Property Acquisition Land Law - Assignment Example

?Land Law Assignment Tracey is a florist and has recently purchased some land which will enable her to build and open up her own shop. The land has been purchased from a company called Safebury Plc which has a chain of supermarkets. Safebury Plc has sold Tracey part of their car park, which is large enough to accommodate her shop and a few parking spaces. As soon as Tracey takes possession of the land, but before she builds her shop, she notices that people are still continuing to park on her land even though it has now been sectioned off from the main supermarket car park. When Tracey politely informs them that the land is now hers the car owners explain that they work for a neighbouring bank and have been using this particular area of the car park for over twenty years. On further investigation the bank manager confirms that over the years the bank have even maintained this area of the car park for example gritting it in the bad weather and installing security cameras on the wall so that the cars are well protected. The bank manager informed Tracey that the bank employees were always in the car park before the supermarket shoppers, so the shoppers have never used this part of the car park. Tracey has also been informed by the bank manager that as far as he is concerned the land belongs to the bank and Safebury Plc was in no position to sell it to Tracey. With reference to relevant legal authority advise Tracey whether it is possible that the bank could have acquired the land through adverse possession. The land in question is unregistered. The issue in respect of the first part of the question requires an analysis on the law of adverse possession and its operation in respect of unregistered land. It has been said that the law on adverse possession is pecuniary as it allows a trespasser to obtain a better title to land than the lawful owner of the property. The principle upon which the better claim is acquired is that of limitation of actions, meaning that the person who brings a claim in respect of the property becomes statute batted against the adverse possessor for recovery of possession. Thus, due to relativity of tile the adverse possessor because of him being in actual possession has the best claim in respect of the land. Under s.75 of the LRA 1925 a registered proprietor of an estate holds it on trust for the successful adverse possessor pending registration of him as the new proprietor. This can be seen from the case of Central London Commercial Estates Ltd. v. Kato Kogaku Ltd.1 whereby leasehold was held on trust for the squatter with the benefits as well as burdens of the leas being kept intact. In respect of unregistered land the limitation period has been held to be 12 years from the time of the squatter coming into adverse possession of the land. (s. 15 of the Limitation Act 1980). Therefore the moment of adverse possession the limitation period starts. In respect of LRA 2002, if an adverse possessor has not applied for registration his interest would constitute to be an overriding interest in respect of a new proprietor if the adverse possessor is in actual occupation of the land when the new proprietor applies for registration. Therefore if the person goes out of possession even though he has completed his period, there would be no right against the new proprietor. Under the LRA 2002 there is no limitation of actions and there is a right of registration granted to an adverse possessor after 10 years of adverse possession (Schedule 6 of the LRA 2002). There are certain exceptional circumstances and apart from that the true registered proprietor is provided with a period of two year to recover possession, otherwise the squatter can reapply and be registered as the new owner. The establishment of adverse possession is an important aspect which will not be considered. The law on this is the same that is for unregistered and registered land. The attempt to codification of this was attempted at in the Court of Appeal’s decision in Buckinghamshire CC v. Moran2. Therefore, what is required is the need to show exclusive physical possession of the land, along with an intent to possess so as to exclude the others, which includes the paper owner which is also called animus possidendi. In Powell v. McFarlane3 the courts stated that the intention to possess is merely artificial. Thus even though a person knows, that there is another person’s claim, this would not prevent him from claiming adverse possession. The burden of proof is lesser in respect of circumstances where the squatter can show that the land has been abandoned by the owner. However, an acknowledgement that the land is of another person would prevent a claim (Archangel and BRB (Residuary) v. Cully). As far as physical possession is concerned, it is said to be shown by either of the two ways, that is the squatter demonstrating that he acquired by possession by dispossessing the paper owner or due to discontinuance of the paper owner. In respect of the current situation it can be seen that the old rules of unregistered land apply, however, it is unknown whether the provisions of LRA 2002 would apply or not. It is easy to show that the Bank has been in possession of the land for more than twenty years and that the supermarket had discontinued its possession. The bank has clearly stated that they are the owner and therefore they satisfy the criteria of adverse possession. Thus pre-LRA 2002 there would be no problems in establishing the adverse possession of the Bank. In respect of LRA 2002 requires registration as discussed above and this needs to be done. If this has not been done than the property is said to be in possession of supermarket and the sale to Tracey would be upheld, with the interest of the Bank extinguished. Again with reference to relevant legal authority advise Tracey whether it is possible that the bank could have acquired an easement over the car park. The issue in this question requires an analysis in respect of the law on easements and whether a successful easement has been created by the bank. The basic elements of easements are that it confers a benefit on the dominant tenement or in other words the land that is benefitted thereby allowing the owner benefitted land to use easement. The second aspect of easement is that it burden on the servient tenement or in other words the burdened land is placed. It is important to mention that the interest created by an easement is proprietary interest which transfers with the transfer of either of the dominant or servient tenement. This can be related to the fact that the entire purpose of an easement is that it benefits a piece of land that are exercised over another piece of land. The criteria for establishing whether a certain right has created an easement have been established by means of the decision of Re Ellenborough Park4. The first and foremost requirement of an easement is that the requirement of a dominant and a servient tenement. The second requirement is that the dominant and servient tenement should be owned by different persons. (Roe v. Siddons). The third requirement is that the easement that has been alleged must benefit the dominant tenemnent or in other words the benefit should accrue either to the person who uses the land, value of land or mode by which occupation of land is exercised. The general guidelines in this respect are firstly, the requirement of proximity between the dominant and servient tenement. (Bailey v. Stevens). The right that has been alleged should in no way provide a personal advantage to the owner of the dominant tenement. Finally a pure recreational user would not be generally conferred to be an easement. The fourth requirement is the capability of the alleged easement to become the subject matter of grant, thereby providing discretionary powers to the courts. The guidelines in this respect are that there must be someone who is legally capable to grant the easement; there must be someone legally capable to whom the easement may be granted; the rights that are being granted must be certain, that is description and definition, so that the obligation of the servient tenement are certain; and finally it must come under the rights that are capable of being formed as easements. The existence of easements can be legal or equitable. The conditions for a legal easement are that it must be in relation to a fee simple absolute in possession or to a term of years. They are legal only if created by statute, deed or registered disposition, or by way of prescription. Clearly in respect of the facts, it is evident that the easement has not been created by way of statute and so this will not be discussed. Furthermore, on the facts there has not been an easement by way of a formal document and so this not an easement created by deed/registered disposition. As far as prescription is concerned an easement can be existent by way of long use. There are three forms of prescription, common law prescription, lost modern grant and Prescription under the Prescription Act 1832. Equitable easements requires formalities which needs to be fulfilled that is it is either for the lesser period of fee simple or leasehold or is created in writing. Easements by prescription are created by the long use principle over the servient tenement. These easements would then be held to be legal. The fact that long use was present, leads to the presumption of grant and creation of easement. As discussed above the three ways will now be discussed. The first and foremost point to note is that for prescription there is the requirement that the land must be fee simple that this the dominant as well as the servient tenement. Thus the long use must be by the fee simple owner of the dominant tenement and it must be against the fee simple owner of the servient tenement. Thus there is no easements against tenants. The second requirement is that the use must be as of a right, thus it must be without secrecy that is ‘of such character that an ordinary owner of land, diligent in the protection of his interests, would have, or must be taken to have, a reasonable opportunity of becoming aware’ of the use (per Romer LJ in Union Lighterage Co. V. London Graving Dock Co.). The use must be without force and finally the fact that since a grant is constituted the acknowledgement is held to be necessary. It is important to mention that where the dominant or servient tenement thinks that consent has been given, when it has not been given, will not defeat prescription. (Bridle v. Ruby). A useful evaluation in respect of without consent and the generation of a prescriptive easement can be seen in Dalto v. Angus and Co. whereby it needs to be seen: is there a use of the servient owner’s land?; is there an absence of a strict right to carry on the use; does the servient owner have knowledge (actual or constructive) of the use?; does the servient owner have the ability to stop the use, either practically or legally?; has the servient owner abstained from stopping the use for the period required for a successful prescriptive claim? If it is found that the answer to these questions are in the affirmative, then there is a strong possibility of the claim to succeed, however, failure to satisfy the criteria does not necessarily mean that the criteria would fail. The other condition is that the use of must be such that it must be in the character of an easement. As far as prescription at common law is concerned it must have existed before ‘legal memory’. This is clearly not applicable to the facts and so will not be discussed. The next prescription at common is that of lost modern grant whereby it is assumed in law that a 20 years’ continuous use of the right can be construed to be conclusive evidence of the fact that the servient owner had made a grant. (Dalton v. Angus). Thus the right is not affected, even if the servient owner shows by way of evidence that he did no make a grant. In respect of the facts at hand, it can be argued by the Bank that they had been granted a prescription at common law by way of lost modern grant. The easement has been established by the fact that there had been a grant on the basis that it is fee simple (presumed), the use has been as of right, that is the care park was used openly and without any force and on the facts there is was no permission shown and clearly the questions stated above are in the affirmative, therefore there is an easement in the favour of the Bank and Tracey has purchase the land subject to the easement. As far as Prescription Act 1832 is concerned, under s.2, if a period of 20 years is established that would be sufficient to establish the claim of prescription, subject to the fact that there had been no interruption for that period of time. Thus Tracey is bound by the legal easement that has been created in respect of the land by the Bank. In order to purchase the property Tracey took out a mortgage from “Loans r Us UK” a company that specialises in lending to people with a low credit rating. The mortgage is for a fifty year term and contains a clause which prevents Tracey from redeeming early. Also, Tracey has agreed that her company and personal bank accounts will always be held at “Banks r Us UK” which is the loan company’s sister company. Tracey has begun to get anxious about the harsh terms. Advise Tracey with reference to relevant legal authority whether the terms are enforceable. In respect of the loan that has been taken out by Tracey the equitable right to redemption that is the rights of the mortgagor need to be discussed. It is evident that a mortgage has a dual nature that is a contract and an interest in land. Therefore along with the rights granted to the mortgagor under the contract, he is also protected by way of equity due to his proprietary interest in the property. As far as the contractual right to redeem is concerned, the mortgagor can redeem the mortgaged on the date stipulated in the contract. However, in equity, there is a general rule that the mortgage cannot be made irredeemable by way of including a certain period of time. (Re Wells) It has been stated that by principle, on payment of the mortgage payment, interest and costs, the mortgagor should have the right to redeem the property. Due to the unfair advantages, the court has struck down ‘collateral advantages’ which are in favour of the mortgagee for example continuation of the mortgage. In respect of collateral advantages it is now seen whether the terms of collateral advantage are not unconscionable, or do not restrict the right to redeem, then they would be held to be valid. (Biggs v. Hoddinot) The court has power to strike down any term of mortgage or the whole mortgage, because of the fact that it was because of unconscionable bargain and does not take into account whether the term is a clog or fetter as to the equity of redemption. As can be seen in Multiservice Bookbinding Ltd Marden, whereby, Browne-Wilkinson J stated that a term would be said to be unconscionable because of its substance being objectionable and because of the fact that it has been imposed by one party on the other. In lieu of the discussion above it can be said that the terms that have been imposed by the Bank are unconscionable as they do not allow Tracey to redeem the mortgage before the fifty year term. Furthermore, the term of Tracey having an account in the Bank would be an unconscionable term and would be said that it has been imposed upon them. Therefore the courts would have the power to alter the term of the mortgage whereby Tracey would be allowed to redeem the mortgage before fifty years. Furthermore, the opening of bank account would also be set aside on the basis that it had been imposed upon by Tracey. References DIXON, M. (2004). Dixon on land law. London, Cavendish MACKENZIE, J.-A., & PHILLIPS, M. (2008). Textbook on land law. Oxford, Oxford University Press GRAY, K. J., GRAY, S. F., & GRAY, K. J. (2006). Land law. Oxford, Oxford University Press COOKE, E. (2006). Land law. Oxford, Oxford University Press CURSLEY, J., DAVYS, M., & GREEN, K. (2009). Land law. Basingstoke, Palgrave Macmillan DUDDINGTON, J. (2007). Land law. Harlow, Longman BRAY, J. (2009). Land law. London, Hodder Education WILKIE, M., LUXTON, P., & MALCOLM, R. (2007). Land law. Oxford, Oxford University Press WEBB, E., STEPHENSON, M. A., & TAN, P.-L. (2009). Land law. Chatswood, N.S.W., LexisNexis Butterworths. STEVENS, J., & PEARCE, R. A. (2005). 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