The Ownership in the Land - Case Study Example

Formalities and Third Party Interests In the case of the ext door neighbor and his two children, their interests will fall under the category of easement, since it is equivalent to a right of way that allows the neighbors access to the public road. The property of the neighbor is the dominant land over the appurtenance present on the servient land, which in this case is Angelina’s. An easement may be said to be the right of one landowner to “make use of another nearby piece of land for the benefit of his own land.”1 An easement is a right of way designated for a specific purpose and it does not interfere in any way with the servient property owner’s rights over his land, it is merely a permanent and/or proprietary interest held by someone else over that easement and is an appurtenant, incidental to the land in question. An easement is therefore an interest in the land which will continue even if ownership of the land changes.2 This is an important aspect to consider in the case of the neighbors and the children, since firstly, their passage over Angelina’s land is for the purpose of reaching the public cycle path for which there is no direct access from their own property and secondly, their right to use this easement may continue although the ownership in the land has changed over to Angelina. In this case, Will also claims that the right to use this easement has been put into writing, in which case it will hold good. However, according to the Land Registration Act of 2002; “No easement expressly granted out of registered land from 13 October 2003 can ever override.”3 This places a restriction on overriding interests arising out of easements, such as that which Will possesses over Angelina’s land. However, the restriction on the overriding interest only pertains to that granted out of registered land from 13th October 2003 and does not apply to easements that have existed before that. In this case, the easement may have existed before this period because Ingrid may have given this right before 2003. Moreover, the right of the neighbor and his children to reach the public land does constitute an equitable interest, which may be considered by the Courts. Before the Land Registration Act of 2002, equitable easements were deemed to automatically enjoy a binding status as overriding interests.4 This has also been upheld by the Courts in several cases, such as for example that of Celsteel v Alton House Holdings5. The principles governing the creation of an easement are set out in the case of Re Ellenborough Park.6 However, the overriding interest has been overruled by the Land Registration Act of 2002, which requires that even an equitable easement must be created through the use of writing6 therefore Will’s rights to the easement may not be upheld if he cannot show an agreement in writing. Will needs to be able to support his claim by showing that the formalities have been adhered to. In order to create a legal easement whose existence will be recognized by the Courts, the grant must be done using a deed and it must also be registered with a written agreement between himself and Ingrid, specifying that he is allowed to use the land for as long as they live next to the old diary, and this agreement should have been executed in accordance with the formality requirement of the LRA 2002. A non compliance with the formality requirements can make an interest invalid and non enforceable7. An easement may also be acquired by prescription under the principle of lost modern grant, I which case the following conditions must apply: (a) (i) the land must have been in continuous use as an easement for at least twenty years or (ii) could have been the subject of an express grant which is now lost but whose existence is capable of being proved. In the event Will is able to prove that such an access over Angelina’s land has existed, or that it is the subject of an express grant, it is only then he will be able to prove his rights to use the easement under the provisions of the new Land Registration Act. When an easement exists, there is a distinct proprietary interest which also exists on the easement and it may need to be protected through a notice on the register of title, in such a case it can be enforceable against a purchaser of the reversion.8 Under certain conditions however, an unregistered interest may still be valid. For instance, an equitable easement, profit or an estate contract may not be deemed to be equivalent to an overriding interest9, however, there may be instances when such overriding interests may have to recognized, as for example, in the case of Celsteel v Alton House (1986)10 where the Court of Appeal held that the right of access amounted to an equitable easement, but it had an overriding interest, under r.258 of the land registration rules. In the case of Ingrid’s promises which Will claims, the first promise not to set up a business is a restrictive covenant and the second is in the nature of an agreement between two freehold owners of land. With the formality provisions that have been mandated under the new Land Registration Act, oral provisions will generally be invalid, as also laid out under the Law of Property Act of 1989, where section 2 mandates that all the terms which the parties have expressly agreed to should be incorporated into a written agreement.11 The oral agreement not to start a business is a restrictive covenant and in general, courts have enforced restrictive covenants12. This will be especially so when the Court deems the restrictive covenant to be applicable13 and worthy of continuation because it affects the environment. In this case, since Angelina starting a pottery business is unlikely to be harmful to the environment, the restrictive covenant will not apply and since it is not in writing, this further reduces the possibility of a Court allowing it. However, where the maintenance of the wall is concerned, it appears likely that Angelina may have to accede to this third party interest, since it may be upheld in the interest of equity. In the case of Yoxley v Gotts14 the Court allowed relief despite the fact that the agreement between the parties was only an oral one, on grounds of equity. In this case, since Will has incurred all the expenses on construction of the wall, it is possible that Angelina may have to pay for its maintenance because such an act would be equitable. In the case of Ingrid’s parents however, it is likely that the Court will uphold their interest in the property, especially since they have invested one third of the monies for the purchase of the house. Ingrid’s parents may have the right to file suit to enforce their rights under proprietary estoppel, as per the provisions of section 116 of the Land Registration Act of 2002, which allows a party to recover on the basis of a promise made by another, especially if the action that has been taken acts to the detriment of the party filing the suit. There is a clear case for proprietary estoppel that exists in this instance, whereby Ingrid’s parents, despite being third parties, will be able to claim an equitable interest in the property despite the absence of a formal legal title. Another aspect that supports Ingrid’s parents’ rights is the fact that they have been in possession of the property. . In the case of Uglow v Uglow9, the issue of proprietary estoppel was deemed to be satisfied through measures of equity to satisfy it. Since Ingrid’s parents have been living on the property, the conditions to invoke their impregnable possession include physical occupation of the property15. As stated in the case of Powell v McFarlane, “Factual possession signifies an appropriate degree of physical control…….. ……broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land as an occupying owner might have been expected to deal with it.”16 However, possession is no more nine tenths of the law. Before the Land registration Act of 2002, it would have been easier for Ingrid’s parents to claim a title to the land in question through their possession of it, however after the Land registration Act of 2002, Angelina will have the right to contest such a claim. The freehold owner has the right to oppose a squatter’s claim, because no matter how long the possession of the property, it will not bar the paper owner’s title (in this case Ingrid) to the registered land17, because adverse possession itself will no longer constitute ownership if the registered title holders oppose the claim. But it is also necessary to take into consideration the fact that although the Land Registration Act of 2002 has eliminated several overriding interests, this does not include an interest belonging to a person who is in actual occupation of the property. Since Ingrid’s parents are in actual possession, their rights may be enforceable. However, it must be noted that in the case of the third party interests of both Will and Ingrid’s parents, both constitute overriding interests – hence under the Land Registration Act of 2002, they must be registered quickly if they are not to be lost. The failure to register it on the title may result in the interest becoming unprotected. Therefore, the fact that neither Will nor Ingrid’s parents have recorded their interests on the registered title may work against them if Angelina chooses to take the matter to Court. While Ingrid’s parents may be allowed some relief due to having invested in the property to their detriment as a result of which equity will operate in this instance, Will’s interests are less likely to be protected. In the case of Joseph however, the agreement with Ingrid specifically allows him the right to purchase the outbuildings within a period of three months. This agreement satisfies the formalities requirements because it is a written agreement which has been signed by both parties and also witnessed. This agreement constitutes an outright intent to purchase which has been expressed by Joseph. It may be argued that since the owner of the property has changed and Angelina is now the new owner, she is not obliged to honor the agreement to sell which the previous owner had made before her. The registration of title to a freehold owner allows the owner absolute rights with the disposition of the property and in the usual instance, it is possible that Joseph’s agreement could have been deemed to be no longer valid under privity of contract , since Angelina is not one of the parties to the contract between Ingrid and Joseph, and she is the current owner of the house. Angelina is not obliged to honor an agreement that she has not made and to which she is not a party. At the present time, Joseph is only renting the outbuildings and is paying a fee of 500 pounds every month to store his cars. Although he has the option to purchase these outbuildings at the price of 100,000 pounds, he is choosing to exercise the option at a time when the original owner, Ingrid, with whom he made the agreement, is no longer the owner of the property. Since Joseph did not actually purchase the property but only registered an interest in purchasing it, it may not be enforceable against Angelina, who is the new owner. In this instance, there is a conflict that arises between legal and equitable interests. Angelina has a legal interest in the property since she is the freehold owner. The Land Registration Act of 2002 has also eliminated the doctrine of interest that was to be administered to purchasers of property regarding third party interests in the land to which a future purchaser is bound18. The new Act has resulted in very few proprietary rights being established, and it is the freehold owner of the land who will have the highest priority, i.e, equitable interests in the land will be subordinated to and overridden by legal interests. Joseph’s intent to purchase agreement can at best constitute an equitable interest, since the land transfer has not yet been executed. Since the Land Registration Act has eliminated most overriding interests, it appears that Angelina may be able to contest Joseph’s right t buy the property if she is not prepared to sell it. At best, the only recourse that Joseph will have is to file suit against Ingrid for recoveries against an agreement which did not come to fruition, but even in this case, the Courts will bear in mind that it is only an intent to purchase rather than an actual conveyance. There is one ground on which Joseph may have a successful case, i.e, if he has made substantial investments in the outbuildings while relying on the provisions of the agreement. However, in this case it must be noted that Joseph’s investments are only that of rent for the property and for transferring the vintage Cars to the outbuildings rather than any substantial expense incurred to his detriment, on infrastructure. While Joseph will have rights as a tenant and can contest any move by Angelina to evict him from the premises before his lease term has expired, he is likely to have less recourse to legal action from the point of view of enforcing his right to purchase against Angelina, if she is unwilling to sell the property. On this basis, the following conclusions may be drawn: Will is claiming the right to an easement, a restrictive covenant and an equitable interest. These require that a deed is to be drawn up and registration also needs to be done in the case of the easement and the restrictive covenant. For an equitable interest however, registration is not necessary, however a deed will be required. Ingrid’s parents are claiming an equitable interest, however in their case also, the new requirements under the Land Registration Act of 2002 require them to have recorded their interest in the registered title, which they have failed to do. They may however have recourse under proprietary estoppel. However, Will’s right to the easement for example, may not be protected under the category of an overriding interest, since the new Act has eliminated protection of such interests unless they are registered. The Land Registration Act of 2002 has reduced the number of overriding interests that can be claimed on a piece of property, therefore Angelina’s rights have been enhanced after the passage of the Land Registration Act of 2002. James’ interest in the property also qualifies as an equitable interest , however this will not have precedence over Angelina’s legal interest in the property. The formalities have been completed by Joseph in his agreement with Ingrid, however because the Land Registration Act of 2002 has overridden most proprietary equitable interests, it ay be difficult for him to enforce his possession of the outbuildings except for the designated lease period he has agreed to with Ingrid. Bibliography Books: * Clake, Alison and Kohler, Paul, 2005, “Property Law: Commentary and Materials”, Cambridge University Press * Dixon, Martin, 2005. “Modern Land Law” , Cavendish * Gardner, Simon, 2007. “An introduction to Land Law,” Hart Publishing * Halsbury’s Laws of England. Easements and Profits a prendre (4th edn) * Meggary and Wade, Law of real property 6th edn * Sexton, Roger , 2004 Land Law Textbook. Oxford University Press Legislation cited: * Land registration Act of 2002 * LCA 1976 * Landlords and Tenant ( Covenants Act) of 1995 * Land registration Act of 1925 * Law of Property (Miscellaneous Provisions) Act 1989 Cases cited:: * Celsteel v Alton House (1986) 1 WLR 512 CA * Crest Nicholson v McAllister [2004] EWCA Civ 410 * Powell v McFarlane (1977) 38 P&CR 452 at 470 * Re Ellenborough Park (1956) Ch 131 * Tulk v Moxhay (1848) 41 ER 1143 * Uglow v Uglow (2004) WL 1476789 * Yaxley v Gotts (2000) Ch 162 Read More