Enforcement of interests Flashcards
What are the requirements for a land contract?
- Must be in writing, must contain all expressly agreed terms, must be signed by both parties
- must be capable of specific performance
It can also be created where parties fail to create a valid legal interest in the land by deed.
What is created when a binding land contract is established?
An equitable interest in the land, called an estate contract
This gives it proprietary status.
What is the standard conveyancing process regarding contracts?
Exchange contracts, where one copy is signed by the seller and the other by the buyer
What happens if a material term of the contract is varied?
The same requirements of creating a contract must be followed
What are some example uses of land contracts?
- Buying/selling land (conveyancing)
- Agreements for lease
- Option agreements
- Right of pre-emption
When are land contracts binding against 3Ps?
When they are protected by entry/land charge
What remedies are available for breach of a land contract?
- Damages - common law remedy available as of right (probably loss they suffered as a result of the breach i.e legal fees)
- Specific Performance and Injunctions
What is the basic rule regarding interests over registered land?
An interest of whatever kind will take priority over later dispositions
s28 LRA 2002
What is a registrable disposition?
A transaction that must be completed by registration (s27(2))
What are examples of registrable dispositions?
- Transfer of freehold or leasehold estate (s 27(2)(a))
- Grant of a new lease for a term of more than seven years (27(2)(b))
- Grant or reservation of an easement (s 27(2)(d))
- Grant of a legal mortgage (s 27(2)(f))
- Grant of a landlord’s right of entry (s 27(2)(e))
How do registrable dispositions affect the general rule?
A registrable disposition of a registered estate made for valuable consideration will take priority over any pre-existing rights in the land except those which have been protected on the register
What happens if a registrable disposition is not registered?
Any subsequent owner of the land will take free of the rights that have not been protected and are not overriding interests
What is required for an equitable interest to be binding against a third party purchaser?
It must be protected by entry of either a notice or a restriction
What is the purpose of entering a notice in the Charges Register?
To protect an interest intended to last beyond a change in ownership
List 5 equitable interests
- Freehold restrictive covenants
- Estate contracts
- Equitable easements
- Equitable leases
- Legal leases more than 3, up to 7 years (optional)
What is meant by ‘overreaching’?
How a buyer/lender ensures they are not bound by pre-existing interests held by beneficiaries
What must purchasers do to ensure overreaching occurs?
Pay capital money to at least two trustees (not beneficiaries unless they are also trustees)
What is the consequence of overreaching?
The beneficiary’s equitable interest is detached from the land and is transferred into money paid by a buyer
What are overriding interests?
Interests that will bind a purchaser for value of registered property, even if not protected by registration
What are three types of overriding interests?
- Leases for Seven Years or Less
- Equitable Interests held by People in Actual Occupation
- Implied Legal Easements if:
a. the new owner knew about it
b. it was obvious on reasonable inspection of the land
c. it has been exercised in the 12 months prior to the disposition
What is required to be in actual occupation?
- physical presence on the land
- need to have possession and furniture in the home
- need an intention to return home
When will an interest in land held by someone in actual occupation not be binding as an overriding interest?
- if it is an interest held by someone who failed to disclose the right when they could reasonably have been expected to do so
- when the interest belongs to a person whose occupation would not have been obvious on reasonable inspection
- when the person to whom the disposition is made does not have knowledge of the occupation at the time
what is the rule regarding the enforceability of legal rights over unregistered land?
Legal rights bind the world
What is the rule regarding enforceability of equitable rights over unregistered land pre 1926?
Binding on everyone except equity’s darling
What is the rule regarding enforceability of equitable rights over unregistered land after 1926?
- most need to be protected by Land Charge entered against the name of the landowner (must be same as the name in the title deeds)
- doctrine of notice continues to apply to restrictive covenants and equitable easements created before 1926, and trusts of land which have not been overreached
What is the doctrine of notice?
An equitable interest over the land is binding on anyone except ‘Equity’s Darling’
Who is equity’s darling
a bonad fide purchaser for value of a legal estate without notice
What are the three types of notice?
- Actual notice - purchaser actually knows of the equitable interest
- Implied notice - the agent knew (e.g solicitor)
- Constructive notice - they failed to pursue a line of enquiry which ought reasonably to have been made
What happens if an equitable interest becomes void for want of notice?
It cannot be revived to bind a subsequent buyer who has notice
What is required for equitable interests to be overreached?
Payment of purchase money to at least two trustees or a trust corporation
What is the effect of a legal right created before 1926?
Enforceable against new owners (legal interests bind the world)
What must be done to protect equitable rights created after 1926?
They must be protected by way of a Land Charge
What is a land charge?
An entry against the name of the landowner in the Land Charges Register
