Property Flashcards
Are proprietary rights enforceable
Are personal rights enforceable
and how? and against who?
Proprietary rights enforced by action in rem (use or possession of land is recoverable) + enforceable against 3P
Personal rights - Enforced by personal action for damages + Bind only original parties
proprietary rights x6
- freehold and leasehold estate
- easement
- mortgage
- restrictive covenant
- estate contract
- beneficial interest in trust of land
Determining status of right in land depends on x3
- nature - substantive characteristics
- creation - formality requirements
- protection - registration to bind purchaser
What is an estate and what types of estate exist + what duration of each exist
proprietary right of POSSESSION
freehold (forever) - fee simple absolute in possession + absolute ownership
leasehold estate (certain duration)
- residue of estate after granting lease = freehold reversion (belong to landowner)
- tenant holding leasehold estate = leasehold reversion
What is an interest + is it enforceable?
proprietary right of limited use
enforceable in rem + capable of being enforced against 3P
3x legal interests + what remedies available
Mortgages
Easements (forever / certain term)
Rights of entry
Automatic right to damages + equitable remedies
Equitable interest x4 + what remedies
restrictive covenants
Estate contracts
Interests in trust of land
Easements granted for uncertain term
NO automatic right to damages, only at court’s discretion
Stages of sale
- exchange of contract (optional)
- completion of deed
- registration
Formalities for estate contracts
- writing
- expressly agreed terms
3.signed by BOTH parties
a. one doc signed by both; or
b. 2 identical docs signed by each party + copies exchanged
Formalities of deed - and what deed needed if unregistered land / registered land
Unregistered land = conveyance
Registered land = transfer
Formalities
1. intended to be a deed
2. Validly executed
3. Delivered
When is legal title acquired - registered or unregistered land
registered = only acquired once legal title registered
unregistered = legal title acquired at completion + trigger requirement to register land within 2 months of completion, if not legal title revert back to seller
4 methods of transfer of land
- sale
- will
- gift
- operation of law e.g. bankruptcy = automatic transfer
effect of a binding estate contract
equitable interest transferred to buyer
If material term in contract is varied what must you do for it to be valid
fulfil all formalities of a valid contract
Types of estate contract x5
- sale contract
- contract for lease
- option agreement
- right of preemption
- failed legal estate / interests
what is a contract for lease + why used
landlord + tenant enter contract to commit themselves to enter lease in the future
premises not ready for immediate occupation, but parties want certainty that lease will be entered into
what is an option agreement + what is its effect?
Gives another party right to serve notice of wishes to buy land during option period
If notice served, seller must sell land to buyer, but buyer not obliged to exercise option and buy land
what is a right of preemption + its effect
Gives another party right of first refusal if landowner decides to sell land → landowner cannot sell without first offering to right holder
NO obligation to sell, and NO ability for right holder to require land to be sold to them
what are the requirements for a failed legal estate / interest to be recognisable as an equitable estate contract
All requirement of land contract met
Remedy of specific performance is available i.e. Claimant has clean hands and NOT breached any contractual terms
3x remedies for breach of estate contract
- damages
- specific performance
- injunction
Compulsory land registration: when? and what dates?
applies to what type of land?
Each time unregistered land sold for the first time
If transfer for value: 1990
if transfer not for value (gift): 1998
BOTH registered -> update register - failure to do so = not legally recognised transaction
and unregistered -> first registration OR voluntary registration (reduced fees)
4x triggering events of compulsory land registration
TRANSFER of freehold estate by sale + gift + court order
GRANT of lease >7 years
Assignment of lease of unregistered land with >7 years left to run
First legal mortgage of freehold / leasehold >7 years left to run
What is the mirror principle of land registration
Register reflect who owns + 3P rights that bind property
except overriding interests
What is the curtain principle of land registration
Records legal title (i.e. ownership), but not beneficial title
What is the insurance principle of land registration
Accuracy of register guaranteed by State → if error, it will be corrected + anyone suffering loss will be compensated
what does property register include
Description of land (address) by reference to title plan
Type of estate (freehold / leasehold)
Rights BENEFIT land (easements)
what does proprietorship register include
Name + address of landowner
restrictions affecting right to sale
class of title
what does charges register include
rights BURDENING land
- mortgages in favour of lender
- restrictive or positive covenants
- easements
- leases
What is land x3
Surface (inc. mines and minerals); AND
Physical things attached to land – fixtures; AND
Benefit of proprietary rights attached to land
what airspace included in land
such height necessary for ordinary use + enjoyment of land
includes lower airspace (e.g. structure cannot overhang in your property) but NOT upper airspace
what ground below land included
up to 300m except gold, silver and treasure, coal
Legal test to determine if fixture or chattel x2 and what takes priority
Examples of fixtures x2
- degree of annexation - presumption of fixture
- purpose of annexation - takes priority by looking objectively at purpose
a. Incorporated chattels into architectural design = fixture
who is the mortgageee
lender who loans
who is the morgagor
borrower who grants right over property as security for loan
Formalities of legal mortgages
- deed
- registered
formalities of equitable mortgages
1. mortgage of equitable interest
2. defective legal mortgage
- mortgage of equitable interest
a. writing
b. signed by guarantor - defective legal mortgage
a. writing
b. all agreed terms
c. signed by BOTH parties
Once mortgage repaid in full what do you do on the register
CANCEL mortgage entries at charges register at Land Registry
a. if over whole of land: DS1
b. If over part of land: DS3
What is equity of redemption
recognises borrower as true owner + right to redeem and can repay loan at any time after legal date of redemption
(equity = market value - outstanding debt)
What does equity of redemption protect x3 =
- Clauses postponing or preventing redemption
- Collateral advantages
- Unconscionable terms
2 types of undue influence
Acts of improper pressure or coercion
Taking advantage of influence in a relationship
what relationships have irrebutable presumption that influence of trust and confidence exists + what relationship does not
Parent - minor child
Guardian - ward
Trustee - beneficiary
Solicitor - client
Doctor - patient
NOT husband - wife or parent- adult child
What does party alleging undue influence have to prove
- Relationship of trust and confidence (or if fall within irrebutable presumption); and
- Transaction which requires explanation (e.g. suspicious transaction / high value)
NB: husband/ wife offering matrimonial home as security for loan is NOT a transaction which requires explanation
–> need to prove unfair advantage taken off rs
What are the limits on equitable relief granted if undue influence proven x2
If delay in making claim → delay DEFEATS equity
If C does not come with clean hands
what is effect if C successfully argues undue influence
How can a lender avoid claim of undue influence
mortgage will be unenforceable against them
Lender can give notice of risk of undue influence IF one party in non-commercial setting standing as surety for another party
(does NOT apply if purpose of loan for joint benefit of co-owner)
1. write to party not benefitting from mortgage to seek confirmation from independent solicitor
2. must not lend until confirmation received
what must a nominated independent solicitor do if lender gave their client notice of risk of undue influence x4
Meet party NOT benefiting face-to-face + on their own
Explain transaction fully
Keep written detailed attendance note
Send certificate to bank
What is the order of priority of mortgages over registered land - for legal mortgages and equitable mortgages
Legal mortgages =
1. Priority depends on order entered on REGISTER
2. If created at same time → application for registration specifies order
Equitable mortgages =
1. Priority: order of CREATION
- Equitable mortgage may be protected by entering notice on charges register → take priority over ALL subsequent mortgage (legal / equitable)
NB: entry of notice does NOT affect priority between equitable mortgages
How can lenders expressly agree to modify the order of priority by postponing a pre-existing interest:
- enter deed of priority / intercreditor deed; and
- registered
what is a legal lender with secured legal mortgage’s rights in event of default of repayment x5
- Debt action
- Possession
- Sale
- Receiver
- Foreclosure
what is the test for unconscionable terms e.g. extremely high interest rates for a borrower
a. is term imposed in a morally reprehensible manner
b. is there clear imbalance of bargaining power - void UNLESS borrower has poor credit history / lender in financial difficulties
can a clause postpone or prevent redemption
Cannot prevent redemption totally; but
May postpone IF no clog or fetter on equity of redemption
can a lender benefit from collateral advantages
yes - if it ends within mortgage term
and is not unconscionable (Except solus tie - seller make condition that borrower buys all its supplies from lender)
can lender include option to purchase mortgaged property
depend on substance of transaction -> can be upheld if independent of mortgage + in substantially separate transaction
what is debt action
+ what is the limitation period
Action against borrower used in addition to other remedies
if value of mortgaged property < outstanding mortgage debt = negative equity
Lender may take possession / sell property and pursue debt action to recover shortfall
recovery of capital = 12 years
recovery of interest = 6 years
how does lender take possession?
last resort remedy - lender must explore alternative arrangements e.g. extending mortgage term / scheduling new payment plans
Taking physical possession (initial step before sale) enables lender to offer property for sale with vacant possession + free from rights of borrower
who is the receiver and why does lender appoint them
deal with tenant issues
generate income from land before sale + apply income toward outstanding mortgage debt
acts as borrower’s agent - lender not liable for receiver’s negligence
how does foreclosure work + what is its advantage
Freehold vests in lender + borrower lose all rights – even if small outstanding amount of debt
Lengthy procedure – court usually order sale INSTEAD especially if value of property significantly > outstanding debt
Even after final judgement of foreclosure – borrower can reopen case if have means to pay
ADV for borrower’s pov: order of foreclosure extinguishes all other secured mortgages
When does lender’s right to repossess arise + what can court do?
when mortgage deed signed
Court expects lender to attempt alternative steps before possession of RESIDENTIAL property
-> court order NOT necessary, but good practice to avoid risk of criminal offence of forcing into property
Court may postpone possession for reasonable period
–> adjourn / stay IF borrower likely able to repay before end of mortgage term / borrower effect sale themselves (evidence of exchange of contracts)
Lender’s right to sell - how does it arise?
- express power of sale (set out in mortgage document)
OR
- implied power of sale
a. if capital + interest mortgage -> arises as soon as one payment becomes due
b. If interest only –> becomes due at legal redemption date
Criteria:
a. Notice requiring payment of whole loan served by lender + borrower defaulted
b. unpaid interest arrears for 2 months
c. Breach of mortgage provision
Lender’s duties when exercising right to sell x4
- After sale, lender = trustee of surplus sale proceeds + must hand to next entitled person (another lender / borrower)
- Duty to borrower to take reasonable care to obtain true market value/ proper price for property NOT perfection to price
- Unfettered discretion as to when to sell, NOT expected to delay
- duty to take expert advice to method of sale
What is an easement
proprietary right to use land which belongs to somebody else
- more limited than exclusive right to occupy
what is difference between granting or reservation of a lease
Grant = = landowner sells/ leases part of land + GIVES buyer/tenant easement over land they retained
RESERVATION = landowner sells/leases part of land to buyer/tenant + RETAINS right over land in their favour (strictly construed to the specified amount reserved)
What case established the rules to determine if it is an easement or just a licence
Ellenborough park test
- Right is CAPABLE of being an easement
- NO disqualifying factors apply
- Right acquired as an easement
how is a right CAPABLE of being an easement x4
a. dominant AND servient land
b. right must accomodate dominant tenement
–> not expressly personal right
–> if connection between biz and land, right benefitting biz will also benefit land
–> proximity between d + s land
c. diversity of ownership
d. right has been GRANTED + valid deed
-> capable grantor: >18 y/o + own legal estate
-> capable grantee = indv, not group
-> reasonably exact description (clear nature + extent of right)
-> must NOT be negative in nature
what are the disqualifying factors preventing a right from being an easement
a. additional expenditure
b. no exclusive possession of servient tenant - must be of reasonable use
c. permission
how can a right be ACQUIRED as an easement + formalities involved
a. EXPRESS grant of easement -
1. express legal easement - deed + registered
2. express equitable easement - writing + signed by grantor
3. failed legal easement recognised as equitable easement - writing + all terms + signed by both partied
b. IMPLIED by 4 methods
1. necessity
2. common intention
3. wheelbarrow v burrows
4. LPA1925, s62
what are the requirements for implication of easement by necessity
- Impliedly GRANTED or reserved -> into deed OR contract
- only if essential for use of dominant land
-> right of way to OTHERWISE landlocked land
-> no alternative options
-> right for vehicles, even if right on foot exists
requirements for implication of easement by common intention of parties
- Impliedly GRANTED or reserved -> into deed OR contract
- land sold/ leased for particular purpose which CANNOT be fulfilled without easement sought
- parties did not have opportunities to reserve this right - e.g. including in a second lease
requirements for implication of easement by wheeldon v burrows
- Impliedly GRANTED (NOT reserved) -> into deed OR contract
- before transfer of part - common owner + occupier of whole land who enjoyed quasi-easement right
- quasi- easement right must be:
a. continuous + physical evidence of existence
b. necessary for reasonable use -> enhances land (e.g. more convenient than alternatives)
c. used by common owner in recent past
requirements for implication of easement by LPA1925, s62
- Impliedly GRANTED (NOT reserved) -> into deed (NOT contract)
Two situations
a. land divided BEFORE informal permission given
(1) prior diversity of occupation
(2) informal permission granted
(3) subsequent conveyance upgrades informal permission + implied into new lease
b. land divided for FIRST TIME
-> similar to wheeldon v burrows
(1) continuous + physical evidence
UPGRADES informal permission into legal easements
requirements of acquiring right of easement by prescription
- 20 years continuously
- right used without
a. force
b. secrecy
c. permission
only between 2 freehold owners (not tenant)
What must dominant owner have to enforce easement
- benefit of easement -> will pass with dominant land
enforceablity of express OR implied LEGAL easement against servient owner
registered land
registered land
1. express legal easements = always enforceable
- implied = binding as overriding interest provided:
a. new owner aware; OR
b. obvious on reasonably careful inspection; OR
c. exercised within 1 year before transfer
enforceablity of express OR implied LEGAL easement against servient owner
unregistered land
unregistered land –> for both express + implied
1) legal interests bind the world = automatically binding
2) transfer of servient land triggers compulsory first registration = binding as overriding interest on first registration
enforceablity of express OR implied EQUITABLE easement against servient owner
registered land
Express equitable easement
1. always enforceable against grantor but must be PROTECTED to be enforceable against new servient owner
a) enter notice in charges register
Implied equitable easement
-> defeated if servient land sold
enforceablity of express OR implied EQUITABLE easement against servient owner
unregistered land
must be PROTECTED to enforce against new servient owner
1) class D(iii) Land Charge
Formalities for a covenant
- writing
- signed by grantor
What does successor covenantEE to enforce covenant against successor covenantOR must show:
BENEFIT of covenant passed to successor covenantee; = enables them to sue
BURDEN of covenant passed to successor covenantOR = enables them to be sued
What test determines if covenant is positive or negative
Haywood ‘hands in pocket’ test
If covenant requires expenditure by covenantor of money/ effort/ time = POSITIVE covenant
Look at substance not form
equitable rules: does the burden pass to the successor covenantor? + what case establishes the 4x requirements
Burden is enforceable directly against person in breach:
Tulk v Mohay Rule :
1) RESTRICTIVE covenant; and
2) Covenant accommodates the dominant land;
a) covenantee + successor hold interest in dominant land at time of creation and enforcement
b) covenant touch + concern land - i.e. only benefit dominant owner whilst own land, affects nature/use of land, not personal
c) dominant + servient land proximity
3) Intention for burden to run -
a) express
b) implied - covenant deemed to be made by covenantor on behalf of its successor (unless contrary intention)
4) Notice
a) Registered land = entry of notice on charges register
b) Unregistered land = Class D(ii) Land Charge
2x equitable remedies if successor covenantee wants to enforce breach directly against successor covenantor
- injunction
a. ongoing or threatened breach = prohibitory injunction
b. breach occurred = mandatory injunction
NB: delay defeats equity -> claimant must apply immediately after breach - damages - if injunction too oppressive
common law rules: does the burden pass to the successor covenantor?
+ what remedies available to covenantee for breach by covenantor
General rule = burden does NOT pass to a successor → covenant is UNENFORCEABLE against successor covenantor
Continuing liability of original covenantor – burden remains with them = can be sued for own breaches + breaches of successors
a) Expressly; or
b) Implied by statute
Remedy = damages against original covenantor
Exception to the general rule that burden does not pass to successor covenantor
doctrine of mutual benefit + burden - Halsall v Brizell
Burden can pass to a successor covenantor IF covenantee grants: benefit of easement to the covenantor + imposes a connected burden
- clear link between burden + benefit
- genuine choice to take benefit
- benefit + burden conferred in same transaction
OR
Grant of long lease exception - all covenants in leases enforceable by and against successors in title via privity of estate
passing benefit by equitable rules
- Covenant touch + concern dominant land (Tulk v Mohay)
- Passed by either:
a) annexation
b) assignment
c) building scheme
how does annexation pass benefit to successor covenantor - equitable rules
occurs when covenants CREATED + intend benefit becomes permanent part of dominant land + passes automatically if sold
a) expressly; OR - covenant made for named land, noy people
b) implied by statutory UNLESS excluded expressly / impliedly
how does assignment pass benefit to successor covenantor - equitable rules
occurs at time dominant land is SOLD + benefit exists as separate interest from land, must be passed every time land is transferred
1) writing; and
2) signed by person disposign of benefit
how does BUILDING SCHEME pass benefit to successor covenantor - equitable rules
ONLY applies to RESTRICTIVE covenants
PASS IF: Parties’ intention to create scheme of mutually enforceable obligations
How can benefit pass to successor covenantor at common law + what formalities
1) express assignment
a) writing
b) notice
2) implied assignment - automatically passes every time land transferred
a) covenant touch + concern land
b) Intention that benefit run with dominant land (express / implied by statute)
c) Original covenantee has legal estate when covenant made
d) Successor covenantee hold legal estate at enforcement
Methods to discharge a restrictive covenant x4
1) automatic discharge - same person becomes owner of both dominant + servient land
2) expressly agreed - enter deed
3) impliedly agreed - doing nothing when covenant breached openly
4) statutory discharge / modification - apply to Upper Tribunal (Lands Chamber)
Grounds for applciation to Upper Tribunal (Lands Chamber) to discharge a restrictive covenant x4
Become obsolete due to changes in character of property or neighbourhood
Continued existence impedes reasonable use of land
a. no practical value
b. contrary to public interest
Dominant owners expressly/ impliedly agree a release
Dominant owners will NOT suffer injury
Basic rule of priority for registered land + its effect + who it applies to
ONLY applies to donees
take land subject to all pre-existing rights (regardless of protection)
Exception to basic rule of priority for registered land + its effect + who it applies to
Registrable disposition of registered estate made for valuable consideration (most land transactions)
take land subject to protected rights + overriding interests but NOT unprotected pre-existing rights which are lost forever
what are 5 legal interests that are registrable dispositions
TRANSFER of FREEHOLD / LEASEHOLD estate
GRANT of new LEASE >7 years
Express LEGAL EASEMENT
GRANT of LEGAL MORTGAGE
Grant of landlord’s RIGHT OF ENTRY
How can equitable interest be binding and enforceable against 3P
- entry of notice
OR
entry of restriction (interests in trust of land + short legal leases 3 years or less) - overreaching - only for interests in trust of land
what happens if overreaching fails
beneficial interest will remain in the land and bind a purchaser as an overriding interest IF the beneficiary is in actual occupation (not automatically binding)
3x overriding interests
- legal leases 7 years or less
- equitable interests held by those in actual occupation
a. equitable interest in trust of land
b. equitable leases
c. option to purchase - Implied legal easements
2x exceptions for an equitable interest to be binding as an overriding interest even if actual occupation
- Interest holder asked about right AND failed to disclose – when reasonably expected to do so
- NO obvious occupation on reasonably careful inspection AND person who made disposition NO actual knowledge about interest
Pre-1926 vs. Post-1926 are legal interests enforceable against 3P
Pre and Post: legal rights bind the world = automatically enforceable
Post-1926 exception = puisne mortgage must be registered as a Land Charge to be protected
Pre-1926 vs. Post-1926 are equitable interests enforceable against 3P
Pre-1926:
1. NOT automatically binding on successor in title → Only binding IF successor aware / should have been aware of interest
- if successor = bona fide purchaser for value of legal estate without notice of prior interest i.e. equity’s darling -> takes land FREE from interest (doctrine of notice)
Post-1926:
1. need protection as Land Charge
2, but not all equitable interests can be protected so doctrine of notice applies
a.Equitable easements and restrictive covenants created before 1926
b. Equitable interests in trust of land NOT overreached
Class of land charge for:
Puisne mortgage
Estate contract
Restrictive covenant created after 1926
Equitable easement created after 1926
Spouse’s matrimonial right of occupation
Class C(i)
Class C(iv)
class D(ii)
Class D(iii)
Class F
what needs to be included in an entry of a land charge
name of landowner according to name in title deed, not birth certificate
if fail to enter correct name = VOID
What are the requirements to be equity’s darling and take land free of all equitable interests
+ what is effect of equitable interest against equity’s darling
bona fide - good faith
Purchaser for value – acquire interest in land by paying and otherwise than by law (e.g. intestacy)
legal estate - freehold / leasehold / charge by legal mortgage
WITHOUT notice - inspects land but finds no evidence of equitable interest
a) actual notice - buyer know of interest
b) imputed notice - notice of interest by buyer’s agent
c) constructive notice - investigation of title deeds + inspection of land -> presence of tenant on land places buyer on constructive notice of tenant’s interest
Equitable interest is VOID against equity’s darling and cannot be revived
