Land Law Case Analysis - Assignment Example

Section A – Seen Scenario ANSWER TWO OUT OF THREE QUESTIONS Bridley-on-Sea is a former fishing village on the south coast of England, which is close to the City of Hanterbury and now consists largely of residential properties, both owner-occupied and council owned. There is also a large 100 bedroom hotel – the Ocean Hotel. The local council is Hanterbury Council. Four years ago, A, B and C, who are cousins, purchased Sardine Cottage, which is a three bedroomed house in the harbour area of Bridley-on-Sea as joint tenants in law and equity with funds that they inherited from their grandmother. At the time of the purchase, all three were undergraduates at Hanterbury University, but since graduation A and B have started work in management trainee positions for the Ocean Hotel. C became a postgraduate student at the University. Three months ago, A was told that the hotel wanted to send her on a one-year training programme in Geneva, Switzerland. She discussed the opportunity with B and C, saying that she would like Sardine Cottage to be sold, since in the future she may take up a hotel appointment anywhere in the world and she would rather have her share of the proceeds of sale. B and C told her that they did not want to sell the property, because of its convenience for their work and studies. A consulted a solicitor and asked the solicitor to send a ‘notice of severance’ to B and C. The notice was duly sent, but, before it was delivered to B and C at Sardine Cottage, B was rushed into hospital with serious heart problems. A collected the letters containing the severance notice, addressed to B and C, immediately after the postman delivered them to Sardine Cottage. B and C have never received the severance notice. B was informed that she was very seriously ill and made a will in hospital leaving all her real and personal property to her mother, W. Unfortunately, B died shortly after making the will. C is stricken with grief over the loss of her cousin B and feels that she would be unable to live in Sardine Cottage in the future. Consequently, she would like the Cottage to be sold. However, due to the credit crunch, A has been told that the training opportunity in Geneva is no longer available and she is opposed to the sale of Sardine Cottage where she wants to continue to live. Moreover, A would like to wait and see if the property market improves before making any decision to sell Sardine Cottage. The registered proprietor of the Ocean Hotel is J, who is also the general manager. The hotel has large grounds, which included a small property known as Seal Rock House, which was for some time let out for self-catering holidays. However, J decided to concentrate on the hotel business and sell the cottage with a small plot of land around it to be used as a garden. Seal Rock House was sold to K who, on behalf of himself and his successors, covenanted with J: i) that no music would be played at Seal Rock House after 7.00 p.m. at night; and ii) that the garden would be surrounded by a fence no higher than three feet and laid out with lawns and plants. Cont/d. K sold Seal Rock House to L who gained planning permission to run a computer repair business from the property. L erected an eight foot high wall around the house, dug up the lawn and plants and concreted over the garden so that she could park two vans which were needed for the business. However, the business was unsuccessful and L only lived in the property for six months. Recently Seal Rock House was sold again to M, a musician, who plays music very loudly in the property most nights. In 1995, Hanterbury Council granted a licence to the Bridley Housing Association with respect to a house, divided into two flats, that the council owned in Bridley-on-Sea. The agreement between the Council and the Housing Association was that the property would be used to house homeless people in short-life housing. P and his girlfriend Q moved into the one-bedroomed top floor flat in 1997. At the time the couple expected to live in the property for six months or so before moving to better council accommodation, but they are still living in the flat. P and Q were each given a ‘Short term licence’ and each pays the same monthly ‘licence fee’ to Bridley Housing Association. The property which was habitable in 1997 has deteriorated over the years. It has become very damp, because the gutters are very dilapidated and when it rains water runs down the outside walls of the property rather than down the pipes and into the drains. The sash window frames are rotting and mould is growing in the bathroom where it is impossible to open the window at all. Cracks are appearing in the ceiling and P thinks there could be some loose slates on the roof. He has rung Bridley Housing Association’s offices on a number of occasions this year to tell them about the damp, but no-one from the Association has visited the property or carried out any repairs. 1. Advise C as to her rights with respect to Sardine Cottage. She is aware of B’s will and that A’s solicitor sent a ‘notice of severance’ to B and herself which she did not receive. 2. Advise J who is concerned that music is being played loudly at Seal Rock House because it can be heard in many rooms in the Hotel. He thinks that the wall and the concrete, which can be seen from all the windows of the bedrooms of the Ocean Hotel, may spoil his guests’ views and therefore their holidays. 1. In order to advise C of her rights with regard to Sardine Cottage it is necessary to determine whether the property was owned as joint tenants or tenants in common. This is important, as property transfers under the law of survivorship if the owners of the property are joint tenants. If the owners are tenants in common each of the parties can deal separately with their own portion of the property and ownership can be transferred to another by a will. It is also necessary to consider the law in relation to severance, in order to determine what the effects of severance would be, and whether a severance can still be valid, even if the other parties have not received the information stating that one of the parties wish to sever. It will also be necessary to consider the will of B, and determine whether B’s share of the property has been validly transferred to W by the will. If a property has been sold to 2 or more parties a joint tenancy1 or a tenancy in common2 will come into existence. With a joint tenancy, all the parties have equal ownership of the property3. As this creates unity of ownership, the property can only be disposed of collectively. Joint tenancies also create the right of survivorship, whereby the share of one party would be split amongst the remaining parties upon the death of that party4. Joint tenants cannot sell their share of the property to another party, although they are able to sell their share to the other joint tenants. Due to the nature of joint tenancies, shares in the property cannot be transferred through a will. Joint tenancies are generally regarded as unseverable5. Neither of the parties are allowed to exert pressure on the other parties to sell the property and any decision to sell must be a unilateral decision in order to maintain unity of title6. Joint tenancies recognise 4 unities, unity of interest, unity of title, unity of possession and unity of time. Unity of interest requires that all the tenants have an equal interest in the property, therefore if the property is sold at a later date the profits from the sale will be divided equally amongst them. Unity of title occurs where the tenants all acquire their rights in the property in the same conveyance. Unity of possession entitles each of the parties equal rights over the enjoyment of the land. The tenants will all acquire their interests in the property at the same time, thereby fulfilling the requirement of unity of time. Tenancies in common are generally reserved for business dealings7, where the tight of survivorship would be inappropriate. In such tenancies each party has individual ownership of their share, and can sell or pass their share to another either by agreement or by a will. Such ownership is only recognised through equity8, although the severance of a joint tenancy will create a tenancy in common9. When joint tenancy attempt to sever the joint tenancy, they must communicate their intention to sever to the other parties, so that they are then aware that the property will subsequently be held as a tenancy in common10. In the scenario above the courts would deem that the property was held by A,B and C as joint tenants, as there has been no discussion in which the parties have intimated that each party would hold their shares on an individual basis. As a result, the parties could only dispose of their own share of the property if the joint tenancy was severed. When considering the position with regard to W, B’s share of the property could not be transferred to her under the will unless the tenancy had been severed. Although in general terms, joint tenancies cannot be severed, there are occasions when the court has ruled that severance has occurred. Severance is regarded as having occurred where one of the joint tenants sells their share of the property to one of the other joint tenants. Such an action would have the effect of changing the joint tenancy into a tenancy in common. Severance has also been deemed to have occurred in cases where all the parties have agreed to the severance. Under s36(2) of the Law of Property Act 1925 the courts have accepted that it is possible for one of the tenants to sever the joints tenancy, irrespective of the wishes of the other parties. For this to occur, the person wishing to sever must have communicated the intention to sever to the other joint tenants, in writing11. In the above it could be argued that the severance is not effective, as B and C had not received the letter notifying them of A’s intention to sever the joint tenancy. This was argued in Re 88 Berkeley Road NW9 [1971],12 in which Goodwin had advised her solicitors to sever the tenancy agreement with Eldridge. The notice arrived while Eldridge was at work and Goodwin signed for the letter. Goodwin died soon after and Eldridge argued that he had never received the notice of the intention to sever. The court was asked to determine whether the severance was to be regarded as valid, despite the fact that Eldridge claimed to have never seen the letter. The court stated that they would only consider the severance to be ineffective if the letter had been returned to the solicitor as undelivered. As this was not the case, the court ruled that the severance was valid. The courts came to a similar conclusion in Kinch v Bullard [1998],13 where the wife of the deceased had served a divorce petition on her partner as well as a notice of her intention to sever, shortly before he died. After the death, she disposed of the letter attempting to aver that severance had not occurred as the letter had not been received at the address. The court were able to establish that the letter had been posted through the letterbox either the day before, or the day after his death, and even though he might not have received the notice, the severance was regarded as being effective. Using the above to advise C, it would seem that the notice of severance would be effective even though B and C did not receive the notice. If the courts deem this to be the case, C would be entitled to deal with her share of the property on an individual basis, as the severance would change the joint tenancy into a tenancy in common. C could not force A to sell her share of the property, but would be able to sell her own individual share to anybody else. If the severance was deemed to be valid, B’s share of the property could be transferred to W by the will. This would mean that a tenancy in common would be created between A, C and W. If C does sell her share, then the buyer would become a tenant in common with A and W. 2. In order to be able to advise J with regard to the music and the wall around the property, it is necessary to consider whether restrictive covenants can be binding on successive owners14. To do this it will be necessary to examine how restrictive covenants are created and the circumstances in which the burden of the covenants can be transferred to a successive owner. It should be noted that, in law, in general terms the burden of a covenant is not assignable and does not usually run with the land15. If the land is leasehold property it is possible for the burden to run with the land16. Equity will allow the burden to run with the land whether the land is freehold or leasehold, if the covenant is a restrictive covenant17. For a covenant to be restrictive it must place a negative duty on the owner of the covenanted land18. A negative duty would be one that prohibited the owner from doing something such as building on the land as is the case in this scenario19 where building work cannot be carried out unless the owner has the express approval of another. In the above, the covenant not to erect anything other than a fenced of a certain height and not to play loud music after a certain time would both be regarded as restrictive covenants. Restrictive covenants must be recorded on the register as minor interests in order for them to be binding on successive owners. Covenants that are not recorded on the register cannot bind the new owner who will take the land free of all agreed covenants20. In the above, there is nothing to suggest that the covenant was communicated to the successive owners, or that an entry was placed on the register, so that successive owners would be aware of these restrictive covenants. This could mean that the court would deem that the covenants were not binding on the successive owners, as they had not been made aware of these, and were not able to gain details of these before purchasing the land, as there was no entry on the register. In law covenants are only binding between the parties to the contract and as such they cannot bind third parties21. In essence this would mean that the covenant between K and J would not be binding on L and M. In some cases the wording of a covenant will include the successors in title22 has being bound by the terms of the covenant. The use of this wording would bind all future owners of the land to observe the covenants. As this was stated in the situation above, the court might deem that the covenant can be binding on L and M, although J would have to prove that L and M ought to have known of these covenants23. If the covenant has not been entered on the register then L and M would have held the property free of any covenants and J could not enforce the agreement with regard to the fence and the music. Read More