After the purchase of the house
After the purchase of the house, Simon was informed by Cheryl that she has an interest in the property and that she is about to claim it. According to Sexton and Bogusz (2009), there are some rights called Home Rights which are included in the sections 30 to 32 of the Family Law Act 1996. Those rights arise where one spouse or civil partner has sole title to the home, the other spouse or civil partner has a statutory right to occupy that home.
Louis was the sole legal owner of the property which he later on sold to Simon. Louis and Cheryl are separated and not divorced and this gives the right to Cheryl to occupy the house.
However, Cheryl contributed to the property when she lived there by spending money on decoration, on a new roof and windows. Therefore, Cheryl has created a constructive trust. A constructive trust arises in favor of the party who either substantially contributes to the payment of the mortgage or pays for or personally undertakes substantial improvements to the property. (Sexton and Bogusz, 2009)
Another important aspect is that when Louis and Cheryl got married, Louis convinced Cheryl that his house will be as much hers as it was his. This gives rise for a proprietary estoppel. As mentioned by Sexton and Bogusz (2009), the facts that may give rise to a claim in estoppel could involve a promise of gift in the form of an interest or an estate in land.
Consequently, having satisfied these elements Cheryl has created an equitable interest in the property. Equitable interests in land can be created in a variety of different ways such as by constructive trust or by proprietary estoppel. (Sexton and Bogusz, 2009)
On the other hand, when Simon saw the property before buying it, he observed that some of Cheryl's belongings were still there because she has been travelling with her sister for the past four months. According to the case Chhokar V Chhokar (1984), the court held that because the wife's furniture were still in the property on the date of registration, this provided evidence of her continuing occupation and her intention to return to her home. This amounted to actual occupation despite the temporary absence. However, in the other case of Stockholm finance Ltd V Gardens Holdings Inc (1995), she was absent from her home for a period of fourteen months but had left belongings in the property. The court held that she was not in actual occupation.
In this case, Cheryl had her belongings in the house and she was travelling with her sister for four months which is not a prolonged period and therefore Cheryl is in actual occupation.
Subsequently, Cheryl has an overriding interest in the property. As mentioned in S.70 (1) (g) of the Land Registration Act 1925, every type of property right in land can be an overriding interest provided that there is actual occupation at the time of the land transfer.
These interests, who are overriding, are extremely dangerous for the purchasers of registered titles because they do not appear on the register. It is an interest which binds the purchaser of a registered title, whether he knew about it or not, despite not being entered on the register of title. (Sexton and Bogusz, 2009)
To conclude, Cheryl has an equitable right over Simon's property and she is in actual occupation therefore that right can be upgraded to an overriding interest. In this case Cheryl's rights are binding on Simon.
When Simon was measuring the property he bought, he saw Danni with two goats in the garden. The document that Danni showed to Simon was a deed, signed by both Louis and Danni and their signatures were witnessed. It also mentioned that she has a right to graze two goats in the garden for 10 years and it was created in 2004.
According to S.1 (2),(3) of Law Property Act 1989 “ an instrument shall not be a deed unless it makes 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. It is validly executed as a deed by that person or as the case may be one or more of those parties. An instrument is validly executed as a deed by an individual if and only if it is signed by him in the presence of a witness who attests the signature and it is delivered as a deed by him or a person authorized to do so on his behalf.” This indicates that the document which Danni showed to Simon is a formal deed.
However, there are four characteristics that are required for an easement to exist and to prove that Danni has an easement. These characteristics as mentioned in the Re Ellenborough Park are: There must be a dominant and a servient tenement. In this case, the dominant tenement is Danni's land and the servient tenement is Louis' land. The easement must accommodate the dominant land. Danni's land which is next to Louis' land has a direct beneficial impact. The easement must be owned or occupied by different people and in this case it is valid. Finally, an easement must be capable of forming the subject matter of a grant. This characteristic is being confirmed by the formal deed which Danni showed to Simon. Consequently, the court of appeal for the Re Ellenborough case held that the purchasers of the plots had easements over the garden. The right to use Ellenborough Park as a private pleasure ground is a recognized easement in law.
On the one hand, it could be a legal easement and on the other hand it could be an equitable easement. According to S.52 (1) of the Law Property Act 1925, an easement or a profit is a legal interest provided that it is created by deed and as mentioned in S.1 (b) of the same Act, its duration is of a fee simple absolute in possession or a term of years absolute.
Where an easement has been created after the 12th of October 2003 by express grant or reservation by a registered proprietor the interest must be registered to be a legal easement. (Sexton and Bogusz, 2009) In accordance to the S.27 (2) (d) of the Land Registration Act 2002, requires the registration of registrable dispositions where the servient land is registered title. If the dominant owner fails to register his easement or profit, that easement will only be equitable despite being created by deed and will only be a minor interest. (Sexton and Bogusz, 2009)
Consequently, Danni could have a legal easement because it was created by deed and for a term of years absolute which in this case is for 10 years. Another important aspect is that the easement was created after the 12th of October 2003 therefore it must be registered to be a legal easement. If Danni did register her easement then it will be a legal easement which will bind Simon.
If Danni has an equitable easement then it will arise because there is an express grant which the dominant owner fails to substantially register. (Sexton and Bogusz, 2009) Subsequently, all equitable easements after the commencement of the Land Registration Act 2002 will be minor interests and they will only bind the purchaser if the dominant owner has entered a notice on the register protecting the right according to S.32 of the Land Registration Act 2002.
In conclusion, Danni will have an equitable easement if she did not register her easement and will therefore be a minor interest which will not be binding on Simon. If she entered a notice on the register to protect her right then it will bind Simon.
Another important fact is when Simon saw Sharon using the garage as studio to develop photographs. Then Sharon showed Simon an agreement which allowed her to use the garage a photography studio for 10 years. The document was signed by Louis and Sharon but it was not witnessed therefore it cannot be a deed.
Firstly, the distinction between a lease and a licence is necessary. One of the main factors that which separates a lease from a licence is whether the grantee has exclusive possession of the property. (Sexton and Bogusz, 2009)
According to the case Wells V Kingston Upon Hull (1875) where the court concluded that the shipowner was not granted general control of the dock and hence the letting to the shipowner was only a licence.
However, there is a specific definition of the term licence as mentioned by Thompson (2006) where a licence is a personal agreement between the licensor and licensee to enter or occupy the licensor's property. This right cannot be assigned and is revocable at will. Given that Sharon and Louis had a personal agreement, Sharon has a licence to use the garage as a studio.
There are different types of licences such as bare licences or contractual licenses. Sharon though, has a bare licence which is the simplest form of licence and can be granted without payment. (Sexton and Bogusz, 2009) Louis granted Sharon a licence to use the garage to develop photographs without her paying for the occupation of the garage. A bare licence can be revoked on giving reasonable notice at any time and at the will of the licensor according to the case Wood V Leadbitter (1845). The licensee must be given a reasonable time to leave the property, therefore Simon should allow a reasonable time for Sharon to remove her belongings from the garage.
Finally, Sharon has a bare licence which was granted to her after a personal agreement with Louis. This kind of agreement is not binding towards Simon and it can be revoked at any time.
Dermot, who is a local resident, was going home through the property's garden and out on to the street. It cannot be considered as an easement because there is no dominant and servient tenement. Dermot is using the garden as a shortcut to the street on his way home so he is not a neighbor.
On the other hand, Louis never objected to this which means he agreed to provide Dermot with a shortcut to his house from the garden of the property. This is a bare licence as well and can be revoked at any time by Simon who is the new landowner.
In conclusion, Dermot has only a bare license and Simon must take into account that it is not for value and can be revoked at any time as mentioned above in Sharon's case with the garage.