The Cae of Land Law - Case Study Example

Question In 1990, Algernon entered into an agreement with Beatrice, the owner of the other' semi', 14 Acacia Ave, to the effect that Algernon would not use Number 12 for business purpose or erect any other building. Restrictive covenant: It is seen that the original owner, Algeron had entered into a restrictive covenant with the co-owner of the house, Beatrice, with regard to its non-use for business purpose or future development. In legal parlance, a restrictive covenant is one in which the covenantee is restrained, or prohibited from performing a deed or action, mutually agreed upon, by covenant. Although restrictive covenants of the kind seen above between the original owner and the co-owner are valid under law, a question would arise whether similar restrictive covenant would be enforceable in the event of a new purchaser coming into the scene. Whether a restrictive covenant could bind future owners of property is a matter in which judicial discretion has to be applied, based on the circumstances of the case and its legal surroundings. However, in the leading case of Tulk v Moxhay (1832) (1848) CB 430 (HL), the facts read as follows. The owners of land in Leicester Square had covenanted with local landlords not to allow development in the park zone. However, when the park was sold off, the new purchaser, albeit aware of the restrictive covenant, wished to build on it. The Court held that it would be inequitable for him to do so. . The aspect of "restrictive covenant "that was seen in the case of Tulk v. Moxhay 1848 and is said that the burden of a covenant which was restrictive in nature could run with the land', despite privity of contract. (Tulk v Moxhay (1848). 2006). This could be enforceable against the new purchaser, Frank and he could be restrained from building any new developments or structures in the restrictive covenant area. Frank could be bound by the interest of Beatrice Question 2: In 1995, he executed a deed to the effect that, his neighbour at number 16, Chris, was entitled to store fishing gear in Algernon's shed'for the rest of his life.' Overriding interests: Under the laws of registered conveyancing, when a person purchases a legal interest in land, he would normally be bound by any third party interests in that land, save and except, when it is registered, or deemed to constitute 'overriding interests.' It has been seen that 'overriding interests' are a significant danger zone for any purchaser of registered title, since, although it does not appear in the register, it is able to influence the title of the purchaser, whether he was aware of it or not. Currently, there are four types of overriding interests and they are with regard to: Local land charges Easement and profits Short term legal leases Property rights of a person in actual occupation. Moreover, under Sch. 3 Para 3, the scope for only legal easements and legal profits are available. Therefore, interalia, easement or profits endured for life of party do not constitute 'overriding interests' and therefore do not fall within the scope of being bound by such interests.(Overriding Interests and Minor Interests: Overriding interests, p.121-122). Thus, by application of the above legal interpretation regarding interests that has been deemed to have been vested by Algernon to Chris through a 'tenant for life' deal for storing fishing gear in Algernon's land for life is not tenable in a Court of Law since it does not satisfy the criteria of 'overriding interests.' Frank may not be bound by the interest of Beatrice. Case 3: In 2000 he granted his niece, Denise, in consideration of 5, an option to purchase number 12 for 275,000, on the giving of one month's notice, within 10 years. Laws surrounding options: An option to purchase land, or chattel is documented through a covenant which facilitates the purchase of the property by the buyer to the seller within a specified time and for a specific amount. Therefore, it could be considered to be an interest in land and needs to be protected by an entry in the Register. "The principle under the new Act is that an interest will only have overriding status if it would be unreasonable to expect it to be registered. And, as most interests that it is reasonable to register are compulsorily registerable anyway, some interests will cease to override by virtue of being registerable." (Land Registration: What's new in 2002: Interests that are registerable. 2006). In this case study, the ingredients of a valid contract are present- consideration, validity time of performance and offer/ acceptance and also, the aspects of easement also comes into fore. In the decided case of Ferrishurst v. Wallcite (1988)[1999]Ch.355(CA) the clause maintained that the existing tenant be given the option of buying the defendant's landlord's title which included a motor shed and land on whose premises the office of the applicant was based. Upon lapse of the lease, the applicant's endeavoured to enforce the buying clause option. Since it was unregistered land, it became incumbent to invoke Section 70 (i)(g) of the Land Registration Act 1925. It was considered that overriding interests were present and the Court of Appeal, surprisingly, allowed the option to be exercised for the total unit rather than the actual occupancy by the applicants. In this case, it is seen that Denise has easement rights over the property and could exercise it when the situation demands. Although the final decision would vest with the Court, the right of Denise cannot be denied. Frank's purchasing decision would need to also take Denise's right in account. Case 4: In 2004, Algernon invited his niece, Erin, to move in with him until she recovered from a messy divorce. Since then, she used her divorce settlement to pay off the mortgage on number 12, and has made substantial improvements to the property. The Courts of Law in the UK have distinguished between 'shared occupancy' and 'share proprietorship.' In order to invoke the latter, two determinants need to be established: There has been an agreement to create an express agreement and that the co-owner shall be a party to such agreement. There needs to be demonstrated evidence of financial contribution by the professed co-owner. In this case it is seen that both these criteria have not been met. Although she has made substantial improvements to the property and paid off the mortgage etc, there is no evidence that there was an express intention on the part of Algernon to have Erin as a co-owner. In the Gissing v Gissing case, the claim for beneficial interest could not be sustained since the Court held that the conduct of the parties at the time of making the contributions are more important than the conduct at the subsequent time. Although the wife in this case had made substantial contributions, it was untenable in Court of law. (Gissing v Gissing.1971: AC 886. (1998). It could be said that the entry of Erin and her support to Algernon was purely by chance and was not indicated or motivated by the contracting parties. Further, it does not met the criteria of intention of the parties to enter into contractual relationships. Moreover, Erin's support for Algeron could be seem in terms of establishing share occupancy and not ownership, since there was no direct fiduciary relationship between herself and Algeron. Hence, Frank may not be bound by Erin's interest. Additional information required: The following information may be needed in order to provide Frank with advice: Original sale agreement and registration documents of 12 Acacia Ave. house Present certified value of house property Terms and conditions governing option agreement with Denise Amount spent by Erin towards payment of Mortgage dues and sums towards improvement of house property Terms and conditions relating to proposed sale to Frank. Works Cited Tulk v Moxhay (1848). (2006). [online]. The K-Zone. Last accessed 27 March 2008 at: http://www.kevinboone.com/lawglos_TulkVMoxhay1848.html Overriding Interests and Minor Interests: Overriding interests. [online]. Sexton. P.121-122. Last accessed 27 March 2008 at: http://www.oup.com/uk/orc/bin/9780199284436/sexton_chap10.pdf Land Registration: What's new in 2002: Interests that are registerable. (2006). [online]. The K-Zone. Last accessed 27 March 2008 at: http://www.kevinboone.com/lawglos_WhatsNewIn2002.html Gissing v Gissing.1971: AC 886. (1998). [online]. SLAPNT@cf.ac.uk. Last accessed 27 March 2008 at: http://ourworld.compuserve.com/homepages/pntodd/cases/cases_g/gissing.htm Read More