Principles of Land Law - Coursework Example

Principles of land law Introduction: It is necessary to view this study in its proper perspective in terms of how the existence of different lease titles binds the register in the case of freehold property held by present seller The present details of the holdings are as follows: Serial To Years Month/year Annual Rent £ Remarks 1. A 17 Jan. 2006 6,000 A went into possession in Jan 2006 2. B 5 Feb. 2007 5,000 B went into possession in Feb 2007 3. C 6 Mar. 2006 7,000 The lease does not commence until June 2009. C is therefore, not in possession yet. 4. D 6 May 2005 8,000 Possession taken on May 05. However, due to financial constraints shop is now unoccupied and D hopes to restart business within few months. 5. E 2½ Sept.2008 2,400 E went into possession in Sept’08 Land Registration Act 2002: The aspect of good title is intrinsic to any sale or purchase of property under English property laws. As a matter of fact that principal idea behind amendment of LRA 002 was to enable e-conveyacing and provide electronic searches of details of property holdings in the UK. It is often possible that buyers may come to realise later the fact that the property purchases by them in encumbered and there are other claimants who possess direct or overriding interests in their purchased property. It is to substantially reduce incidence of such nature that the LRA 2002 has been enforced in UK property market context. According to the LRA 2002, the grant of leases on registered land will need to be registered mandatorily, if a grant of lease is for a period “of more than 7 seven years from the date of its grant”, or if the grant of lease in which “right to possession is discontinuous.” (Harpum and Bignell 2004, p.80). Thus, it may be seen that in the case of lease held by A, its period is for a period of more than 7 years from its grant and therefore the leasehold portion of the freehold held by A needs to be registered. Again it is seen that in case of D’s possession on lease, there has been discontinuance although the rent is still forthcoming. In these cases of A and D, the leasehold part needs to be registered in accordance with existing laws. In the case of B, it is seen that the currency of lease is for 5 years, and he went into possession from February 2007; however, the provisions of LRA 2002 cannot be applied since it is less than minimum seven years requirement. Therefore, B is possessing overriding rights in the lease which he is presently holding and shall possess such privileges and prerogatives as is available to such right holders under law. How various estates and interests may be protected? Persons having useful interest in land held under a trust of land may only protect that interest by way of restriction, not notice. This will include a person with the benefit of a lease, for instance, affecting a beneficial interest as is seen in this case study. Distinct from warnings, the entry of a notice will confer priority on the interest protected, provided it is a tenable interest. Similarly, unlike cautions, receipt of an application relating to a title where a notice has been entered will not provide the service of a land registry notice on its recipient, “but the notice protecting the interest will remain on the register.” (Agreed Notices and Unilateral Notices. 2003). How estates can be created and held under law: This creation of estates could be effected through fee simple, a fee tail or life estate. Under fee simple, land is purchase by an individual and he retains sole custody to it. He may do whatever he wishes on the said land, and its usage terms are everlasting. After his demise, his legal heirs gain possession and ownership to the said land, unless otherwise specified by will, or deed. Under fee tail there are conditionalties which need to be fulfilled before the usage could be made. These are mentioned in the deed or will left by the property owner. Life estate does not inure permanent ownership since it is continent on the occurrence or non occurrence of event, and in effect, the holder of life estate is taking care of the property for someone else. Lease is a form of life estate. How estates are defeated under law: This could be done through the process of : 1. Sale or long term mortgage of property 2. The rightful owner selling off the property during his lifetime 3. Acquisition by the Government 4. Disposal by the rightful owner. Thus it is seen that in the case of restrictive covenants, it has to be respected and arranged for. All matters that affect the defeat of the estate need to be carefully considered while making deed or will, since it is possible that defects in title or ownership could latently affect devolution at later day. Whatever basic indefeasible rights cannot be annulled or made void without an innocent rightholders consent (while yet remaining rights that can have their objects made temporarily inaccessible due to the commission of a crime, or overridden in emergencies), might also be inalienable rights. In the view now advocated, therefore, some inalienable rights might also be indefeasible or fully protected. Further it is seen that in the case of lease terms of more than 7 years, the recipient, or his heir in title must be registered in the register “as the proprietor of profits, along with the notice of the right.” In all other cases, it is observed that “notice of interest must be entered in the register of the title affected by it.” (Harpum and Bignell 2004, p.82). According to Section 4 of The Land Registration Act, 2002, “the lease granted for 21 years or less, which has not yet taken effect cannot be registered or protected by the entry of a notice in the register against the landlords title but takes effect as an overriding interest. A buyer of land so affected may not be able to discover the existence of the lease, because the tenant will not be in possession.” (Explanatory Notes to Land Registration Act 2002: Section 4 When Title Must be Registered. 2002). This is the state of lease which is the subject of C’s lease which would commence only during June 2009. Thus it could be stated that the lease held by C would not be able to ascertain the availability of the lease since C is not yet in possession. Under the provisions of Section 33, it is seen that a lease granted for 3 years or less, cannot become the subject of a notice. (Explanatory Notes to Land Registration Act 2002: Section33 Excluded interests. 2002). Overriding interests. Therefore such leases cannot be entered in the Register, but could exist as overriding interests. In the present case, it is seen that the lease possessed by E is for a period of less than 3 years- actually 30 months. Therefore, it could be reasonably said that the interests of E could be termed as overriding interests. The importance of overriding interests has been highlighted in the case of Lloyds Bank plc. v. Rosset (1991) 1 AC 107 HOL, when the Bank sought possession of farm house mortgaged by the husband who reneged on mortgage dues, the wife sought possession on the ground of having a” beneficial interest in the property, binding the bank by virtue of her actual occupation, as an overriding interest under the Land Registration Act, 1925, s.70 (1) (g) (Lloyds Bank plc v. Rosset. 1997). However, the House of Lords (HOL) verdicted that wife’s interest could not be sustained simply “holding that Mrs Rosset had no beneficial interest” (Lloyds Bank plc v. Rosset [1991] 1 AC 107, House of Lords The position that would emerge after the entry in register would be as follows Serial To Years Month/year Annual Rent £ Remarks 1. A 17 Jan. 2006 6,000 Registration to be effected 2. B 5 Feb. 2007 5,000 Possesses overriding interests 3. C 6 Mar. 2006 7,000 Cannot become a subject of notice 4. D 6 May 2005 8,000 Registration to be effected 5. E 2½ Sept.2008 2,400 Cannot be entered in register Ferrishurst v Wallcite [1999] 1 All ER 977 In the leading case of Ferrishurst v Wallcite [1999] 1 All ER 977 the plaintiffs possessed lease of part of an office block, but the lease included an option to purchase the whole of the block. Upon expiry of the lease, the plaintiffs wished to purchase the entire complex, even the portion which they had not occupied. The question arouse whether they could claim possession of the land through use of overriding interests. In this case, “The Court of Appeal held that if a person had a right relating to the whole of a piece of registered land, then actual occupation of part of the land was sufficient to make the right an overriding interest with respect to the whole of the land.” (Overriding Interests and Minor Interests: Ferrishurst v Wallcite [1999] 1 All ER 977. 2006, p.131). Conclusion: The property laws in UK relating to title of registered freehold property has considered the aspect of reversionary title and overriding interests. The latter is important in that it allows persons with genuine claims to be included without being entered in the Register and yet get their dues or remuneration through the procedure of law. Thus, they “will not be bound by any third-party interests in that land” unless they are noted on the register, or are deemed to be overriding. (Overriding Interest. 2007). In this case, it is necessary that the potential purchaser first needs to examine the land registry documents and establish the concerns relating to the proposed purchase transaction, in terms of other interests or claims. He also needs to consider the overriding interests that may present itself when he assumes ownership of Yorkshire Rose Shopping Centre. Bibliography Agreed Notices and Unilateral Notices. (2003). [online]. Land Registry: Land Registration Act: 2002. Last accessed 03 January 2009 at: http://www1.landregistry.gov.uk/assets/library/documents/fact_sheet012.pdf Explanatory Notes to Land Registration Act 2002: Section 4 When Title Must be Registered. (2002). [online]. Crown. Last accessed 03 January 2009 at: http://www.opsi.gov.uk/Acts/acts2002/en/ukpgaen_20020009_en_1.htm#end Explanatory Notes to Land Registration Act 2002: Section33 Excluded Interests. (2002). [online]. Crown. Last accessed 03 January 2009 at: http://www.opsi.gov.uk/Acts/acts2002/en/ukpgaen_20020009_en_1.htm#end HARPUM, Charles., and BIGNELL, Janet. (2004). The Grant of Certain Leases. [online]. Registered Land. 80. Last accessed 03 January 2009 at: http://books.google.co.in/books?id=637tiH7-UlwC&pg=PT1&lpg=PT1&dq=Full+text+and+explanatins+of+Land+Registration+Act+2002&source=bl&ots=9znFtCK3vM&sig=rdAxkY0yDBrAaJGWq0Rgu5CU8VA&hl=en&sa=X&oi=book_result&resnum=3&ct=result#PPA80,M1 Lloyds Bank plc v. Rosset. (1997). [online]. Last accessed 03 January 2009 at: http://ourworld.compuserve.com/homepages/pntodd/cases/cases_r/rosset.htm#rosset_decision Overriding Interest. (2007). [online]. The K Zone: Wasting Your Internet Bandwidth Since 1994. Last accessed 03 January 2009 at: http://www.kevinboone.com/lawglos_OverridingInterest.html Overriding Interests and Minor Interests: Ferrishurst v Wallcite [1999] 1 All ER 977. (2006). [online]. Sexton. 131. Last accessed 03 January 2009 at: http://www.oup.com/uk/orc/bin/9780199284436/sexton_chap10.pdf Read More