Land Law/Property Practice Flashcards
What legal estates does the Law of Property Act 1925 section 1 say are the only ones capable of subsisting in law?
Fee simple absolute in possession (aka freehold)
A term of years absolute (aka leasehold)
What are the four interests that are capable of subsisting in property law?
An easement (non possessory right to use or enter property)
A rent charge in possession (A sum of money charged on the land to the rent holder)
A charge by way of legal mortgage
Rights of entry
What (broadly) are the 5 main changes to property law the Land Registration Act 2002 introduced?
Changes to nature/scope of overriding interests
Electronic conveyancing
Changes to adverse possession
Changes to the scope of compulsory land registration
Creation of HM Land Registry
True or false - the rights of a freeholder may be subject to the rights of others, such as a mortgagee bank
True :)
What does section 205 (1) LPA 1925 BROADLY define land as?
“Land” includes land of any tenure, and mines and minerals, whether or not held apart from the surface, buildings or parts of buildings (whether the division is horizontal, vertical or made in any other way) and other corporeal hereditaments; also a manor, an advowson, and a rent and other incorporeal hereditaments .
What are fixtures?
Something that is attached to the land and becomes real property
What are chattels?
Part of the land that can be easily removed, and are personal property
Give some examples of real property
Buildings, structures, water and water rights, minerals on and below the earth, trees, crops, airspace above the surface
True or false- real property is subject to both proprietary and personal rights
True :)
Give some examples of personal property
Clothes, jewellery, electronics, equipment, machinery, copyrights, patents. Can be either tangible or intangible :)
True or false - personal property is subject to both proprietary and personal rights
False - personal property is subject to personal rights only. The owner is the only person who has an interest in the property
What are the two key things that must be looked at to see if chattels have become fixtures?
Degree of annexation (extent of attachment)
Purpose of annexation (why it’s fixed)
What are proprietary rights?
Rights that bind ‘the whole world’
What are personal rights?
Only affect the parties subject to the right (i.e A can do this to B’s property, but only A)
What are some features of proprietary rights?
They can be enjoyed against the whole world, I.E you can claim the title of owner of your property against others.
Rights and interests are recognised by the LPA 1925 I.E estate in fee simple, leasehold etc
What are some features of personal rights?
Only enforceable with the people who are involved or agreed on the obligations. Can also arise from law (for example posties being allowed on property to deliver post).
The rights are created via contract only.
What are legal rights?
Protected by legislation
What are equitable rights?
Informal and discretionary
What is an ‘estate in fee simple’?
Fee simple means that the land is completely owned and, therefore is capable of being inherited by the land owner’s heirs
What is ‘priority’?
The right to use something (i.e A owns a shop, gives B right of way but B moves, does A owe C a ROW?)
What is doctrine of notice/equitys darling?
Applies to unregistered land. A purchaser can escape liability of 3rd party interest if they purchase a legal estate in land in good faith without that 3rd party notice.
How many categories is the issue of priority subject to?
four
What is the first category priority is subject to?
Legal rights (WITH EXCEPTION OF A FIRST MORTGAGE) have priority over subsequently created legal rights. They do not have to be registered. Only equitable rights have to be registered as land charges.
Basically, the first created legal rights of the land take precedent over new ones and are enforceable, unless it is a first mortgage, which has to be registered to be enforceable.
What is the second category that priority is subject to?
Certain equitable rights in the LCA 1972 have to be registered to take effect.
What are the rights that need to be registered to take effect under LCA 1972?
Class c (i) - Puisine mortgage (second mortgage where deeds are retained by the first mortgage)
Class c (iii)- General equitable charge (interest in land not secured by a deposit or title deed)
Class c (iv)- Estate contract
Class d (ii)- Restrictive covenant made on or after 1/1/1926
Class d (iii)- Equitable easement (binds person who enters into it) made on or after 1/1/1926
Class F - Homeowner rights
True or false - once the classes relating to priority are registered, they DON’T bind any future purchaser?
False - providing they are registered, they’re binding :)
Who registers the priority charge?
The person who is given the easement and register it against the GIVER and NOT the property
Does the priority, once registered, bind future owners?
Yes unless it is not registered as a land charge. If it isn’t registered as a land charge, then not binding against certain purchasers
Which right classes are void against a purchaser of a legal estate for money if NOT REGISTERED?
C (iv) D (i) D (ii) D (iii)
Which right classes are void against a purchaser of a legal or equitable estate for valuable consideration if NOT REGISTERED?
C (i) C (ii) C (iii) F
True or false - actual knowledge of the land charge is irrelevant. If the charge is not registered in some cases then it is void
True
What is the third category priority is subject to?
Beneficial interest held under a trust are not registrable as a class c (iii) (greater equitable charge) BUT they are overreachable
What is overreaching?
Overreaching is where a purchaser pays the purchase money to min of 2 trustees, who give the purchaser a receipt for the monies paid. On completion, the purchaser overreaches the beneficiary interest and the beneficiary interest is transferred to the purchaser. P is no longer bound by beneficiary interest.
When would overreaching be used?
If there’s only one person on the legal transfer but two people bought a property. The second person would have a beneficial interest. If the property is sold, the transfer only has one person’s name on it and so the second person would retain their interest without overreaching.
What happens is there’s only one trustee in an overreaching scenario?
A second trustee is appointed, usually a solicitor.
True or false- banks can’t use overreaching
False- a bank could use overreaching if A borrowed money for a house to avoid being bound by beneficial interest of B
What happen’s in the beneficiary’s interest is not overreached?
They still have an interest in the land
What is the 4th category that affects priority?
Doctrine of notice/equity’s darling
Explain doctrine of notice/ED
If the beneficiary’s interest is not overreached, then a test is conducted to see if the purchaser is a ‘bona fide purchaser of the legal estate for value without notice of the equitable right’.
What does bona fide mean?
Acting in good faith
What is the doctrine of notice test?
To see if the purchaser had actual notice (was told of the interest), had constructive notice (should have known of the interest based on searches. This is an objective test) or imputed notice (if the solicitor knew of this interest then so should the purchaser). If the answer to these is no, then the purchaser is acting bona fide and it destroys the claim for beneficial interest.
What are a few issues with the current land charges system?
There’s too many advantages for purchasers
Registration is against estate owners- if the estate changes owners a lot this gets confusing
With a good root being reduced to 15 years, it can get confusing to find all the relevant estate owners
How can ownership of unregistered land be shown?
Title deeds, which can be found on the land charges register, physical land deeds. Be mindful of overreaching
What are the steps to follow when establishing a good root of title and eventual purchase?
1- Check title, current and past. 15 years need. Title can include title deeds, marriage and death certificates, and name changes
2- Check the property description matches the plan
3- See if there are any covenants or easements
4- Check all owners names to see if any are on the land charges register
5- Complete purchase within 15 days of search date
6- SDLT
7- Check execution
What are the types of trust land can be placed into?
Express or implied
What is an express trust?
Self declare or declare transfer to trust
What is an implied trust?
Can be a resulting trust (a 3rd party pays and acquires interest) or a constructive trust (property is contributed to in a way that isn’t paying for the whole thing ie mortgage payments)
What must a deed be to be valid?
Signed, written, clear, witnessed, delivered. If a short lease, it can be parol (verbal)
How can equitable rights be created?
Ø Contract
Ø Attempting to grant legal right, but failing to comply with formalities.
Ø Grant of an estate or interest by a person owning an equitable right.
Ø Grant of an estate or interest which can only exist in equity.
Ø Express Trust
Ø Implied Trust
What are the three principles relating to registered land?
Mirror principle- The title register should reflect a complete and accurate record of the facts (rights and interests). Can be ‘cracks’ ie overriding interests. To ensure everything is ok, the land should be inspected.
Curtain principle- Title register should be sole and definitive source of info for proposed purchasers but should not reveal sensitive info (ie beneficial interests under a trust)
Insurance principle - the LR will compensate anyone who relies on the registry info that results in a loss
Why is the LR not a perfect mirror?
Compulsory registration of a short lease of seven years or less, and rights created by actual occupation is not required as this would not only overwhelm the records of the land register, but also impose a burden on the holders of these rights particularly where they are innocent and vulnerable.
As the law must protect the vulnerable, certain rights and interests such as the short leases (seven years or less in length) and actual occupation remain as cracks in the mirror. These interests are also known as ‘overriding interests’.
What are the two categories of overriding interests?
A broad category of interests which override on first registration of title (Schedule 1, LRA 2002), including leases of up to and including seven years, the property rights of people in occupation, easements, and profits.
A shorter list of interests which override on the sale or transfer of land which is already registered (Schedule 3, LRA 2002), including leases of up to and including seven years, the property rights of people in occupation, easements, and profits, but with exceptions to rights of occupiers where the interests of those in the actual occupation are not readily discoverable because they are hidden.
When does the rights of a person in actual occupation of the property override and what are the two examples of when a person in actual occupation won’t override a purchaser?
Whether governed by Schedule 1 or Schedule 3, the rights of a person in actual occupation will override only to the extent that they coincide with that occupation. To further strengthen the mirror principle in the registered land, under Schedules 1 and 3 the rights of a person in actual occupation will not override a purchaser where either:
Enquiries have been made of the right-holder and s/he has failed to disclose the right in circumstances where he could reasonably be expected to disclose it (undiscovered): [Sch. 1 only].
The right-holder’s actual occupation is not obvious on a reasonable inspection of the land, and the person potentially bound did not have actual knowledge of the interest at the time of the sale or transfer (undiscoverable) [schedule 3 only]
What is a person in actual occupation?
A person is in actual occupation where s/he holds a proprietary interest in the land which is protected by him/her by actually occupying the land as opposed to merely receiving rents and profits of the land
How does overreaching work with registered land?
Very similar- LR would disclose the restriction on the property as a form of entry placing limits on registered proprietors use of land. This prevents the sole legal owner selling or transferring to the detriment of the beneficiary.
What is indemnity by the LR?
If there is a loss by using the LR register, the LR will compensate for the loss
What are the 3 types of registers?
A: Property register -
This gives:
A description of the property.
The date the property was first registered.
Any rights it may benefit from, such as an easement.
If the property is leasehold, the register may also show details of the lease, such as the date, the parties, and its length.
Details of entry of legal rights under S. 1 LPA 1925 such as a freehold, or lease that has more than seven years to expire.
B: Proprietorship register -
This shows: The name and address of the current owner.
When they bought the property.
How much they paid for it (if sold since 1 April 2000).
Any restrictions that limit the power of the owner, for example, to stop them from securing a loan without their mortgage lender’s consent.
The class of the title, such as an ‘absolute title’ or ‘possessory title’, which reflects the level of guarantee (based on the strength of evidence given).
C: Charges register-
Information in the charges register may include:
Mortgages or other financial burdens secured on the property (though this won’t show the amount of money involved).
Rights or interests that limit how the land or property can be used, such as leases, easements, or covenants.
Which interests are protectable by registration?
Fee simple (also known as freehold land).
Leases with over seven years left to run.
Expressly created easements where the servient (burdened) land has registered title.
Expressly created profits.
What are the two types of equitable interests that should be protected by an entry in the land register?
1- Those interests that would be registrable under the LCA in unregistered land (notice):
These are third-party interests in unregistered land which would be registerable under the LCA, which bind a purchaser if protected by an entry in the land register; if they are not protected, they do not bind a new purchaser even if s/he has had notice.
For instance, an estate contract (contract to sell and buy land) is registerable under the LCA so if it is not entered in the land register as a notice then the buyer is not going to be bound by the estate contract even if s/he has had knowledge about that.
2- The interests of beneficiaries under a trust which can be protected by an entry of a restriction: these are interests of beneficiaries under a trust which are capable of being overreached.
Of course, if a sale or transfer of land is made without valuable consideration, the transferee (purchaser) takes subject to all pre-existing property rights, irrespective of whether they are registered or overriding.
Interests under a trust are not capable of protection in the land register under the LRA 2002. Instead, a restriction may be entered to facilitate overreaching by informing a potential buyer of the land. The entry of a restriction does not protect an equitable interest and no notice for such interest may be entered.
What must the equitable interests that should be registered on the charge register be registered against?
THE LAND (not the owner :) ) by way of notice or restriction. If they aren’t registered by the purchaser then the non purchaser’s (someone who got the property by gift or succession) interests are valid
What are some of the interests that are covered by the two main categories of equitable interest?
Contract for sale, covenants, option to purchase, proprietary estoppel, leases granted for seven years or less, and easements.
What is unilateral notice?
‘unilateral notice’ is entered without consent from the current landowner. However, evidence is required to submit an application to HM Land Registry.
The Land Registry gives notice to the proprietor of the land to challenge. Unlike agreed notice, a unilateral notice will also identify the person entitled to the right under the Notice.
What is agreed notice?
The registrar may enter an agreed notice where:
(a) the applicant himself is a registered proprietor entitled to be registered as such;
or (b) those in (a) consents;
or (c) the registrar is satisfied with the validity of the claim: S. 34 LRA 2002.
Why does the land need to be registered within 2 months or purchase? (apart from leases 7 years or less)
If a transferee (buyer) fails to register within two months, s/he will only have an equitable title in the land and could be vulnerable to a subsequent fraudulent sale of the land in the name of the person from whom s/he bought it.
True or false - overriding interests face vulnerability for delayed registration
False- they do not :)
What is the basic rule in relation to transfer of registered land?
The transferee, who is not a purchaser, is bound by all pre-existing proprietary interests: S. 28 LRA 2002.20
What is the special rule in relation to transfer of registered land?
A purchaser has priority over all interests except those entered on the register and those overriding within Schedule 3: S. 29 LRA 2002.
What are home rights?
Section 30 of the Family Law Act (FLA) 1996 created ‘home rights’. This is a statutory right of occupation of the matrimonial home for a non-owning spouse or civil partner.
The right arises provided:
a) The parties are legally married or civil partners (and not divorced)
b) The home is, has been or is intended to be the matrimonial home.
Where are mortgages shown in unregistered land?
Usually epitome of title
Where are unknown covenants identified in registered and unregistered land?
registered- in charges register
unregistered- on face of the conveyance
What are positive covenants?
Coventor has to do something
What is a restrictive covenant?
Dont do X or Y
Where would declarations as to right of light and air be shown in a title?
proprietorship register
Where are rights to mines and minerals shown in reg and unreg land?
Reg- property register
unreg- in the conveyance
What do solicitors focus on when trying to est good root?
Ownership chain
Land desc
Stamp duties
Incumbrances (ie ease and cov)
Execution
land charge searches
What are the three stages of conveyancing?
Pre contract - Pre completion - Post completion
What happens in the pre contract stage?
Solicitors take instructions. The degree of consesus between the parties is estbalished. Seller solicitor will submit a pre contract pack including a draft contract and title evidence. Buyer solicitor checks these carefully and conducts any searches. May be a clause by seller sol banning any more searches after moving to pre completion
What happens in the pre compleiton stage?
Correct docs and completion monies sourced.Transfer deeds prepped and executed as well as searches to see if seller personal info is correct. On completion, monies are sent and keys exchanged.
What happens during post completion?
Admin matters sorted ie SDLT, registration
What governs residential conveyancing?
Law Society Conveyancing Protocol
What key actions does the sellers solicitor take through the transaction?
Gets instructions from client
Check for conflict of interest
Investigate title and produce evidence to buyer
Reply to pre contract enquiries
Draft contract
Get clients signature and exchange.
Approve transfer deed
Reply to pre completion enquiries
Completion
Post completion matters ie money discharge
What key actions does the buyers solciitor take through the transaction?
Gets instructions from buyer and maybe lender
Conflict of interest check
Pre contract searches raised and comission surveys
Approve draft contract
Prepare pre exchange report
Get client signature
Exchange
Pay desposit
Draft transfer deed
Draft mortgage deed if acting for lender and client
Raise pre completion enqs
Submit report on title or certif of title to lender and request mortgage advance
Completion
Post completion ie SDLT and registration
When can you act for both sides?
Rarely but if both buyers are competing to buy property
Can you act for joint buyers?
Yes
Can you act for the borrower and lender?
Yes unless conflict risk is high or not a standard mortgage. Usually can act even if conflict tho as long as informed and written consent given
Why will buyers solicitors in comm prop sometimes do title investigations, searches, etc. for the lender?
To save lenders doing own and duplication of costs
