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Common Issues Flashcards

1
Q

What are the two modes of co-ownership?

A

Joint tenants and tenants-in-common

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2
Q

Define ‘joint tenancy’.

A

All joint tenants collectively own the whole of the property, with equal rights by default

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3
Q

What is the right of survivorship in joint tenancy?

A

On the death of a co-owner, the property automatically passes to the other owners

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4
Q

How can a joint tenancy be severed?

A

By serving written notice of severance or automatically in certain situations

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5
Q

What does ‘tenants-in-common’ mean?

A

Each tenant owns a specified share in the property, which can vary

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6
Q

What happens to the property when a tenant-in-common dies?

A

The property passes under the deceased’s will or rules of intestacy

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7
Q

What is a declaration of trust?

A

A document that formally records co-owners holding the property as tenants-in-common

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8
Q

What should spouses consider when choosing joint tenancy?

A

The right of survivorship and contributions to the property price

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9
Q

What is the presumption regarding severed shares in a joint tenancy?

A

Severed shares are presumed to be equal unless agreed otherwise

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10
Q

What is overreaching?

A

Overreaching is the process by which a beneficial (equitable) interest in land is detached from the land and attached to the purchase money, so that a purchaser takes the land free of those interests.

✅ Statutory Basis:

s.2 & s.27 Law of Property Act 1925 (LPA 1925)

✅ Requirements:

Disposition of a legal estate (e.g. freehold/leasehold)

Sale must involve capital money

Money must be paid to at least two trustees or a trust corporation

🧠 Effect:

Beneficial interest is overreached

Purchaser takes land free of the interest

Interest attaches to the purchase money

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11
Q

What is required for beneficial interests to be overreached?

A

The buyer pays the capital money to at least 2 trustees or a trust corporation

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12
Q

What happens when a surviving joint tenant sells the property?

A

The legal estate automatically passes to the surviving joint tenants

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13
Q

What should a buyer expect when purchasing from a personal representative (PR) of a deceased owner?

A

Limited title guarantees and possibly little knowledge of the property

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14
Q

What is the mortgagee’s power of sale?

A

The right to sell property secured by a legal mortgage upon default of the borrower

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15
Q

What are the lender’s duties when exercising the power of sale?

A

A:

Act in Good Faith

The lender must act honestly and fairly when exercising the power of sale.

Obtain a Fair Price

The lender must take reasonable steps to get a fair price for the property.

Selling at an undervalue is prohibited. Any sale at a grossly unfair price could lead to liability for the lender.

Give Notice to the Borrower (s.103 LPA 1925)

The lender must give notice to the borrower before selling the property.

Notice must be given when the borrower is in default, and the right to sell is being exercised.

Duty to Obtain Consent (If Required)

In some cases, the lender must seek borrower consent or follow contractual conditions before selling.

Duty to Consider Alternative Solutions

The lender should consider alternative actions before resorting to the sale, such as restructuring the loan.

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16
Q

What should a prudent buyer check before purchasing from a mortgagee?

A

Mnemonic: “S-C-A-R-T-T-P”
S - Survey the property (Check condition and value)
C - Clear title (Verify no disputes or encumbrances)
A - Ask about tenancies (Check for tenants or leases)
R - Right to sell (Confirm the mortgagee has legal power to sell)
T - Terms of sale (Review sale terms, especially “as-is” condition)
T - Tax and debt checks (Ensure all outstanding debts are cleared)
P - Process compliance (Confirm the legal process has been followed)

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17
Q

Fill in the blank: A joint tenant cannot sever equitable title by _______.

A

purporting to leave their share to someone else in their Will

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18
Q

True or False: A tenant-in-common automatically inherits the property of a deceased co-owner.

A

False

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19
Q

What is the significance of ‘Form A Restriction’ in the Section B Proprietorship Register?

A

Indicates that the owners are tenants-in-common

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20
Q

What should co-owners do to document their mode of co-ownership?

A

Enter into a declaration of trust

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21
Q

What is the outcome of overreaching?

A

Equitable rights in land are attached to the purchase money

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22
Q

What is a common cause of disputes among co-owners?

A

One person wanting to sell their share while the other does not

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23
Q

What is the effect of severing a joint tenancy?

A

The beneficial ownership is divided into shares

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24
Q

What happens if a seller is not the legal owner on the Register of Title?

A

Check the identity against the Register and ask for an explanation

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25
What is required if the sale is executed by an attorney?
A certified copy of the power of attorney
26
What should be obtained before the exchange of contracts when selling a leasehold property?
Any necessary consents required under the lease
27
What is the risk associated with the holder of the first mortgage refusing to discharge the mortgage?
🧾 Mnemonic for Remembering the Risks: "SAD-C" S - Sale Blocked (Unable to sell the property) A - Additional Financing Blocked (No ability to get a second mortgage or home loan) D - Damaged Credit (Risk to borrower’s credit score) C - Complicated Future Transfers (Issues with estate planning, heirs, or title transfer)
28
What should a buyer expect when buying from a mortgagee?
The mortgagee will have little or no knowledge of the property and may sell without title guarantee or covenants.
29
What is a significant risk for buyers when purchasing from a mortgagee?
The buyer has no recourse against the mortgagee if they were not entitled to sell the property.
30
What must be confirmed when a property is sold by a legal entity?
The company or LLP is validly incorporated and has the power to enter into the transaction.
31
True or False: A person dealing with a company in good faith is bound to make inquiries on the directors' power.
False.
32
What should a seller disclose regarding material information?
Any known material information about the property, including issues with neighbors.
33
What is the seller's implied duty regarding latent defects?
To disclose any latent defects in the title that the seller knows or ought to know.
34
What is an example of a latent defect in title?
A right of way not apparent by inspection.
35
What does the seller's liability for inaccurate replies potentially lead to?
Legal action taken by buyers against the seller.
36
What are the potential consequences for a seller found guilty of misrepresentation?
Damages to the buyer or rescission of the contract.
37
What is the time limit for taking planning enforcement action for unauthorized operations?
4 years.
38
What must be obtained for building works to comply with building regulations?
Approval from the local authority building control department.
39
What type of works typically do NOT need building regulations approval?
Most repairs, replacements, and maintenance work.
40
Fill in the blank: Planning permission is required only if the work meets the statutory definition of _______.
[Development].
41
What should a buyer check regarding past alterations made by previous owners?
Whether the relevant permissions for changes have been obtained.
42
What is a Lawful Development Certificate?
A formal confirmation that a proposed use or development is permitted.
43
What is the consequence of not complying with planning permission requirements?
The authority can take formal enforcement action.
44
What is the role of the Building Safety Regulator?
To oversee stricter building safety regimes for higher-risk buildings.
45
What is meant by 'Permitted Development'?
Certain kinds of development automatically deemed to have permission.
46
True or False: Planning permission and building regulations approval are the same.
False.
47
What should a buyer consider to mitigate risks related to property alterations?
Seek guidance on building regulations, apply for planning permission, or make a conditional offer.
48
What should be noted regarding planning permissions?
Some planning permissions contain ongoing conditions for usage or occupancy ## Footnote It is important to ensure compliance with these conditions.
49
What risks does the buyer face if the authority takes enforcement action?
Costly rectification works, inconvenience, potential fines, and criminal liability ## Footnote Non-compliance with building regulations can also lead to structural dangers.
50
What are some options for risk mitigation regarding planning permissions?
* Rely on limitation periods for enforcement * Apply for a Lawful Development Certificate * Seek retrospective planning permission * Obtain a Regularisation Certificate * Take out indemnity insurance * Include contractual provisions in the sale contract * Renegotiate the price
51
What is an overriding interest in property law?
Interest in land belonging to a person in actual occupation that generally overrides registered transfer ## Footnote This interest does not need to be registered.
52
What are the two circumstances where overriding interests do not apply?
* The person fails to disclose their interest when asked * The person's occupation is not obvious during a careful inspection
53
What should buyers do to mitigate risks from overriding interests?
* Inspect the property before contracts are exchanged * Raise pre-contract enquiries about current occupiers
54
What are the risks to the buyer regarding home rights notices?
The buyer may face difficulties evicting a spouse/CP if home rights are registered ## Footnote If not registered, the buyer takes the property free of home rights.
55
What are some options for mitigating risks related to home rights notices?
* Obtain a written release of rights from the spouse/CP * Agree on a contractual condition for removal of rights before completion
56
What common issues might be found in old properties?
* Structural defects * Substantial repair costs * Listed building or conservation area restrictions * Protected trees
57
What should buyers consider when purchasing an old property?
* Advise a Level 3 Survey for older properties * Check for listings, conservation area status, or protected trees
58
What are potential risks associated with known or suspected contamination of land?
* Health risks to occupants * Property damage * Reduced property value * Liability for cleanup costs
59
How can buyers identify contamination risks?
* Review environmental search results * Conduct thorough due diligence
60
What options are available for mitigating contamination risks?
* Obtain environmental insurance * Include contractual provisions for remediation * Renegotiate price to reflect risks
61
What is a restriction on selling in property law?
A limitation on the owner's powers that must be complied with before a transfer can be registered ## Footnote Commonly related to mortgages.
62
What risks does a buyer face regarding restrictions on selling?
Inability to register the property or affect future transfers if not complied with
63
What are options for mitigating risks from restrictions on selling?
* Check compliance with restrictions * Ensure removal of restrictions before purchase * Apply for modification of the restriction
64
What are the two types of covenants in property law?
* Restrictive covenants * Positive covenants
65
What is a restrictive covenant?
Prohibits or limits the ability to do something, affecting the use of the burdened land ## Footnote Examples include limitations on building or certain activities.
66
What is a positive covenant?
A promise to do something or spend money, which generally does not bind future owners ## Footnote Examples include obligations to maintain property.
67
What conditions must be met for a restrictive covenant to be enforceable against future owners?
* Negative in nature for ascertainable land * Protected by registration * Touches and concerns land * Intended to run with the land * No common ownership since it was imposed
68
What should buyers check regarding covenants?
Whether there are covenants that prevent intended land use and their validity
69
What is a restrictive covenant?
A restriction placed on the use of land that benefits another piece of land.
70
What happens if the benefited land and burdened land are both owned by one person?
The restrictive covenant will be extinguished.
71
What should buyers of burdened land check for?
Covenants that prevent the intended use of the land.
72
What is one option for dealing with a restrictive covenant?
Consider indemnity insurance for risks of enforcement.
73
What is a deed of release?
A legal document that formally releases a party from a covenant.
74
What is a court declaration used for in relation to restrictive covenants?
To clarify whether the land is affected by the covenant.
75
What must buyers of benefited land ascertain?
Existing valid restrictive covenants benefiting the land.
76
What can a party with the benefit of a covenant do if there is a breach?
Apply to the court for an injunction.
77
True or False: The burden of a positive covenant passes to future owners.
False.
78
What is a binding obligation on the transferee in relation to positive covenants?
A compulsory renewed covenant protected by restriction.
79
What is a chain of contractual indemnity?
An unbroken chain of indemnity covenants from buyer to previous owner.
80
What principle states that one cannot take the benefit of a deed without fulfilling obligations?
The mutual benefit and burden principle.
81
What is an easement?
A right benefiting a piece of land enjoyed over another piece of land.
82
What are the requirements for a valid easement?
* Must be dominant and servient land * Different owners for dominant and servient land * Must benefit the dominant land * Capable of forming the subject matter of a grant * Must not amount to exclusive possession.
83
What is an express legal easement?
An easement created by deed and must be registered to take effect at law.
84
What is the implication of Wheeldon v Burrows?
Easements can be implied when part of land is sold if certain conditions are met.
85
What is the difference between Wheeldon and s.62 LPA?
Wheeldon requires unity of occupation; s.62 does not.
86
What does an equitable easement require for enforceability?
Registration as a notice or land charge.
87
What can render an equitable easement unenforceable?
Failure to protect it by registration.
88
What are overriding easements?
Easements that bind successors even if not registered under certain conditions.
89
What risks do buyers of servient land face?
Obligations to comply with easements that may restrict use.
90
What options exist for mitigating risks of easements?
* Express release or variation * Indemnity insurance * Implied release due to abandonment.
91
What should buyers check regarding easements before purchase?
Enforceability and scope for intended use.
92
What is the effect of a lease term up to 7 years?
It is automatically binding on the buyer.
93
What must leases longer than 7 years do to be binding?
They must be registered.
94
What is required for a lease term up to 7 years to be binding on future owners?
It is automatically binding on the buyer.
95
What must be done for a lease term of more than 7 years to be binding on a buyer?
It must be registered.
96
What happens if a lease is unregistered?
It becomes an equitable lease and does not void it.
97
What is the significance of a lease term not more than 21 years granted before LRA 2002?
It is considered overriding.
98
What should be reviewed when investigating a lease for a buyer client?
Review the lease document and check for any missing documents.
99
What is the importance of the completion statement in a property transaction?
It should outline amounts due to the seller and account for apportionments.
100
What is a risk to the buyer if the lease is binding on successors?
The lessee's right to stay may override the buyer's rights.
101
What can a buyer ask for if they expect vacant possession?
They can ask for assurance that the tenant will waive their interest.
102
What is required when investigating the seller’s title of unregistered land?
Evidence of a good root of title with an unbroken chain of ownership for at least 15 years.
103
What is a risk of accepting a short root of title?
The buyer may be bound by unknown incumbrances.
104
What is a potential option for risk mitigation regarding unregistered land?
Consider defective title insurance.
105
What does Absolute Title mean?
It means the land is free of unregistered interests, except overriding interests.
106
What is required for a Freehold Absolute Title to be granted?
An unbroken chain of ownership going back at least 15 years.
107
What is Good Leasehold Title?
It is granted if the leasehold title can be proven but not the freehold title.
108
What is the risk associated with Good Leasehold Title?
Potential for someone with a better claim to challenge the legality of the lease.
109
What does Possessory Title mean?
It is granted due to long possession without documentary right.
110
What is a risk to the buyer with Possessory Title?
A third party may have a better claim to the property.
111
What does Qualified Title mean?
It is granted when there is a defect in the title that cannot be disregarded.
112
What is the risk associated with Qualified Title?
Ownership could be challenged by someone with a better claim.
113
What is Full Title Guarantee?
The seller covenants they have the right to dispose of the property and it is free from charges.
114
What does Limited Title Guarantee modify from Full Title Guarantee?
It modifies the covenant regarding known encumbrances since the last disposition.
115
What does No Title Guarantee imply?
No covenants for the title are given, offering no recourse for title issues.
116
What should a buyer insist on regarding title guarantees?
A full title guarantee if the seller is expected to have full knowledge of the property.

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