ONE STOP REVISION

REGISTERED TITLE AND FORMALITIES

Step 1 – identify the interest – e.g. lease, ownership, trust, covenant… Step 2 – is this interest capable of being legal or equitable – see LPA 1925 s.1 (1)(2)(3)
LEGAL:   s.1(1) EIFSAIP and TOYA “the only estates in land which are capable of subsisting or of being conveyed or created at law”   legal interest must be created by deed, UNLESS a parole lease: for a term of 3 years or lessin possessionat best rent reasonably obtained   s.1(2) interests capable of being legal (a) easements (in respect of adjoining land) must be equivalent to EIFSAIP or TOYAmust be adjoining propertymust be created by deed (c) legal mortgage (e) rights of entry must be equivalent to EIFSAIP or TOYA	EQUITABLE:   S.1(3) says any other interest in land is equitable, eg covenant, trust, estate contract   Covenant (in respect of own land): only restrictive binding on successor, and only if protected by notice on register   Formalities for a trust: Express – must be in signed writing (s.53(1)(b) LPA 1925) Implied – none (2 types of implied – resulting/constructive)   Formalities for an estate contract (s.2 LP(MP)A 1989): must be made in writingmust contain all agreed termsmust be signed by or on behalf of each party   Example of estate contract: option to purchase the reversion – gives the tenant an equitable interest in the fee simple estate Note: new purchaser will be bound by the equitable interest only if it has been protected as a C(iv) land charge before he purchased the fee simple (as in Phillips v Mobile Oil Co. Ltd); if not, it will not bind and cannot be enforced.
Step 3 – is it an overriding interest – see Sch 3 LRA 2002
PARA 1	PARA 2		PARA 3
Legal leases ‘not exceeding seven years’	Rights of persons in actual occupation e.g. option to purchase only if a recognised interest in land (step 2)must relate to land which is in actual occupation		Easements only legal, not equitableonly implied and prescriptive, not express
	V
EXCEPTIONS: beneficiary failure to disclose when askedoccupation not obvious on a reasonable inspection UNLESS purchaser had actual knowledgenon-owning spouses (s.30 FLA 1996)interests under Settled Land Act 1925		MEANING OF ‘ACTUAL OCCUPATION’ Hodgson v Marks – physical presence on the land of a person other than the legal ownerChhokar v Chhokar – temporary absence (i.e. in hospital) does not prevent a claim for actual occupationLloyds Bank v Rosset – presence of builders and the daily presence of R to supervise amounted to actual occupation.Hypo-Mortgage Services v Robinson – a child who is in the property together with their parent, the registered proprietor, cannot be a person “in actual occupation” as their presence there is owing to the presence of their parent.
YES Has interest been overreached? only a trust; with +1 trustee which purchaser has paid in full		NO Protected by entry on the charges register? either a registered charge or by notice
Yes: NOT BINDING No: BINDING		Yes: BINDING No: NOT BINDING

EXTENT OF LAND

It was once said that he who owns land owns everything up to the heavens and down to the depths of the earth. However, a combination of common law and statute has negated this seemingly never-ending entitlement.

Griffith J told us in Bernstein v Skyviews that ‘to the heavens’ was restricted for “the rights of the general public to take advantage of all that science now offers in the use of airspace.” He also said that an owner of property owns as much as is necessary for the reasonable enjoyment of property.

Kelsen v Imperial Tobacco – a sign hanging just 8” over the claimant’s land was held to be trespass. In this case, best remedy would be injunction (and damages for time remained after injunction).

Dennis v MOD – claimant awarded damages because RAF fighter planes on training exercise caused nuisance. This compliments Article 8 ECHR – right to private and family life.

Civil Aviation Act 1982 s.76(1): no action of trespass against planes flying at reasonable height

We also know from common law that buried treasure belongs to the Crown alone, so it appears that not everything potentially contained within your ‘land’ will in fact be your ‘land’.

Treasure (defined in s6(1) Treasure Act 1996): any object at least 300 years old which has a metallic content of at least 10% precious (10+ coins: 300 years old; 2+ coins: 10% precious metal and 300 years old) AND any item at least 200 years old of significant cultural or historical interest

Precious metal: gold or silver

FIXTURES

The physical effects within a property are known broadly as ‘fixtures and fittings’. It is important to distinguish between the two however, as (unless the contract for sale has specified otherwise) fixtures automatically become part of land when it is sold and fittings (or chattels) do not. The extent to which these fixtures are attached, that is, are part of the land, is a question of fact in every case.

In order to make this distinction, the common law (largely in Holland v Hodgson) created two tests – the degree of annexation test and the purpose of annexation test.

The degree of annexation test begins with a prima facie presumption that anything affixed to the land, even slightly, is a fixture. The burden of proof lies with the party arguing that the item is a chattel. The courts have developed the view that the greater the attachment of the item, and the more difficult it would be to remove it without damage to itself or the property, the more likely it is that the item will be considered a fixture, e.g. Hamp v Bygrave – six urns and a stone Chinese ornament resting on their own weight were held to be chattels because “there was no doubt that any of the items was fixed or attached to the land” (Boreham J).

Buckland v Butterfield – conservatory attached to house by 8 cantilevers (each 9” long) formed part of the land. Important decision – if vendor wishes to remove such attached items (even rose bushes) he must provide for this when contract is made.

BUT Dibble v Moore (1969) – greenhouse standing on dollies was not a fixture because it was not ‘affixed’ to the land

The issue in the purpose of annexation test is whether the item has been fixed for the enjoyment of the item itself or for the more convenient use of the land.

Note – degree test will raise rebuttable presumption as to classification, and purpose test may overturn, e.g. D’Eyncourt v Gregory 1866 – a number of statues arranged in a garden were held to be fixtures because they were intended to become an integral part of the garden.

However, an object resting on its own weight does not automatically raise the presumption of being a fixture:

Berkley v Poulet 1977 – pictures fixed in the recesses of the panelling of rooms, a marble statue weighing about half a ton standing on a plinth and a sundial resting on a stone baluster outside a property were held to be chattels. Here purpose test did not overrule presumption of chattel, as not part of grand design – just items owner liked.

But (a more recent case):

Elitestone v Morris – a wooden bungalow resting on its own weight on concrete pillars was held to be a building that has become part of the land (so a new category; not fixture or chattel)

Lloyd LJ said “a house which is constructed in such a way so as to be removable… may well remain a chattel…But a house which is constructed in such a way that it cannot be removed at all… cannot have been intended to remain as a chattel.”

Decision emphasised that ‘intention’ is of primary importance.

But Lord Clyde said that this could be misleading – it is the purpose of object which matters, not intention or purpose of person who put it there. Said test was objective, not subjective.

Clyde’s principles applied in Chelsea Yacht and Boat Club v Pope – houseboat attached to pontoons, attached to bank by anchor and rings, was a chattel.

More EGs:

TSB v Botham – light fittings, carpets, curtains and white goods were all held to be

chattels.

Leigh v Taylor 1902 – tapestries in a main drawing room which were attached by tacking them to strips of wood which were then fixed to the walls were held to be chattels.

This is because attaching them the walls was the only way in which they could be enjoyed.

Mortgages

Mortgage: “a transaction under which land or chattels are given as security for the payment of a debt” Lindley MR in Santley v Wilde [1899]

Legal date of redemption: usually 6 months after the signing of the mortgage deed; the date when mortgagee’s various rights and remedies arise

MORTGAGOR’S RIGHTS

Equity of redemption

Equity has developed a right for mortgagor to apply to court to recover their land even after date of redemption has passed. Mortgagor is now described as owning “equity of redemption”.

Rights under LPA 1925

Section 91 – power to redeem mortgage, can be enforced by court

Sections 91(1) and (2) – power to apply to court for an order for sale of property, e.g. if cannot pay mortgage instalments and debt is mounting up, e.g. Palk v Mortgage Services Funding

Section 98 – power to claim possession of mortgaged land where mortgagee does not Section 99 – power to lease property; power can be modified by terms of mortgage agreement

MORTGAGEE’S RIGHTS IF MORTGAGOR DEFAULTS:

Right to sue at common law

• Mortgagee can only sue if mortgagor is in arrears, so presumably a ‘man of straw’ – could be throwing good money after bad to recover the debt
• Can be exercised as well as or after another right is exercised such as possession and sale, e.g. if the sale does not satisfy the debt

Possession

• s.95(4) LPA 1925 – Mortgagee has right to possession as soon as mortgage is executed

– mortgagor DOES NOT have to be in default for this right to arise

• However, mortgagee must apply for a court order before it can enter residential premises
• Most mortgage contracts have an express term that the mortgagor has possession until default
• Moreover, Walton J in Esso Petroleum v Alstonbridge provided that if no such express term exists, where the mortgagor is not in default the court would be likely to find an implied term
• s.36 Administration of Justice Act 1970 (as amended by s.8 AJA 1973) – designed to help borrowers: where an application for possession is made in respect of a dwelling- house the court has the power to suspend, adjourn or postpone the application where mortgagor can pay “any sums due under the mortgage” within a reasonable period (e.g. raising money; selling property)

Any sums due?

• Halifax v Clark – the whole of the capital and interest; couldn’t pay in ‘reasonable time’ so mortgagee granted possession

• But overruled by s.8(1) AJA 1973 – such amounts as the mortgagor would have expected to be required to pay if there had been no such provision for earlier payment (surely what s.36 AJA 1970 intended anyway)

Reasonable period?

• National and Provincial Building Society – a year could be a reasonable time where the property could be sold the clear the debt
  • Cheltenham & Gloucester v Krausz – court must be satisfied that sale will cover the arrears

Leading case: Norgan (1996) – “reasonable period” matters to consider, as per Evans LJ:

• how much borrower can afford to pay
  • if borrower has temporary difficulties
  • reason for arrears
  • how much of original loan left
  • relevant contractual terms – type of mortgage
  • should court exercise its discretion?
  • lender to recoup arrears?
  • any other reasons to influence matters?
• If dwelling-house is unoccupied, no court order for possession required before sale of property

Sale

• Sections 101 to 107 LPA 1925 provides mortgagee with power of sale
• No court order required, although certain requirements (in s.101 LPA) must be met for power of sale to arise:
  • Mortgage must be made by deed
  • No contrary provision expressed in that deed
  • Mortgage money must have become due / legal date of redemption must have passed
• Power of sale becomes exercisable in either of the following situations (in s.103 LPA):
  • Notice requirement payment has been served and mortgagor in 3 months arrears since notice served
  • Interest under mortgage is in arrears and unpaid for 2 months after becoming due
  • Mortgagor has breached some provision of mortgage deed or some relevant provision of LPA
• Proceeds of sale (governed by s.105 LPA) are distributed in this order: costs of sale; mortgage debt, interests and costs; any second and subsequent mortgage; mortgagor
• Where power or sale has arisen and become exercisable, mortgagee has a duty to obtain best price reasonably obtainable – Cuckmere Brick v Mutual Finance; and may have to pay damages if best price not obtained

Appointment of receiver

• Two situations where this might be preferable (i) where secured property is a business which still has some ‘life’ in it; and (ii) where mortgaged property has been leased and mortgagee wants to ensure that rent paid is not paid to the mortgagor
• Usually express power to appoint a receiver in mortgage deed
• Also s.101 LPA says mortgages created by deed can be subject to appointment of receiver in same circumstances as power of sale

Foreclosure

• Drastic equitable remedy – results in transfer of mortgagor’s estate to mortgagee
• Rarely used today

UNDUE INFLUENCE:

A mortgage may be set aside if an applicant can establish that their agreement to it was not freely given; that they were induced to enter in the transaction by the undue influence of another

RBS v Etridge – the leading case in this area; set out procedures for property lawyers to follow in transactions where a third party provides security for another persons borrowing:

The Etridge Protocol

• Direct approach by lender to surety – requesting details of solicitor and informing surety that the function of this solicitor will be to ensure that any resulting consent to the transaction cannot later be disupted
• Response from surety – lender cannot proceed until surety responds with details of solicitor
• Disclosure – lender must disclose to solicitor all relevant information in respect of principal debtor’s current financial situation and all details of the proposed loan
• Face-to-face meeting between surety and solicitor – with ‘core minimum’ requirements
  • explain relevant documentation and consequences (i.e. could lose home)
  • focus on ‘seriousness of risks involved’
  • emphasise that participation is entirely optional
  • check that surety wishes to proceed, and is happy for solicitor to send confirmation of such to lender

KEY: borrower being advised under Etridge guidelines must be told that if s/he proceeds, no claim for undue influence will be possible

Giving borrowers rights, but indirectly also protects lenders from future claims of undue influence

Adverse Possession

PRE OCTOBER 2003

• As the law stood before the Land Registration Act 2002 was enacted, the Limitation Act 1980 (s.15) enabled a squatter in adverse possession of land to extinguish an owner’s title to land after 12 years. Note: the Limitation Act still applies to unregistered title.

• It was thought that property was too valuable simply to ignore it – so the law recognised that if someone treated it as their own for a long period of time with no objection by the paper title owner (owner at law), then they could claim it for themselves.

• Lloyds v Butler [1950]: “Those who go to sleep on their claims should not be assisted by the courts in recovering their property”

Adverse Possession = factual possession + intention to possess

factual possession

• must exclude all others, e.g. Bucks CC v Moran – fenced land with a gate which had been chained and padlocked
  • must be an unbroken period of time, e.g. Bucks CC v Moran – no breaks in adverse possession of property even though possession had changed hands several times)
  • must be openly exercised (“to ensure paper title owner is given every opportunity of challenging the possession” Gray and Gray, Elements of Land Law)
  • must be adverse to paper title owner, e.g. not under a licence or a lease

intention to possess

intention to treat land as his own and exclude rest of world (including legal owner), e.g. changing locks – Lambeth LBC v Blackburn

POST OCTOBER 2003

• The Land Registration Act 2002, based on the proposals in the Law Comission Report:

Land Registration for the 21st Century, came into force on 13 October 2003.

• One of the objectives of the report as a whole was that registration alone should confer title.

• This has made some significant changes to how adverse possession (in relation to registered title only) is dealt with.

• Why the change?
  • more protection for paper title owners
  • encourages voluntary registration of title
  • distinguishes between different classes of squatters, e.g. honest possessor / land thief

• The Limitation Act 1980 still applies to unregistered land.

• The meaning of adverse possession (as above) has not changed.

STEP 1	After 10 years adverse possession, squatter can write to Land Registry to apply to be registered as owner
STEP 2	Land Registry will then send a notice to all parties with an interest in the land
STEP 2	Registered proprietor(s) have 65 days to object to squatter’s application
STEP 3	If no rejection within 65 days, squatter entitled to be registered as owner   If a paper title owner DOES object, squatters application rejected UNLESS he can meet one of three limited exceptions (para. 5 of sch. 6 LRA 2002):   Estoppel Where one person has made a representation and another has relied on that to his detriment   Independent right The report gives examples: (i) entitled under will in intestacy of deceased proprietor, or (ii) purchaser has paid full purchase price but has not yet taken a transfer of the legal estate   Boundaries Where (i) the squatter owns neighbouring land, (ii) boundary is unclear and (iii) for at least 10 years squatter believed that land belonged to him and (iv) land has been registered for at least a year   Note: if squatter’s application is refused but possession proceedings are not brought within 2 years of refusal (and squatter remains in possession) he may apply again to be registered and will be registered regardless of any objection   Where squatter’s application is successful, squatter becomes successor of title.

EVALUATION OF LRA 2002

• Registered proprietor is better protected than unregistered owner as he is notified of any claim

• Encourages voluntary registration of title.

• Registered proprietor MUST respond to keep his land – the law is attempting to balance the rights of registered owner and the need to utilize land

• The rules in Para. 5 of Sch. 6 distinguish between an honest possessor and a land thief

• More in line with Human Rights – old rules for registered title were flawed (Pie v UK)