Land 6 Enforcement of Interests

Formalities of a Land Contract LP(MP)A, s2

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

Electronic Communications Act 2000

Allows contracts to be signed electronically where the subject of the contract is land

Expressly agreed terms LP(MP)A 1989, s2(2)

Terms may be incorporated by reference to another document

Different Documents LP(MP)A 1989, s2(1)

Estate contracts may be signed in two different documents provided they are identical, standard practice is then to exchange contracts

McCausland v Duncan Lawrie Ltd

Any variation to a material term in a land contract must also comply with LP(MP)A, s2, it cannot be oral

Walsh v Lonsdale

A land contract passes an equitable interests in the land to the buyer

Types of Estate Contract

Sale Contract, Agreement for Lease, Option Agreement or Right of Pre-Emption

Sale Contract

A buyer and seller can commit to purchasing/ selling

Agreement for Lease

The landlord and tenant can commit to entering a lease in the future

Option Agreement

Gives a party a right, during the option period, to serve notice that they wish to buy the land and the seller must sell

Right of Pre-Emption

Gives a party a right of first refusal if the landowner decides to sell their land

Remedies for Breach of a Land Contract

Damages, Specific Performance and Injunction

Coatsworth v Johnson

An equitable remedy will not be available if the applicant does not have “clean hands”

Three categories of estates and interests in Land

Registrable Dispositions, Interests protected by entry and Overriding Interests

Basic Rule of Priority LRA 2002, s28

An interest of whatever kind will take priority over later dispositions

s29 Exception to Rule of Priority

A disposition of a registered estate for valuable consideration will be an exception to the rule of priority

Types of Registrable Dispositions

Transfer of an existing registered freehold or leasehold, the grant of a new lease for a term of more than seven years, express legal easements, grant of a legal mortgage and grant of a landlord’s right of way

LRA 2002, s27(2)(a)

Transfer of an existing registered freehold or leasehold must be registered

LRA 2002, s27(2)(b)

The grant of a lease for a term of more than seven years must be registered

LRA 2002, s27(2)(f)

The express grant or reservation of an easement must be registered

LRA 2002, s27(2)(f)

A grant of a legal mortgage must be registered

LRA 2002, s27(2)(e)

A grant of a landlord’s right of way must be registered

Two Methods of protecting an Equitable Interest

Notice and Restriction

Equitable Interests LRA 2002, s32

Must all be protected by entry of a notice

Equitable Interests protected by entry of a notice s32

1. Restrictive covenants affecting freehold land
2. Estate Contract
3. Equitable Easement
4. Equitable Leases
5. Legal Leases more than three and up to seven years (option)
6. Not trust interests (s32)

Restrictions LRA 2002, s40

Impose conditions on a purchaser so that the freehold can only be registered once they are met

Overreaching LRA 2002, s2 and s27

Moves a beneficiary’s interest away from the land and into money provided that the money is paid to at least two trustees

City of London Building Society v Flegg

Overreaching worked

Overriding Interests

Interests which will bind the purchaser for value even though they have not been protected by registration

Main Categories of Overriding Interests LRA 2002, Schedule 3

1. Paragraph 1: Legal Lease granted for a term of seven years or less
2. Paragraph 2: Equitable Interests held by people in actual occupation of the land, subject to exceptions
3. Paragraph 3: Implied Legal Easements or profits a prendre of conditions are met

Link Lending v Bustard

There is no definition of actual occupation however the court should consider (objectively and subjectively):

* The degree of permanence and continuity of presence of the person concerned
* The intentions and wishes of that person
* The length of absence from the property and the reason for it
* The nature of the property
* Personal circumstances of the person

Williams & Glyn’s Bank v Boland

Actual occupation is to be given its plain meaning, and involves a degree of physical presence

Abbey National v Cann

There must be “permanence and continuity” and not simply a “mere fleeting presence” preparatory to moving in

Thompson v Foy

The person claiming the interest must be in actual occupation at the time of the transfer deed and possibly also at the time of the registration to claim an overriding interest

Chhokar v Chhokar

Actual occupation is not defeated by temporary absences such as holidays, hospital stays or business trips

Stockholm Finance Ltd v Garden Holdings Inc

There will be a point at which a prolonged absence means there is no actual occupation

Exception to Actual Occupation: Schedule 3, para 2(b)

An interest will not override a disposition where inquiry was made and the person failed to disclose where reasonable

Exceptions to Actual Occupation: Schedule 3, para 2(c)

An interest will not override a disposition where it belongs to a person whose occupation would not have been obvious on reasonable inspection or where the person to whom the disposition is made does not have actual knowledge at the time

Para 3: Implied Legal Easements as Overriding Interests

Will be binding if:

* The new owner knew about it, or
* It was obvious on a reasonable inspection of the land, or
* It has been exercised within the 12 months immediately before the disposition

Epitome of Title

Contains all relevant deeds for the ownership of unregistered land

Deducing Title

Requirement for the seller to show the epitome of title to the buyer

Mercer v Liverpool

Legal rights bind the whole world

Equity’s Darling

A bona fide purchaser for value of a legal estate in the land without notice of the prior interest

Doctrine of Notice

An equitable interest will bind a purchaser if it was created before 1926 and affected the purchaser’s conscience

Land Charges Act 1972

Requires equitable charges post-1926 to be protected

Pusine Mortgage

Protected by Class C(I) Charge

Estate Contract

Protected by Class C(IV) Charge

Restrictive Covenant

Protected by Class D(II) Charge

Equitable Easement

Protected by Class D(III) Charge

Spouse’s Matrimonial Right of Occupation

Protected by a Class F Charge

Compulsory First Registration LRA 2002, s4

Failure to register land when purchased means that legal title will revert to the seller after 2 months

Effect of Entry of a Land Charge, LPA 1925 s198

The interest will be binding on a purchaser, irrespective of the purchaser’s knowledge

The effect of non-entry of a Land Charge, LCA 1972 s4

Void against a purchaser

Midland Bank Trust Co Ltd v Green

The state of the purchaser’s knowledge is irrelevant after a land charge’s entry onto the register

Land Charges LCA 1972, s3(1)

Entered against the NAME of the landowner at the time the right is granted/ created

Diligent Finance Co Ltd v Alleyne

A charge not against the exact same name from the title deeds will not be void

Types of Notice

Actual, Imputed and Constructive Notice

Actual Notice

The purchaser actually knows of the equitable interests

Imputed Notice

Notice received by the buyer’s agent and the knowledge is imputed to the buyer

Constructive Notice

Where a purchaser fails to pursue reasonable line of enquiry

Wilkes v Spooner

Once an interest is void, it cannot be revived so as to bind a subsequent buyer