The Various Vicinity of the Property Transactions - Case Study Example

Question and Answers Property Law 1 1. Sic utere tuo ut alienum non laedas -So use your own property as not to injure your neighbour's-The given case is related to the aspect of nuisance. Before we have a look at the solution to this legal problem, first we shall infer some aspects of nuisance .We can define the nuisance as an interference with a person's interest in the use and enjoyment of his land.In Hunter v Canary Wharf (1) it was held that a private nuisance is a continuous, unlawful and indirect interference with the use or enjoyment of land, or of some right over or in connection with it. This much discussing civil wrong in the Tort Law always happens in the various vicinity of the property transactions. The nuisance caused to the adjoining occupier normally occurs everywhere. But there are number of rules and regulations to protect the occupier from the annoyance of the neighbor. The cause of action arises from the nuisance can be put forward before the Court. Section 106(b) of Rent Act 1977 says that or that the lessee or any person residing has been guilty of conduct which is a nuisance or annoyance to adjoining occupiers. The law allows the tenant to use the property for what ever purpose they choose, unless the tenancy agreement states otherwise. It's therefore wise to restrict the property's use to that of a single private dwelling. Also impose an obligation on the tenant not to: cause nuisance or annoyance to neighboring occupiers. There are three kinds of nuisances. They are (2) (1) nuisance by encroachment on a neighbor's land; (2) nuisance by direct physical injury to a neighbor's land; and (3) nuisance by interference with a neighbor's quiet enjoyment of his land. ------------------------------------------------------------------------------------------------------------ 1. Hunter v Canary Wharf [1997] 2 All ER 426 2. Lunney , Mark and Oliphant, Ken Tort Law ,Text and Materials 2nd edn. Publ.by Oxford University press 2003 2 Now we shall look into the given case and shall decide how these three tenants liable to each other. Cost cottage 1 The tenant of cottage 1 faces difficulties in using the path through his garden by the other tenants. Since the cottage 1 and its surrounding area is within the exclusive possession of the tenant 1, it is obvious that the using the path through the cottage 1 by tenant 2 and tenant 3 amidst of protests of the occupier is unlawful and illegal. But it is to be remembered that there should be continuous interference over a period of time with the claimant's use or enjoyment of land. This aspect is well explained in the case of British Celanese v Hunt (Capacitors) Ltd (3). Cost cottage 2 The same aspect which is mentioned in cottage 1 can be applied here. If the tenants of cottage 1 and cottage 3 faces the problem of wandering the chickens of tenant 2 and it causes nuisance to these tenants ,their complaint should be considered. Cost Cottage 3 The general principle in the common law that anyone can build or use whatever he likes upon his land. If the effect is to interfere with the light, air or view of his neighbor, that is his misfortune. The owner's right to build can be restrained only by covenant or the acquisition of an easement of light or air for the benefit of windows or apertures on adjoining land. This point is explained in the case Hunter v Canary Wharf Ltd. Here in ------------------------------------------------------------------------------------------------------------ 3. British Celanese v Hunt (Capacitors) Ltd [1969] 2 All ER 1253 3 this case the tenant of cottage 3 has the right to buy anything useful to their house and land and they can use it for the purpose which they meant for also. So the tenant in cottage 3 can not have any valid claim to rise against the tenant 3 merely on the basis of non accessibility of daylight. The liability of Land Owner A land owner is always responsible to tackle the problems of tenants regarding the property he let out. It is not necessary that there should be the provisions regarding the nuisance in the agreement. Since the landlord enjoys the original ownership he should focus on resolving the queries of his tenants. A land lord has the right to prevent the actions of the tenant causing a nuisance or annoyance to other occupiers in the same or adjacent buildings. The landlord would need to maintain a log of nuisance events or complaints as they arise and prove the facts in court.(4) It is to be noted that it is on the part of the claimant to prove that the defendant's conduct was unreasonable, thereby making it unlawful. This point was decided in Cambridge Water Co v Eastern Counties Leather.(5) But it is not necessary to prove the malicious behaviour on the part of the defendant but it may be regarded as evidence of unreasonableness. This aspect is explained in the case Christie v Davey (6). Here in this case, P had been giving music lessons in his semi-detached house for several years. The D, irritated by the noise, banged on the walls, shouted, blew whistles and beat tin trays with the malicious intention of annoying his neighbor and spoiling the music lessons. An injunction was granted to restrain the D's behaviour. We already discussed the various liabilities of the different parties including ------------------------------------------------------------------------------------------------------------ 4. www.tosublet.com Land lord liabilities for tenant injuries 5. Cambridge Water Co v Eastern Counties Leather, [1994] 1 All ER 53 at 70). 6. Christie v Davey 1893 1 ch D 316 4 tenants. Now we shall have look into the post events of sale of the said cottages to the sitting tenants and also we shall check if there is any change in the rights of the tenants. Rights of the tenants after the sale of the cottages After the taking over the title of the property the tenants do not lose the same right as lessee. On the contrary they gain more powers than their status as lessee after the exclusive possession of title of the property. Now they can proceed the matter to the appropriate authority directly without consulting the matter with the lessor. 2. This case is related to the adverse possession of the land .In common law, adverse possession is the name given to the process by which title to another's real property is acquired without compensation, by, as the name suggests, holding the property in a manner that conflicts with the true owner's rights for a specified period of time, i.e., where a trespasser remains in possession of land for a period of time, generally for 15 years then that person may have acquire ownership of the land.(1) The rule raised from the principle that the real owner's right to take legal action to remove someone trespassing on their land does not last indefinitely, but runs out after 12 years. After that, the law will protect not the real owner but the person in possession of the land - that is, the person who is in control of it. (2) In England and Wales, the limitation period for the adverse possession of land is 12 years in virtue of Section 15(1) of the Limitation Act. But it is to be remembered that. ------------------------------------------------------------------------------------------------------------ 1. 1. Barsby, A.W & C Adverse possession Legal research and publishing 2007 2. Limitation Act 1980 Sec. 15(1) 5 the old rule, i.e. establishment of adverse possession of unregistered land after 12 years with no compensation payable, still applies today. Under the LRA 1925, the rights of a person in adverse possession are an overriding interest, if the squatter is in 'actual occupation' of the land. As said above, section 15(1) of Limitation Act 1980, provides that no action shall be brought to recover any land after the expiration of the limitation period of twelve years. In Buckinghamshire County Council v Moran (3) it was pointed out that "Limitation extinguishes the right of the true owner to recover the land, so that the squatters possession becomes impregnable, giving him a title superior to all others." And also it was held in JA Pye (Oxford) Ltd v Graham (4) that time runs from the commencement of adverse possession. That requires a degree of occupation or physical control, coupled with an intention to possess without the consent of the paper owner. Now we shall look into the given case. Here Tom Parker let out some portion of the property to Ken for 2 years 15 years ago. Ken never paid any attention to return the property to Tom and instead of that he turned it to his purposes. Unfortunately Tom did not make any effort to contact Ken and even he did not try to collect the details of the present position of the property he let out .Since Ken fenced and occupied the property even though without the permission of the true owner, he gets the benefit of the Adverse Possession under law as Tom was unavailable for 15 years of long period and naturally the property will be in the ownership and possession of Ken, subsequently in the possession of his daughter. The subsequent turn of the case happened when the County Council took over the abandoned land and started using as the store of the vehicles. The general principle is that even where an owner, if an individual, has died without leaving a will or ---------------------------------------------------------------------------------------------------------- 3. Buckinghamshire County Council v Moran 1990 Ch 623, 635, CA 4. JA Pye (Oxford) Ltd Vs. Graham 2002 UKHL 30, 2003 1 AC 419. 6 near relatives, or, if a company has been dissolved, there will be an owner - usually the Treasury Solicitor on behalf of the Crown - because land remains unregistered, either the owner cannot be traced or the land has been abandoned. If a person is said to be an owner of the property, there should be a factual possession.In the case Powell v McFarlane( 5) the aspect of factual possession defined as an appropriate degree of physical control and there must be a single and exclusive possession, though there can be a single possession exercised by or on behalf of several persons jointly. So here, since the factual possession of the property does not exists, as a governmental body, the County Council entitled to take over the ownership of this unoccupied property. But the question arises about the possession of the chattels which may recover from such abandoned property. A possession constitutes with the requirements of an actual power over the thing and a manifested intention to control the particular item. As per the general Rules on Acquiring Possession by Finding Articles an owner of property does not lose title by losing the property. Owner's rights persist even though the article has been lost or mislaid. But we can not ignore the finder's right on the recovered chattels. The law never backs the interest of the finder in those chattels which has been recovered by the finder himself. The rule in Armory v. Delamirie (6) regarding finder's rights still applies in present cases. In this case Plaintiff is a chimney sweeper, found a jewel and took it to Defendant's shop where the apprentice took the stones out and wouldn't give them back and the Court ruled in favor of the plaintiff. But there is an exception to this right of the finder. A finder has rights superior ------------------------------------------------------------------------------------------------------------ 5. Powell v McFarlane 1977 38 P&CR 452 at 470: 6. Armory Vs Delamirie 1 Strange 505 Kings Bench 1772 7 to everyone but the true owner. This aspect has been illustrated in the famous case South Staffordshire Water v. Sharman.(7) In this case P. operates a pool. D. is an employee of P. and in charge of cleaning out the pool. D. found 2 gold rings at bottom of pool. Court ruled that, where an owner of house or land invites an employee on the land for limited, specific purpose, the possession of that thing found is in the owner of the property. The rule of this case law can be adopted in the given case also. Tom may be the true owner of the property from where the diamond ring was found .Since this property is abandoned and now it is unoccupied, the County council enjoys the possession of the property at present. Hence as per the above said rule County council is entitled to own the diamond ring. 3. In the given case, there is a covenant among the 20 buyers and Cornerstone regarding the right of way, cost of maintaining the road, refrains from rash driving, and lastly maintenance of the garage and car port. Since the covenant contains certain conditions /restrictions, the said covenant is in nature of restrictive covenant. Before entering to the doorstep of the solution of the given case, we shall have to explore the meaning and scope of restrictive covenant and also we shall check its applicability in the given case to arrive a conclusion. Restrictive Covenant (1) As said above, restrictive covenants are such contracts which restrict the use or enjoyment of the property transferred. Such restriction may either be affirmative and ---------------------------------------------------------------------------------------------------------- 7. South Staffordshire Water v. Sharman. 1. Janet Wickell, Restrictive covenants www.homebuying.about.com 8 negative. Where the transferee required being doing something on the land, then it is affirmative. Where it restrains the transferee not to do certain things then it is negative. In other words restrictive covenants are deed restrictions that apply to a group of homes or lots in a specific development or 'subdivision.' They are normally drafted and put in place by the original developer, and are different for every area of homes. Now the question arises whether the restrictive covenants are binding on the subsequent purchaser. The common law recognized that under certain circumstances a promise could be made to "run with the land," so that the owner of the estate burdened by the promise would have a duty to perform it. (2) It is to be noted that restrictive covenants are more than personal agreements. They are in the nature of covenants annexed to lands as if they are the part of the land and together with the land they pass on to every subsequent transferee. Thus the restrictive covenants bind not only on the subsequent transferee but also the other subsequent transferees in series. Hence it is said that restrictive covenants are annexed to the land and they run with the land. This aspect is laid down in Tulk Vs Moxhay(3) where it was held that a restrictive covenant imposed for the benefit of the land retained by the transferor was binding on purchaser. The scope and requirements of a restrictive covenant has given in the case Whit gift Homes Ltd &Ors Vs Pauline stocks Ors (4) elaborately. In this case the scope of restrictive covenant explained as the burden of a restrictive covenant will "run with the land" - that is to say, a successor in title of the original covenanter will be bound by the covenant - if the covenant was taken for the protection of other land retained by the ------------------------------------------------------------------------------------------------------------ 2. Reports on Restrictive covenants H.W Wilkinson 3. Tulk Vs Moxhay 4. Whit gift Homes Ltd &Ors Vs Pauline stocks Ors [2001] EWCA Civ 1732 9 covenantee and if the successor in title of the covenanter had notice of it when he purchased. In this case some other conditions regarding the restrictive covenants are also given: "(1) for a subsequent purchaser of the land subject to the covenant to be bound by the covenant there are three requirements: (a) the covenant must be negative in nature; (b) the covenant must be either (i) for the protection of land retained by the covenantee or (ii) part of a scheme; and (c) the subsequent purchaser must have notice of the covenant. (2) For a subsequent purchaser of other land to be able to enforce the covenant there are also three requirements: (a) The covenant must, to use the old expression, touch and concern his land; (b) the benefit of the covenants must have passed to him by (i) annexation (ii) assignment or (iii) pursuant to a scheme; and (c) there must be no good ground for depriving him of the right to enforce the covenant." Now we can test out the applicability of this aspect regarding the covenant in the given case. Since the covenant among the buyers and Cornerstone contains the conditions of affirmative and negative nature in order to protect the interest of the residents, the covenant is in restrictive nature. Moreover the provisions and the decisions in various case laws shows that the restrictions laid down in the covenants are to be bound by the subsequent buyers also. As per this aspect, Henry Torrington is liable to pay the maintenance charge to Cornerstone. Henry can raise a claim that he does not use the road at all. But he 10 possessed the house with this road from Mr. Quinn and now he enjoys the exclusive possession of the road even though there is no use of it. Regarding the damage of the roof of the garage ,he can not make any demand before Cornerstone as per the rule .The rule of the property law is "the buyer may be allowed the access to the property to effect repairs or decorations; the contract must contain a provision, or the buyer must subsequently agree, that if for any reason the contract is not completed, whether due to the default of the seller or not, the buyer shall not have any claim against the seller in respect of work done, and the buyer shall make good at his own expense any damage to the property. Otherwise he should have to notice the damage before the sale and could have intimated to Mr. Quinn. Now we shall look into the Peter Chapmen's case. Here also he is bound to obey the restrictions laid down in the covenant.So he has to pay the maintenance charge of the road as he is a frequent user if the road. Moreover as per the one of the stipulations in the covenant i.e. not to drive any motor vehicle on the road at a speed in excess of 10 m.p.h, he is not given any right to drive his car rashly along the road. It is against the stipulation and hence Peter is violating the rule. But now the status of the company is liquidated. Naturally the question arises the authority to whom the queries of the residents of the building put forward. Normally the Court will appoint receiver in such condition since the cornerstone is a public company.So the residents can approach the receiver for all their queries.(5) ------------------------------------------------------------------------------------------------------------ 5. Land Registration Act 2002, Land Registry Pracice Guide 36 guide gives advice on the land registration aspects of transactions by administrators and administrative receivers appointed under the provisions of the Insolvency Act 1986 and receivers appointed under the provisions of the Law of Property Act 1925 11 4. Beneficial Joint Tenants are the persons who owned the whole property and the proceeds of its sale belong to both owners as one. They do not have separate shares each - they both own the whole thing. Neither of them have a separate share which they can sell or leave in a will. If one person dies than the survivor becomes the owner of the whole property. Capital A resident's resources are either capital or income. It may not always be obvious whether a payment should be treated as capital or income, but generally, a payment of capital is one which is: a) not in respect of a specified period; and b) not intended to form part of a series of payments. Where a resident has joint beneficial ownership of capital, unless it is an interest in land, divide the total value equally between the joint owners, and treat the resident as owning an equal share. This method of treatment avoids administrative difficulties. Valuation of Capital of beneficial joint tenants Where a property is jointly owned by the resident and another person whose joint ownership does not enable the property to be disregarded as above, the local authority will take the resident's share into account. However, in doing so it is the value of that interest which is taken into account bearing in mind: a) the resident's ability to re-assign the beneficial interest to somebody else. b) there being a market i.e. the interest being such as to attract a willing buyer for the interest. 12 It may well be construed that because a joint owner has a right to occupy the property it is unlikely that there would be a willing buyer prepared to share in that right to occupy it. The only person who may be interested in purchasing the share would therefore be the joint owner and effectively the 'market value' could be nil.(1) The rules for Income Support purposes are very similar in this respect. Following a Commissioner's decision in Tucker's case (2) it was held that the valuation of jointly owned property should be based on the actual market value of the claimant's share and this value may depend on whether there would be a willing buyer of the claimant's interest in the property. Generally t he following heads are being used in computing the valuation of the capital of the beneficial joint tenant. The value of a capital asset other than National Savings Certificates is the current market or surrender value, whichever is higher, less: a) 10% of that value if there would be any expenses involved in selling the asset; and b) any outstanding debts secured on the asset, e.g. a mortgage.(3) A capital asset may have a current market value (e.g. stocks or shares) or a surrender value. The current market value will be the price a willing buyer would pay to a willing seller. ------------------------------------------------------------------------------------------------------------ 1. NHFA Info sheet Treatment of property www.nhfa.co.uk 2. Tucker's case CIS 15936/1996 3. Sec.6 Valuation of Amendment Bill 2000 13 Expense of the sale For the purposes of valuation only the expenses of sale (10%) should be allowed only where there will be actual expenses. The expenses must be connected with the actual sale, and not simply the realization of an asset, e.g. the cost of fares to withdraw money from a bank are not expenses of sale. The deduction is always 10%, even if the actual expenses are more or less than 10%. Debt secured on asset "Secured on" means a legal charge or mortgage must have been made on the capital asset. Now we shall check the given problem. Here Mr and Mrs Bentley is going to sell 15% of their garden and willing is ready to pay 80,000 plus all the Bentleys' legal costs. Then the computation will be in the following manner. The value of the land to be taken into account is the market value of that piece of land, (Here we can take the willing buyer's Pay) less 15% of the, whole of the mortgage secured on the home and the extra land. (sale is regarding 15% of the garden and free from encumbrances) add 10% of that value for expenses of sale (Since the buyer agreed to pay the legal cost) So the capital will be, 80,000 - 7500 (15% of the Mortgage money 50,000) + 8000 (10% of 80,000) = 80500 Since Mr.Bently signed and gave the agreement of second charge of the property to the bank for the Over Draft amount 10000 and bank has decided not to recover the same from Mr and mrs. Bently there is no question arises in this regard. ***************************************** References Books and Authors 1. Barsby, A.W & C Adverse possession Legal research and publishing 2007 2. Cooke, John Law of Torts 8th edn. 2007 3. Grey, Kevin and Grey Susan Elements of land law 1993, 2001 Butter works 4. J.W.B Adverse Possession Limitation of actions publ.by California Law Review Vol.17 No.4 May 1929 pp 390 -395 5. Hughes,William Jr. ,Turnbull, Geoffrey .K Uncertain Neighborhood Effects and Restrictive contracts Vol.39,March 1996, pp 160-172 publ. Elsevier 6.. Lunney , Mark and Oliphant, Ken Tort Law ,Text and Materials 2nd edn. Publ.by Oxford University press 2003 7. Newsom, G.H vol.4 No.1 1941 p 223 University of Toronto Press 8. Riesman, David Jr. Possession and Law of Finders Harward Law Review Vol. 52 No.7 May 1939 pp 1105 -1134 9. Stewart, Marcia Leases and Rental Agreements 3rd edn. 2002 Publ.by Nolo.com 10. Turner, Chris Key cases Tort law Chapter 4 2006 11. Wilkinson, H.W Law Commission Transfer of land Report on Restrictive Covenants the Modern law review Vol.30 No.6 1967 pp 681 -686 publ. by Black shell Statutes 12. Housing Act 1985 13. Landlord and Tenants Act 1988 14. Land Registry Public Guide 16 15 Land registry public guides 36 16. Land Registration Act 2002 17. Land Reform Act 1925 18. Limitation Act 1980 19. Rent Act 1977 Part 7 Security of tenure Journals and publications 20. Housing Benefit Guidance Manual Amendment 12 June 2007 21. Restrictive Covenants under common and completion law 4th edn. Publ. By Sweet and Maxwell 2004 22. Walton, Raymond Administration and Receivership Land registry Practice guide 36 23. .Valuation of Amendment Bill 2000 Websites 24. www.clickdocks.com Assured short hold tenancy agreements 25. www.homebuying.about.com Restrictive contracts 26. www.nhfa.co.uk NHFA Info sheet 2 Treatment of property 27. www.letlink.co.uk Tenancy agreement Residential letting 28. www.questbrook.co.uk Definition of beneficial joint tenants Legal Docs Direct 29. www.tosublet.com Landlord and Tenancy issues Landlord liabilities for tenant injuries 30. www.wragge.com Property Update 2007 Table of case 1. Armory Vs Delamirie 1 Strange 505 Kings Bench 1772 2. British Celanese v Hunt (Capacitors) Ltd [1969] 2 All ER 1253 3. Buckinghamshire County Council v Moran 1990 Ch 623, 635, CA 4. Cambridge Water Co v Eastern Counties Leather [1994] 1 All ER 53 at 70. 5. Christie v Davey 1893 1 ch D 316 6 Hunter v Canary Wharf [1997] 2 All ER 426. 7. JA Pye (Oxford) Ltd v Graham 2002 UKHL 30 2003 1 AC 419. 8. Powell v McFarlane 1977 38 P&CR 452 at 470: 9. South Staffordshire Water v. Sharman 10. Tulk Vs Moxhay 11. Tucker's case CIS 15936/1996 12. Whit gift Homes Ltd &Ors Vs Pauline stocks Ors [2001] EWCA Civ 1732 Read More