Property Law

Land – Freehold Estates | Land Law – SQE1 & SQE2 Exams

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Land – Freehold Estates
Legal estates (LPA 1925, s1(1)):
• Freehold – fee simple absolute in possession
o Fee – inheritable
o Simple – inheritable by any heir and not a restricted class
§ Passes as per will; or
§ Intestate – to next of kin (Administration of Estates Act
1925); or
§ To Crown (Bona vacantia) (Re Lowe’s WT)
o Absolute – not determinable (ending on given event, e.g. marriage)
or conditional
§ NB: LPA 1925 s7(1) – conditional fee simple treated as fee
simple absolute
o In possession – current right to use and enjoyment –i.e. not in
remainder or reversion.
§ ‘in possession’ if estate owner in receipt of rents or profits
from the land or has the rights to receive them (LPA 1925,
s205(1)(xix)
• Leasehold – term of years absolute
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Acquisition of Freehold
• Transfer by:
o Sale
o Gift
o Will
o Operation of law
§ Death
§ Bankruptcy
• Formalities
o Deed – conveyances of legal title by deed, LPA 1925 s 52(1),
requirements of Deed = s 1 LP(M)A 1989
§ Exceptions LPA 1925, s52(2)
o Registration – on national land register, Land Registration Act
(LRA) 2002, ss 4(1) and 27(1)
§ No legal title until registration for registered land
• Sale of freehold
1. Exchange of contracts – seller and buyer agree price and terms in a
binding contract
2. Completion – seller > buyer transfer by deed
a. Conveyance for unregistered land (legal title passes s4 LRA
2002, with obligation to register within 2 months (s6 LRA
2002), reverting back to seller to hold on bare trust for
buyer if no registration)
b. For registered land, legal title does not pass until
registration
3. Registration – buyer is registered as new owner
a. Legal title passes with registered land upon registration
(s27 LRA 2002)
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Exchange of Contracts
• Upon completion of enquiries by buyer (rights of way, building
restriction, survey) – enter into legally binding contract, with liability for
pulling out
• Contract passes equitable interest in land to the buyer – normally
specifically enforceable (‘Equity looks upon that as done which ought to
be done’)
• Parties sign valid specifically enforceable contract, the buyer has an
‘estate contract’ = specific performance against vendor and third-parties
(Cutts v Thodey), unless third-party did not know or did not ought to have
known that the land had already been sold.
• Contracts for sale or disposition have formalities:
o Comply with general contact rules
o Contracts before 26th Sept 1989, LPA 1925 s 40
o Contracts on or after 27th Sept 1989 governed by Law of Property
(Miscellaneous Provisions) Act – LP(MP)A 1989 s.2
§ Apply to grant of mortgage, easement or lease too
© Liam Porritt 2020 4
Formalities
Contracts before 26th Sept 1989
• No formal requirements for validity – contracts may be oral – enforceable
if one of the following:
o Contract in writing and signed by the party against whom the
contract is being enforced
o Existing written record of oral contract – memorandum or note –
signed by party against whom contract is enforced
§ E.g. receipt signed by seller – Davies v Sweet
o Oral, but party seeking to enforce has done ‘part performance’
(demonstrating existence of contract)
§ E.g. buyer taking possession of land with consent of seller
(Bowers v Cator)
§ E.g. making improvements on the land (Broughton v Snook)
Contracts made on or after 27th September 1989
• LP(MP)A 1989 s 2 – valid contract prima facie enforceable if ALL satisfied:
1. Contract in writing
2. Containing all expressly agreed terms
3. Signed by both parties
• There are exemptions from these formalities – see s 2(5) LP(MP)A 1989
o Lease contract < 3 years, which takes effect ‘in possession’
(immediately) w/ best rent reasonably available
o Contracts made at public auctions
o Contracts regulated by Financial Services and Markets Act 2000,
inc. some kind of interest in land
o The creation of resulting, implied or constructive trusts (s 53(2)
LPA 1925)
• Rarely, courts uphold agreements that do not comply with s 2 under
proprietary estoppel to protect against unconscionable conduct or
equitable fraud in cases of considerable performance (e.g. building on
land for the freeholder, with an expectation of being given some land in
return – Yaxley v Gotts).
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All expressly agreed terms
• Usually two identical copies of contract, with exchange making binding
• May be set out in document or other document referred to (LP(MP)A
1989 s 2(2))
• In case of omission of term which forms part of agreement (not referred
to in land document):
o Tootal Clothing Ltd v Guinea Properties Management Ltd – no
reference to supplementary agreement in Land contract – hiving
off part of terms into separate contract, if these terms do not need
to be included within Land contract, can be done without reference
within Land contract. Both will be binding.
§ If terms necessary for land contract (i.e. they are one of the
‘expressly agreed terms’) they can be in composite
agreement, with reference between documents.
o North Eastern Properties Ltd v Coleman and another: if something
part of ‘whole agreement’ and sale is conditional upon this (sale
of chattels / provision of services / sale of many parcels of land,
not just one) it must be in a single Land contract (or in multiple
with references as above).
NB: if separate contract breached, this has no impact on Land
contract.
Rectification
• Wright v Robert Leonard (Developments)
• Original agreement (including oral agreement) includes terms that are
part of the whole arrangement (e.g. sale of chattels included in sale price)
• These are accidentally left out of written contract (oversight)
• S2(4) LP(MP)A, the court may rectify the contract to include the omitted
term (here the chattels), if it would be unjust not to do so
• Oun v Ahmad
• An agreed term is (in opposition to Wright) expressly excluded
• Thus, the contract over land does not comply with LP(MP)A s 2 as there is
no reference between the two documents
• Rectification not available unless mistake or oversight
NB If oral agreement is there originally, these terms are the original terms that
must be included in contract – if one of these is left out, it would be added by
rectification, not by variation.
Variations
• McCausland v Duncan Lawrie Ltd
• Material term in a contract for the sale or disposition of land varied ~
variation must comply with LP(MA)A 1989 s 2, (i.e. they must be written
and signed by both parties and refer to the original document).
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Correspondence exchanged
• Commission for the New Towns v Cooper (Great Britain) Ltd
• Contract cannot be created from correspondence rather than a document
compliant with s 2 LP(MA)A
Signed by both parties
• Firstpost Homes Ltd v Johnson
• The document that is signed by both parties must be the document that
incorporates any other document by reference (i.e. cannot just sign other
document that does not include reference).
• Typing or printing ≠ signature
Remedies for breach of contract
• Damages – loss which claimant has suffered, including loss of the bargain
(Speciality Shops v Yorkshire & Metropolitan Estates Ltd)
• Specific Performance – equitable remedy at discretion of court
• Injunction – restrain from breach of contract, or compel act when no
contractual relationship between the parties
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Completion – Deed
• Conveyance of unregistered land
• Transfer of registered land
Formalities
Legal estates conveyed or created by deed (LPA 1925, s52(1)).
Requirements for valid deed LP(MP)A, s 1:
• Include word “Deed”
• Signed (by seller)
• Witness
• Attested by witness
• Delivered (date – we infer delivery)
Exceptions
• Assents by personal representatives
o Death, land vests in PRs, who transfer the land to the heirs by
‘assent’ rather than by deed of conveyance or transfer
• Conveyances by operation of law
o Bankruptcy – land vests in a trustee in bankruptcy
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Completion – Registration
• Registered land only transfers legal title on registration (LRA 2002, s
27(2)(a)).
• Unregistered transfers on deed with requirement to register land on
buyer – within two months of completion, otherwise legal title reverts to
the seller on bare trust (LRA 2002 ss 4 and 6).
Unregistered interests
• There are some interests which do not have to be registered –
‘unregistered interests which override registered dispositions’
Compulsory Registration
LRA 2002, s27 for registered land, s4 for unregistered land:
• Transfer of freehold by sale, gift or court order
• Lease of more than seven years
• Assignment (transfer) of a lease of unregistered land with more than
seven years to run
• Assent, vesting assent or vesting deed of freehold or leasehold with more
than seven years to run
• Grant of a lease taking effect in possession more than three months after
the date of the grant
• First legal mortgage of the freehold or of leasehold with more than seven
years to run
Can also voluntarily register unregistered land (LRA 2002, s3).
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Acquisition by Adverse Possession (squatting!)
Unregistered land and registered land prior to 13th Oct 2003:
• Adverse possession (physical control and intention to possess) for 12
years
• With registered land, registered owner holds automatic statutory trust for
squatter who also had right to be registered as absolute owner
Registered land:
• LRA 2002, Part 9, Sch 6: 10 years of adverse possession
• Squatter applies to be registered as proprietor
• Notice given to true owner who has two years to evict
Squatting – criminal offence
• Legal Aid, Sentencing and Punishment of Offenders Act, s 144 = 2012
becomes illegal in residential buildings
• Best v Chief Land Registrar – can still acquire title by squatting
• Commercial buildings – squatting a matter for civil courts

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