pay any sums due... mean?
CHELTENHAM & GLOUCESTER BS v. NORGAN [1996] 1 All ER 449 CA
BARRETT v. HALIFAX BS [1995] 28 HLR 634
CHELTENHAM & GLOUCESTER BS v. BOOKER The Times 20 Nov. I 9g6
CHELTENHAM & GLOUCESTER BS v. KRAUSZ [1997] 1 All ER 21
LPA s. 101.
Must be default; no term of contrary intention; legal date for redeeming mortgage must have passed. Can only be exercised where:
Duties of mortgagee re proceeds of sale: to act in good faith (e.g. no sales to associated persons) and with reasonable care (e.g. re timing of sale, price obtained, auction sales) towards the mortgagor.
STANDARD CHARTER BANK v. WALKER [1982] 1 WLR 1410
Proceeds must be paid out under LPA 1925 s 105 in the following order:
CUCKMERE BRICK CO LTD v. MUTUAL FINANCE LTD [1971] Ch 949
TSE KWONG LAM v. WONG CHIT SENG [1983] I WLR 1349
PALK v. MORTGAGE SERVICES FUNDING PLC [1993] 2 WLR 415
BARRETT v. HALIFAX BS [1995] 28 HLR 634
CHELTENHAM & GLOUCESTER BS v. BOOKER The Times 20 Nov. 1996
CHELTENHAM & GLOUCESTER BS v. KRAUSZ [1997] 1 All ER 21
TARGET HOME LOANS v. CLOTHIER [1992] 25 HLR 48
POLONSKI v. LLOYDS BANK (The Times 6 May, 1997)
OTHER RIGHTS OF THE LENDER
REFORM
Law Commission, Transfer of Land - Land Mortgages (Law Com No 204, 13 Nov 1991)
REGISTERED TITLE 2
OVERRIDING INTERESTS
s.70(1)(g) LAND REGISTRATION ACT 1925
Overriding interests (s.3(xvi) LRA 1925):
Overriding interests are automatically binding, though unregistered. They are rights which should be obvious to anyone who bothers to go and look at the property and make enquiries of persons in occupation.
CATEGORIES include:
ABBEY NATIONAL BUILDING SOCIETY v. CANN [1990] 1 All ER 1085
The person must have an interest in the land, not a mere personal interest –
STRAND SECURITIES LTD v. CASWELL [1965] Ch 958
NATIONAL PROVINCIAL BANK LTD v. AINSWORTH [1965] AC 1175
Note that the equitable interests of beneficiaries under the SLA cannot become overriding interests, even when combined with actual occupation. However, equitable interests under a trust for sale can, in certain circumstances - see WILLIAMS & GLYN'S BANK v. BOLAND, below.
MEANING OF "ACTUAL OCCUPATION"
HODGSON v. MARKS [1971] Ch 892 -physical presence
WILLIAMS & GLYN'S BANK v. BOLAND [1981] AC 487 408 -question of fact, not law. Temporary absence does not matter:
CHHOKAR v. CHHOKAR [1984] FLR 313 :-
The effect of s.70(1)(g) is to elevate some minor interests, which would be binding if registered but void against a third party, into overriding interests (if coupled with actual occupation or receipt of rents), which are automatically binding though not registered.
CELSTEEL LTD v. ALTON HOUSE HOLDINGS LTD [1985] 2 All ER 562
GRACE RYMER INVESTMENTS LTD v. WAITE [1958] Ch 831
Where the buyer or mortgagee pays money to two trustees, the seller/mortgagor's "overriding interest" is overreached
CITY OF LONDON BUILDING SOCIETY v. FLEGG [1988] AC 54
PROBLEMS
REFORM
These proposals were firmly ignored by the government.
CO-OWNERSHIP 1
ESTABLISHING CO-OWNERSHIP
Co-Ownership
Lloyds bank v Rossett
Living in amity. Benefits distinct from beneficial interests
With 2 names on a title document, both have legal interests; probably as legal joint tenants (maximum 4 owners- others would have protection of equitable interests only)
If there is just one, the other may have an equitable interest.
Creation of an Equitable Interest
- trust draw up regarding a property
These can be either Constructive or Resulting.
Resulting Trusts;
There must be a direct contribution to the purchase price, WITH the INTENTION of being an owner of the property; in general the share owned will be the proportion paid into the property.
Constructive Trust
This rests on agreement. tends to be what should be, not what was actually put into the purchase of the property.
Lloyds bank v Rossett - The courts formulated a test where they look for two things before implying a constructive trust.
i. Express Agreement and a detriment suffered by the non legal owner
ii. Common Intention - The court can infer common intention from the conduct of the parties involved.
Eves v Eves - note that this case is the high water mark in terms of generosity from the courts is such cases.
Husband acted inequitably, she to her detriment. Courts inferred a constructive trust; she received a 25% share in the value of the house
Grant v Edwards - 50% share
Current view on constructive trust
Detriment generally has to be a financial one.
note, Wherever there is co-ownership there is always a trust of land - Law of Property Act 1925, S36
Consequently in co-ownership there are always legal and equitable interests in the property, the legal owners hold the property on trust for the equitable owners (generally themselves) and the legal owners are trustees and the equitable owners are the beneficiaries.
Disputes are resolved under the Trusts of Land and Appointment of Trustees Act 1996.
Joint Tenancies and Tenancies in Common
The major difference between these two is that the formermost has a right of survivorship. Joint Tenancy arises only if the four unities are fulfilled;
Possession
Interest
Time
Title.
Joint tenancies must have all of the above.
Tenants in common only need possession. Tenancy in common is assumed even where there are unequal contributions to property (also true of commercial interests); the shares will generally be held to be the same as the contibution, unless tehre is an express agreement otherwise.
It is possible to convert joint tenancy to tenancy in common, "severing an equitable joint tenancy" See also S36(2)"he shall give notice in writing...or do such acts...to sever the tenancy in equity"
Severance can be effected in a number of ways apart from the statutory notice; note that the notice in writing must be given to all of the joint tenants- per s36(2)LPA 1925;
There must be an actual intention to sever; this is more than a course of dealing that might lead to severance. The course of dealing must actually clearly be intended to effect severance. In cases where severance has been avoided (see Gore and Snell v Carpenter [1990] 60 P & CR 456) for reasons such as it affecting divorce proceedings, it will not be implied.
As a general rule, severance will be affected by mortgaging the land which is held as a jointly. This is shown in Bedson v Bedson where Russell LJ states, "a mortgage or charge of interest by a beneficial joint tenant operates as a severance" (690)
How to be a co-owner
[s.34(2) LPA 1925]
They have their names on the Land Certificate. In this situation,
there is a legal joint tenancy, and
there can be a maximum of four legal joint tenants
One person has his/her name on the Land Certificate; the other co-owner isn't a legal owner but only has an equitable interest in the property. This equitable interest can arise from either an express or implied trust. Implied trusts will arise from either resulting or constructive trusts.
RESULTING TRUST
Where one person, A, pays the all or part of purchase price for property, but it is conveyed into the name of another, B. Here the law assumes that the property is held by B for the benefit of A in equity.
Test: intention + financial contribution.
Outcome: A is entitled to a share in the value of the property in proportion to her/his contribution.
CONSTRUCTIVE TRUST
There are numerous cases about the kind of conduct that can trigger a constructive trust. There is an overlying principle that a constructive trust is imposed where it would be inequitable to deny it.
LLOYDS BANK v. ROSSETT [1990] 1 All ER 1111
The House of Lords held that there were two ways in which judges had applied the constructive trust as a device to resolve disputes about the family home:
Express agreement, and a detriment suffered by the non-legal owner. There should be evidence of an express agreement made by the parties at some stage before the acquisition of the property, and evidence that the non-legal owner acted to their detriment in reliance on that agreement. Relationship to the doctrine of proprietary estoppel.
Common intention. Where there is no evidence of an express agreement the court may be able to infer a common intention. The conduct of the parties allows the court to infer a common intention that parties intended the property to be shared beneficially. This gives rise to a constructive trust.
What kind of conduct? In Rossett, the court said only the contribution of money to the purchase price would show the necessary intention.
Outcome: A is entitled to a share in the value of the property according to the agreement. This need not be in proportion to her/his contribution.
See also
EVES v. EVES [1975] 1 All ER 768
GRANT v. EDWARDS [1986] 2 All ER 426
HAMMOND v. MITCHELL [1991] 1 WLR 1127
The Trust of Land
Whenever there is co-ownership, there is a Trust of Land (s.36(1)LPA 1925). This means that:
Legal ownership must be as joint tenants
Implications: there is a right of survivorship. What does this mean in practice? It affects who can convey the property.
Equitable ownership can be a joint tenancy or tenancy in common
Implications: there is no right of survivorship if there is a tenancy in common. What does this mean in practice?
It affects who is entitled to what shares in the value of the property.
Co-owners can choose whether to hold their equitable interest as a joint tenancy or tenancy in common. If they don't, the law applies a test for joint tenancies (the four unities):
Tenancies in common only require the unity of possession.
AG SECURITIES v. VAUGHAN [1988] 3 WLR 1205
Why should the common law prefer joint tenancy whilst equity prefers tenancies in common?
Severing an equitable joint tenancy
At a later stage after the purchase, an equitable joint tenancy can be converted into an equitable tenancy in common by any of the following:
RE 88 BERKELEY ROAD [1971] I Ch 648
RE DRAPER'S CONVEYANCE [1969] I Ch 486
(b) 3 additional methods from WILLIAMS v. HENSMAN (1861)
-an act of a joint tenant "acting upon his own share"
-mutual agreement
-a course of dealing
BURGESS v. RAWNSLEY [1975] 2 Ch 429
See generally HUNTER v. BABBAGE (1994) 69 P&CR 548
CO-OWNERSHIP 2
THE MECHANICS OF CO-OWNERSHIP
s.36(1)LPA
Co-owners may choose to draw up express trusts of land. Otherwise, there is a statutory implied trust of land where legal joint tenants.
"a legal estate held by joint tenants shall be held on trust."
The courts have held that there is also a statutory implied trust of land where there is one legal owner and one or more equitable owners. See
WILLIAMS & GLYN'S BANK v. BOLAND [1981] AC 427
THE TRUST OF LAND AND APPOINTMENT OF TRUSTEES ACT 1996
The law changed as at 1st January 1997 when THE TRUSTS OF LAND AND APPOINTMENT OF TRUSTEES ACT 1996 (TL&ATA1996) came into force. It applies to co-ownership arising both before and after that date. Previously, the LPA 1925 regulated the situation. The trust of land replaced both the trust for sale and settlements. s.l(l)(a) TL&ATA1996 defines it as
"any trust of property which consists of or includes land"
s.1(2) "The reference in subsection (I)(a) to a trust-
(a) is to any description of trust (whether express, implied, resulting or constructive), including a trust for sale and a bare trust, and
(b) includes a trust created or arising before the commencement of this act"
TRUSTEES A + B LEGAL ESTATE: JOINT-TENANCY
BENEFICIARIES A + B EQUITABLE ESTATE: JOINT TENANCY
TENANCY IN COMMON
POWERS OF THE TRUSTEES
Consultation:
s. l l (1) The trustees of land shall in the exercise of any function relating to land subject to the trust-
(a) so far as practicable, consult the beneficiaries of full age and beneficially entitled to an interest in possession of land, and
(b) so far as is consistent with the general interest of the trust, give effect to the wishes of those beneficiaries, or (in the case of dispute) of the majority (according to the value of their combined interests).
BENEFICIARIES' RIGHTS
The interests of the beneficiary were, according to the Doctrine of Conversion, regarded as interests in the proceeds of sale. In practice, the courts took a fairly robust attitude. However, the doctrine was abolished under s.3 of the 1996 Act.
The right to occupy
Where there is co-ownership, all beneficiaries have an interest in possession.
s.12 TL&ATA 1996 gives beneficiaries with an interest in possession a right of occupation which lasts so long as occupation remains a purpose of the trust (see s.15 later). Although this is a formal change in the law, past case law had already arrived at this position. See again BULL and WILLIAM & GLYN'S v. BOLAND
Excluding and restricting the right to occupy
s.13 TL&ATA 1996 deals with the problems caused where more than one beneficiary is entitled to occupy the land. The trustees may "exclude or restrict the entitlement of any one or more (but not all) of them"(s.12(1)).
They may impose "reasonable conditions" on an occupying beneficiary (s.12(3)). This is all new law.
DISPUTES BETWEEN CO-OWNERS
Under s.14 TL&ATA 1996, any trustee, beneficiary or secured creditor of a beneficiary may apply to the court for any such order as the court thinks fit "relating to the exercise by the trustees of any of their functions" or to declare the nature and extent of a person's interest.
This replaced the much narrower s.30 LPA 1925: "if the trustees for sale refuse to sell or exercise any of their powers any person interested may apply to the court and the court may make such order as it thinks fit."
The beneficiaries could ask the court to prevent an overreaching sale by two trustees.
s.15(1) The matters to which the court is to have regard...include
(a) the intentions of the person(s) who created the trust
(b) the purposes for which the property...is held
(c) the welfare of any minor who occupies or might reasonably be expected to occupy any land as his home, and
(d) the interests of any secured creditor of any beneficiary.
- This does not represent a change in the law as these consolidate and rationalise the approach the courts previously took under s.30 LPA 1925.
Under s.15(2), where an application is made to exclude or restrict a beneficiary's right to occupy, the court must also consider the circumstances and wishes of each beneficiary entitled to occupy.
s.15(3): "In... any other application... the matters to which the court is to have regard also include the circumstances and wishes of any beneficiary of full age and entitled to an interest in possession of property subject to the trust or (in the case of dispute) of the majority (according to the value of their combined interests)."
In considering whether the property should be sold, the court will consider:
-what was the underlying purpose of the trust?
-has that purpose ended?
JONES v. CHALLENGER [1961] I QB 176
RE EVERS' TRUST [1980] I WLR 1327
BARCLAY v. BARCLAY [1970] 2 QB 677
CONFLICT WITH THIRD PARTY PURCHASERS OR LENDERS
Problems arise where there are equitable owners who are not legal owners. The equitable interest may be overreached under s.27 LPA 1925 as amended by 1996 Act:
(1) A purchaser of a legal estate from trustees of land shall not be concerned with the trusts affecting the land, the net income of the land or the proceeds of sale of the land...
(2) Notwithstanding anything to the contrary in the instrument (if any) creating a trust...the proceeds of sale or other capital money shall not be paid to... fewer than two persons as trustees..."
CITY OF LONDON BS v. FLEGG [1987] 2 WLR 1266
Note what happens when the money is paid to one trustee:
KINGSNORTH FINANCE v. TIZARD [1986] 2 All ER 54
Under the TL&ATA1996, a degree of protection for beneficiaries has been introduced to protect them against trustees' failure to act properly. It operates differently depending on whether title is registered or unregistered.
Where title is unregistered, purchasers are not affected by a failure by the trustees to consult with beneficiaries provided they do not have actual notice of the failure (s.16).
This protection does not apply where title is registered. Instead,
s.94(4) LRA has been inserted which reads:
"There shall also be entered in the register such restrictions as may be prescribed, or may be expedient, for the protection of the rights of the persons beneficially interested in the land."
Could these trigger overriding interests under s.70(1)(g) LRA 1925
Law Commission ReportNo.188 (December 1989):
Overreaching: Beneficiaries in Occupation.
Some of this has been taken on board in the 1996 Act.
CO-OWNERSHIP 3
BANKRUPTCY AND THE FAMILY HOME
Bankruptcy in cases of co-ownership
Insolvency Act 1986
S335 A (2) [a] The court must take the interests of the bankrupts creditors into account.
"Rights under Trusts of Land
In re Turner the courts showed that statute outweighs equity.
On bankruptcy, property vests automatically in the trustee in bankruptcy. Trustee in bankruptcy has duty to "get in, realise and distribute" the bankrupt's estate for the benefit of his creditors. Trustee in bankruptcy takes subject to third party rights, including those of other co-owners.
Where an application is made to a court for land to be sold in the event of the bankruptcy of one of the co
owners, s.15 TL&ATA 1996 does not apply. Instead, the court has regard to the factors set out in s.335A which was added to the Insolvency Act 1986 by the 1996 Act. Additional considerations apply to ex/family homes:
s.335A Insolvency Act 1986
RE TURNER (A BANKRUPT) [1974] I WLR 1556
"In my judgement, there exists in equity two competing claims. On the one hand, the wife, as part owner of the house, asks why she as co-owner should be turned out merely because her husband, the other co-owner, is bankrupt. On the other hand, the trustee in bankruptcy says that he is not only entitled to realise the husband's interest but bound by statute to do so. In my judgement, weighing the two conflicting claims, that by the trustee based on his statutory duty, gives him the stronger claim and requires me to treat his voice as the one which ought to prevail in equity."
RE HOLLIDAY (A BANKRUPT) [1981] Ch 405
RE GORMAN (A BANKRUPT) [1990] 1 All ER 717
RIGHTS OF OCCUPATION TO FAMILY HOME
Legal owners and beneficiaries under a trust of land may have rights of occupation but other people may have rights to occupy matrimonial homes independent of ownership rights. These exist under Part IV Family Law Act 1996 which came into force on 1st October 1997 and replaces the Matrimonial Homes Act 1983.
Spouses' entitlement to occupy
A person has matrimonial home rights where his/her spouse has a right of occupation through ownership.
These rights are defined (s.30(2)) as:
(a) if in occupation, not to be evicted or excluded without a court order under s.33, or
(b) if not in occupation, a right with the leave of the court under s.33 to enter and occupy the accommodation.
Criteria for making an occupation order under s.33
All the circumstances including
- the housing needs and housing resources of the parties,
- the financial resources of the parties,
- the likely effect of an order. . . on the health, safety or well-being of the parties
- the conduct of the parties.
However, there is also a statutory presumption in favour of making an order where it appears that the applicant or a child is likely be significantly harmed by the respondent unless an order is made. This does not apply if making an order would be likely to cause as great or greater harm to the respondent or a child.
An order can be made 'until further order'.
Occupation orders: co-habitants and former co-habitants
This means a man and woman living with each other in the same household as husband and wife (see DV& MPA 1976). They do not have matrimonial home rights but can apply under s.36 for an order not to be evicted or excluded or to enter and occupy the accommodation.
The court will take into account all the circumstances including
- the housing needs and housing resources of the parties,
- the financial resources of the parties,
- the likely effect of an order on the health, safety or well-being of the parties . .
- the conduct of the parties.
The statutory presumption does not apply. In addition, the court will also consider
- the nature of the parties' relationship
- whether they have children or there are children for whom they have parental responsibility
- the length of time they have lived together
- the existence of proceedings under the Children Act 1989 Sch.1 or proceedings relating to the legal or beneficial ownership of the dwelling.
Orders under s.36 must be for specified periods not exceeding 6 months and may be renewed only once.
Who is still not covered?
Mother with no equitable interest living with son who is legal owner.
PROPERTY RIGHTS ON DIVORCE
Property adjustment orders under s.24 Matrimonial Causes Act 1973:
- transferring the property to the other partner . .
- order for the sale of the property .
LANDLORD AND TENANT 1
ESTABLISHING THE RELATIONSHIP
TERMINOLOGY
s.1 LPA 1925
s.205(1) LPA 1925
CHARACTERISTICS
-competent lessor and lessee
-what may be the subject of a lease
-reversion
-fixed maximum duration
LACE v. CHANTLER [1944] KB 368
re MIDLAND RAILWAY COMPANY'S AGREEMENT [1971] Ch 725
ASHBURN ANSTALT v. ARNOLD [1988] 2 WLR 706; 2 All ER 147
PRUDENTIAL ASSURANCE v. LRB [1992] 3 WLR 279 HL
COTTAGE HOLIDAY ASSOCIATES v. CUSTOMS & EXCISE [1983] QB 735
-exclusive possession
ALLAN v. LIVERPOOL OVERSEERS (1874)
LUGANDA v. SERVICE HOTELS [1969] 2 All ER 692
TYPES
fixed term/specific tenancies
periodic tenancies (implied and express)
TICKNER v. BUZZACOTT [1964] 1 All ER 131
perpetually renewable leases: s. 145 LPA
MARIORIE BURNETT v. BARCLAY [1980] 258 EG 624
notice to quit [s.5 Protection from Eviction Act 1977]
tenancies at will and at sufferance
THE LEASE/LICENCE DISTINCTION
BOOKER v. PALMER [ 1942] 2 All ER 674
LUGANDA v. SERVICE HOTELS [1969] 2 Ch 209
THOMPSON v. PHILLIPS [1945] 2 All ER 49
SOMMA v. HAZLEHURST [1978] 2 All ER 1011
STREET v. MOUNTFORD [1985] AC 809
AG SECURITIES v. VAUGHAN; ANTONIADES v. VILLIERS [1988] 3 WLR 1205 HL
ASLAN v. MURPHY [1989] 38 EG 109
FORMALITIES
(a) the statutory requirements
the contract: s.2 Law of Property (Misc. Provisions) Act 1989
deeds: s.l LP(MP)A 1989
short leases/tenancies: ss.52, 54, 205 LPA 1925
(b) the role of equity
estoppel
WALSH v. LONSDALE (1882) 21 CH D 9 s.62 LPA 1925
LANDLORD AND TENANT 2
CREATION & ENFORCEMENT OF LEASEHOLD COVENANTS
:
CLASSIFICATION:
ENFORCEMENT
Rules applicable depend on whether the lease was executed before or after the Landlord and Tenant (Covenants) Act 1995 came into force (Ist January 1996).
LIABILITY UNDER LEASES CREATED PRE-1996:
ss.141, 142 LPA 1925
Aß -------------------------------------------à C
privity | lessor A assigns reversion to C | privity
of | | of
contract| | estate
| lessee B signs lease to D |
Bß -------------------------------------------à D
covenants "touch and concern" the land
Romer LJ in GRANT v. EDMONDSON [1931] 1 Ch 1:
"In connection with the subject of covenants running with land, it is impossible to reason by analogy. The established rules concerning it are purely arbitrary and the distinctions for the most part quite illogical."
SWIFT v. COMBINED ENGLISH STORES [1988] 3 WLR 313
A covenant "touches and concerns" the land where:
HALL v. EW1N (1888)
LEASES CREATED AFTER 1995:
WAIVER of breach requires knowledge and unequivocal recognition of continued existence of lease
DAVID BLACKSTONE LTD. v. BURNETTS (WE) LTD.[1973] 1 WLR 1487
METROPOLITAN PROPS v. CORDERY (1979) 251 EG 561
CHRISDELL v. JOHNSON (1987) 19 HLR 406
LANDLORD AND TENANT 3
KEY COVENANTS AND REMEDIES FOR BREACH
QUIET ENJOYMENT
implied and express KENNY v. PREEN [1962] 3 All ER 814 BROWNE v. FLOWERS [ 191 1 ] I Ch
ASSIGNING AND SUB-LETTING
Generally no implied covenant against this. Restrictions can be absolute or qualified.
s.19 L&TA 1927: consent must not be unreasonably withheld.
s. 144 LPA 1925: landlord may not make a charge for granting consent.
LANDLORD AND TENANT ACT 1988
SCALA HOUSE v. FORBES [1973] 3 All ER 308
EXPERT CLOTHING v. HILLGATE HOUSE [1985] 3 WLR 359
USER
No implied covenant against this. Can be absolute or qualified covenants
s.l9 L&TA 1927 applies.
WASTE AND REPAIRS
what is waste? When implied, can be voluntary and permissive. See liability under
WARREN v. KEEN [1953] 2 All ER 1118
Typically express covenants. What is a repair?
RAVENSEFT PROPERTIES v. DAVSTONE (HOLDINGS) [1980] QB 12
implied covenants: s.l I L&TA 1985
O'BRIEN v. ROBINSON [1973] AC 912
LIVERPOOL CC v. IRWIN [1976] 2 All ER 39
QUICK v. TAFF ELY BC [1986] QB 809
OTHER DISREPAIR PROVISIONS
- no duty of care: MCNERNY v. LAMBETH LBC (1989) 21 HLR
- Defective Premises Act 1972
- local authority intervention
REMEDIES FOR BREACH OF COVENANT
for feiture s.146 LPA 1925 (not arrears)
BILLSON v. RESIDENTIAL APARTMENTS LTD [1992] 01 EG 91 HL
FULLER v. JUDY PROPERTIES [ 1992] 14 EG 106
damages
CALABAR PROPERTIES v. STITCHER [1983] 3 All ER 759.
CHIODI v. DEMARNEY (1988) 41 EG 80
specific performance s.17 L&TA 1985
self-help
LEE-PARKER v. IZZETT [1971] 3 ALL ER 1099
BRITISH ANZANI CASE [1979] 2 ALL ER 1063
injunctions and declarations
END OF THE LEASE/TENANCY
- time runs out
- notice to quit
- surrender/abandonment
EASEMENTS AND PROFITS
Legal or equitable interests entitling owners to exercise rights over someone else's land.
THE ESSENTIAL CHARACTERISTICS OF AN EASEMENT
RE ELLENBOROUGH PARK [1956] Ch 131; [1955] 3 All ER 667
All easements must have the following qualities:
When deciding whether the court will recognise the right as an easement you should bear in mind the following points:
REGIS PROPERTY COMPANY LTD v. REDMAN [1956] 2 QB 612 but note JONES v. PRICE [1965] 2 QB 618
COPELAND v. GREENHALF [1952] Ch 488
NEWMAN v. JONES (1982)
MILLER v. EMCER PRODUCTS LTD [1956] 1 All ER 237
PHIPPS v. PEARS [1965] 1 QB 76
CREATION: LEGAL EASEMENTS AND PROFITS
Must be held for an interest equivalent to an estate in fee simple absolute in possession or a term of years absolute sl(2)(a) LPA 1925; and be created by statute, prescription or deed (and in registered land be registered).
CREATION: EQUITABLE EASEMENTS AND PROFITS
Can be created by express grant (words/statute) or implied grant and implied reservation.
IMPLIED
WRIGHT v. MACADAM [1949] 2 KB 744
INTERNATIONAL TEA STORES CO v. HOBBS [1903] 2 Ch 165
CREATION BY PRESCRIPTION: (outline only)
Common law - lost modern grant - Prescription Act 1832
CREATION BY ESTOPPEL
ENFORCEMENT
When the land changes hands, the benefit passes with any subsequent conveyance of the land by deed. The burden of a legal easement passes with any subsequent conveyance of the land by deed.
The burden of an equitable easement will only pass if it is:
registered land, as a general rule with exceptions, if the easement is entered on the register of the servient owner's title
unregistered land, if the owner of the dominant tenement has registered the easement as a land charge.
Note however
ER IVES INVESTMENTS LTD v. HIGH [1976] 2 QB 379
LAW REFORM
Law Reform Committee Report on Acquisition of Easements and Prof~ts by Prescription
(1966 Cmnd 3100)
ACCESS TO NEIGHBOURING LAND ACT 1992
TERMINATION OF EASEMENTS
BENN v. HARDINGE (1993) 66 P & CR 246
Estoppel And licences
Licence:
a permission to enter and be on land. Traditionally viewed as a personal right, revocable at will by the licensor, which cannot bind third parties. Cotwell v Rosehill Racecourse [1937] 56 CLR 605
Bare licence
e.g. guest at a dinner party; rights of deliverers canvassers etc to approach front door:
Robson v Haslett [1967] 2 QB 939
Licence coupled with an interest e.g. right to enter land and to cut timber there and take it away:
James Jones and Sons v Earl of Tankerville [1909] 2 CH 440
Contractual Licence:
a permission to be present on land which derives from a contact, express implied (i.e. licensee provides consideration) A conema-goer (short term); golf club member who pays an annual sub (medium term);lodger or family member living in dwelling house (long term) may hold such a licence.
Revocation
Traditional view; contractual licence may be revoked by the licensor at any time. Revocation may give rise to breach of contract; remedies are damages
Wood v Leadbetter [1845] 13 M& W 838
Equitable intervention. if a contract contains permission to occupy land for a specific purpose or period, licensor may be under obligation not to revoke the licence before the completion of that purpose or period.
Remedies
restitution
Tanner v tanner [1975] 3 All ER 776
Chandler v Kerley [1978] 2 All ER 942 but see also Horrocks v Forray [1976] 1 All ER 737
Injunction to restrain breach
Specific Performance
Verrall v Great Yarmouth BC [1981] 1 QB 202; [1980] All ER 839
Enforcement against 3rd Parties
The traditional view is that a contractual licence is not binding on third parties as it is not an interest in property; king v david allen & sons [1916] 2 AC 54
As contractual licences came to be increasingly found in residential situations, they came to acquire a proprietary nature, and equity found ways to protect them against third parties.
Situations in which it may arise
DILLWYN v. LLEWELLYN [1962] 4 De G F & J 517, 45 ER 1285
PASCOE v. TURNER [1979] I WLR431
GREASLEY v. COOKE [1980] 1 WLR 1306; [1980] 3 All ER 710
INWARDS v. BAKER [1965] 2 QB 29; [1965] 1 All ER 446
E R IVES INVESTMENT LTD v. HIGH [1967] 2 QB 379
IN RE BASHAM (DECEASED) [1986] I WLR 1498
but see TAYLOR v. DICKENS [1997] TLR 587
Though it is possible to establish by estoppel a claim to future property, it is also necessary to show
that the person making the assurance had led the claimant to believe that the promise would not be revoked.
TAYLORS FASHIONS LTD v. LIVERPOOL VICTORIA TRUSTEES CO LTD [1982] QB 133
Remedies
IS A LICENCE AN INTEREST IN PROPERTY?
According to Lord Wilberforce in NATIONAL PROVINCIAL BANK LTD v. AINSWORTH [1965] AC 1175 a proprietary interest must be "definable, identifiable by third parties, capable in its nature of assumption by third parties, and have some degree of permanence or stability".
Others have argued that the test should not be, "Does it bind third parties?", but "Does one party owe an obligation to the other?" If so, this should amount to an equitable interest in land. It represents a return to the old flexible, moral basis of equity; and a reaction against the post-1925 formalism of land law.
Lord Denning said in DAVIS v. JOHNSON [1979] AC 264; [1978] 1 All ER 1132 "Social justice requires that personal rights should, in a proper case, take priority over rights of property."
RESTRICTIVE COVENANTS
CHARACTERISTICS
CREATION
ENFORCEMENT
REMOVAL AND MODIFICATION
What are restrictive covenants? How do they work? Given they still exist today, how do they fit in with modern ideas about what land can be used for, and if there are to be controls, who should control what can be done with land. Can you get rid of restrictive covenants?
ENFORCEMENT:PASSING THE BURDEN AND THE BENEFIT
THE LIABILITY OF A SUCCESSOR TO THE COVENANTOR
Where the covenantor has passed his/her interest to a successor, the question arises whether that successor is bound by the burden of that covenant. In other words, can the original covenantee sue t his successor?
-no, the burden cannot pass by virtue of the common law
AUSTERBERRY v. OLDHAM CORPORATION (1885) 29 Ch. D. 750.
RHONE v. STEPHENS [1994] 2 All ER 65 HL
-but, yes, it may pass by way of equity provided the test derived from TULK v. MOXHAY (1848) 2 PH 774 is met i.e. if
(a) covenant is restrictive/ negative in character. HAYWOOD v. BRUNSWICK BLG SOC (1881) 8 QBD 403
(b) the covenant benefits a dominant tenement: LCC v. ALLEN [1914] 3 KB 642
(c) the covenant was intended to run with the covenantor's land: s.79 LPA 1925
(d) compliance with general rules about equitable interests ie notice.
THE RIGHTS OF A SUCCESSOR TO THE COVENANTEE
Where the covenantee has passed her/his interest to a successor, is that successor entitled to the benefit of the covenant? Can s/he sue the original covenantor?
-yes, the benefit passes at common law provided 4 conditions are met:
(a) the covenant must "touch and concern" the land.
(b) the covenantee must have a legal estate to the land benefiting from the covenant.
(c) the successor must have a legal estate in the land benefiting.
(d) it must have been intended that the benefit of the covenant should run with the land NB s.78 LPA 1925.
NEITHER OF THE ORIGINAL PARTIES TO THE COVENANT ARE NOW INVOLVED
Can the successor to the covenantee sue the successor to the covenantor? Yes, provided
-the benefit has passed to the successor to the covenantee, and
-the burden has passed to the successor to the covenantor.
As the burden can only pass IN EQUITY, the covenantee must show that the benefit would pass IN EQUITY as well. This can happen three alternate ways:
(a) Annexation
This can be included expressly or by implication in an agreement but in most cases it will be implied by statute unders.78(1)LPA 1925
FEDERATED HOMES v. MILL LODGE PROPERTIES [1980] I WLR 594
ROAKE v. CHADHA [1984] I WLR 40
(b) Express assignment:
MILES v. EASTER [1933] Ch 611
(c) Building schemes.
This involves a development of (usually) housing where each purchaser enters identical covenants with the developer and with each other. These covenants are intended to be of mutual benefit for all the purchasers.
Problems arise when the developer has sold all the sites:
(a) the developer has no land left to benefit from the covenants so cannot sue the purchasers should they breach the covenants.
(b) the developer is not interested in policing the covenants anyway.
(c) theoretically, it is not possible for later purchasers to sue earlier purchasers.
In ELLISTON v. REACHER [1908] 2 Ch 374, it was held that covenants were enforceable against successors to covenantors provided:
-the purchasers all derived their title from one common owner
-the estate was set out in plots before the sale
-the restrictive covenants are imposed on all plots for the benefit of all plots and
-each purchaser acquired his/her plot on the understanding that the covenants were intended to benefit All the other plots in the scheme.
More modern cases have adopted a more relaxed attitude towards the recognition of building schemes:
BAXTER v. 4 OAKS PROPERTIES [1965] Ch 816
RE DOLPHIN'S CONVEYANCE [1970] Ch 654
BRUNNER v. GREENSLADE [1971] Ch 993
THE SPECIAL ADVANTAGES /FEATURES OF BUILDING SCHEMES
-covenants are enforceable irrespective of when purchasers and successors acquired their interests.
-the benefit automatically runs in equity.
-if plots come into common ownership and are later sub-divided again, the original covenants revive.
HOWEVER, DON'T FORGET THAT
-the rules in TULK v. MOXHAY still have to be satisfied so far as the burden in concerned,
-only negative covenants are covered (but see below),
-if the covenant is equitable, it must still be registered to bind a successor.
THE PROBLEM OF POSITIVE COVENANTS
Vendors may well want to impose positive as well as negative covenants eg contribute to upkeep of estate road. Under basic rules, the burden of positive covenants does not run. How can this be got round? Four possibilities:
(a) Rule in HALSALL v. BRIZELL [1957] Ch 169. An exception to the general rules connected to the doctrine of estoppel. This is useful where there is a connection between covenants eg right to use estate road and obligation to pay for it.
(b) Obligations to keep walls and fences in repair have been treated by the courts in practice as being easements: CROW v. WOOD [1977] I QB 77 (CA)
(c) A chain of covenants ie impose a covenant on a covenantor making him/her impose identical covenants on any successor. There are problems here: chain can get very long and may break, and only the person in possession can get specific performance /injunction.
(d) Grant a lease instead of selling the freehold. A completely different set of rules applies to covenants under leases.
BREACH OF COVENANT: WAKEHAM v. WOOD (1982) 4~ P&CR 40
MODERN APPLICATION
THE PLANNING AND SOCIAL CONTEXT
C&G HOMES LTD. v. SECRETARY OF STATE FOR HEALTH [1990] EGCS 54
MODIFYING OR ENDING RESTRICTIVE COVENANTS
(a) common ownership.
(b) discharge by deed.
(c) long usage inconsistent with continuance: CHATSWORTH ESTATES v. FEWELL [1931] I Ch 224
(d) s.84(1) LPA 1925
KEITH v. TEXACO (1977) 34 P&CR 249
GILBERT v. SPOOR [1983] Ch 27
re FORESTMERE'S APPLICATION (1981) 41 P&CR 390
(e) s.610 HOUSING ACT 1985
LAW REFORM
Transfer of Land: the Law of Positive and Restrictive Covenants (Law Commission No.127, 1984). 331 pages+draft bill announced inJuly 1991. Comprehensive reform recommended. Role model would be law of easements. Covenants should exist as legal interests in land, run automatically, bind all successors. After sale, original covenantor and covenantee would be under no obligation and have no rights. No distinction between restrictive and positive covenants.
There would be two new interests in land called land obligations. They could be imposed on a servient land for the benefit of dominant land: neighbour obligations ie positive and restrictive obligations including the provision of services which benefit dominant land; development obligations ie reciprocal obligations relating to regulation of multi-occupied areas such as blocks of flats.
COVENANTS AND THE LEGAL PROBLEMS OF FLAT OWNERSHIP
WHAT IS THE COVENANTS PROBLEM?
WHAT PROBLEMS DO FLAT OWNERS FACE?
HOW TO RESOLVE THESE PROBLEMS
Wilberforce Committee Report 1965: looked at positive covenants and recommended that certain positive covenants should run with freehold land.
Commonhold: Freehold Flats and Freehold Ownership of other Interdependent Buildings Condominium Law
Working Group 1987 (Cm 179).
Commonhold: a consultation paper Lord Chancellor's Dept (1990)
What is Commonhold?
A freehold development of two or more "units" which share services and facilities and so require a system for communal management, and for the ownership of common parts. Purpose:
(a) To provide a new and more satisfactory arrangement for people who live in interdependent buildings with shared facilities (ie blocks of flats).
(b) To resolve the problem of positive covenants generally.
The owner of a commonhold flat would own the freehold of that flat. The ownership would automatically carry with it the right to essential facilities (eg access, gas, water, and electricity) and the right to any communal services (eg cleaning, maintenance and use of the common parts, and insurance of the structure). A commonhold association would own the common parts and manage the services and facilities. The association would be a corporate body made up of and exclusively run by the flat owners.
Leasehold enfranchisement: right to purchase freehold
Leasehold Reform, Housing and Urban Development Act 1993 gives right to collectively buy freehold where at least 2/3rds building let on long leases and at least 2/3rds of those leaseholders give notice of intention to buy.
Price: market value + freeholder's share of marriage value + compensation for any loss suffered by freeholder as
a result of enfranchisement.
Qualifying tenant: long lease, flat, at low ground rent, residence requirements: only or principal home for last 12 months, or for periods amounting to 3 years within last 10 years.
Qualifying premises: self contained, freehold owned by same person, at least 2 flats held by qualifying tenants, at least 2/3rds total flats held by qualifying tenants, 5 or more flats where resident landlord and converted buildings, non-residential purposes less than 10% floor area.
Procedure: initial notice must be given by at least 2/3rds qualifying tenants, qualifying tenants giving notice must occupy at least half total number of flats, at least half qualifying tenants giving notice must satisfy residence requirements.
RIGHT TO EXTEND LEASE: where premises do not qualify for collective enfranchisement, there is an individual right to extend lease for 90 years + current period at peppercorn rent for whole period. Price: market value of new lease. No limit on number of extensions. Benefit of tenant's notice can be assigned to a purchaser of the flat.