Land Law - Text, Cases, and Materials - Essay Example

? Land Law In general, a person who owns a piece of land or a property is said to be the owner of the land and enjoy rights to enjoy the land. It must be noted however that the right of ownership is not absolute; since the Norman conquest in 1066, all English and Welsh land has in theory, been vested in the Crown. On this basis, a freehold owner does not own the property on an absolute basis; rather he or she owns the fee simple estate in the land “from the Crown under freehold tenure.”1 Under this arrangement, for practical purposes, the owner of the fee simple is the owner of the land; s/he also has the right to sell the property on or to improve it and has the right to enjoy the land for ever. It may therefore be noted that in terms of elements such as the right to keep other people out, the right to grow mushrooms in the cellar, sing bawdy songs in the bath, paint the front door luminous green or sunbathe in the nude, the owner would not be restricted in any way. While it is possible that the owner may not be able to carry out all of these wishes out of a consideration for neighbors or for reasons of social propriety, from a legal perspective, there is no restriction placed on the owner to refrain from such acts. In the case of tenancies, the property owner is considered to have absolute rights and is free to lease out the property on the basis of terms that are agreed upon between the owner and the lessee. Thus it would be quite accurate to state that when the fee simple absolute right is vested upon an owner of a piece of land, the owner practically has the right to do anything with his or her land, subject to the normal restrictions of propriety and consideration for others. The only time when the ownership of the crown is exercised is when a person dies. Should the owner die, the land passes under the terms of his or her will, but should the deceased have no one who can inherit his or her assets, then the estate is disposed of according to the laws of intestacy. Over time, the interests of the crown, although existent, have become increasingly ignored from a practical point of view; it is only in theory that the ownership of the crown rests. But upon death and in the absence of a lawful heir, the laws of intestacy operate to restore the ownership of the estate into the hands of the crown. On this basis, it may thus be noted that to have freehold tenure effectively means the right to occupy and use the property as if it is one’s own and the owner is conferred the fee simple estate, which places no restrictions upon the owner at all, other than those required to conform to the rules of propriety, social and legal restrictions exercised in the interest of protecting the rights of all people. 2. There are three items which are under dispute in the sale of the property located at 19, Ham Road. The first is the playhouse at the bottom of the garden which Carolyn is refusing to remove. The other two are items that Carolyn wishes to remove, i.e., a large metal sculpture at the centre of the rookery and a safe bolted into the wall of the garage. In respect to the removal of items from a property, the question of whether or not Carolyn can remove them from the property will depend upon whether they are to be classified as chattels or fixtures because the latter accede to the realty2 and cannot be detached from the property. Chattels on the other hand, do not attach to the property and are not conveyed with the sale. Lord Godard in the case of Billing v Pill3 defined a fixture as “a house which is built into the land, so that in law it is regarded as part of the land.”4 The purchaser of a freehold property is entitled to all fixtures on the property on the date of exchange of contracts5, therefore the issue to be determined is whether or not the large metal sculpture and the safe are to be classified as fittings or fixtures. The distinction between fixtures and chattels was laid out in the case of Holland v Hodgson as being primarily dependent upon two factors (a) the degree of annexation of the object to the land and (b) the object of the annexation.6 An object would be classified as a fixture or chattel on the basis of how it is fixed to the land. An object that merely rests on land by its own weight would be held to be chattel as in the case of Hulme v Bingham7 where machinery that was heavy but unattached to the land was held to be chattel. Applying this criterion, the metal sculpture would be resting on the land by its own weight, so it could a chattel, but the metal safe is actually bolted into the wall of the garage and is therefore fixed to the land; as a result it may be held to be a fixture. Applying the case of Hodgson v Holland to the question of Caroline refusing to remove the playhouse, it may be noted that the playhouse also rests by its own weight, hence may be considered chattel that can be removed. But in Elitestone v Morris8, a wooden bungalow not physically annexed to the land was held to be part and parcel of the land itself. Factors taken into consideration included the question of restoration of the article from its constituent parts and its degree of permanence, hence an object may be considered irremovable because it is part and parcel of the land.9 Applying this precedent, it may also be noted that the playhouse rests on wooden pillars that are concreted to the ground, hence they may be considered a part and parcel of the land and therefore irremovable. Applying tests10 laid out in recent case law, it would also be necessary to determine whether the objects in question have been set up for better enjoyment as a chattel or whether they have been erected to bring about a permanent improvement to the property11. In the case of Leigh v Taylor12, valuable tapestries which had been affixed to the walls such that they could be removed without structural injury were held to be chattel. On this basis, the playhouse and the safe cannot be removed without structural damage, but the sculpture can. Taking the purpose of the installation of the playhouse into consideration, it would appear to be a permanent improvement to the realty because its wooden pillars have been concreted to the property, to enhance its value rather than a temporary set up to be enjoyed as a chattel. Hence it may be considered irremovable because it is part and parcel of the land. The playhouse rests on wooden structures and wood structures have in some cases, been held to not be part of the realty.13 In this instance the playhouse rests on wooden structures concreted into the ground but it is not itself attached to them. Where stones are concerned, Blackburn J in Holland v Hodgson stated: “blocks of stone placed one on top of another without any mortar or cement for the purpose of forming a dry stone wall would become part of the land, though the same stones, if deposited in a builder’s yard and for convenience sake stacked on the top of each other in the form of a wall, would remain chattels.”14 From the perspective of degree of annexation, it could be argued that both the safe and the playhouse are not chattel but fixtures and would pass with the land. The sculpture does enhance the value of the property and the rookery, however it is not fixed to the land and degree of annexation is low; thus on these grounds, it is likely to be considered chattel rather than being a fixture. On this basis, it may be concluded that Kharen cannot insist on Carolyn removing the playhouse, neither can Kharen prevent Carolyn from taking away the metal sculpture. The only area where Kharen might be able to successfully appeal would be in preventing Carolyn from taking away the safe bolted into the wall of the garage because it would be a fixture. 3. In this case, no trust has been formally executed, therefore on purchase, the ownership rights in Rose Cottage would have vested with all of the five original buyers in a share equal to the proportion of their contribution to the purchase price of the property, hence each of the original buyers possesses a one fifth share in the property. Annabel’s share may however not be unencumbered, because she has secured a bank loan against the property, thereby allowing the bank a beneficial interest in the property. In the case of Lloyds Bank v Rosset15 the owner of the property acquired a loan from a bank and when he was later unable to pay up, the bank was able to claim the property despite a claim by the wife that she was entitled to live in the house due to a beneficial interest. Upon Annabel’s death, she has passed on her estate to Fred, therefore her share would belong to Fred. Fred’s share would however be reduced by the extent of Annabel’s loan with the bank because the bank would acquire ownership and rights over that portion of her estate which is secured through the loan. In the same way, Colin’s one fifth share would pass to his mother Gillian, but any overriding interest by a bank that has provided the loan for the sports car would also need to be taken into account in determining the extent of interests in the property. In Petitt v Petitt16 the Court rejected the doctrine of family assets, wherein joint occupation of a property automatically allows for a beneficial interest in it. Rather, a beneficial interest may be established through a contribution to the purchase price or indirectly, by adding to the resources for acquisition of the property. Lord Bridge17 has clarified that neither fairness nor a common intent can be the basis for acquisition of beneficial interest, but any indirect contributions can earn a beneficial interest if based upon an agreement between the parties. Oxkey v Hiscock however, established that fairness would apply to the extent that “each is entitled to that share which the court considers fair having regard to the whole course of dealing between them in relation to the property.”18 The contributions of Mr and Mrs Oxley amount to a percentage breakdown of 59.6 to 40.4, hence distribution of assets was made on a 60:40 basis. In the case of Stack v Dowden, Stack had contributed half of the joint mortgage for an earlier home purchase and the Court of Appeal held that she was entitled to 60% of the proceeds from the sale of the second property19. In Oxley, the Court examined the precedents established in the cases of Midland Bank v Cooke20 and Drake v Whipp21 and held that the beneficial share to which each party would be entitled would depend upon “the whole course of dealing between them in relation to the property.”22 This was also the basis upon which beneficial interest was quantified in the case of Stack; as a result, the cumulative effect of both these cases is that the determination will be made taking fairness into account but examining the entire course of dealing between the parties in order to quantify the interest. The two respective banks that provided the loan to Anabel and possibly for Colin on his loan for the sports car may also gain beneficial rights in the property. On this basis, it may be stated that the beneficial share in the property would now rest in the proportion as follows: Bill – one fifth, Elizabeth – one fifth, Gillian – one fifth minus any lien by the bank for a loan on the sports car, one fifth – Fred, minus the extent of share allowed the bank for the loan that Annabel had taken before her death and one fifth to Deborah; however Deborah’s interest may also be shared by some older person who has guardianship until she turns 18 and is legally an adult who can acquire and retain property on her own merit. On the question of forcing a sale of the property, Bill is likely to find it difficult to force a share of the property unless he is able to ensure that all the parties involved are in favor of the sale and without securing their consent. It must also be noted that Elizabeth is in possession of the property, therefore she will have the right of possession and can actively contest any motion to sell the property. 4. Under sub section 14 of the TOLATA (Trusts of Land and Appointment of Trustees Act 1996), any person who is a trustee or who has an interest under a trust of land can apply to the Court for a beneficial interest in the land, and this can also include his trustee in bankruptcy.23 This specifically applies in the context of a trust in reference to the proceeds of a sale of the land. Thus under this provision, David and Anne’s freehold on Apple Cottahe will not be absolute in terms of their ability to sell the property, because the bank being the financier of the mortgage on the property and being denied payments due to it, will have the right to claim a beneficial interest as a trustee in the land. This provision is especially relevant in the context of a sale of the property and Section 15 of the Act clarifies the issue in the resolution of disputes pertaining to the sale of the property in question. Section 14 of the TOLATA would allow the bank to make an application for an order and the matters which a Court must have regard to in determining interests on a property for sale are (a) the intentions of the persons who created the trust (b) the purposes for which the property which is subject to trust is held (c) the welfare of any minors who are occupying the property or have a beneficial interest in it and (d) the interests of a secured creditor of the property. The last element allows the bank a definite interest in the property in the event of a sale. The problems however may arise in the case of a forced sale of the property. The more the time that elapses with David and Anne being unable to make their payments, the higher the negative equity on the property, The Courts raised this issue in the case of First National Bank v Nano Kojo Adjei Achampong and others24 wherein the defendant Mrs Achampong tried to prevent a forced sale by the bank to recover monies due to it on the grounds that there were infant children or disabled persons present on the land. The Court was of the view that such factors could be sufficient to postpone a sale but not prevent it, because “the effect of refusing an order for sale is to condemn the bank to wait – possibly for many years – until Mrs Achampong should choose to sell before the bank can recover anything. In the meantime the debt continues to increase.”25 Section 15 off the TOLATA would apply in this context and allow the bank to exercise its rights to enforce a sale of Apple Cottage so that it can recover the monies that are due to it. The cases of Achampong mentioned above also clarified that in order to prevent a forced sale under section 15, the resident may need to claim financial reasons, whereby a remaining co-owners is in a position to buy out the secured creditor, i.e., the bank. Hence if David and Anne are able to arrange somehow for a sale of the two bungalows on their orchard, they might be able to pay off their outstanding debts and thereby make the application for sale unnecessary. Since the bank has been informed about the planning permission, they would need to hold off a sale temporarily to allow David and Anne the opportunity to sell the property. Alternatively, if David and Anne are able to secure an offer on the property, wherein a potential buyer is prepared to pay off the bank’s share, then the bank may not be in a position to resist the sale of the property. Ultimately, the reason for the sale is the non receipt of payments by the bank and the addressing of this issue would render the bank’s interest invalid because its financial stake would be satisfied. Bibliography Gray, Kevin and Gray, Susan Francis, 2006. “Land Law” (4th edn), Oxford University Press. Kirtlan, Yvonne, 1997. “Land, fixture or chattel?” Estates Gazette, 14 July at pp 121 Sexton, Roger and Bogusz, Barbara, 2009. “Complete land law: text, cases and materials”, Oxford University Press The New Land Law. Retrieved April 30, 2011 from: http://www.landlaw.org.uk/ Case law: Billing v Pill (1954) 1 QB 70 Drake v Whipp [1996] 1 FLR 826 Elitestone Ltd v Morris (1997) 1 WLR 687, HL First National Bank v Nano Kojo Adjei Achampong and others [2003] EWCA Civ 487 Hodgson v Holland (1872) LR 7 CP 328 Hulme v Bingham (1943) KB 152 Leigh v Taylor (1902) AC 157 at 162 Lloyds Bank v Rosset (1991) 1 AC 107 HL Midland Bank v Cooke [1995] 4 AER 562 Oxley v Hiscock (2004) EWCA Civ 546 at 69 Petitt v Petitt (1970) AC 77 HL Rex v Otley (1830) 1 B and Ad 161 Stack v Dowden (2005) EWCA Civ 857 Taylor v Hamer (2002) EWCA Civ 1130 Read More