C2030960_LAN

Question 1

Mark contribution

Mark direct contribution towards the purchase price means that, in the absence of
evidence that a gift or a loan was intended, Julia was holding the house on an implied
resulting trust for herself and for her husband in proportion to their respective
contributions Bull v Bull. Where non-legal owners have not made a direct contribution,
they can acquire an equitable interest when they have made other contribution like part
of the deposit payment of the property, unless he could be shown that was a gift or a
loan. Generally the court will accept payment of a deposit on a property as sufficient for
a resulting trust (Curley v Parkes).

A trust interest is not capable of being legal under s1(2) LPA 1925, although it’s
capable of being equitable under s1(3) LPA 1925. No formalities are required to create
implied trusts, they arose automatically as a result of the property owner’s actions
without the need for formalities, s 53(2) of the Law of Property Act 1925. Which means
that Mark have valid equitable interest.

Now we need to see whether Mark right would bound and how is protected against a
purchaser. Registrable dispositions, interest in a registered estate are protected by notice
and overriding interests under Schedule 3 LRA 2002 they bound a purchaser in
registered land s29 LRA 2002.

A trust interest is an equitable interest, it cannot be protected by notice under s33 LRA
2002. It may have been signalled by a restriction on the Proprietorship Register. The
trust interest may have become an overriding interest under Schedule 3 para 2 if Mark is
in “actual occupation” of the property at the time of completion of the sale.

The case William & Glyn’s Bank v Bolan establish the meaning of actual occupation
actual occupation as meaning a person is in actual occupation and his far from only live
in the house. On the facts seems that Mark lives there so he his in actual occupation.
There are no formalities in creation of an implied trust, and his occupation would be
obvious on a reasonably careful inspection of the land made by kate. Kate should have
had actual knowledge of the interest, and if asked she must have disclosed his interest.

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If the trust interest has become an overriding interest under Schedule 3 para 2 LRA
2002 by virtue of his “actual occupation”, Kate would have needed to overreach to take
free of Mark interest, by paying the purchase money to two trustees under s2/27 LPA
1925 and City of London BS v Flegg. As we are told that Kate bought from Julia, a sole
legal owner. Kate is unlikely to have overreached her interest. As Mark is still in
occupation of the property, he refuses to move out, it is likely that Kate is bound by his
trust interest.

And if Mark placed a restriction in the Proprietorship Register for the property, Kate
would have needed to overreach her interest in order to be registered as the new legal
owner of the property at the Land Registry. Nothing his said about this on the fact but it
is unlikely that David overreached.

Mark home owner rights

Mark may also have “home rights” in Greenhil House under s30 FLA 1996. Provided
he and Julia are married. His wife is the legal owner and the property was intended to be
the matrimonial home, s30 FLA 1996 that gives Mark a statutory right to occupy, under
a spouse who his not a legal owner.

Now we need to see whether Mark right would bound and how is protected against a
purchaser. Registrable dispositions, interest in a registered estate are protected by notice
and overriding interests under Schedule 3 LRA 2002 will bind a purchaser in registered
land under s29 LRA 2002. A statutory right under s30 FLA is classified as an interest in
a registered estate. In order for it to bind Kate it must have been protected by a notice in
the Charges Register of the property by the date where Kate was registered as the new
legal owner s29 LRA 2002. It is not clear on the facts whether it has been protected in
this way.

If no notice was entered, the right will not bind Kate. A “home right” is incapable of
becoming an overriding interest under Schedule 3 paragraph 2 LRA 2002 - see s31(10)
(b) FLA 1996.

Rights claimed by Paul

(i) Lease for 3 years

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Paul may have a lease of the basement flat. The requirement for a lease are exclusive
possession and a certain term (Street v Mountford). Both appear present on the facts. A
lease is capable of being a Legal Estate in land (s1(1)(b) LPA 1925), but require the
correct formalities to be present in order to make them lega, they must be create by deed
s.52 LPA 1924.

If the agreement meets the requirements of an estate contract under s.2 LP(MP)A 1989,
the agreement must have been made in writing, signed by or on behalf of both parties &
containing all agreed terms. On the facts seems that the requirements are no established,
both parties didn’t sign the agreement.

If so, then this estate contract will be recognised as an equitable lease under the doctrine
of Walsh v Lonsdale. Provided that Paul seeks equity with clean hands.

An equitable lease is an interest in a registered estate s.32 LRA 2002. If a Notice is

entered on the title to Greenhill House before Kate is registered as Proprietor then she
will be bound by Pauls’s lease until it terminates in 1 years time.

If the equitable lease has not been registered as an IARE on Julia’s freehold title then it
may still be binding on Kate as an overriding interest under Schedule 3 para 2 LRA
2002. An equitable lease is a proprietary interest (Strand Securities v Caswell) and if
Paul is actual occupation (Boland). His occupation is likely to have the necessary degree
of permanence Abbey National v Cann. In terms of the conditions we have actual
knowledge of Paul’s interest.

If the agreement does not meet the requirements of an estate contract then consider
whether it is a legal lease under the Parol lease exception (s54(2) LPA 1925). Exclusive
possession and the regular payment of rent may give rise to a periodic tenancy. Both
exclusive possession and monthly rent are present on the facts.

The Requirements for the Parol lease exception are, the lease of 3 years or less, which
are present on the facts, no premium payment, which are no indication; at best market
rent £300 for a cottage in the grounds flat likely to reflect market rent, and the last
requirement taking effect on possession, which seems that it’s satisfied on the facts.

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Paul may therefore have a legal periodic lease. Parol leases are legal without the need
for formalities. This would bind Kate as an overriding interest under Schedule 3 para1
LRA 2002. However, Kate could terminate this lease with 1 period of notice to Paul.

(i) Paul - option to buy

Paul appears to have an option to purchase the field. This is a type of estate contract. An
estate contract is not capable of being legal s1(2) LPA 1925, but it is capable of being
equitable under s1(3) LPA 1925.

To be equitable the option must be created in accordance with s2 LP(MP)A 1989 – i.e.
in writing, containing all the agreed terms, and signed by or on behalf of both parties.
On the facts these formalities are satisfied, making this a valid equitable interest.

Registrable dispositions, IAREs are protected by notice and overriding interests under
Schedule 3 LRA 2002 and they will bind a purchaser in registered land s29 LRA 2002.
An option is classified as an IARE. In order to bind Kate it must be protected by notice
in the Charges Register of the property before the date Kate registers itself as the new
legal owner s29 LRA 2002. However, the option may have become an overriding
interest under Schedule 3 para 2 if Paul was in “actual occupation” of the property at the
time of completion of the sale. Under Bolan he was in actual occupation.

In addition, the option needs to have been created properly like mentioned. Pauls
occupation would have been obvious on a reasonably careful inspection of the land and
Kate must have had actual knowledge of the interest and if asked, she must have
disclosed his interest. Thus it is likely that the option will bind Kate.

b)

If title to Greenhill was unregistered:

(i) Mark

Mark right under FLA 1996 Spouse Right must have been be registered as a class F
Land Charge before Kate completed her purchase if it is to bind the buyer s2(7) LCA
1972.

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Marks’s right under the resulting trust is not registrable and, if not overreached as
above, as an equitable interest it will bind unless Kate is a bona fide purchaser of the
legal estate for value without notice and then would aplly the equity’s darling doctrine.

(ii)

If Paul has a parole lease, this is a legal lease and therefore, “binds the world”. Paul’s
equitable lease is an estate contract and as such, is registrable as a C(iv) Land Charge at
the Central Land Charges Department (Plymouth) under s2 LCA 1972. Therefore, it
will only bind Kate if it is registered as a Class C(iv) Land Charge on the Land Charges
Register by the date of completion of the sale to Kate. If it is not registered it will not
bind under s4 LCA 1972.

(iii)

Paul’s option to buy is registrable as a Class C(iv) Land Charge at the Central Land
Charges Department s2 LCA 1972. Therefore, it will only bind Kate if it is registered as
a Class C (iv) Land Charge on the Land Charges Register by the date of completion of
the sale to Kate. If it is not registered it will not bind under s4 LCA 1972.

Question 3

Purchase of property in January 2014

Co-ownership gives rise to statutory trust governed by the 1996 Act.. They are co-
owners and will held the property in trust. Whenever we have land held in co-ownership
will raise a statutory trust in land under LPA 1925 section 34 (2) and s 36 (1).

Section 1(6) of the Law of Property Act 1925 provides that ‘A legal estate is not
capable of subsisting or being created in an undivided share in land’. This means that it
is only possible for co-owners of the legal estate (the trustees) to hold the legal title as
joint tenants.

Regarding to the legal estate under the facts in January 2014 when they purchase the
cottage, a maximum of four trustees can own the legal estate in the land. As there is an
attempt here to transfer the legal estate to more than four people, the effect is that the

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first four named will own the legal estate, according to s 34(2) of the Law of Property
Act 1925. So, Anat, Beryl, Carla and Doris would held the legal estate, being the
trustees and they hold the legal estate as joint tenants under s 1(6) of the LPA. The
beneficiaries of the equitable interest would be Anat, Beryl, Carla, Doris and Edna.

In order to know how the beneficiaries hold the interest, if as joint tenants or tenants in
common we have to apply four tests.

The first test is the four unities test. Starting to analyze the unity of interest, all co-
owners have exactly the same interest in the property.

The second unity is unity of title, under this all of the co-owners must receive their
interest in the land under the same document, on the facts says that was made a
declaration on the deed saying that all four owners were beneficial joint tenants.

The next unity is unity of time, for this unity to be present each co-owner’s interest must
vest at the same time. The transfer to Anat, Carla, Doris and Beryl will satisfy this unity
if under it Edna immediately received a fee simple absolute, in other words the transfer
to she was not subject to any conditions. On the facts seems that there is no conditions.

The final unity is unity of possession, for this unity to be satisfied, all co-owners must
each one be entitled to possession of the whole of the land and cannot exclude the other
co-owner. That appear to exist on the facts.

All four unities must be present if co-ownership is to be capable of taking the form of an
equitable joint tenancy. On this scenario, all four unities are present, and that means that
at this stage co-owners could have a joint tenancy or tenancy in common. We need to
apply the other tests.

The second test is, does the deed transferring the land to the co-owners contain an
express declaration.

Where the deed in favor of the co-owners contains an express declaration of how the
co-owners should hold the equitable interest in the land, that declaration is conclusive
(Goodman v Gallant). On the facts we saw that there’s a declaration stating that the all
the property was transferred to them as “beneficial joint tenants.” . That statement
prevails and is conclusive, which means that the co-owners would hold the equitable
interest accordingly as joint tenants.

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In conclusion, the legal estate would be held by the first four as joint tenants, and the
equitable interest would be held by the first four and Edna also as joint tenants.

Doris’s sale to Beryl in june 2015

The sale of Beryl’s share of the land to Doris, would not affect the legal interest. This
cannot be severed under s 1 (6) of LPA.

Could the fact that Beryl agreed to buy Doris share amount to severance?

The most common form of severance is severance by notice under s 36(2) of the Law of
Property Act 1925. There are three requirements for a valid notice under s 36(2), notice
must be given in writing, must show the correct intention and must be correctly served
(LPA 1925, s 196). We do not have any evidence of anything in writing. So there is no
severance of Doris Share. That means that the equitable estate continues to be held like
on the time of purchase.

Doris’s death in 2014

Doris have died. That means that her interest in the legal estate passes automatically by
survivorship to the other trustees, which will be Anat, Beryl and Carla when she dies.

His equitable interest in the one-fifth share held as a joint tenant passes by survivorship
to Anat, Beryl, Carla and Edna.

Because joint tenants are treated as being single person and not two individual, and the
right of survivorship applies to joint tenants, meaning that if one dies his interest his
transferred to the other joint tenants.

The gift left by will from Doris to Edna. If a joint tenant makes a gift in his will of his
interest to a third party, that gift will not be effective, neither the intestacy rules would
be apply. Gift under Doris’s will to Edna is invalid.

Carla mortgage her share in February 2015

Carla’s actions will have no effect on the legal title. It will remain with Anat, Beryl and
Carla. It is not possible to sever the legal estate (s36 (2) LPA 1925).

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In regards with Carla equitable interest. Appears that she have severed her equitable
joint tenancy by alienation, provided the mortgage was completed in signed writing
under s53(1)(c) LPA 1925 which is likely. At the time the mortgage was created his 1/4
share of the equitable interest would be held as tenancy in common by the Ray and the
3/4 would be held by the others as joint tenants.

When Carla pays the mortgage, she recover her share from Ray, but that share remains a
tenant in common. So, now we have only Anat, Beryl and Edna as Joint Tenants. Carla
interest would be held as tenant in common from this moment.

Beryl sale in March 2016

In regards with the legal interest, this cannot be severed under s 1 (6) of LPA. Meaning
that will remain the same.

In regards with the equitable interest, seems that Beryl it’s severance her interest to the
other threes. Seems that she have complied with all requirements of s 36(2) of the Law
of Property Act 1925, there was correctly served (LPA 1925, s 196) by post.

The court in Kinch v Bullard , explained that under s 196(3) of the Law of Property Act
1925 it does not matter who left the notice of severance and who pick up so the fact that
Anat’s boyfriend signed it’s irrelevant. It could be left by the sender or his agent, or by a
postman if the notice has been sent by post. The notice of severance is validly served if
the sender can prove that, however it was delivered, the notice was actually left at the
last known abode or place of business of the other joint tenants.

Now the equitable interest in only held by Anat, Carla and Edna as joint tenants. And
Carla have 1/4 held as a tenant in common.

Beryls death

That means that her interest in the legal estate passes automatically by survivorship to
the other trustees, Carla and Anat would be trustee.

In regards with the equitable interest, there his no changes because she didn’t have
interest.

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Anat Death

With Anat death Carla would be the sole trustee, of the legal estate.

In regards with the equitable estate, Carla and Edna would be joint tenants. And Carla
would continue to have 1/4 as tenant in common.

B)

Carla want to sell and Edna would try to prevent that. Under s 6 (1) the trustees of land
have all the powers of an absolute owner, so Carla has the power to sell. In exercising
this power must have regards to the rights of Edna rights.

Under s 11 of TOLATA 1996, Carla needs to consults Edna. But she could decided to
sell against her wishes. On that case, under s 14 of TOLATA 1996 Carla could apply to
the court to get the consent to sell. Or even Edna could apply to the court to prevent
Carla.
Under s 15 of TOLATA the court would take into account to decision the purpose of the
property, the intention of the people creating the trust when they bought it.

C)

Edna could had register a restriction in the proprietorship register. The effect of that
would be to show at anybody who look to the register that Carla ability to sell the
cottage is restricted. With that action Carla is warning that the land his held in trust , she
is the beneficiary behind that trust and in order to take free of interest the buyer need to
overreached it.