Enforceability Of 3rd Party Rights

Question 1

Stages for assessing the enforceability of 3rd party rights.

Answer 1

Step 1: Identify type of 3rd party right being claimed
Step2: is it capable of being legal
Step 3: What are the formalities required? I.e. has it been validly created?
Step 4: Classify the interest - ie is it legal, equitable or statutory?
Step 5: Will it bind the buyer? - depends on unregistered or registered systems
Step 6: Conclude - does 3rd party interest bind buyer?

Question 2

Is it capable of being legal?

Answer 2

Yes - easement (s(1)(2)(a)), mortgage (s.1(2)(c) LPA), lease (s.1(1)(b) LPA)

No - restrictive covenant, estate contract (option, equitable lease), beneficial interest, trusts, FLA see s.1(3) LPA

Question 3

Formalities of legal easement

Answer 3

s. 1(2)(a): must be equivalent to an estate in fee simple absolute in possession or a term of years absolute; and
s. 52(1): By deed. s.1 LP(MP)A

Question 4

Formalities for legal lease?

Answer 4

. Deed (s.52(1) LPA) - signed, witnessed and delivered as a deed and says it’s a deed (s.1 LP(MP)A)

UNLESS - parol lease (s54(2))

• not exceeding 3 years
• in possession
• at market rent
• w/o taking a fine

Another option: legal periodic tenancy (can arise even if neither a deed, nor s.2 LP(MP)A satisfied)

Question 5

Formalities for restrictive covenant

Answer 5

s. 53(1)(a) LPA
1. Signed (by person creating, or authorised agent)
2. Writing

NB – often created by deed. E.g. restrictive covenants are frequently created on a sale of part, and so the RC will be included in the deed

Question 6

Formalities for an equitable lease

Answer 6

s. 2 LP(MP)A (because equitable lease=type of estate contract)
1. Signed
2. Writing
3. Contain all the terms

Question 7

Formalities for an equitable easement

Answer 7

NB – only have a legal easement if you comply with s.1 LP(MP)A. If not:

S53(1)(a) LPA

1. Signed (by person creating or authorised agent)
2. Writing

s.2 LP(MP)A 1989 (correct formalities for an estate contract)
Signed by both parties, writing, contains all agreed terms.

Can be equitable if:

• fails s1(2)(a) LPA
• fails s52(1) LPA

Question 8

Formalities for an estate contract (entered into on or after 27 Sept. 1989) (eg. option to buy land, equitable lease)

Answer 8

S2 LP(MP)A 1989

1. Signed
2. Writing
3. Contain all the agreed terms

Question 9

Trusts

Answer 9

• Express trust: in signed writing by person able to declare trust s53(1)(b)LPA
• Sale of an equitable interest under a trust: signed writing s53(1)(c)
• Implied trusts – arise w/o formalities s53(2) LPA

Question 10

Formalities for FLA interest (neither legal or equitable but statutory)

Answer 10

s.30 Family Law Act 1996:

1. Be married/civil partnership
2. Legal owner still alive
3. Home must be/have been/will be the matrimonial home

Question 11

Does a legal interest always have to be created by deed?

Answer 11

No - Under s.54(2) LPA 1925, there is a parol lease exception (not exceeding three years, market rent, in possession with no fine)

Question 12

What is the effect of a licence?

Answer 12

Thomas v Sorrell (1673) - Vaughan CJ: “Properly passeth no interest, nor alters or transfers property in anything, but only makes and action lawful, which without it had been unlawful.” - Does not create any proprietary interest in land

Question 13

What are bare licences and what are contractual licences?

Answer 13

Licence for no consideration. Only for that purpose. Scrutton LJ in The Calgarth [1927] - invite someone to use your staircase not to slide down the bannisters.

Contractual licence is one supported by consideration. Common law - revocation of a contractual licence may give rise to damages for breach of contract. Possible injunction in equity.

Question 14

Formalities for contract for sale at public auction

Answer 14

s2(5)(b) LP(MP)A 1989 – a contract for sale of land made at a public auction does not have to be in writing