The legal issues arising out of the material facts demands the discussion on registered land and also third party rights on it. Julie and Zac purchased a free hold house in 2002. It was registered land. They both registered the property and inserted their name in the register as proprietor.. After few years they sold the house to Emile. I am asked to advice Emile is there any rights of Aunt Mildred, Anita, Rajinder and Imran over the house? If so, will they bind Emile?
We know registered land means land where ownership and interests have been transferred onto a register. Secondly rights in property means a. Estates in land and b) Interest in land. Estate in land: Means ownership of land for a period of time. Here estate means legal state. On the other hand Interest in Land means a right of existing land which is owned by some one else It is a some sort of right in some one else land. less than ownership.
The legal rules relevant to the above issues can be found in s.29 LRA 2002. According to the rules we know a purchaser for valuable consideration of the registered title who completes his or her purchase by registration is bound by-
- An interest which has been protected by entry on register by a notice or restriction.
- An interest which is overriding under schedule 3
- A registered charges or
- Interest completed by registration.
We presumed that Emile is a purchaser of the house for valuable consideration and has completed her purchase by registration. So she will bind third parties right. Now we will discuss the rights of Mildred, Anita, Raiinder and Imran gradually.
Aunt Mildred’s right: Contributed one third of the purchase price of the house but her name is not included in the register. In the given fact it is not clear whether this contribution is a loan or gift or participation as share holder. In fact equity say where the purchase money is provided by two or more parties jointly and the property is put into the name of one of the parties in that case equity will presume a resulting trust in favour of the other party or parties.. A resulting trust will be imposed when there has been an incomplete disposition of a beneficial interest in a trust.. Dver V Dver (1788). On the other hand presumption of resulting trust will not arise in cases where the purchase monies have been provided as a loan or gift So it can be said that if the money is not paid as a loan or gift in that case Emile may bind by the rights of Mildred. It also should keep in the knowledge the presumption of resulting trust may be rebutted by showing that there is a relationship between the parties. Buffrey V Buffrey .
Now the question is Aunt Mirdad was living that house since 2002 to 2007 until the house was sold. We know the interests of people who live in a property may bind a purchaser (subject to conditions) even if those interest are not shown on the register. There is no specific definition of actual occupation. According to case laws, it is a question of fact there must be some physical presence rather than some entitlement in law. It is also involves some degree of permanence & continuity. So according above points and the according to the following cases we can say Mildred was in actual occupation. Wiliams & Glyn’s Bank ltd V Boland, Abbey National V Cann, Malory, Lloyds Bank V Rosset or Chhoker V Chhoker etc. A purchaser for valuable consideration of a registered land and purchased by registration will be bound by notice and overriding interest. LRA 2002 schedule 3 and para-2 cleared that an interest of a person in actual occupation of the land is an existing right plus actual occupation. So, if override the interest of Mildred than it will bind the Emile. Things to remember that if the person with the interest was asked about it before the purchaser bought the land and s/he failed to disclose the interest when they could reasonably have been expected to disclose it than occupier’s interest will not override. This is also not mentioned in the question whether Emile inspected the house before purchase?
Anita’s right : She has a room and she used to live the house every year minimum two months and also the room is fixed for her. Moreover she is granted right of pre-emption. We know pre-emption has a wide definition. Right of pre-emption means the act of right of purchasing before others. Or more elaborately we can say a pre-emption right is a right to acquire certain property in preference to any other person. A right to acquire existing property in preference to any other person usually referred to as a right of first refusal. Moreover Anita was granted a pre-emption right which was written. This is an estate contract. According to LRA 2002 s.33 interest can be protected either by a notice or restriction in register. If not notice is registered future purchaser will not be bind. Midland Bank V Green It is not confirmed in the question whether the interest of Anita’s entered in register. If not mention in register than it could be said Emile is not bind about Anita’s interest. The other way to enter the interest of a beneficiary under a trust on the register is to use a restriction. Here it is not clear any restriction entered for Anita. So if not entered restriction than it could be said Emilie is not bind to Anita. The question does Anta’s short stay (2 months) and keeping cloths and belongings cover actual occupation? Case law say a person’s absence is ‘so lengthened that the notion of her continuing to be in actual occupation becomes insupportable. Actual occupation means there must be physical presence but this does not mean that the person claiming the overriding interest must resides or works on the premises. Actual occupation does not require an unintended personal presence by the claimant of an overriding interest. According to above case law Anita’s short stay could presume an actual occupation. Now it is not clear whether Emilie inspected the house and the time where Anita was is not clear. So if it could be proved Anita’s overriding interest than Emile may bind on her interest
Rajinder’s right : He is a next door neighbour. He was granted to use the shed in their garden. This is known as easement. An easement is a right either to do something, or to use something over another persons land. The right to light is an example. Kelk V Pearson. Right of way- Borman V Griffith, Right to storage-Wright V Macadam An easement may be created in a number of ways. In this case it is express grant. The deed was made for five years. This is a legal easement as it is made by deed. Under the Law of Property Act 1925 s70(1)(a)[LPA] if the easement is legal than it can be overriding and will bind the purchaser of the property. Also according to LRA 2002 s-3 p- 3 an implied legal easement is binding on a purchaser for valuable consideration only if
- It is registered under the Commons Registration Act 1965 or
- The purchaser actually knows of it or
- The easement would be obvious on a reasonably careful inspection of the land or
- It has been used within one year before the disposition.
So if the easement is not registered than Emile will not bind by the interest of Rajendra. As well it is not clear whether she knows or inspected the house before purchase. So if not above she will not bind by any interest of Rajendra.
Imran’s right : He was granted lease for 2 years over phone. If a legal lease for less than three years than it needs not to be registered and it can not be protected using a notice. To create or transfer a legal interest than it must be made by deed.. According to s.54 (2) LPA a short lease need not to be made by deed. Because if the lease is–
- Short lease, 3 years or less
- In possession immediately
- Can even be granted orally
- With the best rent
Imran lease was short and granted by orally and it was immediate. So it could be said Emile will be bind by Imran interest.
From the overall discussion we could presume or it is likely to say Emile will bind by the rights of Mildred, Rajinder and Imran and on the other hand it is less likely to say that rights of Anita will not bind Emile.
Books, Writer, Publisher, Edition And Year
Elements of Land Law by Kevin Gray and Susan, Oxford University
Press 2009, Fifth Edition
Text Book on Land Law by Judith-Anne Mackenzie and Mary Philips,
Oxford University Press 2008. 12th Edition
Unlocking Land Law by Judith Bray, Hodder Arnold, 2008,Second Edition
Property Law Cases and Materials by Roger J Smith, Logman Law Series, 2009 4th edition Blackstone’s statutes on Property Law by Meryl Thomas. Oxford University Press, 2008-9
HM Revenue & Customs Guide book of land registration and third party rights Land Registry Practice guide 62 Nov 2008 edition
Williams & Glyn’s Bank Ltd V Boland  AC 487
Abbey National Building Society V Cann 1 AC 56
Chokar V Chhhokar  FLR 313
Stockholm Finance Ltd V Garden Holding Inc  NPC
Kingsnorth Finance Co Ltd V Tizard 1 WLR 783
Malory Enterprises V Chesire homes (UK) Ltd 
Lloyds Bank Plc V Rosset Ch 350
Law of Property Act 1925
Land Registration Act 2002
Land Charges Act 1972
Priorities in Registered Land, case comment by MP Thompson. Conv, 1988 Nov-Dec, 453-460. Source –www.west law
Case Comment on Abbey National Building Society V Cann by PT Evans in Journal Article, Conv, 1991’March t April, 155-167
Third party rights on in registered land by Debbie Rook and Aimee paterson, Journal Article on The Telegraph, August, 2008
Article on overriding interest by BPF(British property Federation)
Property guides on Times on line by Paula Hawkins, /times News Paper
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