Land Sale Flashcards

1
Q

How to answer a land sale question

A

Where the parties have used the ADLS contract, or another contract, consider liability for damage under this framework only. If it is unclear whether they have used a format or not – consider liability under both the ADLS and the default rules.

  1. Is there a valid contract?
    ○ S24 & PLA
  2. If ADLS:
    ○ Damage in the “in-between” period assessed according to Clause 5: Risk lies with V, who must pay for damage or sale is cancelled/carried out at reduced price.
  3. Otherwise, default rules apply
    ○ If unconditional – ET passes to P, risk lies with P. P to pay for damage, but V owes fiduciary duties to prevent in the first place.
    ○ If conditional – ET may pass depending on the nature of the condition. If ET does not pass, V is liable for damage.
  4. In either scenario;
    ○ Consider whether the P can claim the V’s insurance under s 13 ILRA.
    Consider whether either of the of the parties could sue in trespass (where damage is caused by someone else).
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2
Q

Registration system for buying and selling land. This involves two distinct processes;

A
  1. A contract for the sale and purchase of land (ASAP)
  2. Change in the register to reflect a transfer of legal ownership
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3
Q

Stage 1

A

Contract
Exchange of promises (consideration
Signed and in writing.

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4
Q

Stage 2

A

Transfer
P pays in full; settlement occurs, V enables P to register.
S 24 LTA: Contract is not effective until registered. This is when the P gets legal title.

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5
Q

Default rules for the in-between period under an unconditional contract

A

If contract is unconditional both parties are legally obliged to perform it (if one doesn’t specific performance from contract)

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6
Q

(unconditional) cases 1

A

Re Richards - until the contract is registered, the purchaser has an equitable title which means, like in this case when the vendor dies, they can order specific performance of the property

Clarke v Ramuz - fiduciary duties owed by vendor: take reasonable care and keep in reasonable state of cultivation

Englewood Properties: Fiduciary duty is more limited than a trustees but must do what is reasonable with the property

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7
Q

(unconditional) cases 2

A

Jerome v Kelly: vendor is still entitled to earn an income from property etc.

Batchelar Centre: B agreed to clause that the vendor could take higher offers so no better off clause

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8
Q

result of unconditional contract

A

If the contract is unconditional it means the purchaser is liable for damage but vendor should prevent it and if they don’t they may have breached their fiduciary duties

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9
Q

Conditional contracts

A

If there are conditions in the ASAP, the purchaser may not get an equitable title. We have to look at the nature of the condition though.

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10
Q

case on conditional contracts with the two types of conditions

A

Bevin v Smith – a condition solely for the purchaser that can be waived will create an equitable interest

  • Condition precedent – no contract until condition is satisfied (no EI)
  • Condition subsequent – condition follows existence of contract (generally EI)
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11
Q

Options to purchase/right of first refusal

A

Motorworks - ROFR does not confer EI, but if it changes to an option it will

Palm Gardens - the option would only be given after the units were prepped for rent and rented which they never were

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11
Q

Contractual modifications to what happens in inbetween period

A

Clause 5 of ADLS says the risk lies with the vendor and they must fix the damage. If the damage made the property untenantable (not capable of purpose which it was bought), p can cancel

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12
Q

Statutory modifications

A

S 13 of the insurance law reform: allows purchase to take on vendors insurance pay out.

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13
Q

Trespass

A

Cousins v Wilson – could not sue in trespass as did not have equitable interest.

Law uncertain so make policy argument to why trespass should be able to be claimed

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