UNIT 1 - 3rd Party Rights and Fixtures vs Chattels Flashcards
Which one of the following items will usually be considered to be a chattel?
A) Fitted kitchen units
B) Built-in oven and hob
C) Free-standing fridge
D) Bathroom sink
E) Fitted wardrobes
CORRECT ANSWER C - case of TSB v Botham [1995] EGCS 3
Which one of the interests listed below is capable of existing as a legal interest in land?
A) An Easement
B) An interest of a beneficiary under a trust
C) An estate contract
D) An option
E) A restrictive covenant
CORRECT ANSWER A - an easement is the only interest in the list that is capable of being a legal interest in land - s.1(2) Law of Property Act 1925 (although certain formalities will have to be complied with for it to be valid). All the other interests are only capable of existing as equitable interests - s.1(3) Law of Property Act 1925.
Which one of the following transactions does not require a deed to be valid at law?
A) Grant of a legal lease for two years with immediate possession
B) Sale of an existing legal lease
C) Grant of a legal lease for a term of five years
D) The sale of a freehold
CORRECT ANSWER A - the grant of a legal lease for two years with immediate possession comes within the exception to s.52 LPA that legal leases for not more than three years can be created orally or in writing - see s.54(2) LPA 1925. However, the sale of an existing lease is the transfer of a legal estate in land and is required to be by deed. The grant of a legal lease for a term of five years and the sale of a freehold must be completed by deed.
TRUE OR FALSE:
A contract to create or convey an interest in land will be void if it does not either contain all the terms the parties have agreed or refers to some other document which contains the terms the parties have agree.
TRUE - authority for this s.2(2) Law of Property (Miscellaneous Provisions) Act 1989
Which one of the following is not an example of an estate contract?
A) An option to purchase land
B) An equitable lease
C) A contract for a sale of land
D) An interest of a beneficiary under a trust
CORRECT ANSWER D - An interest of a beneficiary under a trust is not a contract to create or convey a legal estate in land. All the other interests are capable of being estate contracts and recognised by equity, provided the requirements of s.2 of the Law of Property (Miscellaneous Provisions) Act 1989 have been met.
Which one or more of the following statements is or are correct?
A) All land in England and Wales belongs to the Crown
B) The Crown has the right to occupy all the land in England and Wales
C) There are only two LEGAL estates in land
D) A person owning an estate in land can create out of it a lesser estate
CORRECT ANWERS A,C & D - All land in England and Wales does belong to the Crown but the Crown does not have the right to occupy it whilst there is a freeholder or leaseholder in possession. There are only two legal estates in land, the fee simple absolute in possession (the freehold) and the term of years absolute in possession (the leasehold). A person owning an estate can create out of it a lesser estate, e.g., the owner of a freehold estate can grant a leasehold estate. “Fee” means that an estate is capable of being inherited and “simple” signifies that it may pass to any class of heir.
Which one of the following answers is the correct statutory provision to match with the statement below?
All contracts for the sale of an interest in land must be in writing, contain all the agreed terms and be signed by or on behalf of the parties to the contract.
A) s.54(2) Law of Property Act 1925
B) s.2 Law of Property (Miscellaneous Provisions) Act 1989
C) s.52 Law of Property Act 1925
D) s.53(1)(b) Law of Property Act 1925
CORRECT ANSWER B - s.2 LP(MP)A 1989 governs the formation of contracts for the sale of interests in land; s.52 LPA 1925 provides that a legal estate can only be passed by deed; s.54(2) LPA 1925 deals with the creation of legal leases for not more than 3 years and s.53(1)(b) deals with the formalities for the express creation of a trust in land.
TRUE OR FALSE: After exchange of contracts, the buyer has an equitable interest in the property.
TRUE - The exchange of contracts is the first stage in a conveyancing transaction. At this stage the buyer only has an equitable interest in the property. Legal title to the property does not pass until completion has taken place and the legal formalities have been completed.
Which one of the following characteristics is not essential for a leasehold estate to exist?
A) Certainty of duration
B) Ownership of an adjoining piece of land
C) Exclusive possession
CORRECT ANSWER B - for a leasehold estate to exist there must be certainty of duration and the tenant (ie. the owner of the leasehold estate) must have exclusive possession of the land (ie. the right to exclude everyone from the land, including the landlord). There is no requirement for a tenant or landlord to own an adjoining piece of land for a leasehold estate to exist
TRUE OR FALSE:
When a seller vacates the property, he may be able to remove fixtures that were present on the property at the time the contract was entered into.
TRUE - The seller is permitted to remove fixtures present on the property when the contract was entered into, but only if they have reserved the right to remove them in the contract.
A freehold owner entered an agreement (not in the form of a deed) to grant a five year lease with a tenant. The parties have never formalised the arrangement.
Which of the following answers best describes the circumstances in which equity would intervene to recognise the arrangement?
A) The agreement must state that it is a deed, be signed, witnessed, delivered and the tenant must have clean hands.
B) The agreement must be in writing and signed as the interest is not capable of being legal.
C) The agreement must be in writing, signed, contain all the expressly agreed terms and the tenant must have clean hands.
D) The agreement must be formalised by deed.
E) The agreement must be in writing, signed, contain all the expressly agreed terms and the freehold owner must have clean hands.
CORRECT ANSWER C - Equity may intervene to recognise the agreement if there is a contract complying with s2 of the Law of Property (Miscellaneous Provisions) Act 1989 (which requires the written contract to incorporate all the expressly agreed terms and be signed by or on behalf of all parties) and the tenant has clean hands (Walsh v Lonsdale).
Option A is not the best answer as it omits the need for the contract to comply with s2 LPMPA, in particular the need for the contract to incorporate all the expressly agreed terms.
Option B is wrong. A lease is capable of being legal.
Option D is not the best answer. A five-year lease requires a deed in order to be legal (s.52 LPA 1925 and s1 LPMPA 1989), but this is not relevant to whether equity will recognise the arrangement.
Option E is wrong as it is the tenant who needs to demonstrate clean hands.
Your client has recently completed their purchase of a house from a seller. The seller’s husband is refusing to leave the house. The husband has never made any financial contributions towards the house.
Which of the following answers best describes the husband’s interest in the house?
A) The husband has a beneficial interest under a resulting trust which is equitable.
B) The husband has no interest in the house as he has never made any financial contributions towards the house.
C) The husband has a beneficial interest under a constructive trust which is equitable.
D) The husband has a statutory home right as a non-owning spouse.
E) The husband has both a statutory home right and a beneficial interest under a trust.
CORRECT ANSWER D - The facts clearly state that the client purchased from a seller, the husband has made no financial contributions and there is no mention in the facts of any agreement or detriment. The husband, therefore, has no legal or beneficial interest in the house.
As the non-owning spouse of the seller, the husband has home rights under the Family Law Act 1996. These are statutory rights and do not create a proprietary interest in land.
Options A, C and E are wrong in that they refer to the husband having a beneficial interest in the house. The husband has no such interest for the reasons given above.
Option B is not the best answer. Whilst it correctly identifies any claim to a beneficial interest under a trust will fail, it omits to recognise the FLA 1996 right.
A client has entered into a contract to sell their house. After exchange of contracts, the client seeks your advice about whether they may keep the freestanding oven that slots in between two of the kitchen cabinets. The oven was purchased by the client’s late husband. The oven is not mentioned in the contract
May the client remove the oven before completion?
A) No, because the oven is likely to be a fixture due to the high degree of attachment.
B) Yes, because the oven is likely to be a chattel due to the slight degree of attachment.
C) Yes, because any item with sentimental value is always removable.
D) No, because removal of the oven would cause the room to be unfit for use as a kitchen.
E) No, because any item within a property is permanently part of the land and must not be removed.
CORRECT ANSWER B
The oven is freestanding and connected to the land only by its own weight and an electrical flex. The oven is likely to be a standard measurement and easy to remove and replace and therefore retains its character as a chattel.
The degree of annexation is slight and therefore Options A and E are wrong. Whether an item is a fixture or chattel is determined by the two stage test and not any sentimental value. Option C is therefore wrong.
Option D is wrong as a freestanding oven can be easily removed and replaced and does not form part of an overall architectural design.
A client has entered into a contract to purchase a house. After exchange of contracts, the client seeks your advice about whether the seller must leave the built in oven and inset hob both made by the same high end manufacturer as part of an expensive modern kitchen. The items are not mentioned in the contract.
May the seller remove the items before completion?
A) Yes, because the items are likely to be fixtures due to the high degree of annexation.
B) Yes, because the items are likely to be chattels due to the slight degree of annexation.
C) Yes, because the items are the seller’s personal property and always removable.
D) No, because removal of the items would cause the room to be unfit for use as a kitchen and appear to form part of the overall design of the kitchen.
E) No, because any item within a property is permanently part of the land and must not be removed.
CORRECT ANSWER D
Although the items could be removed without significant damage, it is not known whether they are of standard size or easy to replace.
Once removed, the oven and hob could not be used without similar cabinets to house them and the items appear to form part of the overall design of the kitchen. Hence the purpose of annexation is for the better enjoyment of the land and not the items. The items are therefore fixtures.
Options A and B are not the best answers as they only consider the first element of the two stage test (the degree of annexation).
Options C and E are wrong as neither answer reflects the two stage test.
A freehold owner sells part of their land. Within the transfer (by deed) the buyer promises to use the land for agricultural purposes only.
Which of the following answers best describes the interest that has been created?
A) It is a restrictive covenant which is legal as it has been created by deed.
B) It is a restrictive covenant which is not capable of being a legal interest.
C) It is a legal easement as it has been made by deed.
D) It is a restrictive covenant which is capable of being a legal interest.
E) It is a restrictive covenant and must be created by deed in order to take effect at law.
CORRECT ANSWER B - A restrictive covenant does not appear in either s1(1) or s1(2) of the Law of Property Act 1925 and is therefore not capable of being legal (s1(3) LPA 1925). The required formality for the creation of a restrictive covenant is in writing and signed (s53 LPA 1925). A deed more than meets this requirement.
Options A, D and E are wrong. Creating a restrictive covenant by deed does not alter the fact that it is equitable by nature.
Option C is wrong. This is a restrictive covenant, ie a promise by one landowner in favour of another landowner that they will not do certain things on the land.
