Importance of a Law of Property - Essay Example

Part A (70% weighting) (i) Sheila, who has recently died, owned the freehold of a number of properties, including Redacre, Greenacre and Blueacre. In 2000, she signed a lease by deed of Redacre to Roland "until such time as the landlord gives two months notice that it is ready to redevelop", at a monthly rent. In 2004, she signed a written agreement, headed "Licence" stating that Janet and Harry may, on paying a regular licence fee, share occupation of Blueacre, "but not exclusively", with each other and such other person or persons as Sheila might authorise, until either they or Sheila give a fortnight's notice, but that they must vacate the premises between 10.00 am. and noon on each day. In May 2005, she signed a document, not by deed, stating that Gill was to have a three-year lease of Greenacre commencing in July 2005, again at a monthly rent. Gill duly went into possession in July. Roland, Janet and Henry and Gill have regularly paid the monthly sums required under their respective agreements. Shelia's executors wish to obtain vacant possession of the properties in order to sell them. You are a trainee in the firm of solicitors acting for the executors. Your principal has asked you to research and give her a brief report outlining the legal principles, and identifying the relevant cases and statutory provisions, as to whether (a) the lease of Redacre can be terminated without needing to show a readiness to redevelop (b) the agreement regarding Blueacre is a lease or a licence (c) the lease of Greenacre is valid for three years or may be terminated earlier. (you should not consider issues regarding possible statutory protection for these agreements). You should include with your report (but not counting in the word limit) a list of all cases consulted (with references) and, if appropriate, statutory provisions that are closely relevant to the case, so that your principal can follow these up and give the appropriate advice. (ii) Your principal has also asked you to do a separate piece of research, unconnected with the properties above, to produce a short report on decisions in the cases in the last ten years in which the courts have considered and/or applied the concept of the termination of a lease by surrender by operation of law Part B (30% weighting) Explain precisely (in 600 words), in relation to both A (i) and A (ii), what was your research strategy and how you carried out the research, explaining the database searches that you made. Include (but not counting in the word limit) a bibliography of all books and databases used to carry out the research. Part A : (i) a) In order to determine if any person has any equitable or legal rights over Sheila's estate one has to consider if it is capable of being an equitable or legal interest. The first consideration under 1(1)(a) is that for there to be a legal interest it has to be an estate in fee simple absolute in possession and (b) A term of years absolute. The second consideration is under 1(2) which identifies only those interests which can be legal interest, which includes such examples as a legal lease of which both lease. The first question is whether Sheila's executors are bound by the leases created by Sheila. The first note to make is that all legal leases that Sheila has made are valid are binding. However, the question is whether this deeded lease is a legal lease because it is not in terms of years absolute, therefore not a legal lease; rather it is an equitable lease. Equitable leases must be registered if created after 1925 and the land is registered. If the land is not registered then the lease is not binding if sufficient enquiry has been made and there is no obvious notice of occupation. In this case this would fail because there is a deed, which if sufficient enquiry had been made would have been findable. As we are dealing with executors of the estate they have actual notice because they hold the deed, therefore it is binding on them and any buyers because it would have to be made available to subsequent buyers. If it is registered land then it is not binding if not registered, if it is registered then it is binding. However, even if this equitable lease is not registered then there would be rights held by the tenants under the overriding interests as occupier's rights as per the recent case of Malory v Cheshire Homes.1 b) All the licenses could be binding with extra protection if it was a case of residential accommodation under Street v Mountford2 where the only circumstances are that residential accommodation is offered and accepted with exclusive possession for a term at rent, the result is a tenancy The courts will, save in exceptional circumstances; only to be concerned to inquire whether as a result of an agreement relating to residential accommodation the occupier is a lodger or a tenant."3 In this case it is a residential tenancy. Therefore the basic principle is that it is a legal lease between these the parties, unless exceptions apply. Does this tenancy hold all the protections of the law, as it would be classed as a legal estate as it is for set period of years absolute If it is a legal estate then it should be enforceable against the world. The first avenue is to determine if there has been any tenancy breaches that fall as an exception held under the Street v Mountford formula because a tenant in direct violation of a clause is an exception to this formula, such as is a tenancy in arrears. These exceptional circumstances4 that have been defined as; occupancy under a contract for the sale of land5; pursuant to an employment contract6; holding of an office7; the owner has no power of tenancy8; there was no intention to create legal relations, e.g. family relationship or act of friendship9. There is no indication that there are any exceptions, therefore the principle of Street v Mountford will apply and this is a binding lease. Therefore in order to remove the parties of Blueacre from the premises has to be done through the proper legal avenues of lease termination. There is possibly a way round the principle in Street v Mountford, which is whether it can be shown that at anytime through their occupation that they were not in absolute possession. In other words, if there is obvious intention that the property could be open to others at the whim of Shelia then the license could be terminated within a fortnight. The problem here is that the aim of Street v Mountford was decided to even the playing field for residential occupiers and this has later been protected by statutory protections, such as the Housing Bill Act 2004. c) In the case of the three year lease that was not deeded; however it falls under the definition of a legal interest because there is absolute possession and a term of years absolute. Therefore using again the ratio from the cases such as Street v Mountford the protection of residential tenants is paramount within English Law. (ii) The decision was made not reform overriding interests, such as adverse possession and the powerful rights of tenants under occupier's rights, as suggested by the law commission, rather parliament decided to phase out archaic rights and create two schedules dealing with overriding interests. This discussion will explore the problems for landlords in terminating leases under a legal lease due to the powers held by the tenant under occupier's rights. Schedule 1 deals with overriding interests that will remain to be binding, which includes actual occupation. Therefore it seems that problems discussed are still very real; however Schedule 3 deals with the limitations on certain overriding interests listed in Schedule 1 and one of these are the actual occupation interests. The limitations that are most important to this discussion on the interest succeeding are in respect to those where inquiry has been made and that individual has failed to disclose; and those individuals who are not in obvious occupation on careful inspection. In relation to termination of leases, as they hold legal status the following cases makes it very difficult for landlords to regain possession as they merely hold an equitable interest, because the tenant holds absolute possession and term of years absolute. Therefore this would cause significant problems with the cases of Chhokar10, Cheshire Homes11 and Tizard12 because at the point of sale to a subsequent buyer if there is possession by another, but even in enquiry there was no obvious proof of actual occupation. Therefore the occupier's rights were upheld, which would be the case for legal and equitable tenants also.13 The actual law therefore has tried to deal with the suggested changes of the Law Commission, as well as considering the problems with registering all interests. Rather the numbers of interests that override have been reduced and it provides a manner in which subsequent purchasers and creditors have not been bound. In respect to the notion of actual possession the law has been defined, whereby if possession is not apparent on a reasonable exploration of the property there is no possession. This would be interesting if one considers the case of Malory v Cheshire Homes Ltd14 this has caused an interesting problem, because the Court of Appeal held that there could be actual possession of vacant land; however how can one explore vacant land and find a reasonable circumstances of possession This decision by the Court of Appeal is contrary to the LRA 2002, which was prior to its inception. The law reform has tried to balance out the problems with overriding interests, but is it enough to protect the buyer and those persons whom hold beneficial interest in property The changes in respect to overriding interests have been minimal, the law reform has eliminated some of the obsolete interests but it has not properly cleared up the problem of occupiers rights. It has defined what actual occupation is but if this definition holds how would this have affected the case of Chhokar v Chhokar. This is because Mrs Chhokar was not in physical occupation, but it would be unjust for Mr Chhokar and Mr Parmar to succeed in their unjust and fraudulent dealings; which goes against the purpose of overriding interests, which is to ensure fairness and justice. Therefore the uncertainty and confusion in this area will still be apparent and even if clarified injustices may occur. The question of clarity in the law may create uncertainty in the judicial arena, due creating injustices; therefore causing problems with the mirror principle of law. This is even the case since the introduction of the Land Registration Act 2002 (LRA). The introduction of e-conveyancing has opened up interests in land, such as leases and charges for viewing. It has also meant that there is no need to lodge applications of land charges and transfers of title as this will be done automatically in the e-conveyancing; therefore creating a more efficient system for conveyancing practitioners. As with every change there will be apprehension that the title and charges have really been completed without the sending of applications and receipts of notification; however this is belied by the fact the changes can be viewed openly to make sure they are correct.15 The key factor is that the category of overriding interests have been narrowed by the LRA, but as Cheshire Homes illustrates this is limited in the area of actual possession, which continues to put landlords at a detriment in regaining possession of their property and terminating leases. Part B: The research for this advice was based on a Westlaw and LexisNexis UK database search of cases, ratios and journal articles. In addition the use of well known text books to identify basic legal principles, which have been listed in the Bibliography page below. The searches simply included putting in the terms such as legal lease, licenses or equitable interests. The question of overriding interests are essential to landlords and the termination of leases, so the case dealing with this area were explored, even though they are primarily concerned with house sales. The question overriding interests and the rights of the tenant versus the landlord are the key factors in this legal scenario. Therefore this research considered the approach pre and post 1925 to legal and equitable interests in property and then considered changes since the LRA 2002, as opposed to purely considering the scenario in respect to statutory tenancy rights. This is a very important approach to this question as many changes have come about because of recent case law, such as Street v Mountford. In the problem solving question the specific study was examined and research into legal v equitable leases was the approach by applying the appropriate common law. In reference to the question concerning case law and leases the topic area that was chosen is causing problems for both landlords and owners selling their property, which is the question of overriding interests. Therefore the approach taken was to explore recent examples of such cases and then discussing whether they illustrate the law moving towards protecting landowner's rights or that of the tenants. The methodology of this discussion will be from primarily a theoretical standpoint. It will consider the approaches of law commission and judges in respect to overriding rights. Also it will make a review of literature of journals and white papers on the subject of legal theorists and lawmakers towards protecting overriding interests, rather than the landowner and the aims of their approach. It will then take this theory and literature review and consider some of the case law and recent statutory changes and whether this has affected the powers that the possessor has by holding occupier's rights and the type of changes that recent legal reforms that have taken place have impacted on this rights. It will also consider whether these reforms have had positive, negative or no impact on occupier's rights and why this is; for example is the change consequence or do these changes have little effect. Finally this discussion will discuss how occupier's rights have affected the rights of landlords in terminating leases and regaining the possession of their property. This discussion is not a quantitative analysis of the actual number of cases that have been decided either in favor or against the landlord. Rather it is concerned with recent legal principles and whether there has been a change in respect to the termination of leases and the regaining of possession by landlords. This research has done this by considering such conclusions from recent cases; as well as from the perspectives of various sources of literature and already collected and analyzed data. Bibliography: W. Ashburner (1933) Principles of Equity 2nd Edition, London, Butterworths Burn, 1998, Maudsley and Burns: Land Law Case and Materials 7th Edition, Butterworths Cheshire & Burn (2000) The Modern Law of Real Property 16th Edition London, Butterworths R. Edwards & N. Stockwell (2002) Trusts and Equity, Harlow England, Longman Goff & Jones (1998) The Law of Restitution 5th Edition, London, Sweet & Maxwell Hayton & Marshall (1996) Commentary and Cases on the Law of Trusts and Equitable Remedies 10th Edition, London, Sweet & Maxwell Heydon, Gummow & Austin (1993) Cases and Materials on Equity & Trusts 4th Edition, London, Butterworths Holdsworth (1974) History of English Law Vol. 17, London, Sweet & Maxwell Jackson, 2003, Title by registration and concealed overriding interests: the cause and effect of antipathy to documentary proof, 119 LQR 660 Law Commission Report 271 The Lawyer, Real Estate: Land Registration Act 2002 - the main changes, The Lawyer November 17th 2003, 31 Maitland (1936) Maitland's Equity 2nd Edition, Cambridge, Cambridge University Press J. Martin (2001) Hanbury and Martin: Modern Equity 16th Edition, London, Sweet & Maxwell Megarry & Wade (2000) The Law of Real Property 6th Edition, London, Sweet & Maxwell Meagher, Gummow & Lehane (1992) Equity: Doctrines & Remedies 3rd Edition, London, Butterworths Parker & Mellows (1998) The Modern Law of Trusts 7th Edition, London, Sweet & Maxwell Pettit (1997) Equity and the Law of Trusts 8th Edition, Croyden, Butterworths Tolley Riddell, 1997, Land Law, Butterworths L. Small & R. Pain, 2003, Land Registration Act 2002, JJ 78(1) Snell (2000) Principles of Equity 30th Edition, London, Sweet & Maxwell D.W.M Waters (1967) The Nature of Trust Beneficiary's Interest, 45 CBR 219-283 LRA 2002: Finance and Credit Law, 2003, Land Registration Act 2002, F & CL 5.8(3) HM Stationary Office, Land Registration Act 2002, Chapter 9 of Explanatory Notes, at 118 & 119 can be found at: http://www.hmso.gov.uk/acts/en2002/02en09-c.htm Jackson, 2003, Title by registration and concealed overriding interests: the cause and effect of antipathy to documentary proof, 119 LQR 660 Law Commission Report 271 The Lawyer, Real Estate: Land Registration Act 2002 - the main changes, The Lawyer November 17th 2003, 31 Read More