Contracts for land and formalities

Question 1

Formalities for a contract for the sale of land

Answer 1

a) s2 of the Law of Property (Miscellaneous Provisions) Act 1989 (“LP(MP)A1989”).

b) A contract must:
(i) be in writing;
(ii) contain all the terms agreed by the parties; and
(iii) be signed by or on behalf of both the parties.

Question 2

Doesnt apply to which contracts?

Answer 2

Law of Property (Miscellaneous Provisions) Act 1989

This section does not apply in relation to

(a) a contract to grant such a lease as is mentioned in section 54(2) of the Law of Property Act 1925 (short leases);
(b) a contract made in the course of a public auction; or
(c) a contract regulated under the Financial Services and Markets Act 2000, other than a regulated mortgage contract, a regulated home reversion plan, a regulated home purchase plan or a regulated sale and rent back agreement

Question 3

Firstpost Homes v Johnson

Answer 3

A letter and plan comprises two separate documents - typed name on letter not enough to satisfy statutory requirement for a signature.

Question 4

McLaughlin v Duffill

Answer 4

Contract can be signed by an applinted agent
Agent’s authority does not need to be in writing.

Confirmed s 2 LP(MP)A 1989

Question 5

Where a term is left out of the written contract. Possible solutions:

Answer 5

(i) rectification of the contract;

(ii) collateral contract, Record v Bell [1991]

Question 6

No written contract exists at all. Possible solutions:

Answer 6

(i) exceptions in s2(5) LP(MP)A 1989;
(ii) constructive trust, Yaxley v Gotts [2000] Ch162;
(iii) proprietary estoppel.

Four elements needed for proprietary estoppel:

1. an assurance or representation
2. reliance on the assurance or representation
3. detriment
4. unconscionability

Question 7

Transfer of title to land

Answer 7

a) A deed is required to create or transfer a legal estate under s52(1) Law of Property Act 1925 (“LPA 1925”), subject to exceptions in s52(2).

b) s1(2) LP(MP)A 1989, a deed must:
(i) make it clear on the face of it that it is a deed
(ii) be validly executed as a deed by the person making it (or their authorised representative).

c) s1(3) LP(MP)A 1989, in the case of an individual, the deed will only be validly executed if it is:
(i) signed and witnessed
(ii) delivered as a deed.

d) Unregistered titles – ownership of the legal estate passes as soon as the conveyancing transaction has been completed (i.e. the money paid and the deed of transfer completed and handed over).
e) Registered titles – there will be a transfer deed as above but the legal estate remains with the seller until the buyer’s name is entered on the register as the new owner of the land.

Question 8

Once contracts have been exchanged:

Answer 8

a) the parties are bound and will be liable for breach of contract if they do not complete
b) the buyer has an equitable interest in the property and may apply to court for specific performance of the contract.

Question 9

Chattels and Fixures

Answer 9

It is important to distinguish between fixtures (which are part of the land) and chattels (which are not).

Botham & others v TSB Bank Plc reaffirmed

1) fixtures are a part of the land and pass with title
2) degree of annexation important in deciding if chattel or fixture.

Also considered

• intention of installer
• the purpose - permanency intended
• possibility of disconnection without damage to fabric of building.