Monthly Archives: January 2015

Question 5. Page 32. Law of Property

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Anne has entered into a contract to buy Greenacre from Paul. He has now sold Greenacre to Clare. Anne is saying that Claire must now sell Greenacre to her. What is the correct statement of Anne’s position?

a. Anne has an estate contract, this is an equitable interest and if Claire is a bona fide purchase shhe takes free of the interest regardless of notice?

b. Anne should have entered the estate contract as a class iv Land Charges. section 2 LCA 72 . If she has then Claire is bound by that interest. If she has not then Claire takes free regardless of her notice or her bona fides.

c. Anne has a contract with Paul and has a personal claim against him in breach of contract.

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a. She had an estate conttract then this is not binfing on Claire who is a third party. The bona fide purchaser of legal estate without notice is equity’s dalring in which case Claire’s position is inassailable.Moreover, if this is regstered land notice would have no effect.

b. This is correct in that Anne shold have entered it. But even if it was entered this would have no effect. This is like Midland Bnk v Green

c. She does have a personal claim. She has no claim against Claire.

b.

Question 4. Page 32. Law of property

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Anne has a trust in Blueacre. Legal title is held by her parents, Daniel and Dorothy. Paul has purchased Blueacre from Daniel and Dorothy and after, paying the purchase monies to them both, wants Anne to move out. What is the correct statement of Anne’s position?

a. Her interest has been overreached so she has no right to stay.

b. Paul is bound by her interest if he has actual, imputed or constructive notice of Anne’s interest in Blueacre.

c. Anne should have protected her interest by entry by her interest on the Land Charges Register against the names of Daniel and Dorothy.

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a. May be correct. She has an equitable interest and not a legal interest. Paul has legal ownership and legal rights bind the world. His rights will defeat hers. The parents held the property on trust for their daughter. They were the two trustees. Money was paid to them and as it is at least two trustsees this will probably operate as overreaching. Anne probably has a constructive trust and not a resulting trust as she probably did not contribute to te purcahse price. Her rights will be turned into a shar eof te money.

b. Notice is neither here nor there. This is registered land.

c. Anne should have done this. Anne would still have to move out but she would definitely get some compensation and its amunt might be larger.

Question 3. Page 31. Law of property.

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Anne bought Whiteacre from Paul. Her neighbour Nina claims that Anne cannot use Whiteacre as a business as Nina entered into a restrictive covenant with Paul. How should Nina have protected her interest?

a. She must enter the restrictive covenant onto the Land Register against Whiteacre.

b. She cannot protect it against a bona fide purchaser.

c. She should enter the interest against Paul’s name on the Land Charges Register.

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c is the correct answer. Land Charges under the LCA 1972 are registered against the name of the owener of the affected property and not against the land. This is a controoversial and possibly foolsh system but that is the way it is. A registered land charge is binding on a bona fide buyer.

Question 2. Page 31. Law of property.

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Anne has a trust interest in Greenacre, the legal title is held by her partner Dell. Paul has purchased Greenacre froom Dell and wants Anne to move out. Which is the correct statement of Anne’s position.

a.    Anne’s beneficial interest will be binding on Paul if Anne has entered her interest in Greenacre on the Land Charges Register under section 2 Land Charges Act 1972?

bb.      Anne’s beneficial interest is automatically lost on transfer as her interest has been overreached when purcahse money was paid to Dell.

.c.      Paul will only be bound if he had actual, imputed or constructive notice of Anne’s interest in Greenacre.

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a. Anne has an equitable interest and it is overreachable. However, it is possible to register it. So she miight have registered it. But Paul has legal title. Legal rights bind the world but in this case her equitable interest will survive if she has registered it.

b. This is not necessarily true. Dell held a legal interest and not an equitable one. Even if he was deemed to hold it on truste for himself and Anne there was only two trustees. Money would have to be paid to at least two trustees for overreaching to occur. This is wring.

c. If this is registered land then the doctrine of notice does not apply. If it is uunrgeiesterd then this would not apply still.

Quick quiz. Page 31. Law of property.

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Anne wants to transfer her unregistered title in Whiteacre to Paul. Which is the correct method?

a. She hands the bundle of deeds she has to Paul.

No, this is wrong. She needs to have a deed prepared by a lawyer to grant the title to Paul.

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b. She hands Paul a deed which states that Anne transfers Whiteacre to Paul – the document complies with section 1 LP . MP. Act 1989.

Yes, this is valid. The sale will need to be registered under the Land Registration Act 2002.

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c. She and Paul agree a document which states that Anne is going transfer Whiteacre to Paul – the document complies  with section 2 Law of Property Miscellaneous Provisions Act 1989.

This is not quite the same. This is an estate contract rather than a conveyance itself.

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Activity 2.5 Page 30. Law of Property

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Paul transfers the unregistered title of Whiteacre to Samantha for GBP 10 000. Will Samantha be bound by the following interests, all of which arose prior to the sale of Whiteacre to Samantha?

a. An easement granted by Paul to his neighbour Bethany?

This depends on whether Samantha knew about it or not. Bethany should have registered this as a land charge. If so that constitutes notice to the world and it will bind Samantha who is Paul’ successor in title. It is not an easement of necessity – because that would have not have been granted – which would have been binding regardless of notice. The easement is overreachable. This is unregistered land so the doctrine of notice applies.

Legal rights bind the world in unregistered title. The word granted implies that there was a deed and a deed would have created a legal right. Bethanty would need to register it as a land charge to make her case water tight because if it was not  a legal easement but an equitable easement it would be overreachable.

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b. A restrictive covenant granted by Paul to his neighbour Saskia?

This hangs on whether or not it was registered as a land charge. IIf yes then yes. If no then no it is not binding. A restrictive covenant can only be equitable. If granted before 1925 then it will be governed by the doctrine of notice and that would bind Samantha unless she is equity’s darling. If granted after 1925 then Saskai should have registered it as a land charge. That determines whether or not it is binding.

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c. Eloise’s beneficial interest in Whiteacre arising from her contribution to the purchase price Paul paid when he bought the property?

This like Kingsnorth Finance Ltd v Tizard. This is a resulting trust which is even more advantageous to the beneficiary than a constructive trust. She contributed to the purchase price. If she has registered her interest it is inassailable. If not then it will still prevail if supported by actual occupation as in Tizard – though that was a constructive trust. If she is not resident then it is overreachable. Her occupation – if at all – is discoverable.

Her interest is not registrable under the Land Charges Act 1972. It will not have been overreached as Paul is the only trustee – the purcahse money needs to be paid to two or more trustees to be overreached. Whether this is binding depends upon the equitable doctrine of notice.

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d. Tamara’s licence to occupy Whiteacre?

No. Licences are never binding. IIt is not a property interest. It exists in personam.

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e. The option to purchase Whiteacre Paul granted to Chris?

This is like Green v Midland Bank. It is registrable. If registered this equitable interest will prevail. If it is not registered then it will be defeated. It can be a land charge of class C iv.

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f. How, if at all, would your answer to each one of the questions change in each of the following alternative circumstances?

– Samantha paid ten pounds for Whiteacre

Yes, she is the bona fide purchaser of legal estate for value and if she is without notice then she is equity’s darling. In this case she can defeat all the interests above if she has no notice of them. She iis still a buyer as per Midland Bank v Green as this is value.

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– Samantha gave a peppercorn for it

This is nominal consideraton but it is still valuable. As this is unregistered title it makes no difference. In registered title it would be different.

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– Samantha gave no consideration

This is not valid consideration since it has no economic worth. It is derisory and an insult to the courts. Therefore she is a donee. She can defeat the licence and nothing else. As she got it for free she is not losing out as much as if she had paid for it. Courts are less sympatheitc to donees that buyers. She is not a purchaser under the Lan Charges Act in terms of registrable interests. She is not equity’s darling and cannot defeat overreachable interests.

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– The legal title to Whiteacre was co owned by Paul and Gordon who jointly conveyed it to Samantha.

They had joint tenancy. If the money is paid to both trustees then Eloise’s beneficial interest  will be overreached. This is the case even iif she is equity’s darling.

Overreaching has no effect on an easement or a restrictive covenant since these are excluded from overreaching under the Lae of Property Act 1925. So this does not change the earlier answers.

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Self assessment questions. Page 29. Law of Property.

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1. When will a purchaser be bound by a restrictive covenant entered into before 1926?

When he has notice of it. The doctrine of notice still holds good here.

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2. What is the consequence of failure to register a land charge?

Then the interest will not be protected. It shall be overreached. The buyer probably had no knowledge of it.

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3. Which equitable interests are still subject to the doctrine of notice?

This are ones in unregistered land.. The doctrine of notice does not apply to registered land. These equitable interests are constructive trusts, resulting trusts, options to buy, estate contracts, easements and restrictive covenants.

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4. What is constructive notice and when does it apply?

This is when a buyer ought to know something. The person who has the interest has not told the buyer but the right holder’s interest was easy to discover by a fairly careful buyer. It goes back to the old maxim – caveat emptor.

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