Analysis of Land Law - Case Study Example

Land law case study Unit: Background of the case Pamela is a freehold owner whom has purchased two freehold properties through partnership. In the first freehold property purchased her partner Jack finance the purchase process through a bank and used the property as security without Pamela’s knowledge. Consequently, Pamela’s Partner borrowed a loan from a building society to repay the bank’s loan. Moreover, Pamela purchased the other freehold property through the help of Peter. However, during the purchase Pamela noticed that the property had fewer assets than when she was viewing the property during transaction. On the other hand, while Pamela was visiting a local garage she collected a piece of metal that was later identified to be valuable by the museum. However, the garage later claimed that they were the actual parties who found the item since Pamela was supposed to deliver the item to the Garage’s lost and found items section. Therefore, the following analysis aims to establish the legal remedies for all the incidences involving Pamela Discussion The establishment of priority between Pamela and the mortgagees The Dunroamin property in dispute between Peter and Pamela is registered under freehold ownership. However, for freehold ownership the owner of the property is required to be the party registered under the freehold contract1. However, the registered party in the contract is Peter who in this case also contributed to the purchase of the property. Therefore, the property was owned under a partnership2. In any case, property owned under a partnership is presumed to be owned on the contribution between the partners. Therefore, Pamela was not in a position to make individual decisions with regard to the sale of the property. However, peter who was a stakeholder in the partnership had paid the purchase fee through a bank. As a result property “Where a legal mortgage of land is created by a charge by deed expressed to be by way of legal mortgage, the mortgagee shall have the same protection, powers and remedies (including the right to take proceedings to obtain possession from the occupiers and the persons in receipt of rents and profits, or any of them)” 3. Therefore under this act the mortgagees had a right to be enjoined in legal procedures concerning the property. Nevertheless, the legal implications between the property and the mortgagees were based on charges enforced by Peter. Whereas Peter had refinanced the previous loan from the bank by acquiring another loan from building society, based on the charges imposed the charges still stood and could be executed by the building society. This is due to the fact that in an instance a party acquires a loan from bank B to finance another mortgage loan from bank A, the burden of charges from bank B will fall on bank B4. As a result, this put the property at risk of since he had guaranteed the property to be the security with regard to repaying the loan. Moreover, based on Section 8 of the criminal Law Act 1977 an individual facing possible forfeiture of repaying a loan is liable for criminal charges that may be brought against him or her5.In any case, defaulting to pay a secured loan could provide legal grounds for the repossession of the secured property by the financier6. Therefore, in a situation where two mortgagees have provided loans to a free hold owner the priority of repossessing the property falls on the second mortgagee who has the most recent contractual agreement with the freehold owner7. Therefore in the determination of the bank charge priory the building society had the first priority with regard to repossessing Peter’s property in the event he defaulted paying the loan. However, in the event of charges between a freehold owner and a mortgagee charges are based on the period the charges were included in a contract and based on the individuals who are bound by the charges8. During the purchase of the property Pamela initiated the transaction without involving the bank. On the other hand Peter was the party responsible for involving the bank. As a result, Pamela had priority over the bank based on registry of charges since she had purchased the property using her funds. On the other hand, the bank had priority over Peter since he was the party responsible for enforcing the registry of charges. Moreover, based on the agreement between Pamela and Peter, Pamela had an assured tenancy based on the fact that she had paid money with the aim of co-owning the property. With reference to the Redstone Mortgages plc v Welch and others case an assured tenant has the right to be excluded from any procedures that solely involves another party in the property agreement9. In any case, the ownership of freehold property provides the owner of the property the mandate to borrow funds from a financial institution while using the property as security10. Nevertheless, this only applied to Peter’s part of the bargain. Therefore based, on fact that Peter had borrowed the funds without disclosing to Pamela, Pamela was a victim of non disclosure and therefore she would not be liable for any of Peter’s bank charges. With reference to the Barrett v Barrett case in 1977 mortgage contribution is different from individual contribution during the purchase of property. Therefore, the interests of the mortgagor and the interests of an individual contributor will differ11. Additionally, based on Pamela’s contribution towards the purchase of the house she had an assured tenancy which means she had a priority over the bank. Therefore, she would not be liable for any legal implications that involved the agreement between the two Mortgagees and Peter regarding the property. The legal implications of movement of assets prior to the completion of the purchase agreement With regard to the issue of Ahmed moving some of the assets from the property, the legal remedies would be bases on the contract between the parties involved. The freehold ownership rights require the owner of freehold property to make any use of the property since he or she has full rights to the ownership of the property12. Thus it may be presumed that Ahmed had the right to make any modifications to the property since the full ownership of the property had not been transferred to Pamela and Jack. During the negotiation process for the purchase of the property owned by Ahmed the purchase agreement involved purchasing the house and all the furniture in it. In the event of freehold property purchase agreement, the seller must specify all the items within the property that required to be moved from the property after sale13. Therefore, during the agreement between Ahmed and Pamela Ahmed had indicated that furniture and the assets he had removed to be the property was to be included in the sale of the property. In certain circumstances the purchasers of the freehold property may still be subjected to the contractual terms of the seller14. Therefore, it was only essential for Ahmed to disclose in the contract whether he was going to move the assets he had moved from the property. However, in this case, Ahmed had not outlined such obligations in the sale agreement. Additionally, the purchase of freehold property is governed by the rule of caveat emptor15. This requires the party involved in the purchase to be fully aware of the freehold property being sold. Jack and Pamela in their role as the purchasers had analyzed the property and were aware that the assets that Ahmed had moved were part of the property. The sale of the freehold property was based on contractual agreement. Therefore, in any case of a contractual agreement has a contractual obligation16 . Hence, Ahmed had forfeited his obligation by moving the assets which was not outlined in the contract. As a result, Pamela and Jack who were the partners during the purchase of the freehold right had a right to hold Ahmed to be accountable for the removal of the assets prior to the final sale of the property. Therefore, Pamela and Jack had the option to initiate legal procedures against Ahmed for contract forfeiture. The legal remedies for the issue between Pamela and the Garage Following the identification of an unknown item in the garage, the Preston museum validated the item to be a valuable treasure. Based on the treasury act of The United Kingdom an individual who comes across an object that he or she perceives to be valuable should submit it to the relevant state authority in order to validate its value17. Therefore the essence of delivering treasure to any sate authority is based on the fact that the property does not belong to the individual but belongs to the state18. Consequently, based on the treasure law property found and the owner cannot be ascertained, the state awards the property to the finder through monetary compensation19. In this case, the metal treasure that Pamela had found was not the garage’s property since the Garage had classified it to be a requirement of lost and found items. Hence the treasure could have belonged to another individual other than the garage owners’. In this case, the actual finder of the treasure is presumed to be the direct recipient of the certificate or monetary reward of the treasure find20 Bibliography Blum, B.A. Contracts: Examples & Explanations. (Aspen Publishers online, 2007), 3. Chester, M. An introduction to purchasing property in the UK. Wraggle Lawrence Graham and co. < http://www.wragge-law.com/insights/an-introduction-to-purchasing-property-in-the-uk/> accessed 28th November 2014. Citizens advice bureau. If you find something including treasure. < http://www.adviceguide.org.uk/scotland/consumer_s/consumer_common_problems_with_products_e/consumer_lost_found_and_uncollected_goods_e/if_you_find_something_including_treasure.htm >, Accessed on 28th November 2014. Eileen, O. "Barrett v Barrett." The Estates Gazette (May 31, 2008): 138. FindlawUK. Leasehold freehold and common hold properties. < http://www.findlaw.co.uk/law/property/buying_property/66.html> accessed 28th November 2014. Goode, R., Goode, R.M. Principles of corporate insolvency Law. (Sweet & Maxwell, 2011) 118. Hazel, M. "Redstone Mortgages Plc v Welch and Others." The Estates Gazette (Sep 12, 2009): 98-107. HMrevenue & customs. CG27350 - Disposals of partnership assets: SP D12  < http://www.hmrc.gov.uk/manuals/cgmanual/cg27350.htm> Accessed 28th November 2014. Home owners alliance. Leasehold v Freehold – what’s the difference? < http://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/leasehold-v-freehold-whats-the-difference/> Accessed 28th November 2014. Knight, C. The penny cyclopedia of the society for the diffusion of useful knowledge (volume 25, 1843 ). Law of Property Act 1925 c 21, s 85. Lexis PSL property. Creation and priority of Mortgages overview < Accessed on 28th November 2014. Martinius, J. M&A: Protecting the purchaser. (Kluwer Law international, 2005) 311. Murray, John C. "EQUITABLE SUBROGATION: CAN A REFINANCING MORTGAGEE ESTABLISH PRIORITY OVER INTERVENING LIENS?*." Real Property, Trust, and Estate Law Journal 45, no. 2 (Summer, 2010): 249-82. Money marketing. MORTGAGES: Plumbing the Debts." Money Marketing (Nov 16, 2006): 42. Morris, G., McKay, S., Oates, A. Finance director’s handbook. (Elsevier, 2009). 823 Portable antiques scheme. Advice for finders of treasure on archaeological projects. < http://finds.org.uk/treasure/advice/forearchaeologists > Accessed on 28th November 2014. Scriven, J., Stalman, H. A treatise on copyhold customary freehold & Ancient Demense Tenure: with jurisdiction of courts baron and courts leet, (Butterworths, 1867). 397. Treasure Act 1996 c24 s 8. Warner and Richardson solicitors. Freehold and leasehold solicitors. < http://www.wandr.co.uk/site/property_solicitors_winchester/freehold_leasehold/> accessed 28th November 2014 Read More