Head 6 - transfer of land (some problems)

Question 1

What is the nemo plus rule?

Answer 1

The Nemo Plus rule: A disposition which is granted by a person who is neither the owner nor authorised to make the transfer is invalid and hence cannot transfer ownership: see LRA 2012 ss 49(4) and 50(2).

Question 2

What is derivative acquisition?

Answer 2

Derivative acquisition requires consent of the owner. So the transferor must either be owner or a person who is otherwise authorised to make the transfer.

Question 3

What protection is offered to good faith acquirers of registered land?

Answer 3

Even where the protection does not apply, the acquirer (if in good faith) is likely to be eligible for compensation from the Keeper under the Keeper’s warranty.
It is often said that good faith acquirers will receive either the ‘mud’ or the ‘money’

Question 4

What is accretion?

Answer 4

Accretion is when transferor owns later but not at the time of registration, and ownership passes to the original transferee.

Question 5

What are the requirements for accretion to apply?

Answer 5

The disposition must contain either a grant of absolute warrandice or a clause conveying granters whole right, title and intent present and future.

Question 6

When does accretion not apply?

Answer 6

Accretion cannot operate (and is not necessary) where LRA 2012 s 86 applies.

Question 7

What is a voidable title?

Answer 7

A voidable title is a title that is valid until or unless the disposition in his favour is reduced and the decree of reduction is registered in the Land Register or Register of Sasines.

Question 8

What are some examples of voidable titles?

Answer 8

Examples include where the transferor induces the transfer by fraud or undue influence, where the transferor transfers in breach of an obligation not to do so, and where the transferor’s own title is voidable.

Question 9

What protection is offered to good faith acquirers where the transferor has a voidable title?

Answer 9

The good faith acquirer is protected by common law and it applies to property of all kinds (heritable and moveable, corporeal and incorporeal) and indeed to grants of subordinate real rights.

Question 10

What is the causal basis of transfer?

Answer 10

Causal basis of transfer requires just cause of conveyance. So if the missives of sale are void, the seller is still the owner.

Question 11

What is the abstract basis of transfer?

Answer 11

Abstract basis of transfer views the conveyance abstractly from the contract. So if the missives of sale are void, the buyer is the owner.

Question 12

Which answer applies in Scotland, when the missives are void?

Answer 12

The abstract basis of transfer applies in Scotland.

Question 13

What are some encumbrances that cannot be registered and may not be obvious from an inspection of the property?

Answer 13

These include short leases, many servitudes, and floating charges.

Question 14

What happens if an unknown encumbrance emerges?

Answer 14

The transferee may have a claim against the transferor under warrandice.

Question 15

What protection is offered to good faith acquirers where a valid encumbrance was not listed on the title sheet?

Answer 15

On becoming owner by registration in the Land Register, an acquirer takes free of any encumbrances which exist but are not listed on the title sheet.

Question 16

When does risk pass from the seller to the buyer?

Answer 16

The default rule is that risk passes on conclusion of missives.

Question 17

What typically alters the default rule for when risk passes?

Answer 17

A provision in the missives which typically says that risk passes on the date of entry. See Scottish Standard Clauses cl 20.2.

Question 18

What section of the LRA 2012 protects good faith acquirers of registered land?

Answer 18

The law only protects good faith acquirers of registered land. The protection comes under section 86 of the LRA 2012

Question 19

What are the requirements for realignment under section 86?

Answer 19

Section 86 imposes various requirements, the most important of which are that :

(I) the transferor was entered in the proprietorship section of the title sheet as proprietor;

(ii) the transferor (or transferor and transferee taken together)
were in possession for a year; and

(iii) the transferee is in good faith.

SECTION 86 PROTECTS AGAINST REGISTER ERROR NOT TRANSACTIONAL ERROR

Where s 86 applies the effect is to prefer the good faith acquirer over the original owner