The Situation of Horace and Wynona - Essay Example

 The Situation of Horace and Wynona Horace and Wynona married in 1980 and purchased Manor House for their matrimonial home. Horace provided the deposit for the house and the rest of the purchase was through a loan that was secured by a first mortgage. The house was registered in Horace's name only but they both contributed to the monthly loan repayment. The mortgage was redeemed in 2005. In 2003 Horace granted a 10-year lease of the garage to their neighbor, Nicola. In 2005 the attic was transformed into a self-contained flat for their son, Simon. They all agreed that Simon would live there until January 2010. Simon paid £500.00 per month for the flat. Last week Wynona came home from a month's holiday in Capri to find that Horace has disappeared. She has learnt that while she was away he sold Manor House to Pavel. Pavel has just moved in. Pavel has done his own conveyancing and is surprised to find that Wynona and Simon are both living in Manor House and that Nicola continues to park her car in the garage. In the above situation in order to ascertain whether any interest is binding on Pavel or not, it is necessary to consider the terms and conditions of the transfer deed. Unless the transferor of the property expresses a different intention, or it has been implied a transfer of property immediately passes to the transferee all the interest, which the transferor is capable of passing in the property. In the property is land, the easements annexed thereto, the rents and profits accruing after the transfer and things attached to the earth. In situations any machinery that is attached to the earth is transferred, then all moveable parts thereof. And in cases where the transferred property is a house, then the easements annexed thereto, the rent accruing after the transfer and all other things provided for permanent use. Hence if it is not expressly implied when a transfer of property takes place all rights and liabilities of the transferor are thereby passed on to the transferee. If it is assumed that the title deed was silent with respect to the lease of Nicola and to the agreement between Horace and his son Simon, then all rights and liabilities accruing from the property shall automatically get transferred to Pavel. Under such circumstances Horace shall no longer be able to claim any money from either his son or the neighbour, since that money shall now be due to Pavel. All interests accruing from the property shall be vested with Pavel. In the above situation it is also the responsibility of the seller or the property to make the buyer aware of Any material defect in the property or in the seller’s title thereto of which the seller is, and the buyer is not, aware, and which the buyer may not be able to discover; to produce all documents of title relating to the property which are in the seller's possession or power; to answer all relevant questions put to him by the buyer in respect to the property or the title thereto; to execute a proper conveyance of the property ; to take as much care of the property and all documents of title relating thereto which are in his possession; pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all encumbrances on such property due on such date, and, except where the property is sold subject to encumbrances, to discharge all encumbrances on the property then existing. If the seller’s fails to disclose any material defect or any defect in the title it would amount to a fraudulent transfer. Horace did not disclose to Pavel that there was an agreement between him and his son, or that he had leased parking rights to his neighbour. Under such circumstances Pavel may either choose to treat the transfer or property as void, or may claim damages from Horace for non-disclosure of material facts and fraudulent transfer. But at same time assuming that the title deed was silent on both accounts and Pavel has now gained from the incoming accruing from both the lease with the neighbour and agreement with the son, he shall be bound to uphold the agreement as well as the lease. Since the title deed had been registered in Horace’s name he was the sole owner of the property and thereby was entitled to dispose of it at his will. Even though Wynona his wife had made contributions towards the payment of the mortgage, it does not entitle her to claim ownership of the property. In the case of Oxley v Hiscock in this case the property had been purchased in the name of one person but both partners had made financial contributions towards it purchase. The court declined the ownership rights of Oxley and held that since the property was in the name of Hiscock she would not be entitled to an equal share (2004 EWCA Civ 546). In the case at hand Horace has sold the property to Pavel and has disappeared, Wynona who is Horace’s legal wife although may not be able to get an equal share from the income generated from the sale of the property. But her right’s, as a wife shall be upheld should she choose to take Horace to court. Wynona is entitled to claim half of the income generated from the sale of the property. And hence she is entitled to commence divorce proceeding against her husband and not only claim her share in the property but may also claim her right to maintenance from her husband. As far as the rights of Simon are concerned he had entered into an agreement with his parents to live in a certain portion of the house till the year 2010. The rent that he paid to his parents would be regarded as the consideration towards the agreement. Since Horace had sold the property to Pavel, the result of which was a breach of contract between Horace and Simon. Simon is entitled to sue Horace for damages arising out of breach of contract. Similarly in the case of Nicola the neighbour who had leased parking rights from Horace would also be entitled to sue him for breach of contract and claim damages arising out such breach. Further Simon and Nicola may also claim that Pavel had failed to exercise due care and had not inquired about any facts relating to the title deed and since he had been negligent. He would be legally bound to uphold the entitlements of both Simon and Nicola, as all the rights and liabilities accruing from the property had now been transferred to Pavel. As the purchaser of the property there are certain rights and obligations that accrue from such act. A buyer of a property is bound: to disclose to the seller any fact as to the nature or extent of the seller's interest in the property of which the buyer is aware, but of which he has reason to believe that the seller is not aware, and which materially increases the value of such interest; to pay or tender, at the time and place of completing the sale, the purchase-money to the seller or such person as he directs; where the ownership of the property has passed to the buyer, to bear any loss arising from the destruction, injury or decrease in value of the property not caused by the seller; where the ownership of the property has passed to the buyer, as between himself and the seller, to pay all public charges and rent which may become payable in respect of the property, the principal moneys due on any encumbrances subject to which the property is sold, and the interest thereon afterwards accruing due. And after fulfilling his obligations the buyer is entitled to any benefit or increase of value of property and the rents and profits thereof. Since Pavel is entitled to enjoy the benefits and rents accruing from the property he shall also be bound to uphold his obligations, i.e. the right and entitlements of Simon and Nicola. In the event that the title deed had not been registered the situation would be rather different. According to section 4 of the Land Registration Act 2002, registration of an estate in land is compulsory when one of the following events occurs: the freehold is transferred i.e. by sale or by gift; a legal lease for more than seven years is granted; a legal lease with more than seven years to run is transferred grant of a first legal charge (a mortgage) Since there has been no registration, the title would become defective, and hence throw up numerous encumbrances in the sale of the property. Firstly it would be difficult to ascertain who is the actual owner of the property, whether it belonged to Horace or his wife Wynona. Since the property was purchased as a matrimonial home and both Horace and Wynona had contributed towards its purchase, both of them had an equal interest in it. Secondly since no registration of the title deed had taken place, and thereby there was no single owner of the property. Since Horace had not registered the property he did not have the right to sell it. Further the parking lease of Nicola is for 10 years and according to section for where a lease for more than seven years is granted, it is compulsory for the title to be registered. Since Horace had failed to do so the title had in fact become defective. Also as the title has not been registered Simon would not be obligated to pay any rent to either his parents or to Pavel, Simon would also be able to claim that he has ownership interest in the property as he is Horace and Wynona’s heir. Wynona is also entitled to take Horace to the court of law over questions regarding his ownership rights, as the title is unregistered and there is no single owner of the property, and since she has also made payments towards to the purchase of the property she is the real owner of the property and hence entitled to an equal share in the income generated from the sale. Under such circumstances where the property, which has been transferred, is in dispute any transfers so made are not considered legal. Horace has also neglected to inform Pavel of any material defect in the contract, and by not doing so has failed to uphold his duties and obligations as a seller. Under such circumstances Pavel may hold the sale to be void. It has also been established that the sale of the property by Horace to Pavel is a fraudulent one, therefore Pavel may either hold the sale as void or may sue Horace for damages. On his part Pavel failed to exercise due care and did not inquire about the title. His actions were negligent and he failed to ascertain whether the title deed was registered or not. Under such circumstances all rights, interests and obligations accruing from the property have been automatically transferred to Pavel. He is now under an obligation to uphold the interests of Simon and Nicola. Also since the title is unregistered, neither Simon nor Nicola need pay any rent to Pavel. Only after Pavel gets the property registered in his name may he either choose to terminate the lease and agreement of Simon and Nicola respectively. In such an eventuality both Simon and Nicola may sue Horace for breach of contract. The above situation is a primary example for the need to register the title deed. Registration of the title deed not only removes any defects from it, but also clearly upholds the rights of the owner of the property. If the property is registered there is no question about ownership, rights or interests. Registration not only protects the interests of the seller but also of the buyer as well. References Roger J. Smith Property Law 5th Edition Aug 2005 Jesse Dukeminier, Gilbert Law Summaries: Property, Harcourt Legal & Professional Pubns; 16th edition (January 2002) William B. Stoebuck, The Law of Property , West Publishing Company; 3rd edition (January 2000) http://www.propertylawuk.net/ (last accessed May 23, 2006). http://www.opsi.gov.uk/acts/acts2002/20009--c.htm (last accessed May 23, 2006). http://www.manches.com/text/practices/family/article.php?id=44 (last accessed May 23, 2006). http://www.swarb.co.uk/index.shtml (last accessed May 23, 2006). Read More