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SQE 2 > Land weak areas > Flashcards

Land weak areas Flashcards

1
Q

Which rules to use for positive covenant

A

Must use common law

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2
Q

Passing of burden in common law

A

CANNOT pass - 3 exceptions:
* Doctrine of mutual benefit + burden
* Chain of indemnity covenants (as only burden of restrictive covenants pass - allows them to sue)
* Lease - both restrictive + covenants bind (except personal ones)

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3
Q

Requirements for doctrine of mutual benefit & burden

A
  • Benefit + burden must be linked
  • Benefit + burden conferred in same transaction
  • Genuine choice as to whether to accept
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4
Q

Passing of benefit in common law

A

Can pass by:
1. Express assignment or
2. Implied assignment

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5
Q

Requirements for express assignment (passing of benefit under law)

A

a) must take place at same time as transfer
b) must be in writing (& signed?)
c) written notice must be given to original covenantor (person with burden)

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6
Q

Requirements for implied assignment (passing of benefit under law)

A

a) covenant must touch + concern the DL
b) intention for benefit to run with DL (express in cov or implied by statute UNLESS personal/excluded)
c) original covenantee must have held legal estate in DL
d) successor must hold legal estate in DL (need not be same type e.g. LH/FH)

TILL

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7
Q

What does touch & concern the land mean?

A

a) only benefit dom owner while they own DL
b) affect nature, quality, use or value of DL
c) NOT be expressly personal

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8
Q

Passing of burden under equitable rules

A

Tulk v Moxhay - RAIN:
1. Must be restrictive
2. Must accommodate DL
3. Must be intention for burden to run with DL (express in cov or implied by statute UNLESS personal / excluded)
4. Must be notice (notice in CH of SL OR D(ii) land charge)

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9
Q

What does accommodate the DL mean (passing burden under equity)?

A

a) original covenantee + successors must have retained an interest in DL at time of creation + enforcement
b) covenant must touch + concern the land (see other flashcard)
c) sufficient proximity between DL + SL

PIT (think rain pitter patter)

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10
Q

What if the restrictive covenant is not protected as notice or D(ii) land charge?

A

Purchaser for value not bound - donee is!

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11
Q

Passing of benefit under equitable rules

A

(1) Covenant must touch + concern DL
(2) Successor to original covenantee must have legal or equitable estate in benefited land
(3) Intention that benefit run with DL, i.e.:
* Express annexation in cov OR automatic statutory annexation (UNLESS personal/excluded)
* Express assignment
* Building scheme

LIT

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12
Q

Building scheme requirements

A

a) all buyers buy from same seller
b) seller divided estate into plots
c) covenants were intended to benefit ALL plots
d) each buyer buys on understanding that covenants intended to benefit ALL plots

treated as by-laws that are reciprocally enforceable by plot owners

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13
Q

Effect of registrable disposition of registered estate for valuable consideration

A

Takes effect over ANY pre-existing rights in the land, EXCEPT:
* those protected on register
* overriding interests

any that should have been protected but were not are lost forever!

NOTE donees take the land subject to ALL pre-existing interests, irrespective of whether they have been protected via registration!

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14
Q

5 types of registrable disposition

A
  1. Transfer of registered estate
  2. Grant of new lease of more than 7 years
  3. Grant of legal charge / mortgage
  4. Express grant / reservation of legal easement
  5. Grant of LL’s right of entry
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15
Q

What is meaning of registrable dispositions

A

Do not operate at law until registered!

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16
Q

3 categories relevant to registered land

A
  1. Registrable dispositions
  2. Interests protected by entry (minor interests)
  3. Overriding interests
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17
Q

Who do minor interests (those protected by entry) bind?

A

Bind 3rd party purchase for value if protected by:
* notice, or
* restriction

NOTE: donee bound regardless!

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18
Q

Effect of a notice in register

A

Doesn’t guarantee proper creation / existence of interest - only that IF it has been properly created, it will be binding on buyer

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19
Q

Registered land

Which interests are protected by notice

A

a) home rights
b) estate contracts
c) equitable easements
d) equitable leases
e) freehold restrictive covenants

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20
Q

Registered land

Which interests are protected by restriction

A

a) LH restrictive covenant
b) Trusts of land

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21
Q

Where a trust exists, what is purpose of restriction in proprietorship register

A

To help ensure overreaching occurs

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22
Q

Does overreaching apply to both registered and unregistered land?

A

Yes

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23
Q

How does overreaching take place?

A

By paying the capital money to at least 2 trustees - must not be paid direct to the beneficiaries unless they are also a trustee

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24
Q

What are overriding interests

A

Bind any purchaser even if not protected by registration

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25
What should be done in a sale re overriding interests
Since they won't appear in register, inspections & enquiries should go beyond simply looking at registers
26
3 types of overriding interests
1. Legal lease of 7 years of less 2. Implied legal easements created after 12 Oct 2003 (those before then continue to override) 3. Equitable interests held by those in actual occupation
27
3 options for implied legal easement to be binding as overriding interest
1. New owner **knew** about it, or 2. New owner *did not know*, but it was **obvious on reasonable inspection of land**, or 3. Exercised **within 12 months** immediately before disposition (tricky if e.g. hidden in non-visible drain as bound)
28
2 options for successful claim to an overriding interest re actual occupation
1. Proprietary interest + obvious actual occupation 2. Proprietary interest + non-obvious actual occupation + actual knowledge
29
When will actual occupation NOT be binding as an overriding interest?
1. Inquiry was made (to interest holder) + it was **NOT disclosed** when *reasonable to do so*, or 2. Occupation would **NOT have been obvious** on *reasonably careful inspection of land*, or 3. Buyer did **NOT have actual knowledge**
30
Legal interests - pre-1926 position
Legal rights bind the world (even if new owner did not know / should have known)
31
Legal interests - post-1926 position
Legal interests bind the world EXCEPT *puisne mortgage*
32
Equitable interests - pre-1926 position
Binding UNLESS Equity's Darling - *donee still bound* Only binding where they had notice - Equity's Darling is a *bona fide purchaser for value **without notice***
33
Equitable interests - post-1926
Binding if protected as a **Land Charge** (deemed to constitute notice, against owner's name) * Exception: *beneficial interests under a trust* that have not been overreached / * *pre-1926 equitable easements + restrictive covenants* still under doctrine of notice regime
34
Effect of interest being protected as land charge
Interest binds purchaser *whether they knew about it or not* Entry does NOT guarantee validity of interest
35
What if interest is not protected by land charge? | Unregistered land
Void against purchaser but NOT against *donee*
36
3 compulsory first registration triggers
1. **Transfer** by sale, gift or assent of unregistered FH / LH with *more than 7 years remaining* 2. **Mortgage** over unregistered FH / LH with *more than 7 years remaining* 3. **Grant of legal lease** for *more than 7 years* (does NOT trigger registration of reversion)
37
What does doctrine of notice still apply to?
* Equitable easements + restrictive covenants created pre-1926, and * Beneficial interests under trust of land that has not been overreached
38
What does the doctrine of notice provide
Equitable interest is binding on everyone except Equity's Darling, i.e. * Bona fide * Purchaser for value * Of legal estate * Without notice *Even if trust not overreached!*
39
Types of notice under Equity's Darling
* Actual * Constructive - that which a prudent buyer would have found out about * Imputed - through agent e.g. solicitor
40
If doctrine of notice does not apply, is it lost?
Lost forever - VOID, cannot be revived!
41
4 components of equity of redemption
1. Equitable right to redeem the loan 2. No postponement or prevention of redemption 3. No collateral advantages 4. No unconscionable terms in mortgage deeds (i.e. imposed in morally reprehensible manner)
42
Options available to legal lender
1. Debt action (used in addition to other remedies or when negative equity) 2. Possession (must be a last resort) 3. Sale (strongest right - borrower loses all rights) 4. Receiver (acts as manager of property) 5. Foreclosure (take property in satisfaction of whole debt)
43
When does right to possess arise?
Before ink is dry (as soon as mortgage granted) - borrower need not be in default
44
What does right to possess involve
1. Physical possession, or 2. Where property is let, directing that Ts pay their rent to lender rather than borrower
45
Limits on right to possess
1. **Criminal offence** to *use / threaten violence to gain entry* - lender should really apply for court order even if not necessary 2. Pre-Action Protocol - should be **last resort** for *residential property* e.g. should try and make a payment plan first 3. If *wholly / partly residential*, court can **adjourn** proceedings / **stay** or **postpone** possession order if it appears *borrower is likely to be able to pay any sums due within a reasonable period* 4. Court has power to **postpone possession** if connected person who should be added to proceedings e.g. spouse / cohabitant
46
Is a court order required for power of sale
No - but right must exist, have arisen and become exercisable (BAE)
47
When does right to sell exist
1. Express in mortgage doc 2. Implied into legal mortgage unless excluded
48
When does right to sell arise?
When mortgage money has become due * Capital mortgage - when **one portion** of capital due * Interest-only mortgage - **legal redemption date** (usually about 6 months in)
49
When is right to sell exercisable
(1) If express, wil state when (2) If implied, only when at least 1 of the following is met: * *Notice requiring payment* of whole loan has been served & borrower **defaulted** (*3 months* have passed) * **Interest unpaid** + in arrears for *at least 2 months* * **Breach** of another mortgage provision
50
Lender's duties when exercising right to sell
1. Take reasonable care to obtain true market value / proper price (acceptable margin of error ok) 2. Duty to take expert advice as to method of sale, marketing strategy & reserve price 3. Act in good faith (honest sale + unconnected) NOT under duty to improve property nor delay a sale to wait for market
51
From when is foreclosure available and its effect
* Available on app to HC once **legal redemption date** passed * Borrower given period to repay & if debt not repaid by date = property vests in mortgagee * If property worth less than debt, borrower released from liability!
52
How is borrower protected from foreclosure proceedings
1. Court's **discretion** to reopen proceedings in exceptional cases (even after absolute order) 2. For dwelling houses - an **adjournment** app 3. **Judicial sale** app, preserving the equity of redemption
53
Only when will an easement be implied by common intention
1. DL sold / leased for **specific purpose** 2. Purpose **known** to both parties 3. Easement is **essential to achieve** the common purpose
54
Wheeldon v Burrows rule
1. Right enjoyed as **quasi-enjoyment by seller before** division of land 2. Quasi-easement was **continuous + apparent** (some degree of permanence) 3. Quasi-easement **necessary for reasonable enjoyment** of DL (right enhances the land, could be defeated by other route equally convenient) 4. Quasi-easement **in use** by common owner **at date of transfer** / lease of DL *Grant only*
55
S 62 impled easement requirements
1. **Grant** only 1. Prior **diversity of occupation** (unless easement of light OR continuous + apparent - can be implied into first lease / transfer) 3. **Informal permission of licence** granted to DL occuper to use SL i.e. existing privilege 4. **Conveyance** of DL 5. Must not be excluded
56
Enforceability by dominant owner of easement
Benefit passes with DL regardless of land being unregistered or registered, interest being legal or equitable
57
Remedies available if someone stops a party using a valid and enforceble easement
1. Prohibitory injunction 2. Damages in lieu or in addition 3. Mandatory injunction to remove obstruction
58
Are express legal easements automatically binding - registered vs unregistered land
* Registered - yes due to substantive registration * Unregistered - yes, bind the world
59
Are implied legal easements automatically binding - registered vs unregistered land
* Registered - as overriding interests * Unregistered - bind the world
60
Must express + implied equitable easements be protected to be enforceable?
Yes * Registered land - notice on CH register of SL * Unregistered land - D(iii) land charge Otherwise buyer not bound - *doness always bound*
61
Only which type of easement can be impliedly reserved
By necessity & common intention
62
When might damages in lieu of injunction be granted re breach of restrictive covenant
- injury to C's rights is small - capable of being adequately compensated by money - would be oppressive to grant injunction
63
Which remedies can be used against **successor** re breach of positive covenant
Damages ONLY (SP only available for breach by original covenantor)
64
4 grounds on which to bring application to wholly or partially discharge / modify restrictive covenant - Lands Chamber
1. Become **obsolete** due to changes in character 2. Its continued existence **impedes the reasonable use** of the land 3. The dominant owners expressly or impliedly **agree** 4. The dominant owners will **not suffer injury**
65
What to show re impedes the reasonable use of the land ground
1. Offers no practical value to person it should benefit, or 2. Contrary to public interest AND money will be adequate compensation
66
Limitation period for recovery of interest + capital through debt recovery
Interest - 6 years Capital - 12 years
67
How can presumption of JT in equity be rebutted?
1. Property acquired for **business** use 2. **Unequal contribution** to purchase price (unless family home - JT presumed regardless) 3. **Post-acquisition money management** (i.e. not just purchase price - strong presumption in favour of JT in family home) * Rebutted in exceptional cases where it can be shown one co-owner provided for greater finance for home e.g. ALL mortgage | PUB
68
When is express assignment relevant?
Where it is expressly required by the covenant. * unlike annexation, need to be assigned again everytime land is transferred for benefit to pass (need to comply with s.53(1)(c). * annexation cannot be a fall-back if parties fail to expressly assign benefit where that is required. * Need to show a chain of assignments that is unbroken.

SQE 2 (21 decks)

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