Land Law: The Legal Advice - Essay Example

Q Alice has just become the registered proprietor of Greengables, a large house with a cottage in the grounds, and an extensive garden. She acquired the title from Zoe. She has recently been approached by various parties claiming rights over Greengables and seeks your advice. 1) Barrie, a neighbouring freeholder, has a deed granted by Zoe, dated 12th January 2008 which gives Barrie the right to store theatrical props and costumes in the cellar of Greengables. 2) Caroline, another neighbouring freeholder, has a written licence agreement entered into with Zoe, dated 4th August 2006, giving Caroline the right to play croquet in the grounds of Greengables 4 times a year in consideration of the payment of £25 per annum. 3) David is living in the cottage in the grounds, and has shown Alice a document which is a grant of a 10 year lease over the cottage, granted by Zoe, to commence on 1st January 2005. 4) Edwina has announced that she incorporated part of the grounds of Greengables into her garden in 2003, and put up a fence and padlock at that time. She has just told Alice that she intends to hang on to the land. Alice knew nothing of any of these matters. She wants the cellar for her own use, she plans to turn the croquet lawn into a wildflower meadow with water features, she wants to install her elderly mother in the cottage and she wants her land back from Edwina. Advise Alice To be able to advise Alice it will be necessary to discuss the principles of overriding interests and how such interests might be able to give the person rights over the land belonging to Alice. It will also be necessary to discuss the validity of licences and leases as well as the rights of persons in actual occupation. This will involve analysing case law and statute in relation to those interests that have to be registered in order to be valid, and those that can exist as an overriding interest even when they have not been entered on the register. There will also need to be a discussion in relation to the fenced in land to determine whether Alice would be able to reclaim this land. This will involve consideration of the law in relation to easements as well as the possession of land by prescription. Overriding interests An overriding interest is an interest that does not need to be on the register in order to bind the interests of a new owner. Generally speaking, interests can only be protected if they are entered on the register, however, there are some occasions where such interests cannot be entered but can still be binding on a subsequent owner. The courts have adopted the principle of overriding interests to assist those persons who could not reasonably expect to have their interests protected by registration. This includes things such as short term leases, legal easements1, as well as squatter’s rights and the rights of persons in actual occupation2. Overriding interests are covered under s70 of the Land Registration Act 1925, which has now been replaced by the Land Registration Act 2002. Overriding interests are now dealt with under sch 1 and 2 of the 2002 Act. One of the first case to adopt the principle of overriding interests was Williams & Glyn Bank v Boland, in which the wife of the respondent claimed an overriding interest in the property based on the fact that she had made a substantial contribution to the purchase and was in actual occupation. This case demonstrates how actual occupation might be regarded as an overriding interest3. In general, the courts are unlikely to interfere with the right of a person in actual occupation to remain in the property if they can show that they have an interest in that property. Any person who can prove such an interest might be able to rely on proprietary estoppel to prevent the sale of the property4. In Willmott v Barber (1880) 16 Ch D and Ramsden v Dyson (1866) LR 1 HL 129, five essential elements were identified, that must be satisfied before a legal owner would be prevented from asserting his legal rights. These elements included proof that the plaintiff had expended some money or had acted in some way, believing that they would gain an interest in the land5; they must have made some mistake as to their legal rights; the defendant must know of the existence of his own right which is inconsistent with the plaintiffs rights; the defendant must be aware of the plaintiffs mistaken belief of his rights; and lastly the defendant must have encouraged the plaintiff to spend money in the way they have or have encouraged them to act in the way they did6. Leases In determining the validity of the claims above, it is necessary to consider the law in relation to leases and tenancies. Any lease that is for less than 3 years does not have to be registered against a property and will therefore not trigger a requirement for the registration of title7. An informally created lease cannot be for more than 3 years8, and the rent paid must be the market rent for a similar size property. The tenant must also take immediate possession for the agreement to be regarded as binding9. Leases in excess of 7 years need to be entered on the register in order for them to be binding10. Where the lease is for a period between 3 and 7 years there is no requirement for registration, however, the rights of the lessor will not be protected unless an entry is made on the register11. When determining whether the person holds a licence or a lease for the land, the court will reach a conclusion based on whether that person enjoys exclusive possession or whether there are services and conditions attached which indicate that the possession is not exclusive. A person with a valid lease will be able to exercise full ownership rights over the property until the lease expires12. The distinction between lease and licence was made in Shell-Mex & B P Ltd v Manchester Garages Ltd [1971]13, in which the court determined that the tenancy would be regarded as a licence if the landlord retained control over the property, such that the tenant did not have exclusive possession. It is the duty of the landowner to ensure that registration of an interest is carried out, where the lease granted is going to be in excess of 7 years14. If this is not done then the transfer of the land by lease in invalid and a new owner would be entitled to possession of the land free of any incumbrances15. Under the Law of Property Act 1925 ownership and incumbrances are defined as estates and rights claimed over the land are classed as interests. Ownership is listed as the fee simple absolute in possession16. Incumbrances can be commercial or family, legal or equitable and non-registrable or registrable17. Incumbrances with commercial use are generally classed as legal rights. The courts will often deem that these rights are good against the whole world irrespective of notice to the third party that these are in existence or registration. The rights that fall into the category of good against the whole world are easements18 or profits a prendre19, rentcharges20 and legal charges21. In the above, the deed should have been entered on the register, and therefore would have been identifiable by Alice as giving a right over the cellar to Barrie. There is no mention of any form of payment being made by Barrie for the use of the cellar. This could allow Alice to contend Barrie’s right to continue using the cellar, as the law states that there has to be evidence of any rent paid being the market rent for that property. The court may decide that as no consideration is being paid for the use of the cellar, that the agreement is not binding, which would mean that Alice could reclaim the cellar for her own use. In relation to the licence agreement, licensees do not have the same protection as leaseholders. Licensees can have their licences revoked at short notice even if the licensee has not breach the terms of the licence22. Licences allow the licensee to occupy the property without exclusive possession. In Street v Mountford [1985]23 Lord Templeman observed that a lease has been created where the tenant has the right to ‘call the land his own’. Windeyer J made the comment in Radiach v Smith [1959]24 that ‘exclusive possession provides the touchstone of a lease’. In this case, this would mean that Alice would be entitled to terminate the lease of the land to Caroline, and prevent her from using the land in the future. With regard to David, although he has a lease for 10 years, it would be likely for the court to regard this as invalid, as the lease would have to have been entered on the register as it is for an excess of 7 years. This would mean that Alice would be able to reclaim the cottage. David might be able to exercise his right to remain, as he is in actual occupation. For this he would have to prove that he believed that he would have an interest in the property. If he can show this the court might allow him to remain in occupation. When considering the situation with Edwina it is necessary to look at the law in relation to easements25 and prescription26. An easement can be averred by implied grant. For this to happen the easement must fit into one of four categories. The easement has to be either necessity, an intended easement, an easement under the ruling in Wheeldon v Burrows27 or implied as a grant under s62 of the Law of Property Act 1925. In Wheeldon the court allowed the easement to remain on the basis that the easement was continuous and apparent, necessary for the reasonable enjoyment of the part transferred and at the time of the transfer used and enjoyed for the benefit of the part transferred. Depending on how long the land has been used by the person claiming a right over the land, that person, might be able to gain control of the land either by presumed grant or prescription. In order for such a claim to succeed, the person claiming the right has to have enjoyed that right for more than 20 years. An easement by prescription can be through statutory prescription28, in which the claimant has to show that they have exercised that right for 40 years without interruption. Such a claim would be indefeasible and absolute. If the true owner of the land has made no attempt to prevent the claimant form using the land, then the claimant might be awarded the land on the basis of lost modern grant29. For this to apply there would have to be no other party that could prove ownership of the land. In the case of Edwina, she has only used the land since 2003, and therefore, she would not be able to succeed in a claim under the rules for prescription. She might be able to claim an easement, however, she would have to prove that the previous owner had allowed her to use this land, and that in order to enjoy her own land, continued usage of this section of the land was necessary. Q.3 Susan, a sub tenant has just received a notice from Terry indicating that her sub lease is forfeit. She is very upset and seeks your advice. Terry was granted a 20 year lease in Ladbroke Mansions, in February 2003. The flat is in a purpose built block in a very smart residential area. The building is well maintained and there is never a shortage of possible tenants. The lease contains the following covenants : 1) not to sub-let, assign, or part with possession without the consent of the landlord; 2) not to use the flat for immoral or illegal purposes ; 3) to redecorate the interior of the flat at least once every six years. There is also a forfeiture clause giving the landlord the right to re-enter the premises in the event of a breach of any of the covenants. Terry had intended to live in the flat during the lease, but was given an opportunity to take up a job in Spain for 5 years. Consequently, he asked Susan if she would be willing to take a 5 year sub lease. Susan jumped at the chance, and Terry wrote to Lavinia, the landlord at the end of January 2009 asking for permission to sub let. Lavinia phoned almost immediately, to say that she was not at all keen on the idea of sub letting, since she had always had bad experiences with sub tenants. Terry assured her that Susan would be no trouble and asked her to reconsider. By mid March Terry had heard nothing more from Lavinia and, anxious to take up his new post, he decided to sub let anyway. Susan’s sub lease began on 1st April 2009. At the beginning of May, Lavinia called round to the flat to make sure that the redecoration had been carried out. She was infuriated to find Susan in residence and accused her of being a squatter. Susan produced her sub lease. No redecoration had been done and Susan said she had no plans to do any such work, and was unaware of any requirement to do so. Lavinia noticed material lying around indicating that Susan offered sexual services and giving the telephone number of the flat. Susan admitted that she did bring ‘clients’ home from time to time, but that she was very discreet. After getting a contact number for Terry, Lavinia stormed off in a vile temper. Susan phoned Terry to tell him what had happened. He blamed Susan and told her to leave immediately. Susan refused since her sub lease still had nearly 4 years to run. The next thing she knew was that Terry served a notice on her . Advise Susan In order to advise Susan, it is necessary to analyse the legal relationships of the parties involved in order to determine whether Terry is entitled to terminate the sublease, as well as analyse the relationship between Lavinia and Susan. The starting point is to examine the relationship between Terry and Lavinia. As they are the original parties to the contract, there would be privity of contract30 and privity of estate31 between them. The action of Terry assigning the sublease to Susan would only create privity of estate between Susan and Lavinia32.The differences that apply under privity of contract and privity of estate will affect the ability of Lavinia to enforce the repair covenant. Under a privity of contract all covenants bind33 whereas under privity of estate34 only the covenants which are regarded as typically part of the landlord and tenant relationship will be bound35. Privity of estate only affects the benefit and burden on the assignee and the landlord in respect of covenants that touch and concern the land36. Having established the relationship of the parties it is necessary to look as to whether the burden and benefit of the covenants can pass with the assignments. Looking first at the position of pre 1996 leases the general rule was that the original tenant could not pass the burden to the assignee. If the lease began prior to 1996 then the assignment of the tenancy would not absolve Terry from the liability37 in accordance with the contract38. This would mean that Terry would be bound by the covenants throughout the duration of the lease even though his interest has been assigned39. Covenants in leases are deemed to be made on behalf of the covenantor and his successors in title unless a contrary intention is expressed40. Leases issued prior to the Landlord and Tenant (Covenants) Act 1995 allowed liability of the original tenant to continue even though the original tenant has no control over the assignee41. Although the burden of the covenants did not pass to the assignee in pre 1996 contracts the landlord would normally seek redress against the assignee42 in the first instance. As there is no requirement in law for the landlord to seek redress from the assignee first the landlord could opt to seek redress from the original lessee instead of the assignee43. This was particularly useful where the assignee had become insolvent44. One way in which Terry could pass the burden to Susan would be by way of an indemnity from her45. This would mean that Susan would not be liable to the landlord for the covenants if she assigned the lease to someone else46 but would still be liable to Terry under the indemnity47. As the lease began after 1995 the Landlord and Tenant (Covenants) Act 1995 s5 releases Terry from the burden of the covenant and passes the burden to Susan48. Under s3 of the LT(C)A 1995 the benefit and burden of all covenants49 shall be annexed to each and every part of the demised premises and shall pass on assignment and the test of touching and concerning does not apply50. Covenants expressed in a personal way are not transferred to the assignee51. If the assignment is in breach of the covenant than both Terry and Susan would have joint and several liability52. Covenants against assignment can either be absolute53 or qualified54. An absolute covenant would prevent any assignment or subletting. A qualified covenant entitles the tenant to sublet or assign with the landlords consent55. Under the Landlord and Tenant Act 1927 s19 (1) the landlord cannot withhold consent unreasonably56. Should he decide to withhold consent he would have to show that consent is being withheld reasonably57. Reasonableness is not defined in the legislation but has been defined by case law. In this case, Lavinia did not give her consent to the assignment. It could be argued that the assignment of the sub-tenancy to Susan has waived the right of Terry to claim forfeiture for the breach of the covenant to repair the property, as only restrictive covenants can be enforced against a sub tenant58. As Terry has control over the property he should still have the burden of the covenants. If the only breach was the repair covenant and Susan did the repairs there would be no breach and Terry could not take forfeiture action59. The action by Terry of subletting without the consent of Lavinia is a breach of the covenant. This would allow Lavinia to take forfeiture action for the breach of the subletting covenant and to force Terry to surrender his share of the property as it had been sublet in breach of the covenant60. The effect of this would be to bring the term of the lease to a premature end. It has already been stated in the scenario above that a condition was inserted into the leasing agreement that any breach of the covenant would entitle the covenantor to take forfeiture action61. Under s146 of the Law of Property Act 1925 it is possible in some circumstances for the breach to be remedied. As the breach was due to the subletting the only way in which this could be rectified would be for Terry to terminate the agreement with Susan and resume possession of the property. From the above, the advice to Susan would be that Terry would be able to terminate the sublease as she has not carried out the repair work which is subject of the covenant. Alternatively, if Terry does not terminate the sublease, Lavinia would be entitled to terminate the lease between herself and Terry, as he has breached the covenant with regard to the repairs as well as the sublease. If Lavinia did this, then the sublease for Susan would also cease. Q.5 Jem owns a large piece of property, Atticus House, title to which is registered. About 10 years ago, he sold off part of his land, Finch House, to Keith. The only vehicular access to Finch House was by way of driveway which originally served both properties. Keith has used the driveway all the time since he moved in and would find life quite difficult if he had to walk from the main road to the cottage, which is set some distance back from the main road. Jem now wants to redevelop the front of the property and re-route the driveway to the other side of Atticus House. Keith has objected to these plans and is insisting that he has a right to use the driveway. Jem has applied for planning permission to construct a two storey extension to the side of his house in order to provide living accommodation for his sister, who is planning to move into Atticus House permanently. Jem’s neighbour Radley has objected to the planning application on the grounds that the extension will block the sunlight which his conservatory currently enjoys. The conservatory was built in 1989 and Radley grows exotic plants in there. Jem rents a small office where he attempts to write the great novel. His original lease was granted in 2003. In 2006 Scout, the landlord told Jem that he could use the backroom of the office to store his extensive collection of reference books. The lease was renewed in 2008, but no mention was made of storing the books. Scout has now said he wants the backroom for his own purposes and told Jem to move his books. Advise Jem as to whether he will be able to move the driveway, build his extension and continue to store his books in the backroom. The advice concerns the creation of easements and incumbrances on the property and land and whether these can be binding on successive owners of the land. In order to be able to advise Jem in respect of his right to continue storing his books and the continued use of the driveway by Keith in order to get to his property it is necessary to look at the legislation surrounding the recording of such easements and incumbrances. Easements62 are a form of incumbrance and carry with them legal rights. These legal rights are classed as good against the world. This is irrespective of any notice being given to a third party informing them of their existence and such interests are often not registered. Easements that are attached to land are perpetual. The easements can be equivalent to a fee simple absolute in possession63 or they can be for a fixed period in terms of years absolute64. Where this is the case then successive owners will be bound by the easements65. An easement must be attached to land and cannot be a personal easement66. Some incumbrances are of a family nature and are generally equitable incumbrances that should be registered. When looking at the discovery of incumbrances on a property the doctrine of notice applies67. This doctrine relies upon what a reasonable purchaser would have or ought to have discovered before completing the purchase. It is the duty of the owner of the incumbrance to register their interest. This interest should be entered on the Land Charges Registry68 if the land is unregistered land. if the property is registered an entry should appear on the property register so that any prospective buyer examining the register would know of its existence. A prospective buyer is under a duty to search the register before buying the land69. If the incumbrance has been registered at the time of the sale of the property the new buyer will be bound by the incumbrance even if the new buyer failed to search the register. If there are no incumbrances registered at the time of the sale the buyer takes the land free of any incumbrances. This also applies even if the new buyer new of the existence of such incumbrances70. There are some instances when rights that are not on the register can still bind a new owner. These are classed as overriding interests71. When land has been sold as registered land any dispositions must be done through the land registry72 if they are intended to create a legal estate or interest73. Dispositions that are not entered on the register only allow the transferee an equitable right and not a legal interest74. Overriding interests that can override title despite not being entered on the register include legal easements75, squatter’s rights and the rights of any person in actual occupation of the land76. The purchaser is under a duty to make enquiries of any occupier as to whether they have an interest in the property. To be able to advise Jem as to whether he will be allowed to continue to use the backroom, and Keith’s use of the easement over the land to get to his property, it is necessary to establish whether their right exists in equity or in law. The difference between equitable rights and legal rights is that legal rights of ownership are gained by registration with the person named on the register acquiring rights in rem property77. Equitable rights are rights in personam78 and cannot exist without the law. Equity attempts to right a wrong but is also based on the principle of fairness or justice79. Equity cannot alter the law and cannot deny a person their legal rights but operates on the conscience of the legal owner by instructing them on how they should behave. In this manner equity can impact on the law without altering it. With legal ownership the owner can dispose of the property or use it in any manner they choose80. Equity only intervenes in these rights if the actions of the legal owner would be unfair or unjust to those claiming an interest in the land81. In the above there is no mention that an entry has been made on the register with regard to the interests, this would mean that any interest would only be an equitable interest. It could be argued that because Jem has his books stored in the backroom as well as renting the room as an office that he is in actual occupation of the backroom82. As he has a lease for the office, Scout would be unable to claim this back until the lease expired, unless Jem breached any covenants made with Scout in relation to the property. With Keith’s use of the driveway, as there is no entry on the register in relation to the use of the drive, Keith would have to rely on the principle established in Wheeldon v Burrows. If there is no other access to Keith’s property, the court would be likely to allow the easement to continue. If there is another access then the courts may decide that the easement is not binding on Jem, which would mean he would be able to stop Keith from using this as a way of accessing his property. When dealing with the issue regarding the extension, Jem might face difficulty in getting permission. Under the Prescription Act 1832 the courts have accepted the right to light might exist if that right has been enjoyed in access of 20 years. In RHJ Ltd v FT Patten (Holdings) Ltd, the neighbourong landowner was objecting to the proposed development on the grounds that it would obstruct light on their land. In this case the developers had served a light obstruction notice, which places a duty on the neighbours to assert their right to light within a year of that notice. If no such right is averred, then the neighbour cannot later claim a right to light when the development begins. The courts view the unchallenged notice as though the development had already been completed, and the tight to light as already being obstructed. In the above, Radley has enjoyed the right to light for 20 years, which means that he would have acquired a right to continue enjoying that right under prescription. This would mean that Jem might be prevented from building the extension, if this would result in blocking light from Radley’s property. Read More