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SQE 1 > Land Law - FLK 2 > Flashcards

Land Law - FLK 2 Flashcards

1
Q

What is the difference between fixtures and chattels?

A

Fixtures are included within land, whereas chattels are personal property.

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2
Q

What is the two-stage test for distinguishing a fixture from a chattel?

A
  1. The degree of annexation - how firmly affixed is the object to the land?; and
  2. The purpose of the annexation - why has the object been attached to the land (to improve the land (fixture) or for the better enjoyment of the object (chattel))
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3
Q

How are rights in land divided?

A

into estates and interests

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4
Q

What is an estate in land?

A

An estate is a period of time.

Rights: possess, enjoy and use the land.

Period of time can be perpetual (freehold) or fixed which comes to an end when the time expires (leasehold).

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5
Q

What is an interest in land?

A

An interest is using land owned by another, short of exclusive possession.

Right: use and enjoy land physically

Legal interests: easements, mortgages, rights of entry.

All other interests are equitable: restrictive covenants, buying a freehold estate, contract for the sale of a freehold estate, easement for life, beneficial interest under a trust.

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6
Q

What is real property?

A

All property rights relating to land are real property, except leases. Bind the original parties to the agreements and third parties, e.g. easements and mortgages.

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7
Q

What is personal property?

A

All types of property other than land, e.g. good, chattels, money, shares, IP, and leases.

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8
Q

How to acquire and transfer legal estates?

A

To create or transfer an existing legal estate, a deed is required, unless and exception applies.

The deed must be:
i. clear on its face it is intended to be a deed; and
ii. validly executed (signed, witnessed (one witness) and delivered)

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9
Q

How to acquire and transfer equitable estates?

A

If the estate does not appear in s.1(1) and s.1(2), LPA 1925, then it is not legal and its equitable by nature (s.1(3), LPA 1925).

The relevant formalities of transfer in s.53(1)(b), LPA 1925 must be complied with (i.e. in writing signed by donor).

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10
Q

What are the formalities of estate contracts?

A

Once a contract to transfer an existing legal estate has been made, equity views the purchases as owning an equitable interest during this interval between exchange and completion.

If there is breach of a valid contract, the remedy of specific performance will be granted to transfer the legal estate.

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11
Q

How to acquire and dispose of legal interests in land?

A

To create or transfer an existing legal interest, a deed is required, unless an exception applies.

The deed must be:
i. clear on its face it is intended to be a deed; and
ii. validly executed (signed, witnessed (one witness) and delivered).

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12
Q

How to acquire and dispose of equitable interests in land?

A

Equitable interests on land can arise as set out below and should comply with the following formalities:
i. by express trust
ii. by contract to convey or create legal interest
iii. granting a legal estate or interest which is void for lack of correct formalities
iv. by grant of an estate or interest by a person who only owns an equitable interest
v. granting of an interest that can only exist in equity
vi. by constructive or proprietary estoppel
vii. implied trusts - no formalities for the creation of a resulting or constructive trust

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13
Q

Methods to protect and enforce third party interests - registered land?

A

Interest must be protected by entry on the Land Register in order to bind, unless the interest falls within the list of ‘overriding interests’ which bind even of no entry appears in respect of them.

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14
Q

Methods to protect and enforce third party interests - unregistered land?

A

Legal interests bind automatically.

Other interests will either be covered by the Land Charges Act 192 or be binding where the buyer has notice of them.

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15
Q

What are the two different ways in which land can be held?

A

Land may be held as:
i. Freehold (fee simple in absolute possession) - this is an absolute interest, not conditional, gives the right to immediate possession and ownership can be passed on

ii. Leasehold (term of years absolute) - lease maybe fixed term or periodic. It is granted from a freehold or longer leasehold can can be for any duration of time

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16
Q

What are the estates that can be substantively registered?

A

Following estates and interests over unregistered land may be registered voluntarily by the owners at any time:
i. freehold
ii. leasehold (that has more than seven years unexpired)
iii. leases of any length where the right to possession is discontinuous
iv. leases of any length granted to take effect in possession more than three months after the date of grant
v. a rent charge that is either perpetual or for a term of which more than seven years are unexpired
vi. a ‘profit a prendre’ in gross that is either perpetual or for a term of which more than seven years are unexpired
vii. a franchise that is either perpetual or for a term of which more than seven years are unexpired.

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17
Q

What are the most common trigger events to convert land from unregistered to registered title?

A
  1. A transfer of an unregistered freehold estate in land
  2. A transfer of unregistered leasehold with more than seven years to run at the time of transfer
  3. A grant of a new legal leasehold in land fro a term of more than seven years or for a term of any length to take effect in possession after a period of three months from the date of the grant
  4. A first legal mortgage of unregistered freehold or leasehold
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18
Q

How to protect interests?

A
  1. Notices - appears in charges register.

Protects easements/profits, equitable leases, restrictive covenants, home rights and estate contracts but not a trust for land.

A notice can be entered without the consent of the registered owner but the owner can challenge it.

  1. Restriction - appears in the proprietorship register.

Protects a trust for land.

Registered owner’s consent is not required to register a restriction.

Limited powers of disposition of the land and where the land is held on trust, the buyer needs to implement overreaching to take free of the beneficial interest.

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19
Q

What is overreaching in the protection of interests?

A

A beneficial interest under a trust for land can be overreached if the buyer pays the money to a minimum of two trustees or a trust corporation.

In doing so, the beneficial interest is detached from the land and attached to the proceeds of sale. The buyer takes free of such interests.

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20
Q

What are overriding interests?

A

Interests which override the register.

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21
Q

What are interests which override registration?

A
  1. Para 1 - legal leases of seven years or less in duration
  2. Para 2 - an interest belonging to a person in actual occupation
  3. Para 3 - legal easement or profit
  4. Para 6 - local land charge
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22
Q

What are interests that need to be protected on the register?

A

Equitable interests and home rights are protected as minor interests by:

  1. Entry of a restriction in the proprietorship register where it is a trust for land; or
  2. Entry of a notice in the charges register where it is an easements/profits, equitable leases, restrictive covenants, home rights or estate contracts.
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23
Q

What is the role of title deeds?

A

A seller of unregistered land must prove title by showing uninterrupted possession for a period of 15 years.

They must produce a bundle of documents (epitome of title) that demonstrates good root of title.

Usually a conveyance by deed or a legal mortgage which is:
i. at least 15 years old
ii. shows ownership of the entire legal and equitable interest in the land
iii. contains a description of the land
iv. does not cast any doubt on the title.

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24
Q

What does a review of an epitome of title include?

A

Good root of title, unbroken chain of ownership, correct stamp duties and proper execution.

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25
Q

What must a buyer of unregistered land do?

A

Investigate title and inspect the land to identify any third party interests that may extend over the land.

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26
Q

What do legal estates and rights bind?

A

Apart from puisne mortgages which must be protected by a Land charge, legal estates and rights bind the world.

The buyer will be bound by them whether or not the buyer knows abut the estate or interest.

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27
Q

How are equitable interests protected?

A

Apart from trusts for land, equitable interests are protected by registration of a Land Charge or the doctrine of notice.

Once registered the Land charge is deemed to be actual notice and will bind a buyer.

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28
Q

What is a land charge registered against?

A

A land charge is not registered against the land but against the estate owner.

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29
Q

When should a land charge be registered?

A

Should be registered before completion of the purchase.

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30
Q

When is the deemed date of notice for a land charge?

A

Registration is deemed actual notice of the interest from the date of registration and will bind any buyer whether or not they have knowledge.

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31
Q

What happens if the land charge is not registered?

A

It will be void against any buyer for money or money’s worth.

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32
Q

When searching the Land Charges Registry what searched should be conducted?

A

A search should be made against not only the current owner but all the names of previous owners revealed in the epitome of title.

33
Q

What are the main interests governed by the doctrine of notice?

A
  1. Over-reachable interests that have not been successfully overreached such as a beneficial interest under a trust
  2. Restrictive covenants entered into between freeholders of land before 1 January 1926
  3. Equitable easements created before 1 January 1926
  4. Interests arising by estoppel.
34
Q

What is a buyer bound by in relation to the doctrine of notice?

A

A buyer is bound by the equitable interests unless they are a bona fide purchaser for value of a legal estate or legal interest without notice of the equitable interest.

35
Q

What is a purchaser bound by in relation to the doctrine of notice?

A

The purchaser of an equitable interest cannot claim the benefit of the doctrine of notice and will be bound by the third party right.

Similarly, the recipient of property by way of a gift will not take free of third party rights.

36
Q

What is co-ownership?

A

Where two or more people concurrently own and possess land.

Where there is co-ownership, a trust for land arises, with the legal estate being held by those to whom it is conveyed as trustees for themselves beneficially.

37
Q

How can co-owned property be held?

A
  1. joint tenancy
  2. tenancy in common
38
Q

What are the two titles in co-ownership?

A
  1. Legal title - joint tenancy by a max of four people, as trustees
  2. Equitable title - only as a joint tenancy or a tenancy in common by an unlimited number of people.
39
Q

What is a joint tenancy?

A
  • Co-owners are one entity and own whole interest and nothing individually.
  • The unities of possession, interest, title and time must be present
  • A joint tenant dealing with their ‘share’ will operate as severance of the joint tenancy in equity
  • Right of survivorship applies
40
Q

What is a tenancy in common?

A
  • Co-owners own distinct and undivided shares
  • Only unity of possession is required
  • Presence of other unities does not preclude tenancy in common
  • A tenant in common can deal with their share separately be selling or mortgaging it
  • No right of survivorship
41
Q

What are the rules of survivorship?

A

Joint tenant:
- When a joint tenant dies, his interest automatically passes to the remaining joint tenants. It does not pass under the will or through intestacy.

Tenants in common:
- When a tenant in common dies, his interest will pass to their estate in accordance with their will or the rules of intestacy.

42
Q

What is severance?

A

A joint tenancy can be converted to a tenancy in common by severance.

This applies only to equitable interest and not the legal estate.

This must happen while the parties are alive and not by the will.

43
Q

What is severance achieved by?

A
  1. Written notice
  2. Acts operating on the joint tenants share
  3. Mutual agreement
  4. By mutual conduct or course of dealing
  5. By bankruptcy
  6. By homicide
44
Q

What steps are taken in the event of a dispute between co-owners?

A

An application can be made to the court under s.14 relating to either:

i. exercise by the trustees of any of their function; or
ii. declaring the nature or extent of a person’s interest in property subject to the trust

The court will grant an order as the court thinks fit.

45
Q

Under s.15(1) what are the matters the court regards when considering a Section 14 application?

A

i. the intentions of the person or persons (if any) who created the trust

ii. the purpose for which the property subject to the trust is held

iii. the welfare of any minor who occupies or might reasonably be expected to occupy any land subject to the trust as his home

iv. the interest of any secured creditor of any beneficiary

46
Q

What does s.15(3) provide?

A

Provides that the court will have regard to the circumstances and wishes of any beneficiaries of full age and entitled to an interest in possession in property subject to the trust.

47
Q

What is an easement?

A

An easement is a right over one parcel of land for the benefit of another parcel of land such as a right of way.

48
Q

What are the four main characteristics of an easement?

A
  1. There must be a dominant land and servient land
  2. The easement must accommodate the dominant land
  3. The dominant and servient land must not be owned and occupied by the same person
  4. The easement must be capable of forming the subject matter of the grant
49
Q

What are the methods of creation of easements?

A
  1. Express grant
  2. Implied by necessary
  3. Implied by common intention
  4. The rule in Wheeldon v Burrows - quasi-easements to full easements on the sale of part of the land provided.
  5. section 62 Law of Property Act 1925
  6. Prescription
50
Q

What is a freehold covenant?

A

A promise by the freehold owner (covenanter) to another freehold owner (covenantee) to do (positive) or not to do something (negative) over his land.

51
Q

What are the rules for the passing of the benefit and burden of freehold covenants?

A

Burdened/Servient land:
- Land bound by the covenant owned by the covenanter

Benefited/Dominant land:
- Land with benefit of the covenant owned by the covenantee

Positive covenant:
- Effort or expenditure required to perform the covenant obligation

Negative covenant:
- no effort or expenditure required to perform the covenant obligations (also known as restrictive covenants)

52
Q

What are covenants?

A

Equitable interests and therefore must comply with s.53(1) LPA 1925.

53
Q

What are the remedies for breach of covenant?

A
  1. Breach of positive covenant - damages and specific performance
  2. Breach of restrictive covenant - injunction and damages in lieu of an injunction
54
Q

What is a mortgage?

A

A security interest over land granted by the borrow in favour of the lender to secure any amounts owing to the lender under a loan.

It is a legal interest in land, therefore a deed is required to create a legal mortgage in relation to a legal estate.

55
Q

When can a lender enforce the mortgage?

A

If a borrow fails to repay money owing to the lender or breach any other covenants in the loan documentation, this will be a default under the loan agreement and will allow the lender to exercise its security interests and enforce the mortgage.

56
Q

What are the remedies for a lender pursuant to the mortgage?

A
  1. Possession of the property
  2. Power of sale
  3. Debt action
  4. Appointing a receiver
  5. Foreclosure - free from any rights
57
Q

What is the protection of mortgagors for unregistered land?

A
  1. Lender has the right to take the title deeds into custody as security for the mortgage; or
  2. If the mortgage is not protected by taking the deeds into custody, then it should be protected by a Class C(i) Land Charge.
58
Q

What is the protection of mortgagors for registered land?

A

A legal mortgage over registered land should be entered on the charges title of the register since it is a registrable disposition.

59
Q

What is the order of priority for unregistered land?

A

Where the mortgagee has the title deeds, they will take priority over all other lenders

Where the lender does not have title deeds, provided the earlier mortgage has been registered as a Class C Land Charge, the earlier mortgage takes priority before a later mortgage.

60
Q

What is the order of priority for registered land?

A

Where there is more than one charge, the order of priority is the date they are entered on the register and not the date of creation.

The mortgage that appears first on the title register will rank first and be paid out first from any proceeds of sale.

61
Q

When will an interest created before the registration of a charge bind the lender?

A

Only if it is:
1. A registered charge;
2. The subject of a notice on the register; or
3. An overriding interest

62
Q

What is a lease?

A

A lease is an interest in land which grants exclusive possession of a property for a fixed period of time.

63
Q

What if exclusive possession is not granted (leases)?

A

It is a licence, a personal right to occupy, which is not an interest in land and may be revoked at any time.

64
Q

What is the relationship between landlord and tenant in a lease?

A

A lease will contain covenants made between the landlord and tenant setting out their rights and obligations towards each other during the term of the lease.

65
Q

What are the three essential characteristics of a lease?

A
  1. Certainty of term
  2. Exclusive possession
  3. Rent

if not met, a license has been created.

66
Q

What is the difference between a lease and a license?

A

Lease: proprietary right, possible assignment to a new tenant, and may benefit from statutory protections.

License: personal right, cannot be assigned and does not benefit from statutory protections.

67
Q

What does privity of contract and privity estate apply to?

A

Applies to leases granted before 1 January 1996.

68
Q

What is privity of contract?

A

Covenants will be enforceable between the original landlord and original tenant for the term of the lease.

However, the original tenant remains bound by the leasehold covenants for the duration of the contractual term of the lease, even where the lease is assigned to another party (unless released by the landlord).

The tenant is, therefore, liable for breaches by his successors in title.

69
Q

What is privity of estate?

A

Exists between two parties if they are in a direct landlord and tenant relationship but are not the original landlord or original tenant since the interests have been assigned.

Therefore, successors in title to the original landlord and to the original tenant may be liable to each other on thee covenants in the lease if there is privity of estate provided the covenants ‘touch and concern in land’ and are not personal in nature.

70
Q

What did the Landlord and Tenant (Covenants) Act 1995 do?

A

Applies to leases granted after 1 January 1996. It replaces privity of contract and privity of estate with new rules.

71
Q

What are the rules for the passing of the benefit and burden of leasehold covenants and enforceability?

A

Between the original tenant and original landlord, all covenants in the lease are enforceable.

Upon assignment of the lease all covenants pass to the assignee (except those expressed to be persona) and they cease to be liable on the covenants in the lease.

The assigning tenant is automatically released from liability under the lease.

It is not automatic for the landlord, they must follow ss.6 and 8 of the 1995 Act to be released from landlord covenants.

72
Q

What are authourised guarantee agreements (AGA)?

A

Where a post 1995 lease contains a qualified covenant against assignment, and the current tenant asks for permission to assign, the landlord may ask the current tenant (i.e. the assignor) to enter into an ‘authourised guarantee agreement’.

The assignor, therefore, guarantees the new tenant (i.e. the assignee) will perform the covenants and the guarantee would only last as long as the assignee remains the owner of the lease.

73
Q

What is alienation?

A

Alienation is the disposal of a leasehold estate by the tenant.

74
Q

How does alienation of a lease happen?

A
  1. Assignment
  2. Sub-lease
  3. Mortgage/Charge
  4. Parting with Possession/Occupation
75
Q

Absolute covenant against Alienation

A

Any assignment or other dealing with the lease will be a breach and may lead to forfeiture of the lease, unless the landlord’s permission is obtained.

An absolute covenant is not subject to any regulatory provisions.

76
Q

Qualified covenant against Alienation

A

The tenant may be permitted to assign or part with possession provided the seller obtains the prior consent of the landlord. Such consent must not be unreasonably withheld.

Where the landlord receives any written request to assign, underlet, charge or part with possession of a lease, the Landlord and Tenant Act 1988 provides that the landlord must give his consent within a reasonable time, state the conditions attached to the consent or the reasons for refusal of the consent.

77
Q

What actions may the landlord take for non-payment of rent?

A
  1. Sue for rent
  2. Commercial rent arrears recovery
  3. Forfeiture
78
Q

What actions may the original tenant is sued by the landlord for a breach by the new tenant (the assignee)?

A
  1. Recover from the assignee
  2. Recover monies owed using the indemnity covenant
  3. Rely on the implied indemnity
79
Q

What are the different ways a lease can be terminated?

A
  1. Effluxion of time
  2. Notice to quit
  3. Surrender
  4. Break clause
  5. Disclaimer
  6. Frustration
  7. Repudiatory breach
  8. Merger
  9. Forfeiture for non-payment of rent
  10. Forfeiture for breach of covenant

SQE 1 (10 decks)

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