Posted: December 18th, 2014

Land law;

Land law;

Order Description

This Coursework is related to Land law.
My Coursework Quesiton is a scenario based question…In the question, I have to explain, applying the relevant case and statute law in each instance, whether or not

the interests of Julia, Henry, Lynne, Timothy, and Simon would be binding upon LBS on the completion of its charge over Abbey Farm.
I will attach Word Document with the Question and i Will attach a recomended module handout, which could be usefull in writing my paper. Recommended textbook:Martin

Dixon, Modern Land Law, 9thedn (Routledge, 2014)
PLEASE, insure that you have read attached Word Document carefully(Word Document name – Coursework Question). it explains evertything in detail.
And the Second Word Documet(Document name- Module Handout) consists of a useful information as well as consist of essential cases which should be added to my

courserowk paper.

1    OWNERSHIP OF LANDFrancis King Week 2

(Dixon chapter 1)
What the law means by this is a collection of rights to property, proprietary rights which the law recognises and will protect, and which can be transferred.
1.1    Title
This collection of rights is called ‘title’.  When we say we own property, we really mean we have the best and strongest title to it.  But we may not (very often in

the case of land) be the only person with some title to or interest in it.
1.2       Fragmentation of ownership
In the case of land, ownership may be fragmented; that is, a number of rights, proprietary and personal, may exist in relation to the same piece of land at the same

time.
A person may:
?    have the freehold estate in a piece of land (the best and strongest title
to land, and:
•    grant a lease of it to a tenant (and that tenant may grant a sub-lease);
?    mortgage it to a bank;

And the land may:
?    have the benefit of easements and restrictive covenants over neighbours’ land;
?    be burdened by easements and restrictive covenants which benefit neighbours’ land;
?    be partly occupied by someone with a licence (a personal right);

?    be subject to a claim to a beneficial interest in the land (which was covered in LW109).

Such complexity is unique to land and requires a system of sufficient complexity to allow and regulate such fragmentation.

1.3    Tenure
(Anglo-French tenir, ‘to hold’, c.f. Latin tenere, ‘to hold’).
‘Tenure is the name given to the relationship whereby a tenant ‘holds’ land of a lord.’                                                                               J

H Baker
‘It remains theoretically true to say that all land is held from the Crown.’
Mark Thompson
1.4    The 1925 legislation
Law of Property Act 1925
Land Registration Act 1925 – repealed
Land Charges Act 1925 – now replaced by Land Charges Act 1972

1.5    The effect of the 1925 legislation

?    Reduction in the number of legal estates and interests.

?    Extending the (previously local and voluntary) system of registration of title, so that ultimately all titles to land would be centrally recorded. (LRA 1925)

[REGISTERED LAND]

?    Where title is not registered [i.e. UNREGISTERED LAND] introduction of a system of registration to protect certain types of equitable interest as Land Charges

(in place of the doctrine of notice). (LCA 1972, LPA 1925)

?    Introduction of overreaching of equitable interests which exist behind trusts – converting the trust interest into a money interest – (LPA 1925, s 3) – applies

to both REGISTERED and UNREGISTERED land:

City of London Permanent Building Society v. Flegg[1988] AC 54.

1.6      Legal estates
‘In English law no subject can hold land allodially – he can only own an estate in land’
Minister of State for the Army v. Dalziel(1944) 68 CLR 261, 277 per Latham CJ
Legal estates: title to one’s own land indefinitely (freehold) or for a fixed period of time (leasehold).
S.1(1)LPA 1925 – FSAP and TYA
Fee simple absolute in possession – Meaning of ‘fee simple’-  ‘absolute’ –  ‘in possession’
Term of years absolute –
Section 205(1)(xxvii) LPA 1925: ‘”Term of years” includes a term for less than a year, or for a year or years and a fraction of a year or from year to year’.
Street v. Mountford [1985] AC 809
Lace v. Chantler [1944] KB 368
Prudential Assurance Co. Ltd. v. London Residuary Body [1992] 2 AC 386

1.7    Legal interests
Legal interests: rights in another’s land, e.g.an easement (such as a right of way).  Such rights may be granted for the equivalent of a fee simple absolute in

possession or for a term of years.  In other words, an interest, such as a right of way, can be granted indefinitely (just as freehold lasts indefinitely) or for a

fixed number of years (just as leases are granted for a fixed number of years).
S.1(2)LPA 1925

1.8    Equitable interests
Equity recognises certain rights which the law does not, eg:
•    rights under a trust,
•    rights which are less than the equivalent of a fee simple absolute in possession or a term of years,
•    and rights created informally

Everything not in s.1(1) or s.1(2) = S.1(3)LPA 1925

Equity has remedies which the law does not have.  But whereas legal
remedies are available as of right, equitable remedies are discretionary
– the court may or may not grant the remedy as it chooses.
If the court chooses not to, it may award common law damages (money compensation) instead.

Certain interests or rights in land may exist only in equity, eginterests under a trust and restrictive covenants.  (Restrictive covenants are promises made in a deed,

e.g. A sells a building plot to B; in the deed of transfer, B promises – ‘covenants’ – say, not to use the plot for any purpose except residential.)
Some interests or rights which can exist at law may exist in equity instead, eg. easements (such as a right of way).  Legal interests exist at law when created with

the necessary formalities (see below); without such formalities they are not recognised at law, but may still exist in equity because it would be ‘unfair’ –

inequitable – to deny them altogether.  Equity’s recognition of certain rights despite the lack of legal formality is very important.

1.9    Need for a deed
S.52 LPA 1925 – to create or transfer legal estate or interest in land
What is a deed – s.1 Law of Property (Miscellaneous Provisions) Act 1989
1. Must be clear on face of document that it is a deed
•    “This Deed of transfer …”
2. Must be validly executed:
•    signed
•    witnessed
•    delivered
Exception – s.54(2) LPA 1925 – short lease (not exceeding 3 years)

1.10    Equity still requires writing
Contract – s.2 Law of Property (Miscellaneous Provisions) Act 1989
Exception – implied trusts.

1.11    Summary of estates and interests in land
Legal estates    – all require deed (except short lease)
?    fee simple absolute in possession
?    term of years absolute

Legal interests    (all require deed)
?    easements
?    profits àprendre
?    rentcharges
?    mortgages
?    rights of entry

Equitable interests existing only in equity (all require contract?)
?    beneficial interests under a trust of land
?    restrictive covenants
?    estate contracts (which includes options)

Equitable interests which could have ranked as legal interests but take effect in equity through failure to comply with formalities
?    term of years absolute
?    easements, profits àprendre, and mortgages

N.B.  Legal estates and legal interests are sometimes called collectively ‘legal estates’:
LPA 1925, s 1(1), (2) and (4)
LRA 2002, ss 2 (a)(i), 59(1) and 132.

Many writers observe the convention of calling the fee simple absolute in possession and the term of years absolute ‘legal estates’, and reserve the term ‘legal

interests’ for the rest.  The Land Registration Act 2002 calls legal interests ‘dependent estates’: s 59.
_________________________________________________________________________________

2    TITLEAlan Moran Week 3

2.1        INTRODUCTION
A person may have a legal estate – freehold or leasehold – in his own land, and also legal interests in the land of another.  He may also have an equitable interest,

e.g. a restrictive covenant, in the land of another.  A person may also have an equitable interest in land under a trust, giving him a share in the beneficial

ownership of that land whether he is an estate owner or not.
Title to one of the two legal estates is the way an estate owner can prove to the world that he ‘owns’ his land.  A seller of land really sells title to the estate in

that land and so he needs to establish that he has a title to sell.  A purchaser will want to be satisfied that the seller’s title is good and will want to know what

rights exist in relation to other land to benefit the seller’s land, and what burdens exist for the benefit of other land.

2.2    THIRD PARTY INTERESTS
When title to land changes hands, third parties – those neighbouring estate owners who have some interest (incorporeal hereditament) in the land being sold – wish to

know where their interests stand in relation to the new owner;  are their interests preserved, or may they lose them?  Third parties who have some equitable interest

will be concerned as to the protection of their interest on any sale or mortgage of the land.

2.3    THE TENSION INHERENT IN LAND LAW
Land law has progressively sought to make it ever easier for a purchaser to buy land (and for a lender to lend money on the security of it).  Land law reforms have

tried to strike the right balance between
•    making the purchase of land easy and yet
•    protecting third party interests.

The first and second parties are seller and buyer (or lender).
The third party is a person with an interest in the land being sold,
eg a right of way or an equitable interest.

Seller                                     Buyer

Third party

2.4    TITLE AND CONVEYANCING
Title is how an estate owner proves ownership and conveyancing is the name of the mechanism for passing that title from seller to buyer.  We do not examine the

mechanism of conveyancing in detail – those who plan to become solicitors will do a conveyancing course on the LPC.  What we do look at is the underlying law relating

to title to legal estates and to legal and equitable interests and an outline of the coneyancing procedure.

2.5    TWO SYSTEMS OF LAND OWNERSHIP
In England and Wales, there are two systems of title to land and for the conveyancing of title to land.  These are called Unregistered Land and Registered Land.  We

made some mention of these in last term’s synopsis.  Strictly speaking we should call them ‘Unregistered Title’ and ‘Registered Title’ but they are commonly called by

the first-mentioned terms.
We have to look at both systems but the Registered Land system is now far more important because nearly all land is now registered.  The basic question in both is ‘how

does the law balance the interest of the buyer in getting a good title easily with protecting the interests of third parties?’  Remember the simple diagram.

2.6    LAW APPLICABLE TO BOTH SYSTEMS
It is vital to understand that the Law of Property Act 1925 is basic land law which applies to both Unregistered Land and Registered Land.

LPA 1925
s 1 – legal estates, legal interests and equitable interests
s 2 and s 27 – overreaching
ss 34 and 36 – co-ownership
s 52 – deeds
s 53 – creation of trusts in land
s 54(2) – creation of leases by parol
s 62 – easements
ss 85 to 116 – mortgages
s 205 – general definitions

are the main features which apply to both systems.

3UNREGISTERED LANDAlan Moran Week 4
(Dixon chapter 3)
The end of a centuries-old practice.
Law Comm No 271 contains the following:
‘ . . . unregistered land has had its day.  In the comparatively near future, it will be necessary to take steps to bring what is left of it on to the register.’

Para.1.6
‘ . . . it is absurd to continue to maintain two separate systems of conveyancing – the registered and unregistered . . . Unregistered conveyancing must be given its

quietus as soon as possible . . . ‘  Para. 2.6
‘We consider that . . . the remaining unregistered land should be phased out as quickly as possible . . . ‘  Para. 2.9

3.1    Title to freehold and leasehold estates in unregistered land
Title deeds; record of previous sales, mortgages and other dealings with the land
Investigation of title: Law of Property Act 1969, s 23
Absence of state involvement

3.2    Protection of third party interests in unregistered
land
Legal interests
bind the whole world – need no protection
Equitable interests
bind the whole world except a bona fide purchaser of a legal estate for value without notice (‘equity’s darling’)  – the doctrine of notice

Protection for certain equitable interests (and one legal one) by registration as‘land charges’

Land Charges Act 1925; Land Charges Act 1972
Land Charges Department – maintains a record of those interests set out in the LCA 1972 – records kept on a variety of registers – name-based
s 2 LCA 1972
Class A and Class B land charges cover charges imposed on land by statute
* Class C(i) land charge – A PUISNE MORTGAGE (a legal Interest)
Class C (ii) land charge – A LIMITED OWNER’S CHARGE
* Class C (iii) land charge – A GENERAL EQUITABLE CHARGE
* Class C (iv) land charge – AN ESTATE CONTRACT
Class D (i) land charge – AN INLAND REVENUE CHARGE
* Class D (ii) land charge – A RESTRICTIVE COVENANT
* Class D (iii) land charge – AN EQUITABLE EASEMENT

Class E land charge: annuities arising before 1926 but not registered on the old register of annuities.
* Class F land charge – A MATRIMONIAL HOMES ACT CHARGE.
(* denotes more commonly occurring)

Effect of registration:

‘The registration of any instrument or matter … shall be deemed to constitute actual notice of such instrument or matter, and of the fact of such registration, to all

persons and for all purposes connected with the land affected …’  (s.198(1) LPA 1925)

Equitable interests not included in the Land Charges Act
Residual category including:
– Beneficial interest under a trust
– Pre-1926 restrictive covenants and equitable easements
– Rights arising from estoppel

3.3    Overreaching(Dixon 2.9 and 3.7)
Relates to both Registered and Unregistered Land
Sections 2 and 27, LPA 1925
City of London Permanent Building Society v. Flegg[1988] AC 54
(NB – the fact that this case involved registered land only emphasizes the point that overreaching applies equally to unregistered and registered land.)

SUMMARY
Title – proved by title deeds
Third party interests:
Legal           – automatically binding on all – no protection needed
Equitable  -most need LCA registration for protection
– beneficial interest under a trust depends on doctrine  of notice but can be overreached

4    REGISTERED LANDAlan Moran Weeks 4 and 5
(Dixon chapter 2)
The Land Registration Act 2002 came into force on 13 October 2003.  It is referred to here as ‘LRA2002’.  The Land Registration Act 1925 may still be referred to, and

it is done here as ‘old law’ and as ‘LRA 1925’.
4.1   Introduction
?    Objective of registration
?    Advantages of registration
?    Key features of registration

4.2   Three basic principles of land registration
?    Mirror
?    Curtain
?    Insurance

4.3   The register
A:  Property Register
?    Description of land and estate comprised in the title – postal address or verbal description – reference to filed plan
?    Benefits – interests the land enjoys over neighbouring land, e.g.   easements and restrictive covenants
?    Burdens – interests which neighbouring land enjoys over the land in the title, e.g. easements

B:  Proprietorship Register
?    Specifies class of title
?    Identifies owner – ‘registered proprietor’
?    Contains entries affecting right of disposal: ‘restrictions’

C:  Charges Register
?    Registered charges (mortgages)
?    Restrictive covenants
?    Notices

Filed Plan – definitive as to extent of land comprised in title

Classes of registered title
ABSOLUTE:
Freehold – s 9(1)(a) LRA 2002
Leasehold – s 10(1)(a) LRA 2002
GOOD LEASEHOLD – s 10(1)(b) LRA 2002
POSSESSORY–  s 9(1)(c), s 10(1)(d) LRA 2002
QUALIFIED:
Freehold – s 9(1)(b) LRA 2002
Leasehold – s 10(1)(c)

Upgrading – s 62 LRA 2002

4.4   First registration
4.4.1       Voluntary registration – s 3 LRA 2002
– freehold estate
– existing leasehold estate with more than 7 years to run
4.4.2    Compulsory registration – s 4 LRA 2002
transfers of land not yet registered, including
– transfers for value
– gifts
– assents
– lease granted for more than 7 years

4.4.3        Class of title given (with future possibility of upgrading title as mentioned above)

4.4.4        Effect of first registration – ss 11 and 12 LRA 2002
–    title vests in first registered proprietor
–    title is with benefit of but subject to the interests disclosed in the application
–    certain interests – called ‘overriding interests’ – bind though are not protected in any way on the register:
see Schedule 1, but note especially:
–    leases for 7 years or less
–    rights of persons in actual occupation
–    legal easements

4.4.5    Cautions against first registration: s 15 LRA 2002: see below8.6 (i)

4.5      Dealings with registered land
(i)     Powers of disposition – ss 23 and 24 LRA 2002
(ii)    Registrable dispositions – s 27 LRA 2002
Categories of disposition which must be registered to take effect at law:
?    transfers of legal estates
?    legal charges
?    grant of a lease for a term of more than 7 years
?    legal easements and profits a prendre
?    certain other estates and interests

(iii)   Priority of interests – ss 28 – 30 LRA 2002
?    where there are competing interests, the first in time prevails

4.6    Protection of third party interests
4.6.1Cautions against first registration:  ss 15-22 LRA 2002
4.6.2 Notices:ss 32-39 LRA 2002 – agreed notices – unilateral notices
4.6.3 Restrictions:ss 40-47 LRA 2002
4.6.4Overriding interests:

First registration: s 11(4); s 12(4)
Sch.1, especially paras 1, 2, and 3
Registered dispositions: s 29
Sch.3, especially paras 1, 2, and 3
The important categories of overriding interests are:
?    Easements
Sch.1 para. 3, Sch. 3 para. 3
?    Leases for a term not exceeding 7 years
Sch.1 para.1, Sch.3 para.1
?    Interests of persons in actual occupation
Sch 1 para 2, Sch 3 para 2

[Old law – third party interests were called ‘minor interests’ –
Overriding interests: s.70(1) LRA 1925:
Under s 70(1)(g) LRA 1925:
Actual occupation:
Chhokar v. Chhokar [1984] FLR 313
Lloyds Bank v. Rosset [1988] 3 All ER 915
Abbey National BS v. Cann [1990] 1 All ER 1085

Rights:
Williams & Glyn’s Bank v. Boland [1980] 2 All ER 408

Making enquiry:
Hodgson v. Marks [1971] Ch.932

Actual occupation – cases since LRA 2002:
Thompson v. Foy [2010] 1076 (Ch)
Link Lending v. Bustard [2010] EWCA Civ 424
Thomas v Clydesdale Bank Plc [2010] EWHC 2755 (QB)
See: Conv. 2011, 4, 268-284 by Barbara Bogusz

Overreaching and overriding interests: s 2 LPA 1925:

City of London PBS v. Flegg [1987] 3 All ER 435
HSBC Bank plc v Dyche[2009] EWHC 2954

4.7   Charges
Registered charges are noted in the Charges Register, i.e. mortgages, are registrable dispositions.  Entry on the register protects the mortgage but a legal charge is

registered as such on the title of the estate charged and not merely protected by a Notice.

4.8    Rectification and Indemnity
s.65 Sch4 LRA 2002
_________________________________________________________________________________

1    TRANSFERRING ESTATES IN LAND
Alan Moran Week 6
(Clarke and Greer chapter 3.3)
?    An outline of the conveyancing process
?    Contracts
?    Conveyances and transfers
?    E-Conveyancing
5.1    The conveyancing process
OUTLINE OF A SIMPLE TRANSFER OF FREEHOLD TITLE
1. Pre-contract stage

2. Exchange contracts

3. Completion

4. Post Completion

Costs for buyer
On a purchase at £350,000 about £12,000 plus deposit.
……………………………………………………………………………………………………………………………………………………………………………………

5.2    Contracts
Formalities for a contract concerning land
Law of Property (Miscellaneous Provisions) Act 1989, s 2:
(1)    A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have

expressly agreed in one documentor, where contracts are exchanged, in each.
. . .

(2)    The document incorporating the terms or, where contracts are exchanged, one of the documents incorporating them (but not necessarily the same one) must be

signed by or on behalf of each party to the contract.

Essentials of a valid s 2 contract:
•    Contract for sale or other disposition
•    All terms incorporated
•    One document (commonly in two parts to be exchanged)
•    Signed by parties

Any variation of a contract must also comply with s 2:
“Section 2(1) certainly did tighten up the formalities required for contracts for the sale or other disposition of interests in land. Its effect is merciless. An

appropriately signed document purporting to amount to a contract for the sale or other disposition of an interest in land will not in fact create a valid contract

unless it includes all the expressly agreed terms of the sale or other disposition. If it fails do so it will be void”.Keay v Morris Homes (West Midlands) Ltd [2012]

EWCA Civ 900 per Lord Justice Rimer.

Effect of non-compliance with s 2: the ‘contract’ is void
But:the parties’ conduct may have consequences –
•    Claim under proprietary estoppel
•    Claim under a constructive trust
•    Claim for restitution where a party spent money in reliance on void contract

Matters excluded from s 2(1) by s 2(5):
•    Short leases under LPA 1925, s 54(2)
•    Auction sales

For a controversial preparedness by the court to avoid formality, see:
Joyce v. Rigolli[2004] EWCA Civ 79 – de minimis boundary agreement.

5.3    Conveyances and transfers

Need for a deed:
‘All conveyances of land or of any interest therein are void for the purpose of conveying or creating a legal estate unless made by deed.’ LPA 1925, s 52(1)
Exceptions: s 54(2) LPA 1925
Formalities for a deed:
For individuals: s 1, LP(MP)A 1989
For companies: s 44, Companies Act 2006 (in force with effect from 6 April 2008)
To be a deed, a document must comply with the formalities for content and execution set out in s 1(2) of the Law of Property (Miscellaneous Provisions) Act 1989:
Section 1(2) says:
(2)  An instrument shall not be a deed unless
(a)  it makes it clear on its face that it is intended to be a deed by  the person making it or, as the case may be, by the parties to it (whether by describing itself

as a deed or expressing itself to be executed or signed as a deed or otherwise); and
(b)  it is validly executed as a deed
(i)  by that person or a person authorised to execute it in the  name or on behalf of that person, or
(ii)  by one or more of those parties or a person authorised to execute it in the name or on behalf of one or more of those parties
(3)    An instrument is validly executed as a deed by an individual if, and only
if –
(a)it is signed—
(i)by him in the presence of a witness who attests the signature; or
(ii)at his direction and in his presence and the presence of two witnesses who each attest the signature; and
(b)it is delivered as a deed by him or a person authorised to do so on his behalf.

Section 1(2A) says:
(2A)  For the purposes of subsection (2)(a) above, an instrument shall  not be taken to make clear on its face that it is intended to be a deed merely because it is

executed under seal
Crago v. Julian [1992] 1 All ER 744
Shah v. Shah [2002] QB 35

5.4     E-Conveyancing
The Law Commission and HM Land Registry worked on the Bill which became the Land Registration Act 2002.  Their work is set out in Law Com No 271.  A main aim of the

LRA 2002 is to replace paper conveyancing with e-conveyancing.  The scheme is set out in Law Com No 271 at paras 2.41 – 2.68.  This move is described as ‘the most

important single feature of the Bill’ (para. 2.41).
Both contracts and transfer deeds will be submitted electronically to HM Land Registry.  This would seem to make redundant in future the relevant provisions in the LPA

1925 and the LP(MP)A 1989.
Part 8 and Schedule 5 of the LRA 2002 provide for e-conveyancing.  The disposition of the estate or interest and its registration will take place simultaneously.

Section 91 provides that ‘documents’ made electronically will have the same effect as paper deeds.  Delivery becomes irrelevant and attestation unnecessary.

6        LEASESHOLD ESTATES
Alan Moran Week 7

(Moran, Commercial Property, chapters 3 and 4 on Moodle)

6.1     LEASES

6.1.2   The leasehold estate – Law of Property Act 1925 s 1(1)

6.1.2Definition-  A lease is ‘the grant of a right of exclusive possession of land for a definite term which is less than that which the grantor himself has.’

Reversion  –  landlord’s interest

Term  –  tenant’s interest

6.1.3   Essential elements of a lease

Exclusive possession

Street vMountford [1985] AC 809

Definite term

Say v. Smith [1563] 1 Plowd 269
See: Shakespeare’s Sonnet 18, line 4
Lace v. Chantler [1944] KB 368
Prudential Assurance Co Ltd v. London Residuary Body [1992] 2 AC 386

Rent?
Street v Mountford[1985] AC 809, 826 per Lord Templeman
Ashburn Anstaltv Arnold [1988] 2 All ER 147; [1989] Ch 1,10 per Fox LJ
LPA s 205(xxvii)

6.1.4Formalities

Creation and Assignment – statutory requirements:
LPA 25 s 52(1)
Law of Property (Miscellaneous Provisions) Act 1989 s 1
Note also: LPA 25 s 54(2)
Cragov Julian [1992] 1 All ER 744

Who may grant or take a lease – entities with legal personality: plcs, limited companies, LLPs – entities without legal personality: partnerships (by up to four

partners) and unincorporated associations (by up to four trustees)

Execution by individuals (including partners and trustees): Law of Property (Miscellaneous Provisions) Act 1989 s 1

Execution by limited companies: Companies Act 2006 s 44

First Registration under Land Registration Act 2002:
•    Assignment of a lease which has more than 7 years to run –
s 4(1)(a) and s 4(2)(b)
•    Grant of a lease for more than 7 years: s 4(1)(c)
Registrable Dispositions under LRA 2002:
Transfer (assignment) of existing registered lease: s 27(2)(a)
Grant of lease for more than 7 years out of superior registered estate: s 27(2)(b)
Leases for 7 years or less are overriding interests: Sch 1, para 1 and Sch 3, para 1 LRA 2002

6.2LICENCES

A licence ‘properly passeth no interest no alters or transfers property in any thing, but only makes an action lawful, which without it had been unlawful.’ Vaughan CJ

in Thomas v. Sorrell (1673) Vaugh.330

6.2.1    Types of licence

Bare licence

Contractual licence

Clore v. Theatrical Properties Ltd [1936] 3 All ER 483
Esso Petroleum v Fumegrange Ltd [1994] 2 EGLR 90
Dresden Estates v Collinson[1987] 1 EGLR 45

6.2.2    Creation of licences

Writing not required
Trustees of Grantham Christian Fellowship v The Scouts Association Trust Corporation [2005] EWHC 209

Writing usual.

6.3   DISTINCTION BETWEEN LEASES AND LICENCES

Proprietary right – personal right
Exclusive possession – exclusive occupation

Street v. Mountford [1985] AC 809
Ashburn Anstalt v. Arnold [1989] Ch1
Shell Mex BP Ltd v. Manchester Garages [1971] 1 WLR 612
Esso Petroleum Co Ltd v Fumegrange Ltd [1994] 2 EGLR 90
National Car Parks Ltd v. Trinity Development Co (Banbury) Ltd [2002] 2 P & CR 18
Clear Channel v Manchester City Council [2004] EWHC 2873; [2005] EWCA Civ 1304

Effect on third parties

Clore v Theatrical Properties Ltd and Westby and Co Ltd [1936] 3 All ER 483

———————————————————————————————————————————————–

7     MORTGAGESFrancis King Weeks 8& 9
(Dixon 10.1 and 10.9.4)
Note:  Borrower = Mortgagor; Lender = Mortgagee;
the borrower grants a mortgage (of the title to his land) to the lender (as opposed to incorrect popular saying that the borrower ‘gets’ a mortgage from the lender)
Debtor-Creditor relationship

INTRODUCTION
What a mortgage is – a loan secured on property

Domestic mortgages and their uses:
– for purchase: ‘acquisition mortgage’
– for raising money: ‘further’/’second’ mortgages for improvements and for raising money for business purposes
Commercial mortgages – ‘secured lending’ – freehold/leasehold premises – lending to companies and need for guarantor
‘Equity’ – meaning
‘Loan to value (LTV) ratio’ – meaning
Mortgage products – based on re-payment options – variable rate – fixed rate
Mortgages may be legal or equitable – most are legal

7.1      CREATION OF LEGAL MORTGAGES

s 85(1) LPA 1925  “A mortgage of an estate in fee simple shall only be capable of being effected at law . . . by a charge by deed expressed to be by way of legal

mortgage.”
Equivalent provision for mortgages of leaseholds: s 86(1) LPA 1925
A charge by deed by way of legal mortgage – s.87(1) LPA 1925
s.87 LPA 25  : The charge gives the Lender
‘the same protection, powers & remedies’ as if the mortgage had been created under s.85(1) or 86(1) LPA 25
The only method in registered land s.23(1) (a) LRA 2002
Requires deed under s.52 LPA 1925

Mortgage of registered land must be completed by registration – s 27(2)(f) LRA  2002 – mortgages are noted in the Charges Register (and may be further protected by a

Restriction in the Proprietorship Register)
Consequence of failure to register – mortgage is only equitable
Further mortgages – permitted unless the first lender has entered a Restriction – further mortgages added to Charges Register.

7.2      CREATION OF EQUITABLE MORTGAGES

S 2 LP(MP)A 1989
United Bank of Kuwait v. Sahib [1996] 3 WLR 372 (113 LQR  533)
Equitable mortgages can be protected by a notice on the Charges  Register.

7.3 CONTENTS OF THE MORTGAGE

Include:
For repayment of the loan
Covenants by the Mortgagor relating to the property itself,  e.g.
maintenance
insurance
leasing
Rights & remedies of the Mortgagee

7.4      PROTECTION OF MORTGAGES

Creation of a first legal charge triggers requirement to register the estate and the charge at the Land Registry: s 4(1)(g), LRA 2002
Restriction

7.5      DISCHARGE OF LEGAL MORTGAGES
– when all sums due have been paid
– on sale of property on which loan secured
– by insurance on death of joint borrower
Registered charge then deleted from register

7.6      PROTECTION AND RIGHTS OF THE MORTGAGEE

1.    Right to possess
2.    Right to sell
3.    Sue on covenant to pay
4.    Foreclosure
5.    Appointment of receiver

7.6.1- Possession
Inherent right – ‘before the ink is dry’
Four Maids Ltd v Dudley Marshall Properties Ltd ([1957] Ch 317
Inhibitions on the right –
White v City of London Brewery Co  [1889] 42 Ch.D
Depends on whether residential or commercial…
Residential –
s.1 Protection from Eviction Act 1977
Ropaigealach v Barclays Bank plc [1999] 3 WLR 17
Residential & Commercial –
s.6 Criminal Law Act 1977
7.6.2    – Sale

Power must have:
arisen (s.101 LPA 1925)
AND
become exercisable (s.103 LPA 1925)

Position of sale:
Before power of sale has arisen
After arisen but before exercisable
After arisen and exercisable

Court order?? Horsham Properties Group Ltd v Clark [2008] EWHC 2327

SILVEN PROPERTIES v RBS LTD [2004]  1WLR 977
Not a trustee but must:
act in good faith AND
obtain best price
Consider:
1. Duty to exercise power of sale?
2. Duty as to timing of sale?
3. Duty as to price?
4. Duty as to identity of purchaser?
5. Duty as to purity of intention?

EFFECT OF SALE
Estate conveyed under s.104(1) LPA 1925
Subject to interests that were prior to lender

Priority – s.105 LPA 1925
– M’ee pays off any prior mortgages
– Then pays any costs of sale
– Then pays own debt
– Then pays balance to m’or or others…
Priority rule under s.30 LRA 2002:
Notices under s.34,
Restrictions under s.48
Overriding interests under Sch.3

7.6.3– Covenant to repay
Action lies in contract
Limitation period – 12 years
Useful in ‘negative equity’ cases
Palk v Mortgage Services Funding [1993] 2 WLR 415

7.6.4   – Foreclosure
THE EFFECT
PROCEDURE
Court order
order nisi
order absolute
Sale instead under s.91(2) LPA 25?

Foreclosure actions ‘are almost unheard of today and have been so for many years’ – Palk v Mortgage Services Funding PLC[1993] 2 WLR 415

7.6.5  – Appointment of a Receiver
POWER OF APPOINTMENT
s.109 LPA 25
Arising &  exercisable – as for sale

MAIN FUNCTION?
AGENT of Lender or Borrower?
7.7      PROTECTION OF THE MORTGAGOR

1.    Redemption
2.    Postponing possession
3.    Controlling sale

7.7.1  – Redemption
Right to Redeem
•    Law
•    Equity
•    Redemption date

Equity of Redemption – ‘Bundle of rights’ for mortgagor
Include:
•    Right to redeem
•    Right to lease
•    Right to sue

7.7.2  – Postponing possession
Residential – s.36 ADMINISTRATION OF JUSTICE ACT 1970
if… the mortgagor is likely to be able within a reasonable period to pay any sums due under the mortgage.
Court can adjourn proceedings
Depends on whether:
– paying off arrears OR
– want to sell themselves
Commercial – Court’s power to postpone
Limited (Birmingham B.S. v Caunt1982 Ch 883)

1. Paying off arrears –
‘TO PAY ANY SUMS DUE’
Did mean previously the entire sum
Halifax Building Society v. Clarke [1973] Ch. 307
s.8 ADMINISTRATION OF JUSTICE ACT 1973

‘WITHIN A REASONABLE PERIOD’
‘reasonable period’ can mean the whole term of the mortgage
C& G  B.S. v Norgan [1996] 1WLR 343

‘LIKELY’
A realistic prospect & evidence of this
First National Bank v Syed  [1991] 2 All ER 250:
Town & Country B.S. v Julien [1991] 24 HLR 312

2. Want to sell for selves –
‘TO PAY ANY SUMS DUE’
Means the entire sum

‘WITHIN A REASONABLE PERIOD’
Nat. & Provincial B.S. v Lloyd [1996] 1 All ER 630
Bristol & West B.S. v Ellis [1996] 73 P & CR 15
Max. 6-12 months likely, but no fixed rule

‘LIKELY’
A real prospect and some evidence of a sale occurring
Further cases include:
Target Homes v Clothier [1994] 1 All ER 439

7.7.3  – Controlling sale
Mortgagor opposes sale
Use of s.91(2) LPA 1925

NEGATIVE EQUITY CASES:-
Palk v Mortgage Services Funding PLC [1993] 2 WLR 415
Polonski v. Lloyds Bank Mortgages Ltd [1997] Times 6th May
Barrett v. Halifax Building Society [1996] 28 HLR 634

BUT
C& G PLC v Krausz 1997 :
M’ee should control sale if it is also seeking one
Court can’t postpone a possession order to allow M’or to apply for a s.91(2) order to sell if it won’t clear the debt

7.8        UNDUE INFLUENCE

The problem: borrower – ‘surety’ – lender
Borrower’s ‘undue influence’ on surety
Surety’s claim to have mortgage set aside
The ‘Etridge guidelines’

Barclays Bank v. O’Brien [1993] 4 All ER 417
Royal Bank of Scotland v. Etridge (no.2) [2001] 4 All ER 449
First National Bank plcv Achampong[2003] EWCA Civ. 487
Mortgage Agency Services Number Two Ltd v Chater[2003] EWCA Civ490

Recent developments:

Hewitt v First Plus Financial Group plc[2010] CA Civ 312
Annulment Funding Company Ltd v (1) Cowey (2) Cowlam[2010] EWCA  Civ 711
Royal Bank of Scotland v Chandra [2011] EWCA Civ 192  2 March 2011

———————————————————————————————————————————————–

8        EASEMENTSFrancis King Week 10
(Dixon chapter 7)

8.1    NATURE OF EASEMENTS

Re Ellenborough Park [1956] Ch131
“(1) There must be a dominant and servient tenement; (2) an easement must accommodate the dominant tenement, that is, be connected with its enjoyment and for its

benefit; (3) the dominant and servient owners must be different persons; and (4) the right claimed must be capable of forming the subject matter of a grant.”

Hill v. Tupper (1863) 2 H & C 121; 159 ER 51
Phipps v. Pears [1965] 1 QB 76
Copeland v. Greenhalf [1952] Ch.488 (16 Legal Studies 51]
Wright v. Macadam [1949] 2 KB 744
London & Blenheim Estates v. Ladbroke Retail Parks [1993] 1 All ER 307

8.2    CREATION OF EASEMENT

GRANT OR RESERVATION?
Grant –  Where land is sold by A to B and B gets an easement over A’s retained land (granted)
Reservation –  Where land is sold by A to B and A has an easement over B’s land (reserved)

(a)    Express grant or reservation

(b)    Implied grant
* Easements of necessity
Nickerson v. Barraclough [1980] Ch 325; [1981] Ch426
{See also Access to Neighbouring Land Act 1992}
* Common intention
Wong v. Beaumont Property Trust Ltd. [1965] 1 QB 173
* Quasi-easements
Wheeldon v. Burrows (1879) 12 Ch D 31
* s 62 LPA 1925
[Subsection 1] “ A conveyance of land shall be deemed to include and shall by virtue of this Act operate to convey, with the land, all buildings, erections, fixtures,

commons, hedges, ditches, fences, ways, waters, watercourses, liberties, privileges, easements, rights and advantages whatsoever, appertaining or reputed to appertain

to the land or any part thereof, or, at the time of conveyance, demised, occupied, or enjoyed with, or reputed or know as part or parcel of or appurtenant to the land

or any part thereof.”

(c)    Prescription

“Nec vi, nec clam, necprecario” (Not by force, nor secretly, nor with permission)
“… of such a character that an ordinary owner of the land, diligent in the protection of his interests, would have, or must be taken to have, a reasonable opportunity

of becoming aware of that enjoyment.”  (Romer LJ in Union Lighterage Co v. London Graving Dock Co. [1902] Ch.577)
Length of user necessary to acquire a prescriptive easement:
(i)    Common law presumption; long user.
(ii)    Fiction of the lost modern grant.
(iii)    Prescription Act 1832
{On easements of light, see also Rights of Light Act 1959}

(d) Implied reservation
* Implied through necessity –
Sweet v Sommer[2004] EWHC 1504 (Ch)
* Implied through common intention –
Peckham v Ellison[2000] 79 P&CR 276
* Wheeldon v Burrows Rule and S.62 LPA 1925 not applicable
* Courts prefer grant to reservation –
balance of power with seller so should reserve if they want to

8.3 PROTECTION OF EASEMENTS
LEGAL
1.    DURATION
2.    MODE OF CREATION – BY DEED
Implied easements (including under s.62 LPA 1925) are treated as if they had been created in the purchase deed
3.    EASEMENTS EXPRESSLY CREATED out of registered land MUST BE REGISTERED (s.27 LRA 2002)
Otherwise if an enforceable contract under                                                  s.2 LP (MP) A 1989, will be equitable easement

REGISTERED LAND
Express legal easements – s.27 LRA 2002
An Implied legal easement OVERRIDES IF the conditions in
Sch.3 para 3 LRA 2002 are met:-
•     the buyer has actual knowledge of it; or
•     the easement would be obvious on a reasonably careful inspection of the land; or
•     the easement has been exercised within the period of one year before the disposition;
Equitable easement protected by entry of notice on Register, s.34 LRA 2002

8.4EXTINGUISHMENT OF EASEMENTS

1.    Release – express or implied
2.    Unity of possession – D&S same owner
3.    Abandonment – must show intention

8.5    REFORM OF THE LAW OF EASEMENTS
The Law Commission has engaged in a lengthy and wide-ranging review of the law of easements (and the related areas of profits à prendre and freehold covenants,

which do not form part of our syllabus).  The Law Commission’s final report, Making land work: easements, covenants and profits à prendre (Law Com 327), was published

in June 2011.  The full text of this (very lengthy) report, and the earlier consultation documents, can be found on the Law Commission’s web-pages:
http://www.justice.gov.uk/lawcommission/areas/easements.htm

Note that these pages also contain an Executive Summary, which provides a useful way into this mass of information.
The Law Commission final report includes (at pages 186-212) a draft Law of Property Bill which proposes a number of important changes to the law of easements.  You

should note that these have not yet been enacted, and it is not yet clear if, or when, they may be enacted.  The most important changes are the following (with

references to the section-numbers of the draft Bill:
•    Simplifying the law relating to acquisition of easements by prescription by the introduction of a single statutory scheme (Draft Bill s.16-17);

•    Replacing the current methods of acquisition of implied easements with a single statutory principle (the operation of which could be expressly excluded by the

parties): easements would be implied where they were necessary for the reasonable use of the land at the time of the transaction (Draft Bill s.20);

•    Removing the possibility that s.62 Law of Property Act might operate to transform previously-granted informal permission (for example by licence) into an

easement when land was transferred (Draft Bill s.21);

•    Modifying the (perceived) rule in Copeland v Greenhalf so that a right to use another’s land in a way that prevent the land-owner from making reasonable use of

the land could qualify as an easement (Draft Bill s.24);

•    Introducing a rebuttable presumption that an easement had been abandoned after 20 years’ non-use (Draft Bill s.27);

•    Giving the Lands Chamber of the Upper Tribunal the power to modify or discharge easements in certain circumstances (Draft Bill s.30-31 and Schedule 2).

https://www.essex.ac.uk/e-learning/tools/faser/

AND submit printed, watermarked, work before 12:00hrs to the School of Law Office, 5S.5.5

Word Limit  2 500 words

William is the registered proprietor of Abbey Farm, Bridgwater, Somerset, a property comprising a large house, an outbuilding, a barn, a field, and a meadow.  When

William bought Abbey Farm in 2004 for £650,000, his partner, Julia, paid the 10% deposit. Subsequently, William entered into the following arrangements:
(a)    in April 2011, he granted Henry a lease of the outbuilding for a term of six years;
(b)    in May 2012, he entered into a written agreement which was called a licence for the grant to Lynne of a four-year licence of the meadow at a monthly payment of

£100 for the purpose of grazing sheep;
(c)    in June 2013, he orally granted a tenancy to Timothy of the barn from 1 June 2013 to 30 April 2016, Timothy paying the sum of £1,000 and a rent of £5,000 a

year;
(d)    in January 2014, he borrowed £20,000 from his brother, Simon, who was to take a legal charge over Abbey Farm to secure the loan, Mark, a sole practitioner in

Bridgwater, being the solicitor acting for Simon.
The following events have occurred.
During February 2014, Mark’s offices were flooded and all files lost.
The relationship between William and Julia has always been volatile. Three weeks ago, following an argument with William over his intention to apply for a mortgage,

Julia grabbed a few personal items and stormed out of Abbey Farm and has gone to her mother’s house in Taunton.
Two weeks ago, William applied for and has now been offered a loan from the Loamshire Building Society (LBS) of £200,000 to be secured by a first charge over Abbey

Farm. On the LBS application form, William forgot to mention the loan from Simon, and stated that he lived alone.
William’s solicitor, Charlotte (who did not act for William in the loan from Simon and has no knowledge of that matter), acts for William and LBS in connection with

the mortgage and has obtained from the Land Registry an official copy of the register of the title to Abbey Farm which shows no entries in the Register concerning any

legal charge.
Assuming no entries are made on the register of the title to Abbey Farm between the date of the official copy and the completion of LBS’s legal charge, explain,

applying the relevant case and statute law in each instance, whether or not the interests of Julia, Henry, Lynne, Timothy, and Simon would be binding upon LBS on the

completion of its charge over Abbey Farm.

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