Special Features and Problems of Land Law - Essay Example

When Brian bought the property ‘Cherry Tree Farm’ from his old friend Simon, who was the sole registered proprietor, he had done so in utmost faith and belief. As such, Brian committed three types of blunder; He did not consult any solicitor for his conveyance and secondly Despite being an old friend, he overlooked the fact that at the time of purchase, his friend’s wife and daughter were occupying part of the property and Other third parties’ interests might be affected as either through the equity binding them in the form of constructive trust or they might have equitable proprietary rights. Therefore, as solicitor, I would be present the picture of the third parties as below and subsequently give my advice as below. Answer A(i) The said property, despite the fact that Simon was sole registered owner, has other people who might be considered as strong equity owners of the property. When the property sale deal was being completed, Wanda, Simon’s wife was in hospital. Simon’s wife has strong legal and equitable interest in the property. This factor becomes significant when considering the question of unconscionability and applying the law of estoppel which primarily operates in the form of constructive trust. Therefore, it is important to now that She has been co-occupant of the house when the deal had taken place and hence has equitable rights to the property. Wanda had made the deposit for the house from her personal savings and therefore, despite not having any legal title to the land, she has legal interest which can be contested in the court. She, as a wife, is entitled to a case of proprietary estoppel, under constructive trust, which makes her a strong contender. Under (Law of Property Act 1925 s 199(1)(ii)(a)), the occupant(s) of the property have major interests ‘since it is implicit in Williams & Glyn’s Bank v Boland [1981] AC 487, Midland Bank v Dobson [1986] 1 FLR 171 and Lloyds Bank v Rosset [1991] 1 AC 107 that the beneficial interest (of the third parties) under this trust precedes the court order’ (Milney, 1997). It is an important consideration that belief involved in proprietary estoppel cases can be in any rights in and over the property. I would, therefore advice him to discuss the matter with Wanda and would try to resolve the issue through mutual agreement. Answer A(ii) Tom, another third party, through a properly executed deed, was given exclusive possession over a cottage in the property for a period of six years. In simpler words, the said cottage was given on lease to Tom by the sole registered owner, Simon. The deed is a legal contact between the two parties with specified terms and conditions. The contractual obligations are legally binding on the two parties. When the property is transferred or sold to another person, the liabilities and other encumbrances, unless discounted, are also carried forward, without affecting the rights of the people, especially those who are leased part of the property through proper legal deals. According to LRA 2002(c.9) Section 12(8), ‘registration with possessory title has the same effect as registration with absolute title, except that it does not affect the enforcement of any estate, right or interest adverse to, or in derogation of, the proprietor’s title subsisting at the time of registration or then capable of arising’ (www.opsi.gov.uk). Answer A(iii) Simon had also given right of way over his driveway to his neighbour Nora, for ‘as long as you live’. This law of easement primarily provides a right to use a piece of land by the neighbours for performing specific functions. The most popular easement is ‘right to way’. The other types of easement that facilitate other essential services are passage for drainage, water, gas, electricity etc. The easement can be created either by express grants in the form of deeds or verbal assurance. It may also be created as a result ‘of necessity’ or ‘by prescription’ when the land is used by one and all, openly for more than twenty years. According to Law of Property act 1925, 62(1a), ‘A conveyance of land shall be deemed to include and shall ... operate to convey, with the land, all ... liberties, privileges, easements, rights, and advantages whatsoever, appertaining or reputed to appertain to the land, or any part thereof, or, at the time of the conveyance ... enjoyed with or reputed or known as ... appurtenant to the land or any part thereof’ (www.estoppel.co.uk). According to this right, the easement cannot be created as an illegal act and therefore ‘it runs with the land’. In other words, when the land is transferred, the easement is also passed on with the land by default. Hence, the neighbour, Nora, will have a life long usage of the driveway to her place as per the convenience of the easement that was granted to her as a verbal assurance. Nora has a strong case under proprietary estoppel and Brian would be well advised to maintain a status quo with his future neighbour, Nora. Answer A(iv) The interests of Jerry, to whom Simon had given a cottage on a ten years lease on 1st November, 2003, is case that Brian would have to consider and again maintain a status quo. The lease, as in the case of Tom, is a legal obligation that is passed on to the new owners when transfer of property takes place. While Tom’s exclusive rights over the cottage were only for six years, Jerry’s right extend for 10 years which gives him the added advantage of the latest reforms in the property laws that favour lessee (leaseholders). The status of Jerry is different to that of Tom in the sense that his 10 years lease made in 2003, would fall under the new Land registration rules 2003, which provides a new scheme for adverse possession of a registered land. According to s96 of LRR 2003, if the squatter (in this case lessee) occupies the land for ten years he becomes entitled to claim for owner’s title (www.propertylawuk.com). Once the notice is put for the claim for ownership and the rightful owner does not take physical possession of the said land within 2 years, the second application by the squatter or lessee in this case, will become entitled to claim the land as proprietor despite objections from the rightful owners. According to Schedule 12 (7), ‘for three years after 13 October 2003 the squatters unregistered interest will be an overriding interest whether or not he or she is in actual occupation and so will be binding on purchasers’ (LRR, 2003). Brian would have tough time to evict Jerry from the land since he already possesses a 10 years’ lease over a cottage in the farm. Answer A(v) Jerry’s 10 years’ lease over the cottage in the farm had another very interesting condition that favoured Jerry. After 10 years and within the next two years, if Jerry wished, he was entitled to buy the cottage for £100,000. The two years moratorium given to Jerry within which time, he is given the option to purchase the cottage, is a clear cut accent that establishes his right to remain in the property. This is the most ridiculous condition that was ever made in the lease. This conditional option to buy the cottage in the next two years, after the expiry of lease, gave Jerry ample of opportunity to make claim over the cottage as a proprietor because the new Land Registry Rules, clearly state that if the squatter occupies a registered property for 12 years and more, he becomes entitled to claim the said property as his own. The law even states that the rightful owner or proprietor must keep the said property as a trust for the squatter. The Land Registry Act 2002 does not affect the position of those who are already in the possession of either lessee, exclusive ownership for a limited period or even the unregistered interests like family members, who may be in occupation of part of the property. Hence, Jerry has full prospect of becoming a rightful owner after 12 years, that too, without much legal hassle and without making any extra payments. Answer A(vi) Simon’s 22 years old daughter, Dana occupies attic in the main farmhouse. At the time of the transfer of the property, she was a legitimate resident of the farmhouse and who can claim to have unregistered equitable interest in the said property. Though as an adult, she may not enjoy much legal right to the property but as an unmarried daughter, she does have a claim over the space in the farmhouse that she currently occupies. The daughter has equitable interest in the property and has a fitting case for proprietary estoppel. Indeed, Brian is in trouble from this particular case also and liable to be sued for actions that may threaten the status quo of Dana. Advice One can therefore, state that Brian had been taken for a ride by his old friend Simon who had not disclosed full details of his encumbrances, the equitable interests who might qualify as legitimate equities under ‘constructive trust’ and the various legal instruments that he had made with third parties, who were residing in and near his property ‘Cherry Tree Farm’. These are fit cases to move for Restriction under Schedule 91, 92, 93 or even file a case under proprietary estoppel which helps the interests of the third party who may not have legal rights but may enjoy equitable interests whose interests were not protected by the law. In fact, Simon seems to have deliberately concealed the real state of affairs, prior to the sale and therefore, is guilty of fraud and fraudulent intentions, which is punishable by fine, imprisonment for a term, not exceeding more than two years or both (Schedule 183(1), LRA 2002). I would, therefore, advice Brian to strictly avoid any legal agreement with the party (Simon) and cancel any agreement of purchase for the said property that he had made with him. Answer B My advice to Simon would have remained the same even if the farm was given to Brian as a gift. Had Simon not concealed the facts and the various legal contracts like leasing of part of property, giving exclusive right to cottages for limited term etc. Brian still, stood the chance to bargain and come to some understanding with Simon. But if the farm was gifted to Brian, he would not have gained the various liabilities and taxes but it would have become an impossible task to evict Wanda and Dana, (wife and daughter of Simon) from the farm because they both had strong equitable interests in the property. Reference LRA (Land Registration Act) 2002. Revised Statutes. Available from: [Accessed 26 August, 2008]. LRR (Land Registration Rule) 2003. Available from: [Accessed 26 August, 2008]. Milne, Patrick. (1997). ‘Proprietary estoppel, purchasers and mortgagees: an alternative approach’. Web JCLI Milne. Available from: [Accessed 26 August, 2008]. Property Law. Available from: [Accessed 26 August, 2008]. Proprietary Estoppel. Available from: [Accessed 26 August, 2008]. Read More