Ians Property Law Situation - Case Study Example

Property Law According to Section 1) of the Law of Property Act of 1925, there are only two kinds of ownership (a) fee simple absolute and (b) term of lease absolute*1. Ian is faced with two different kinds of leases that already exist on the property he has purchased, one of which is a long term lease of 25 years, while the other is a short term tenancy. Ian may not be able to evict Mr. Mitchell, but will have to honor the lease that the mechanic had with Alfie. The extent of obligations that Ian will have towards Mr. Mitchell in terms of repairs and maintenance of the property, etc will depend upon the terms of the lease agreement that Mr. Mitchell had with Alfie. However, Ian as the new freeholder of the property cannot repossess the leased property, unless Mr. Mitchell violates the terms of the lease such as (a) does not pay rent (b) the original lease with Alfie specifies that the lease can be ended before the specified 25 year period (c) refuses to carry out any obligations that are executed in the lease agreement between Alfie and Mr. Mitchell*2. However, there is one important clause that must be considered in the light of the Land registration Act of 2002 which became active in 2003. Since Mr. Mitchell has acquired the property after the date of the new Registration Act, Alfie should have registered the lease title in favor of Mr. Mitchell*3. In fact, since the duration of the lease period is for 25 years, registration would have been mandatory even before the new Act. Hence, the first factor to be explored is whether or not Alfie and/or Mr. Mitchell have registered Mr. Mitchell’s term of lease absolute. In the event this has not been done, Ian will be under no obligation to allow Mr. Mitchell to remain except on renegotiation of new terms. But since Mr. Mitchell has paid some consideration in order to acquire a lease on the property, he will be entitled and within his rights to retain his possession of it and his lease allows him the right to peaceful possession and enjoyment of the outbuilding on which he holds a lease. Although he possesses the outbuilding, this is not a separate property but will be a part of the Albert Court property depending upon the legal description of the property and its boundaries as they have been spelt out in the title deed. Miss Watt’s term of tenancy is however a short term. The terms of the Land registration requirements under the new Act of 2002 will apply in her case*4. The new Law requires that all new tenancies of any length that start more than three months after the date they are granted must be registered in order to make Miss Watts’ interest in the land legal. Unless Miss Watts has registered her tenancy, she will not have any right to possession since the original freehold owner with whom she had entered into the tenancy agreement has sold the property and his interests in the property have now been transferred to Ian as the new owner of the property. She will now have to make fresh arrangements with Ian, who has the option to continue her tenancy or give her a reasonable period of notice to vacate the property and find alternative accommodation. There is a possibility that she may be able to make a claim under adverse possession of the property by way of her tenancy, as was the case in Pye v Graham*5, because she has been paying her rents and is in possession of a valid tenancy, which has not been revoked by Alfie in any way before the sale, irrespective of rent payment, In reference to the two tenants above, Land Property Act*6 specifies the modes of conveyance of land and according to Clause 4, the conveyance will be valid only if contrary interest is not expressed. While Alfie had not been entirely truthful with Ian in revealing the nature of the liens on the land, the blame does not rest entirely with Alfie because Ian also did not bother to find out anything before purchasing the land. Now he is obliged to accept the land with encumbrances because he has already paid the consideration for the property through the money he lent to Alfie and therefore possesses valid title to the property. He must now register the title in his name, but would need to indicate Mr. Mitchell’s title as well, especially if that gentleman has registered his title. While Ian’s obligations are flexible with regard to Miss Watts, they are not in the case of Alfie’s covenant with Mr. Branning. This agreement falls into the class of a restrictive covenant, which Sexton refers to as a “promise by one landowner in favor of a neighboring landowner”*7, which a purchaser is obliged to honor. Although Ian claims that he does not have any knowledge of the covenant, it is nevertheless an obligation he is obliged to fulfil. In the event that he wishes to dispute the covenant on the basis that he was not aware of it, then the matter has to be taken to the land office of the urban locality where Albert Court is located so that the dispute can be resolved and Ian will be obliged to honor whatever decision is taken. As far as Kat’s lien on the property due to the existence of the trust is concerned, much will depend upon whether or not Alfie has taken necessary steps to ensure that a trust was executed in her favor through a written instrument in order that it may be valid. Oral dispositions for equitable interests have been deemed to be non enforceable by the Courts under law*8, which makes it very clear that unless a trust is executed through a written instrument, it will not be deemed to be legally valid. This section states: “A disposition of an equitable interest or trust subsisting at the time of disposition, must be in writing, signed by the person disposing of the same….”*9 Although Alfie has promised Kat that he will place half the property into trust for her, Kat will be unable to claim any equitable interests if Alfie has not executed a written instrument. Disposition is identified as conveyance of land at Section 205 (i) (ii) of the Land Property Act. For example in the case of Hodgson v Marks*10, Hodgson had made an oral disposition via a trust in favor of Evans who sold his interest to Marks. But marks was not deemed to possess any title or rights to the property since the disposition conveyance of land was not executed in writing. Moreover Section 52(1) also clarifies that conveyancing is invalid unless transferred by a written deed. However, an exception to this could be the principles of estoppel, which may serve to validate a deed that does not completely satisfy the formality requirements, as established in the case of Shah v Shah*11. However, Kat may have the right to possession under the Matrimonial Homes Act of 1967. These rights are now contained in Sections 30-32 of the Family Law Act of 1996. This will apply in Kat’s case since Alfie is the sole title holder for ownership of the property at Alfie Court. However, as Alfie’s wife, this right to possession will exist completely independently of any equitable share that she may have by virtue of a constructive trust*12. The extent of her rights under a constructive trust will depend upon the extent of any investments she may have made in the property and will be determined on a proportionate basis. For example in the case of Lloyds Bank plc v Rossett*13, title for a property rested with Mr. Rossett who borrowed a loan to pay for renovations. Although Mrs. Rossett make some contributions in terms of arranging renovation work, this was not deemed equivalent to ownership of title, which would have rendered her liable to repay the loans her husband had taken from the bank. However, Mrs. Rossett was able to claim her right to possession of the premises and the bank could not vacate her, so that they could sell the house and recover their loans. In a similar way, Kat can claim her right to remain in possession of the property, especially if the title has not yet been registered in Ian’s name. Ian has two advantages in this regard (a) he is in possession of the property since Kat was away on holiday (b) once his title has been registered, Kat’s right to possession will cease since she is not in actual possession at the time of title registration. In order to determine which of the items in the house Kat can actually claim, the test of annexation will have to be applied and a determination must be made about which of the items are fixtures and which could qualify as chattel. In the case of Berkley v Poulett*14, Scarman held that items which are fixtures and are a part of the original building plan cannot be removed from the premises, while other items would qualify as chattel which could possibly be removed. National conveyancing protocol laid out in the Miscellaneous Provisions Act of 1989 requires a vendor to supply a list of items which are for sale. The case of TSB Bank plc v Botham*15 established the fact that disputes are likely to occur when the form is absent or incomplete.*16 Moreover, such assessments of whether or not an item is a fixture or chattel is expected to be concluded at the time of contract, otherwise it may be an indication of deliberate concealment as was the finding in the case of Taylor v Hamer *17 where the owner removed some flagstones after the oral agreement was concluded. It was Ian’s responsibility to ensure that a proper listing was prepared of the items in the house, with fixtures and chattel appropriately mentioned. Otherwise, the general assumption is that he has bought the house as it was when he viewed it and executed his contract with Alfie and therefore he may be able to retain all the things that Kat is now claiming, since Ian reasonably expected to receive all the contents that existed in the house at the time of his purchase. However, even if this argument put forth by Ian is not accepted by the courts, then a determination must be made, applying the annexation test if necessary, to determine which items would qualify as fixtures. For example, the fridge and washing machine cannot be classed as fixtures and Kat may be able to claim her right to possession of those items since the property title was transferred without her notice or consent. But in the case of items such as fitted carpets and the carillon clock, these items are like fixtures in the house, especially the clock which rests on its own weight and is fitted into a recess in the wall, and there could be some damages involved to the structure of the property itself if this is removed. There will be some alteration to the basic structure of the property and would therefore qualify as a fixture of the property. Similarly, the removal of the fitted carpets would also involve substantial dismantling which could cause damages to the flooring of the property which qualifies structurally as an integral part of the property. In the case of the bronze chandeliers, they are also an integral part of the décor and structure of the house, although they were installed at a later date and would therefore qualify as fixtures in the property and therefore, cannot be deemed to be removable unless this has been specified in the contract for sale between Alfie and Ian. However, what is significant in this instance is the fact that Ian has purchased the property and executed the contract in the reasonable expectation that he will receive the property in the condition that it was when he viewed it. The removal of these fixtures identified above will constitute structural alteration to the house which will be untenable under the terms of contract for sale, as established in Taylor v Hamer. Therefore, it is very likely that a Court will rule in Ian’s favor as far as possession of these fixtures is concerned. The only significant area where Kat will have some valid claim will be through her claim that Alfie has sold the property without her knowledge and consent and as Alfie’s wife, she also has some rights over the property, especially the right to possession endowed on her through the Matrimonial Homes Act. From the above, it may be seen that most of the recourse that may be possible to Ian will depend upon the nature and content of the actual written instruments that exist between Alfie and the claimants to the property. The registration factor will play a significant role in an enforcement of the rights of Mr. Mitchell, Miss Watts and Kat by the courts. Mr. Branning can also enforce his prior agreement with Alfie through Ian, but this will most probably have to take place through some mode of arbitration rather than a battle in the courts and is therefore mostly, a personal matter that will have to be settled between Mr. Branning and Ian on some compromise basis. Bibliography Berkley v Poulett 1976 CA Taylor v Hamer (2002) WL 1446261, [2002] EWCA Civ 1130 TSB Bank plc v Botham (1997) 73 P & CR D1 Hodgson v Marks[1971] Ch 892, [1971] 2 All ER 684, [1971] 2 WLR 1263, 22 P&CR 586, 219 EG 1445, [1971] EGD 773. Court of Appeal * Shah v Shah (2002) QB 35. Sexton, Roger. (2004) Land Law textbook Oxford: Oxford University Press, p 5 Lloyds bank plc v Rosset {1991] 1 AC 107, House of Lords Pye v Graham (2002) UKHL 30 Royle, Richard (2003) Briefcase on Land Law. 4th edn. Cavendish Publishing Can the freeholder evict me? [Online] Available at: http://england.shelter.org.uk/advice/advice-186.cfm; accessed 1/7/2006 Land Registration Act 2002: Changes that may affect you. [Online] Available at: www.landreg.gov.uk/legislation/ Wolstenhome and Cherry’s Annotated Land Registration Act 2002. London: Sweet and Maxwell, 2003 Read More