#3752 - Registered And Unregistered Land - GDL Land Law

Interests in Land

Legal Interests

- Preliminary issues:

• does grantor have legal capacity? (e.g. not owner of equitable lease).

• does interest have legal capacity? s1(2) LPA 1925: (a) easements/profits for freehold/leasehold period (if not specified: assumed same period as grantor’s estate); (b) rentcharge; (c) charge by way of legal mortgage; (d) similar charge; (e) landlord’s right of entry.

- Creation formalities:

• 1. deed (s52(1) LPA 1925)

• 2. registration:

  • registered land – any express grant (s27(2) LRA 2002: transfer of legal estate; 7+ year legal lease; expressly granted legal easement, legal charge);

  • unregistered land – mortgage (s4(1)(g) LRA 2002).

- Transfer formalities:

• assignment: deed (s52(1) LPA 1925).

  • if failed could be equitable interest (estate contract) if s2 LP(MP)A 1989 compliant.

• conveyance: transfer of interests implied (s62 LPA 1925) unless contrary intent expressed (s62(4)).

remedy if infringed: damages by right + equitable remedies at court’s discretion.

Equitable interests

- Types of equitable interest:

• 1. inherently equitable (s1(3) LPA 1925: any interest not in s1(2) LPA 1925): e.g. restrictive covenant, estate contract (inc. option + right of pre-emption [s115 LRA: interest from time created]); beneficial interest under trust (express declaration: s53(1)(b) LPA 1925 formalities), easement for uncertain period.

• 2. granted by holder of equitable estate.

• 3. failed legal interest (Walsh v Lonsdale: failed deed estate contract if s2 LP(MP)A compliant + capable of specific performance): e.g. equitable easement (no deed/registration); equitable mortgage/charge (no deed/registration); equitable lease (only contract/no deed/registration).

- Creation formalities:

• 1. inherently equitable: s53(1)(a) LPA 1925: in writing, signed by grantor.

  • (express trust of land: s53(1)(b) LPA 1925: evidenced in writing signed by settlor).

• 2. estate contracts: s2 LP(MP)A 1989: in writing, all express terms, signed by both parties.

  • (+ must be capable of specific performance: clean hands etc.)

  • inc. failed legal interests (Walsh v Lonsdale).

  • options to purchase: original grant (Spiro v Glencrown Properties).

  • right of pre-emption (Bircham & Co v Worrell Holding; s115 LRA 2002: interest from time granted.).

  • NOT oral agreements to exchange (Sharif v Sadiq) invalid.

• EXCEPTIONS: no writing needed – implied trusts (s53(2) LPA 1925 + s2(5) LP(MP)A 1989); proprietary estoppel: reliance to detriment (Gillett v Holt).

- Transfer formalities:

• s53(1)(c) LPA 1925: in writing, signed by grantor or authorised agent.

• contract to transfer: s2 LP(MP)A 1989.

• conveyance: transfer of interests implied (s62 LPA 1925).

remedy if infringed: only equitable remedies, at court’s discretion (clean hands: Coatsworth v Johnson; although only not if breach gross + wilful – Porter v Taswell).

Licence: (if no legal or equitable interest) – mere personal right, revocable at will, will not bind 3^rd parties.

Enforcement of 3^rd party interests against a purchaser

[Structure:

• 1. identify interest.

• 2. set out formalities (for creation + protection).

• 3. apply (+ consider different possibilities)].

Registered Land

- 1. registrable dispositions (s27(2) LRA 2002: created by registration): +7yr legal lease, expressly granted legal easement, legal charge, right of entry.

• registered: notice entered on charges register by registrar (s38 LRA 2002) binding.

• not registered: possibly equitable, if valid contract capable of specific performance.

- 2. interests protected by notice in charges section of register (s32 LRA 2002): estate contract (option to purchase, right of pre-emption, equitable lease), equitable easement, restrictive covenant, FLA 1996 right.

• notice entered: binding (s29(2) LRA 2002)

  • (FLA right: no vacant possession until cancelled by Family Law Courts – s33 FLA 1996).

• notice not entered: not binding against purchaser for valuable consideration (s29(1) LRA 2002).

  • even if buyer has notice (De Lusignan v Johnson).

  • unless overriding: Sch 3 para 2: actual occupation (but s31 FLA 1996: FLA right cannot be overriding).

  • exception: fraud (Lyus v Prowsa).

- 3. interests under a trust: protected by restriction on proprietorship section of register (s40 LRA 2002).

• overreached: will not bind purchaser (equitable interest transferred to purchase monies).

  • conveyance by 2+ trustees or trust corp. (s2(1)(ii) LPA 1925).

  • payment to 2+ trustees or trust corp. (s27 LPA 1927).

  • City of London BS v Flegg: overreaching overriding interest (e.g. occupation etc.) defeated.

• not overreached: binding if overriding interest under Sch 3 para 2.

  • payment to 1 trustee not overreached (Williams & Glyn’s Bank Ltd v Boland).

- 4. overriding interests: bind even though not registered (s29(2) LRA 2002).

• 1. Sch 3 para 1: legal leases 7/- yr.

• 2. Sch 3 para 3: implied legal easement – if: a. known to purchaser; b. obvious on reasonable inspection; c. used within 1 year.

• 3. Sch 3 para 2: any interest of person in actual occupation – if: a. apparent on reasonable inspection; b. known to purchaser; + no failure to disclose when asked by interest holder.

  • AO at date of completion (Abbey National v Cann).

  • actual occupation: q. of fact + degree.

    • temporary absence irrelevant (Chhokar v Chhokar: hospital; Link Lending v Bustard: furniture + visits + bills)

    • long absence = no AO (Stockholm Finance v Garden Holdings: 1 year).

    • preparatory acts = no AO (Abbey National v Cann)

    • occupation by proxy difficult: (Strand Securities v Caswell: step-daughter no; Stockholm Finance v Garden Holdings: visits by cleaner + driver no; but Abbey National v Cann: [Ld Oliver] obiter: maybe caretaker).

  • e.g. Hodsgon v Marks: c. intended to create trust; t. sold property to d. d. took subject to c’s interest.

Unregistered Land

- 1. legal interests (except puisne mortgage): bind the whole world – no need to register.

- 2. interests registrable as land charges (s2 LCA 1972):

• [registration requirements:

  • against owner’s name as in title deeds (s3(1) LCA 1972; Standard Property v British Plastics Federation; Diligent Finance Co Ltd v Alleyne).

  • by date of completion of sale (s4 LCA 1972)].

• a. C(i): pusine mortgage; C(iii) equitable charge (e.g. equitable mortgage of legal estate not protected by deposit of deeds); F: FLA rights.

  • registered: binding (s198 LPA 1925: registration constitutes notice).

  • not registered: not binding against purchaser of any interest in land for valuable consideration (inc. equitable purchaser; marriage consideration) (s4(5) + s4(8) LCA 1972).

• b. C(iv): estate contract (inc. options etc); D(ii) post-1925 restrictive covenants; D(iii) post-1925 equitable easements.

  • registered: binding (s198 LPA 1925).

  • not registered: not binding against purchaser of legal estate for money’s worth (s4(6) LCA 1972).

    • (i.e. still binds: equitable purchaser; purchaser for other/no consideration (inc. marriage)).

    • e.g. Hollington Bros v Rhodes: unregistered contract for lease defeated by sale (despite actual notice).

    • e.g. Midland Bank Trust Co v Green: unregistered option to purchase defeated by sale (despite bad faith).

- 3. interests under a trust.

• overreached: will not bind purchaser (equitable interest transferred to purchase monies).

  • conveyance by 2+ trustees or trust corp. (s2(1)(ii) LPA 1925).

  • payment to 2+ trustees or trust corp. (s27 LPA 1927).

  • City of London BS v Flegg: overreaching overriding interest (e.g. occupation etc.) defeated.

• not overreached: dep. on doctrine of notice.

  • payment to 1 trustee not overreached (Williams & Glyn’s Bank Ltd v Boland).

- 4. equitable interests still subject to doctrine of notice: pre-1926 equitable easement; pre-1926 restrictive covenant; lessor-lessee restrictive covs.; unoverreached trust interests; interests arising by estoppel (ER Ives v High).

• legal interests: bind whole world – regardless of knowledge.

• equitable interests: do NOT bind bona fide purchaser for value of legal estate value without notice then do not bind any future 3^rd parties (Wilkes v Spooner).

  • bona fide: good faith.

  • purchaser: NOT...