Propery Law in the United Kingdom - Case Study Example

PROPERTY LAW Question: Mr.Jackson purchased a property called the Glebe House from Damion Brown. Prior to his purchase, he engaged the services of Bob Anderson, the Senior Partner of Biedale Solicitors in Nottingham to look after Mr. Jackson's interest on the prioperty since he was then abroad. Mr. Anderson entrusted the purchase transaction to Alex Draper, a trainee solicitor with Biedale Solicitors. To help Laex, in the work, Mr. Anderson engaged also the services of the Rogers and Co.(Surveyors). Rogers Adrian did not report any problem after checking the Glebe House personally and recommended that the House is good for the price. Mr. Jackson bought the property without even seeing it before payment was made. He relied entirely on Alex and Rogers Co. to advise him on his purchase from Damian Brown and the internet sales photographs and details of the property. Alex completed the transaction on his behalf over the summer. While Alex and Mr. Anderson were out in their office, Mr. Jackson went to their office and made a complaint over the property he bought. The secretary of Mr.Anderson wrote down the following complaints of Mr.Jackson. He is horrified to find several serious problems at the property of which he was totally unaware until now:- Jeremy Smith (son of new neighbour Mrs Smith) seems to have taken over 5 acres of the land belonging to Glebe House (and now to Mr Jackson) and is treating it as it as his own. He says he has done so for years and has no intention of stopping. Mrs Smith is complaining about the fact that Mr Jackson has applied for planning permission to change Glebe House into a conference centre and says that it is in breach of a covenant entered into several years ago between her father and Mr Brown whereby Glebe house and land were transferred on condition that there would be no business use on the property. A note was pushed through the letter box at Glebe House from a "Cheryl Armitage" claiming to be Damion Brown's fiance and wanting the return of her "investment" in Glebe House forthwith. She is contacting her solicitor. Valuable items have been taken from the property ( presumably by the seller) including: -Valuable artwork depicting the history of Glebe house -A set of garden statues -Kitchen display wall cabinets forming part of the fitted Kitchen 1) What are the rights of Mr. Anderson over the property 2) What are the liabilities, if any, of Alex and Mr. Anderson in this case 3) What are the effects of the covenant between Mrs. Smith's father and Mr. Damian Brown and the claim of Mr. Brown's fiance over the rights of Mr. Anderson over the property Answer: For us to give an answer to the issues of the question, let us first take an overview of the property law in the United Kingdom where the facts of the question arose. The right to property One of the fundamental rights afforded for the citizens of the United Kingdom is the property right which can be defined as the right to own, possess, use, enjoy, and dispose property. The term property includes but is not limited to movable properties such as cars and clothing, and immovable properties such as lands, land and buildings or land and house. Though fundamental by nature, the right to property is only a statutory right, which means that the exercise of this right is subject to existing laws of the State where this right is provided. The exercise of this right was mostly based from common law jurisdictions that were prevalent during the ancient times at the United Kingdom. Though statutory laws are now in effect, common law are still useful most especially in property issues where no statutory bases are readily available just like purchase of property through the internet. Relevant to this right is the purchase of real property. Purchase or "buying", is a traditional way of owing a real property such as land or house. When a person purchases or buys a property, he is given the absolute right or title over the property. Absolute right or title means that he is free from any intervention even of the State in the ownership, possession, use, enjoyment, and disposal of the real property. Conveyance Absolute right or title over a real property right, however, arises from a contract of conveyance or the "the transfer of title of (real) property from one person to another". In conveyance, certain conditions are attached by statutory or common law provisions that must be observed by each of the contracting parties before, during and even after its execution. Therefore, there is a limitation to the enjoyment of absolute right or title over the real property. It can only be enjoyed if the statutory or common law provisions attached in conveyance were observed and no contractual obligations were violated all through out the process of conveyancing. Statutory and Common Law provisions of right to real property Some of the statutory laws that provide the lawful provisions in the purchase of real properties in the United Kingdom are the Transfer of Land Act of 1958, Housing Act 2004, and the Law of Property Act 1925. Though some provisions of latter law had been amended, it is still utilized in determining legality of conveyance. Section 52, paragraph 1 of the Law of Property Act 1925, provides that "conveyances be in deed and all conveyances of land or of any interest therein are void for the purpose of conveying or creating legal estate unless made by deed." This means that the transfer of title must be reduced in writing or in a public instrument in order to be binding such as a deed of sale. Certificate of Land Title In a deed of sale, the transferor is usually called the vendor or seller and the buyer or purchaser is usually called the vendee or buyer. In order for the seller to validly pass title over a real property, he must possess a valid title over the property. Evidence of ownership of land usually called the "Certificate of Land Title" which should be registered under the Torrens system of the United Kingdom to be valid. A Certificate of Land title contains all the necessary information about the title such as the name of the owner, the land boundaries, and other vital information such as covenants, encumbrances, or mortgages ("Checking the deeds"). Possession of valid title by the seller prior to conveyance was based on common law principle of nemo dat quod non habet, which means "no one gives what he does not have (Pilcher v Rawlins, 1872, 7 Ch App 259). The freehold property A freehold property means "the owner has a complete and absolute ownership of the land, and all the buildings that stand on the land."("Buying free hold property"). Conveyance of freehold land to any persons "shall pass to the grantee the fee simple or other whole interest which the grantor had power to convey in such land". (Law of Property Act 1925, sec 45, par 1). A conveyance of land, having houses or other buildings, shall be deemed to include all parts "appurtenant to the land, houses, or land conveyed." (Law of Property Act 1925, sec 62, par 2). Who is a solicitor A solicitor is a person who handles legal work to include giving advice in buying or selling freehold properties. In the United Kingdom, a client usually hires solicitors to provide legal advice and to process the purchase of freehold property to include the making of the contract. Some of the solicitor's responsibilities include: 1) checking the legal documents giving evidence of ownership to the Land Registry and the right to sell of the seller; 2) asking standard questions about whether there have been any problems with neighbors; 3) checking property boundaries; and, 4) agreeing with the seller what fixtures or fittings should be included in the sale price. ("Buyer's Legal Prep") Although the seller of a residential property is required to produce "Home Information Pack" (Housing Act 2004, part 5), the solicitor should still provide a detailed list of what is included in the price. All of these will be part of the contract. If the seller takes away things that were included in the price, you can ask for them to be returned or claim compensation. ("Buyer's Legal Prep"). If you get poor service from your solicitor, you can make a formal complaint. If s/he does not deal with your complaint properly, get advice from a different solicitor. If you have lost out financially because your solicitor, you can take it further. You will be able to get compensation, but will need help from a new solicitor ("Buyer's Legal Prep") The Covenant A covenant is a promise to engage or to refrain from doing a specified action. A real covenant may be an agreement or agreement between the previous owner and the new owner of a real property. In can be in the form of doing something (affirmative covenant) or to refrain from doing something (negative covenant). An example of negative covenant is the one made between Mr. Smith and Mr. Brown where in as a condition for the sale of the former's property to the latter, Mr. Brown should not convert the land and house for commercial purposes. Each covenant has two sides: the burden and the benefit. The burden is the promisor's duty to perform the promise and the benefit is the promisee's right to enforce the promise. These covenants "run with the land" which means that the subsequent owners or successors may either be able to enforce the covenant or be burdened by it. In order for the burden to run with the land, six requirements must be met: 1) the covenant must be in writing to satisfy the Statutes of Fraud; 2) the original parties to the agreement must have intended that successors be bound by the terms of the agreement; 3) the subsequent owners must have actual notice, inquiry notice, or constructive notice of the covenant at the time of the purchase; 4) the covenant must touch or concern the land; 5) there must be a horizontal privity between the original parties; and, 6) there must be strict vertical privity of estate. ("Covenant running the land" supported by Law of Property Act 1925, secs 78 to 84). The rights of a bona fide purchaser A bona fide purchaser (BFP) - or a bona fide purchaser for value without notice - is a term used in the law of property to refer to an innocent party who purchases property without notice of any of the other party's claim to the title of that property. This is usually applicable, for example, in conveyance by a seller who kept relevant information to the buyer such as claims by other parties, even when asked by the latter. If a buyer is a bona fide purchaser, no claims can be filed against him/her. The cause of action is against the party who made the fraudulent conveyance. As applied in the case of Kingsnorth Finance Trust Co.Ltd v. Tizard [1986] 1 WLR 783: "A bona fide purchaser for value without notice will not be bound by equitable interests that he/she does not have actual or imbued notice of, as long as they have taken "such inspections as ought reasonably to have been made." A purchaser of the freehold property, on the other hand, is not obliged to require (from the seller) the production of any other information relevant to the title or to inquire about the contents of the title or as other parties' claim to the property, for example, refund to the improvements thereon. "He shall assume, unless the contrary appears, that the recitals contained in the abstracted instruments of any deed, will, or other document, forming part of that prior title, are correct, and give all the material contents of the deed, will, or other documents so recited, and that every document so recited was duly executed by all necessary parties, and perfected, if and required, by fine, recovery, acknowledgement, enrolment, or otherwise." (Law of Property Act 1925, sec 45, par 1, subpar a and b) On a sale, the purchaser shall not be entitled to require that the conveyance to him be executed in his presence, or in behalf of his solicitor, as such. But he shall be entitled to have, at his own cost, the execution of the conveyance attested by some person appointed by him, who may, if he thinks fit, be his solicitor (Law of Property Act 1925, section 75, par 1). Conclusion: Applying the provisions and principles of the fore stated property laws in the United Kingdom, the answer to the questions will depend upon the variety of circumstances. 1) If the solicitor failed to perform or if there was negligence in the performance his duties and responsibilities as a solicitor in the case at hand, he will be liable for the damages sustained by Mr. Jackson. 2) If Mr. Brown failed to provide the compulsory information in the Home Information Pack, or other relevant information when asked by the solicitor, he will be liable for the damages sustained by Mr. Jackson. 3) If the removed objects of the property where part of the contract price, it should be returned by whosoever took it or else s/he will be liable for damages. 4) In order for the covenant to be enforceable, it must satisfy the requirements as provided. 5) If Mr. Jackson will be declared as a bona fide purchaser, he will not be liable to the claims of Mr. Brown's fiance and he should have a full enjoyment of his rights. 6) If the 5 acres land will be proven to be within the boundaries of the Glebe House, Mr. Jackson has the right do deny its use to anyone. 7) Mr. Jackson owes an apology to the son of Mrs. Smith. REFERENCES: 1. "Buyer's Legal Preparation". England Shelter Organization (Online). Retrieved on 18 January 2009. Retrieved from 2. "Buying a freehold property". Buying Free Hold Property (Online). Mortgages.com. Retrieved on 18 January 2008. Retrieved from 3. "Covenant running with the land." Wikipedia, the Free Encyclopedia (Online). Retrieved on 18 January 2009. Retrieved from 4. Law of Property Act 1925. OPSI (Online). Retrieved on 18 January 2009. Retrieved from Read More