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SQE2 > 2a. Property - Land > Flashcards

2a. Property - Land Flashcards

1
Q

Nature of land

To what extent does a landowner have a right to the air above?

A

To the extent necessary for the ordinary use and enjoyment of the land

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2
Q

Nature of land

Is a freehold landowner entitled to all minerals under his land?

A

Except coal, oil, natural gas, gold, silver, and treasure, to which the Crown is entitled

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3
Q

Nature of land

What does a landowner need to draw water from a source running through their land?

A

A licence

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4
Q

Nature of land

What does the degree of annexation test provide?

A

The greater something is attached to the land, the more likely it is to be a fixture

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5
Q

Nature of land

What does the purpose of annexation test look at?

A

Whether something was brought onto the land with an intent to make a permanent improvement or only a temporary one

If the purpose of annexation test is met, the degree of annexation becomes irrelevant

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6
Q

Estates and interests in land

What are the two estates under the Law of Property Act 1925?

A
  1. Freehold estate (uncertain duration)
  2. Leasehold estate (fixed duration)
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7
Q

Estates and interests in land

What are the five types of legal interest, and how must they be created?

A
  1. Legal mortgage
  2. Legal easement
  3. Rentcharge
  4. Right of entry
  5. Profits a prendre

Must be created by deed.

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8
Q

Estates and interests in land

What three things are required for a deed to be valid?

A
  1. In writing
  2. Clearly intended to be a deed
  3. Duly executed as a deed

Duly executed means signed in the presence of an attesting witness and delivered (delivered means expressing an intention to be bound)

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9
Q

Estates and interests in land

What is a rentcharge?

What does the the rentcharge owner’s right of entry allow him to do?

A

An interest in land requiring the landowner to make a periodic payment in respect of land to the rentcharge owner, but is different to and cannot arise under a lease or tenancy

Enter and take possession of the premises in the event of a default

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10
Q

Estates and interests in land

What is a profit a prendre?

A

An interest in land enabling someone to take something from the land of another

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11
Q

Estates and interests in land

What is a common situation in which an equitable interest may arise by accident?

A

When parties attempt to create a legal interest by deed, but the formalities for a deed are not met

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12
Q

Estates and interests in land

What are the some types of equitable interest?

A
  1. Equitable mortgage
  2. Equitable covenant (restrictive or positive)
  3. Equitable easement
  4. Estate contract
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13
Q

Estates and interests in land

For equitable interests created after 1925 and equitable interests which are not a beneficial interest under a trust, what is required for an equitable interest to be binding?

A

Notice

A BFP for V without N will not be bound

Other than the two examples, this requires the interest to be registered, otherwise there is no notice.

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14
Q

Principles of unregistered title

What two interests will a buyer of an unregistered legal estate purchase it subject to?

A
  1. Any legal interest over the estate, whether or not they were aware, and
  2. Any equitable interest of which they have notice
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15
Q

Principles of unregistered title

How are legal interests generally discovered?

A

Checking the deeds, or inspecting the property

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16
Q

Principles of unregistered title

What does it mean when a seller deduces title to the buyer, and what is the traditional way of doing so ?

A

Seller proves that they own the land they are contracting to sell, by producing documents commencing with a good root of title demonstrating an unbroken chain of ownership for a minimum of 15 years

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17
Q

Principles of unregistered title

What are the four requirements of a good root of title?

A
  1. At least 15 years old
  2. Deal with the whole legal and equitable interest in the property
  3. Contain adequate description of the property
  4. Do nothing to cast doubt on title
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18
Q

Principles of unregistered title

What is the epitome of title?

When does the seller send this?

A

A chronological list of all the documents, together with a copy of each

In the contract package

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19
Q

Principles of unregistered title

What is required for most equitable rights and interests to be enforceable against subsequent buyers?

A

Registration with Land Charges Department of HM Land Registry

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20
Q

Principles of unregistered title

What is an equitable interest land charge registered against, and who makes the application for it?

A

It is against the name of the estate owner at the time the land charge was created, not the address of the property

Applied for by the person who claims the right

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21
Q

Principles of unregistered title

What are the two Class C equitable interest land charges relevant to the SQE?

A
  1. C(i): Puisne mortgage, i.e. a legal mortgage not protected by deposit of title deeds, e.g. a second legal charge
  2. C(iv): Estate contract, e.g. protects the interest of someone who has an option to purchase or has executed a contract to purchase but before completion

Second mortgage can’t be protected by title deeds as first lender has them

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22
Q

Principles of unregistered title

What are the two Class D equitable interest land charges relevant to the SQE?

A
  1. D(ii): Restrictive covenant
  2. D(iii): Equitable easement
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23
Q

Principles of unregistered title

What does a Class F equitable interest land charge protect?

A

A non-owning spouse’s statutory right of occupation in the matrimonial home

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24
Q

Principles of unregistered title

What is the relevance of registration of these land charges?

Does registration bind subsequent owners?

A

They constitute actual notice of the interest

Yes, because registration is actual notice of the interest to all persons

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25
Q

Principles of unregistered title

What is the consequence of an equitable land charge not being registered?

A

It is void against a purchaser for value

Unless the doctrine of notice applies and they have other actual, constructive, or imputed notice

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26
Q

Principles of unregistered title

To what two things does the doctrine of notice apply, and under it, what four things must a buyer show to take free of any equitable interest?

A

Only applies to equitable interests pre-dating 1925 and beneficial interests under a trust.

To take free, the buyer must show they:
1. Were a BFP for V without N
2. Acquired a legal estate/interest, not just an equitable interest

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27
Q

Principles of unregistered title

When will a person be deemed to have constructive notice?

A

When they would have discovered something with reasonable enquiry

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28
Q

Principles of unregistered title

What is imputed notice?

A

Notice given to an agent of a buyer is deemed to be given to the buyer

Things an agent should have known can also be imputed to a principle, i.e. things the agent should have constructive notice of can be imputed to the principle.

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29
Q

Principles of unregistered title

Why is notice irrelevant in the registered system?

A

Because interests are either:
1. Registered (and therefore binding on the buyer) or
2. Protected as overriding interests (which automatically bind the transferee irrespective of registration or notice)

Failing that neither legal nor equitable interests are binding and any other notice cannot save them

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30
Q

Principles of unregistered title

What does someone receiving unregistered property as a gift take the property subject to?

A

Any equitable interest, even if without notice

Paying value is the key defence mechanism in this situation

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31
Q

Principles of unregistered title

What does it mean for an interest in unregistered land to override first registration, and what are four examples of interests which do this?

A

It means that it is sheltered from and superior to the first registration of the land

  1. Lease for seven years or less
  2. Legal easement
  3. Local land charge
  4. Interest of a person in full occupation
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32
Q

Principles of unregistered title

How does an interest which overrides cease to be overriding?

A

If the buyer is aware of it, they must disclose it to HMLR, after which it is protected by an entry on the register

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33
Q

Principles of unregistered title

In relation to unregistered land, what three things must an applicant for adverse possession show with regard to possession?

A
  1. Actual
  2. Exclusive
  3. Without permission of the landowner

The point of adverse possession is that the applicant treat the land as theirs as of right, hence why the law should transfer it to them

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34
Q

Registration of title

What are the four main triggering events?

A
  1. Grant of first legal mortgage
  2. Transfer, e.g. conveyance on sale, assent, deed of gift
  3. Grant of lease exceeding seven years
  4. Assignment of lease with more than seven years remaining

Requires registration within two months if occurring after 1 December 1990

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35
Q

Registration of title

What two things happen if registration is not applied for within the two month window in the case of (1) a conveyance and (2) a lease or mortgage?

A
  1. Transfer of legal estate is void, and legal estate reverts to the transferor
  2. Lessor/mortgagor retains full legal title but holds as trustee of the lessee/mortgagee

Cost of remedying failure to register falls on the party in default

Two month window may be extended if good reason is provided to the Registrar

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36
Q

Registration of title

What is the impact of a failed legal registration becoming an equitable estate?

A

It will lose priority to other transactions which create interests in the estate before defect is cured

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37
Q

Registration of title

What are the four classes of title?

A
  1. Title absolute (freehold/leasehold): LR satisfied proprietor is true and proper owner.
  2. Qualified title (freehold/leasehold): Proprietor’s ownership only established for short period or is subject to reservations (i.e. certain title docs missing). Can be upgraded if issue rectified
  3. Posessory title (freehold/leasehold): proprietor in actual occupation / in receipt of rents but has no doc to evidence how property was acquired.
  4. Good leasehold title: where tenant can’t provide evidence of landlord’s title to land.
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38
Q

Registration of title

Absolute freehold title is the best and most common kind of title. What are the only two interests absolute freehold title is subject to?

A
  1. Interests on the register after registration, e.g. charges, notices, restrictions
  2. Overriding interests at registration
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39
Q

Registration of title

How can good leasehold and possessory title be upgraded, and what are they upgraded to?

A

Good leasehold becomes absolute leasehold if landlord’s freehold title is produced.

Possessory becomes absolute freehold if possessory title is not challenged for 12 years since it was granted.

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40
Q

Registration of title

How can a party with an interest in unregistered land ensure that they are notified if an application for registration is made regarding their land?

A

Register a caution against first registration, and the caution gets its own title number and register

Owner of estate can apply to HMLR for caution to be cancelled on grounds that cautioner lacks the interest they claim

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41
Q

Registration of title

What are four types of disposition which do not operate until registered?

Three are triggering events

A
  1. Transfer of freehold estate (for value, by court order, by gift, or by PRs)
  2. Grant of legal lease with more than seven years
  3. Express grant or reservation of legal easement, legal profit, or legal rentcharge
  4. First legal mortgage
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42
Q

Registration of title

In the registered system, when does title pass?

A

When the disposition is registered at HMLR

Completion of the contract in unregistered system

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43
Q

Registration of title

What are the three registers on the register of title, and what appears on each?

A
  1. Property register (basic details; rights benefitting the land)
  2. Proprietorship register (class of title; name of estate holder; restrictions on the land)
  3. Charges register (rights of others burdening the land, e.g. mortgage or easement)
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44
Q

Registration of title

What is a notice?

A
  • Entry on the charges register of burdened land in respect of an interest affecting the registered estate, or
  • Entry on the property register of benefitting land in respect of an interest benefitting the estate.
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45
Q

Registration of title

What is a restriction?

A

An entry on the proprietorship register used to prevent any dealing with the land otherwise than in accordance with the terms of the restriction

E.g. in a tenancy in common: “No disposition by a sole proprietor…”

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46
Q

Registration of title

What is an overriding interest in the registered system?

A

Interest which is binding on both the proprietor and a person who acquires an interest despite the fact that the interest does not appear on the affected register of title

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47
Q

Registration of title

What are the three overriding interests in the registered system?

A
  1. Legal leases for seven years or less
  2. Legal easement or profit, not expressly created by deed
  3. Interest of person in actual occupation, except spouse who must use an F land charge
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48
Q

Registration of title

What is the requirement for the type of easement that can be overriding in the registered system, and what type of easement cannot be, and why?

A

It must be a legal easement and must not be an express easement, i.e. it must arise from implied grant/reservation or prescription.

An expressly created easement (i.e. created by deed) cannot be overriding.

Because an express easement must be registered in its own right to be effective, and when it is placed on the charges register of the burdened land, it becomes binding anyway.

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49
Q

Registration of title

Other than not being an express easement, one of what two options must be satisfied for a legal easement to be overriding in the registered system?

A
  1. Known to the buyer or obvious on reasonable inspection, or
  2. Exercised within one year of the date of the disposition
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50
Q

Registration of title

What must a person claiming the overriding interest have in addition to mere occupation?

A

A property right in the land, e.g. tenancy or right to remain

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51
Q

Registration of title

What will make an interest cease to be overriding?

A

If upon disclosure to HMLR during applying for registration or a registrable disposition, the interest is capable of registration, it will cease to be overriding and will be protected by an entry on the register of title

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52
Q

Co-ownership

What will the court do where, e.g. two parties buy a property, each contributing to the purchase price, but legal estate is conveyed to only one?

A

Infer a resulting trust, with the legal owner holding the estate on trust for both

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53
Q

Co-ownership

What are the options where contributions are (1) equal and (2) unequal?

What way must the legal estate be held, and why?

A
  1. Equal: Joint tenancy
  2. Unequal: Tenancy in common

As joint tenants, because tenancy in common cannot exist at law

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54
Q

Co-ownership

What is the impact of the doctrine of survivorship?

Does the doctrine apply in law and equity?

A

Any attempt to gift or leave a joint tenancy upon death will fail, and it will vest automatically in the surviving joint tenants

Yes

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55
Q

Co-ownership

What is the maximum number of trustees that can hold the legal estate in land?

What about the behind-the-scenes equitable interest?

A

Four

No limit

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56
Q

Co-ownership

What is a declaration of trust?

A

A conclusive agreement between co-owners as to how their beneficial interest is to be held

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57
Q

Co-ownership

What is severance in the context of a equitable beneficial interest, and what are the six ways it can be achieved?

A

Bringing the equitable joint tenancy to an end and converting it to a tenancy in common

  1. Written notice
  2. Total alienation (selling/gifting share)
  3. Partial alienation (mortgaging)
  4. Involuntary alienation (bankruptcy)
  5. Mutual agreement (all JTs agree to sever)
  6. Mutual conduct (course of dealings where JTs treat shares in property as seperate (ongoing negotiations))

Severance can only take place during severing JTs lifetime (not by will)

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58
Q

Co-ownership

After a party disposes of or treats their share as separate, are they completely out of the picture?

A

No, they still hold the legal estate on trust for the purchaser of their share, because severance only concerns the equitable interest

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59
Q

Co-ownership

Why does the bankruptcy of one joint tenant sever an equitable joint tenancy?

A

Because the bankrupt’s equitable share is transferred to the trustee

60
Q

Co-ownership

Although the intention of the parties will control, if it cannot be determined, what will the court assume?

A

That equity follows the law, and the beneficial interests reflect the legal interests, i.e. joint tenancy, because tenancies in common cannot exist at law

61
Q

Co-ownership

What should a solicitor acting for a buyer always be aware of when the legal estate is held by only one party?

A

There could be behind the scenes co-owners who may have a claim on the property

62
Q

Co-ownership

What is overreaching, and how does it occur?

Why does this allow overreaching?

A

A process under which a buyer may take property free of a beneficiary’s interest under a trust, when purchase money is paid to all trustees (minimum of two or one if a trust corporation)

The payment transfers the equitable interest of the beneficiary from the land and attaches it to the purchase money.

63
Q

Co-ownership

What should a buyer do if there is only one trustee, to ensure they can overreach and take property free of the interest?

A

Ensure that a second trustee is appointed to receive the money, or obtain a written release from the beneficiary regarding this requirement

64
Q

Co-ownership

When will sections 14 and 15 of the Trusts of Law & Appointment of Trustees Act 1996 help co-owners?

A

If they cannot decide how or when to dispose of property

65
Q

Co-ownership

What does section 14 allow?

What does it not allow?

A

It allows a trustee or any other person with an interest in property subject to a trust to apply to the courts for an order relating to the trustee’s duties to sell, obtain consent, or declare the nature of a party’s interest

It does not allow the court the appoint or remove a trustee

66
Q

Co-ownership

What are the four factors under section 15 for the court to consider in determining an application under section 14?

A
  1. Intentions of the trustees
  2. Purpose for which the property subject to the trust is held
  3. Welfare of any minor who occupies or might reasonably be expected to occupy
  4. Interests of any secured creditor or beneficiary
67
Q

Co-ownership

If the court does have to make a split upon the breakdown of a relationship, what proportion will each receive and what will the court consider?

A

Each party will receive the proportion the court considers fair considering all the circumstances and not just those surrounding the purchase

68
Q

Leases

An oral tenancy is valid if for less than how long?

A

Three years

69
Q

Leases

Although a lease must generally be created by deed, what two things are required to create a legal short lease of three years or less in writing or orally without a deed?

A

Tenant:
1. Takes possession of leased premises
2. Pays at least market rate rent and are not required to pay any upfront sum or premium

70
Q

Leases

In a long term lease, what is required for the rent to be adjusted?

A

The lease must provide for it

71
Q

Leases

What is a reversionary lease, and what is the maximum period between the lease being entered into and the tenant taking possession for it to be valid?

A

A lease under which the tenant does not take possession until some time in the future

21 years

72
Q

Leases

If there is no notice provision in a periodic tenancy, how much notice must be given to terminate it?

A

An amount of time equivalent to one period in the tenancy

73
Q

Leases

In an implied periodic tenancy, how is the period determined?

A

Based on the intervals between the payment of rent

74
Q

Leases

What arises and what does not arise if an owner of land allows a buyer to take possession of land before a written agreement is entered into?

What is the effect of the prospective buyer in possession attempting to assign?

A

A tenancy at will (not a legal interest) may arise, but no estate in land is created

It operates as notice to terminate the tenancy, as soon as the tenant notifies the landlord of such

75
Q

Leases

In the case where such a tenancy at will arises, what is the effect of the prospective buyer in possession (1) attempting to assign and (2) beginning to pay rent?

A
  1. It operates as notice to terminate the tenancy, as soon as the tenant notifies the landlord of such
  2. Court will treat it as a periodic tenancy unless there is very clear evidence that the parties intend the tenancy at will to continue
76
Q

Leases

In what two situations is a lease void for uncertainty?

A
  1. A term is uncertain
  2. Starting/ending date (if fixed) is uncertain/not knowable
77
Q

Leases

Even if a lease is not created by deed and is not an eligible short lease, equity will recognise such as a contract for the disposition of land if what two conditions are met?

What does this not apply to and what will it not protect against?

A
  1. Lease in writing incorporating all terms expressly agreed
  2. Signed by all parties

This exception does not apply to oral leases and will not protect against a buyer of the landlord’s reversion unless the lease is registered

78
Q

Leases

How is an equitable lease which was recognised due to the failed creation of a legal lease appropriately registered in (1) the unregistered system and (2) the registered system?

A

Unregistered: Class C(iv) estate contract land charge
Registered: Notice on the charges register

Otherwise not binding on a BFP for V without N, unless rent is paid in which case it converts to a legal interest which binds a purchaser of unregistered land and will be an interest that overrides first registration or a registrable disposition

79
Q

Leases

What are the three characteristics of a lease?

What is likely created if any is missing

A
  1. Exclusive possession
  2. Fixed or periodic time certain
  3. In consideration of a premium (lump sum or periodic payments)

Licence: a right to use land in some way, creating neither an estate nor an interest in land

80
Q

Leases

What covenants will a lease generally contain?

A
  • To pay rent
  • Quiet enjoyment
  • Repair (landlord and tenant’s duties)
  • Uses to which the premises can be put
  • Alterations (either qualified or absolute bar)
  • Assignment (either qualified or absolute bar)
81
Q

Leases

What is the covenant of quiet enjoyment?

A

An obligation imposed on the landlord to not interfere in any way with the tenant’s enjoyment of the property nor allow the lawful activities of other tenants to do so

82
Q

Leases

Where an absolute bar is in place to make alterations or assign, can the tenant still ask for the landlord’s specific consent?

Where the bar is qualified, how forthcoming must consent be?

A

Yes

It must not be unreasonably withheld

83
Q

Leases

What is Commercial Rent Arrears Recovery?

Is is automatically available?

A

Statutory procedure allowing landlords of commercial premises to recover rent arrears by taking control of tenant’s goods and selling them

Available even if not expressly provided for in the lease

84
Q

Leases

What is forfeiture with regard to a lease, residential or commercial?

Is it automatically available?

A

The right of the landlord to re-enter the premises and bring the lease to an end due to default by the tenant, usually rent not paid

Must be expressly provided for in the lease

85
Q

Leases

What is the tenant’s right in a forfeiture situation?

A

Settle the arrears instead of losing premises

86
Q

Leases

How might a landlord waive his right to forfeit?

A

By being aware of the default and then:

  1. Accepting or demanding payment
  2. Serving notice on tenant of repairs to be done
  3. Carrying out distress for rent (re-entering and seizing tenant’s goods in lieu of rent)

Any act suggesting landlord has looked beyond forfeiture and wants to solve the issue another way

87
Q

Leases

What is a Jervis v Harris clause?

What is the significance of the costs being recoverable as a debt?

A

Self-help clause, enabling landlord to re-enter to make repairs and recoup costs as a debt if tenant breached covenant to maintain after serving notice on tenant to carry out repairs

Costs are recovered in a more straightforward debt action, rather than a damages action

88
Q

Leases

What are the remedies for breach of the covenant to pay rent?

A
  1. Commercial Rent Arrears Recovery
  2. Forfeiture
89
Q

Leases

What are the remedies for breach of the covenant to repair/maintain?

A
  1. Damages
  2. Specific performance
  3. Self-help
  4. Forfeiture again
  5. Debt action
90
Q

Leases

What is a section 146 notice, and what are the three requirements for one?

A

The notice served on a tenant by a landlord for breach of repairing obligations when landlord wishes to forfeit the lease

  1. Specify the breach
  2. Require the breach to be remedied within a reasonable time
  3. Require tenant to pay compensation in any event
91
Q

Leases

What is the first determining factor in whether covenants of a lease bind the original parties after assignment?

A

Whether the lease is granted before 1 January 1996

92
Q

Leases

What is the position under a lease made (1) before 1996 and (2) from 1 January 1996?

In an on or post 1 January 1996 situation, what is the assignor still liable for?

A
  • Before 1996: The original landlord and original tenant remain liable to one another, even after assignment, unless expressly released
  • From 1 January 1996: Tenants are automatically released from their covenants upon assignment

Breaches of covenant which occurred before assignment

93
Q

Leases

What is an authorised guarantee agreement?

Allowed in a residential lease?

A

An agreement, usually required by a landlord as a condition of assignment, whereby the original tenant will act as guarantor for his immediate successor in title, meaning only the last party to give an AGA is liable

Not allowed in the lease and if the landlord tries to impose such in an assignment situation, it must be imposed lawfully

94
Q

Leases

What occurs when a tenant tries to create a sublease which is longer than his own lease?

A

No new lease is created, but the tenant’s full lease will be assigned instead

95
Q

Leases

What is the required form of the assignment of a lease?

A

Deed, even if the lease is made orally

96
Q

Leases

What is the effect of an assignment by a tenant made in breach of the landlord’s consent requirement?

A

The assignment is legally effective, but there is a breach of covenant on the part of the original tenant as with the landlord

97
Q

Leases

Are the covenants in the head lease usually enforceable against a subtenant, and why?

A

No, because there is no privity of contract or estate between the landlord and the subtenant

98
Q

Leases

Is a sublease affected by the assignment of a head lease?

A

No

99
Q

Leases

Who may serve notice to terminate where there are multiple landlords and multiple tenants?

A

Any of them

100
Q

Leases

What are the two ways the parties can mutually agree to bring a tenancy to an end?

A
  1. Surrender: Parties agree tenant will give up possession to the landlord
  2. Merger: Parties agree landlord will transfer reversion to the tenant
101
Q

Leases

If a head lease is ended by expiry, notice to quit, or forfeiture, does any sublease existing under it come to an end?

A

Yes

102
Q

Leases

If a head lease is ended by surrender, does any sublease existing under it come to an end?

What about merger?

A

No, the subtenant will become the tenant of the head landlord on the terms of the sublease and will have to pay rent due under the sublease to the head landlord

New owner of the estate (usually the headlease tenant) will hold the estate subject to the sublease, and the subtenant’s position will be the same as with surrender

103
Q

Easements and profits

What are the three essential characteristics of an easement?

A
  1. There must be a dominant and servient tenement
  2. Easement must benefit the dominant land, not just the owner/occupier personally
  3. Dominant and servient land must be in separate ownership
104
Q

Easements and profits

What are the two requirements for a legal easement or legal profit?

A
  1. For equivalent of an absolute interest (fixed period or forever, but not for life)
  2. Created by deed

If no deed, equity may rescue

105
Q

Easements and profits

What two conditions must be met for equity to rescue a legal easement or profit not created by deed?

A
  1. In writing incorporating all terms expressly agreed
  2. Signed by both parties

Same as exception to non-short lease not by deed.

106
Q

Easements and profits

What are the three ways an easement can be created?

A
  1. Express grant or reservation (legal)
  2. Implied grant or reservation (equitable)
  3. Prescription (legal)
107
Q

Easements and profits

Under section 62 of the Law of Property Act 1925, what type of easements and profits will pass under statute even if not specifically mentioned in the transfer document (and why), and does this apply to grant and reservation (and why)?

What are the two conditions for section 62 to apply?

A

Easements and profits appurtenant because they run with the land and cannot be transferred on their own.

Just grant, because if the seller wanted to reserve them when selling a parcel of land, they easily could have (same reason why implied easement generally can’t help seller other than two exceptions).

Grant must be within the power of the grantor, and there must be no contrary intention

108
Q

Easements and profits

When does implied grant or reservation arise, and what are the four types of easements which can arise impliedly?

A

When the parties have not expressly created necessary easements as part of the conveyance

  1. Easements implied by necessity
  2. Intended (but not executed) easements
  3. Ancillary easements
  4. Easements implied by existing use

1 and 2 are available to the grantor, in exception to the general rule that they should reserve whatever rights they need

109
Q

Easements and profits

  1. When will an easement be implied by necessity?
  2. From what will an ancillary easement arise?
A
  1. Where a parcel of land is landlocked, a right of way will be implied in order to access
  2. From the realities of the situation, e.g. a right to take water from a spring gives rise to an ancillary right of way to that spring
110
Q

Easements and profits

What are the three requirements for an easement by existing use to be implied on sale/transfer?

A

Easement must:

  1. Be continuous and apparent
  2. Be necessary to the reasonable enjoyment of the land acquired
  3. Have been used by the seller for the benefit of the land at the time of conveyance
111
Q

Easements and profits

What are the two requirements for an easement to arise by prescription?

A

Party has used the benefit:

  1. Unchallenged for 20 years, and
  2. As of right, i.e. without permission or making payment
112
Q

Easements and profits

What is the status of an easement arising by common law prescription?

A

It is a legal interest

113
Q

Easements and profits

When will legal easements and profits bind a buyer in the (1) unregistered system and (2) registered system?

A
  1. When they come into existence
  2. When they are registered
114
Q

Easements and profits

In the registered system, what is the consequence of not registering a right which arises by express grant or reservation?

A

It will not take effect as a legal interest, and will not override an equitable interest

115
Q

Easements and profits

What is required for an equitable easement to bind a buyer in the unregistered system?

A

Registration as a D(iii) equitable easement land charge

116
Q

Freehold covenants

Is the original burdened party liable on the covenant even after the sale of land by the person benefitting from the covenant, and why?

i.e. is the original burdened party liable to a successor, where the original burdened party remains?

A

Yes, under privity of contract, the person to whom the covenantee sells is essentially assigned the right to benefit from the covenant

117
Q

Freehold covenants

What typically determines if a covenant is enforceable between successors?

i.e. where both parties have moved on and no original party remains

A

Whether it is a positive or restrictive covenant

Positive generally only binds the original parties; restrictive can bind successors

118
Q

Freehold covenants

What are the four conditions for the benefit of a restrictive covenant to be enforceable by the successors of the original benefitting party, where the original burden party is gone?

Remember, if the original burdened party is still in situ, a restrictive covenant remains binding on them

A
  1. Covenant touches and concerns the land, i.e. benefits the land in the same way as an easement
  2. It was intended to pass with the legal estate held by the original benefitting party
  3. The BP held the legal estate in the land to be benefitted at the time the covenant was made, and
  4. The successor of the original BP now holds the legal estate

Essentially a privity of contract argument to transfer a benefit to the land, which was intended to run with the legal estate, to the person who now owns the legal estate

119
Q

Freehold covenants

Is the burden of a restrictive covenant enforceable in law against a successor in title of burdened land?

A

No, but it may be enforceable in equity if:

  1. The original benefitting party held the legal estate in the land to be benefitted when the covenant was made, and
  2. Burden was intended to run with the land
  3. Convenant is on the charges register of burdened land if registered, or D(ii) restrictive covenant land charge if unregistered

Registration is only required to enforce in equity, as if it is a legal interest, e.g. restrictive covenant, it is binding on the world at large

120
Q

Freehold covenants

What are three of the ways of otherwise enforcing a positive convenant?

A
  1. Grant a lease
  2. Chain of indemnity covenants
  3. Benefit and burden rule
121
Q

Freehold covenants

Why does a granting a lease allow a positive covenant to be enforced?

A

Because the burden of positive and negative leasehold covenants run with the land due to privity of estate

122
Q

Freehold covenants

How does a chain of indemnity covenants allow a positive covenant to be enforced?

A

The original covenantor and each successive successor in title obtain an indemnity covenant from the next buyer, so the liability is continually offset and primarily enforceable

123
Q

Freehold covenants

What is required for the rule that a person cannot accept a benefit without also accepting the burden, and what is a consequence of them failing to uphold a positive convenant?

A

The benefit and the burden must be related to each other, e.g. benefit of using a road paired with burden of helping fund its maintenance.

Whilst the obligation to maintain is not enforceable against a successor, they can be denied use of the benefit.

124
Q

Mortgages

How must a legal mortgage be made?

A

By deed

An unsuccessful attempt to create a legal mortgage will be rescued by equity, if the appropriate writing can be evidenced

125
Q

Mortgages

What are the three situations in which an equitable mortgage can be created?

A
  1. Parties agree that mortgage should only be equitable
  2. Contract in writing to create a legal mortgage, and there is no deed or the deed fails (rescue)
  3. Mortgagor owns equitable interest only
126
Q

Mortgages

Regarding registered land, how is (1) a legal mortgage and (2) an equitable mortgage protected?

A
  • Legal mortgage must be completed by registration, and has priority over competing interests (unless previously registered or overriding)
  • Equitable mortgage is protected by placing a notice or restriction on the property’s register
127
Q

Mortgages

Regarding unregistered land, who has priority regarding mortgages?

A

The first mortgagee, because they will have custody of the title deeds

128
Q

Mortgages

Regarding unregistered land, how is (1) a subsequent legal mortgage and (2) an equitable mortgage protected?

A
  • Subsequent legal mortgage is protected by registration as a C(i) puisne mortgage land charge
  • Equitable mortgage is protected by registration as a C(iii) general equitable land charge

Both are registered against the borrower’s name

129
Q

Mortgages

Within what time period of a company creating a charge must it be filed with Companies House?

A

21 days

130
Q

Mortgages

What are the two main situations in which a third party may have an interest in land subject to sale?

A
  1. Tenants
  2. Co-owners, or non-owning occupants who contributed to the purchase price
131
Q

Mortgages

What legal tenancies in (1) unregistered system and (2) registered system will bind a mortgagee?

A
  1. Unregistered: legal tenancies granted before the mortgage was created
  2. Registered: legal tenancies not exceeding seven years

A legal tenancy of registered land exceeding seven years must be registered in its own right to be binding

132
Q

Mortgages

What equitable tenancies in (1) unregistered system and (2) registered system will bind a mortgagee?

A
  1. Unregistered: equitable tenancies registered as a C(iv) estate contract land charge
  2. Registered: equitable tenancies not exceeding seven years, and the tenant is in occupation

Tenant must be in occupation as this converts it to a legal interest, which is an overriding interest

133
Q

Mortgages

Where the mortgage deed prohibits creation of tenancies without mortgagee’s consent, is the mortgagee bound by unauthorised tenancies?

A

No

134
Q

Mortgages

What is required where an institution is lending money secured by co-owned property, but the proceeds are to be used by only one of the co-owners for a separate purpose?

A

Other co-owner must be:

  1. Separately represented by another solicitor, and
  2. Given full financial information

The other co-owner must understand the practical implications of the proposed transaction in a meaningful way

135
Q

Mortgages

What are four of the rights a legal mortgagee has once the mortgage is registered as a charge?

A
  1. Sue for the debt
  2. Take possession
  3. Foreclose
  4. Sell

Equitable mortgagee has the same rights, with a different process for sale

136
Q

Mortgages

Whilst a legal mortgagee can usually always take possession, the presence of what on the land adds an additional requirement, and what is this step?

A

If there is a dwelling on the land, possession can only be sought through the courts

137
Q

Mortgages

What is the effect of foreclosure?

When does the right to foreclose arise?

A

The mortgagee becomes the owner of the property via court order

Same as right to sell, right to foreclose does not arise until after the contractual due date has passed (usually six months after creation)

138
Q

Mortgages

What are the three requirements, one of which is enough, for the power of sale to become exercisable?

In addition to the contractual due date having passed

A
  1. Interest payments more than two months in arrears
  2. Written request for payment and three months has passed
  3. Breach of any other term of the mortgage
139
Q

Mortgages

What is sale by a legal mortgagee under a power of sale subject to and what is it free of?

A

Subject to any prior mortgages
Free of any interest over which the mortgage has priority, e.g. unprotected interests

A legal mortgage also has priority over any subsequent legal mortgages. This means a buyer from a lender who has taken possession takes free of any other legal mortgages created after the one the property was repossessed under.

140
Q

Unless there is anything on the register to the contrary, what will a legal mortgage have priority over when it is entered on the register of title?

A

Any interest whose priority is not protected

141
Q

What two things will have priority over a properly registered legal mortgage in the registered system?

A
  1. Charge registered before the mortgage, and
  2. Overriding interest if it existed before the mortgage
142
Q

Mortgages

Whilst an equitable mortgagee will generally have the power of sale, what do they not have?

A

Power to convey or transfer the legal estate

143
Q

Mortgages

When an equitable mortgage in the registered system is protected by placing a notice or restriction on the property’s register of title, what will the equitable mortgage have priority over?

A

Any later dealing with the legal estate, even a later legal mortgage

144
Q

Mortgages

For all legal mortgages in the unregistered system other than the first protected by the title deeds, what is the main factor in determining priority?

A

The date of registration as a legal charge

145
Q

Mortgages

What are the priority rules for equitable interests (including equitable mortgages) in both systems?

A

Generally, first in time has priority

SQE2 (15 decks)

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