Topic 1 Flashcards

Question

The three steps of conveyancing are:

Answer 1

1. Exchange of Contracts 2. Completion of the Deed 3. Registration

Answer 2

- Contracts where the subject matter is land - All three of the following requirements must be satisfied to have a valid land contract. This is as per the (LP(MP)A), s 2: The contract must be in writing, it must contain all the expressly agreed terms, it must be signed by both parties. - This is in addition to the normal contract law requirements and relates to all contracts where the subject matter of the contract is land.

Answer 3

- The contract must be in writing - It must contain all the expressly agreed terms – LP(MP)A 1989, s 2(2): the contractual terms may be incorporated into the contractual document either by being set out in the document or by referring to some other document ('by reference'), which is very common in practice. - For both commercial and residential sale transactions there are Law Society standard conditions of sale - It must be signed by both parties – one document or two identical ones - The standard conveyancing practice is to exchange contracts. Two copies of the contract are drawn up. One copy is signed by the seller and the other by the buyer. To create a binding contract the parties then exchange their copies.

Answer 4

- The case of McCausland v Duncan Lawrie Ltd [1997] 1 WLR 38 held whenever a material term in a land contract is varied that variation must also comply with LP(MP)A 1989 s.2.

Answer 5

- The effect of a binding land contract is to pass an equitable interest in the land to the buyer, called an estate contract. - Walsh v Lonsdale (1882) makes clear that a contract to create or transfer a legal property right will create a proprietary right in equity if the remedy of specific performance is available ie the claimant must have clean hands.

Answer 6

1. As part of the process of buying/selling land (conveyancing), the buyer and seller may choose to enter a sale contract to record the terms of the agreement and to commit themselves legally to the purchase/sale. 2. Prior to the grant of a lease, the landlord and tenant may choose to enter into a contract to commit themselves to enter into the lease in the future. This is common in practice where the premises are not ready for immediate occupation, but the parties want the certainty that a lease will be entered into. In practice this is called an 'agreement for Lease' or 'contract for Lease'. 3. An Option Agreement is a type of land contract that gives another party a right, during the option period, to serve notice that they wish to buy the land. If notice is served during the option period, the seller must sell the land to the buyer. However, the buyer is not obliged to exercise the option. 4. A Right of pre-emption is a type of land contract that gives another party a right of first refusal in the event the land owner decides to sell their land. This means that the land owner cannot sell the land without first offering it to the party holding the right. There is no ability for the party who has the benefit of the right to require the land be sold to them.

Answer 7

Damages - This is a common law remedy and therefore available as of right rather than at the court’s discretion. The usual measure of damages is the loss which the claimant has suffered as a result of the breach e.g. legal and surveyor's fees, including the loss of the bargain. Specific Performance - This is a court order compelling the defaulting party to carry out positive contractual obligations. Injunction - Prohibitory injunction: this is a court order restraining somebody from doing something, including breaching a contract by selling the land to someone else. - Both specific performance and injunctions are equitable remedies. This means they are not available 'as a right' (unlike common law damages) and are entirely at the discretion of the court. This means there is no automatic right a claimant will get the remedy they seek. Equitable principles - Means the court will have regard to the behaviour of both parties in determining whether to make an order or grant an injunction. If the buyer delays in requesting the remedy or itself has not behaved honourably then the court may well refuse to make an order of specific performance or grant an injunction.

Answer 8

* It is very difficult to discover third party interests, where documentation is held by the right-holder themselves rather than any centrally administered authority. * Examining title deeds is necessary and reading very ancient documents might be very difficult or the deeds might be missing as a result of fire/loss. There might also not be a plan of the property, so it is difficult to know for certain the extent of the property. * There is no state guarantee of accuracy or compensation for error (this does exist in the registered system.) * As there are more documents to read and interpret the conveyancing process may be slower and incur more expensive legal fees for a purchaser. The process is also very repetitive each time the land is sold again.

Answer 9

- The LRA 2002 governs the present system of registration. - The system was introduced in England and Wales by the Land Registration Act 1925 (now repealed), which envisaged that land would gradually be registered, region by region. - From 1926 onwards central government designated various areas as being areas of compulsory registration, so eventually all of England and Wales would be registered. It was not until 1990 that all of England and Wales became designated as an area subject to compulsory registration. - Even now, you do not have to register an unregistered title – you only have to do this if there is a transaction (sale, mortgage, gift, assent (if you’ve inherited land), or event (disposition) which triggers compulsory registration.

Answer 10

* Each registered title has a title plan which evidences the full extent of the property and usually also provides information as to who is responsible for the property’s boundaries. * Once a person is registered as the title owner that ownership is guaranteed by the State. Therefore, buyers are certain that the title to the land has been investigated and approved before registration. If it is incorrect then an innocent party who has suffered loss can make a claim for compensation against the Land Registry. * Once a title is registered a copy of the registered title can be downloaded from the Land Registry’s website easily and quickly. This reduces the risk of fraud too. * Once the title is registered all information is held centrally and can be viewed online. This speeds up the conveyancing process as a seller’s solicitor can deduce title and draft a contract for sale very quickly rather than have to wait for the original deeds and documents to be sent from the client (or the client’s lender)

Answer 11

* Each time that unregistered land is sold for the first time since 1 December 1990 it must be registered. This is known as first registration * (Note: It has only been compulsory to register changes of ownership following death or gifts of land since 1 April 1998.) * Under LRA 2002, s 4 (first registration) and LRA 2002, s 27 (transactions involving already registered land) there are a number of circumstances which trigger compulsory registration: “triggering events.” * These triggering events apply to both unregistered and registered land. If the land is unregistered the event triggers a requirement to register the land for the first time. If the land is already registered, the event triggers a requirement to update the register. * The LRA 2002, s 3 allows for voluntary registration of unregistered land, for example if the owner wants to obtain the advantages of the land registration system. The Land Registry offer reduced registration fees in these circumstances.

Answer 12

- Transfer of the freehold estate by sale, gift, or court order. - Grant of a lease for a term of more than seven years. - Assignment (transfer) of a lease of unregistered land with more than seven years to run. - An assent, vesting assent or vesting deed which is a disposition of the freehold or a leasehold with more than seven years to run (this refers mainly to transfers on death.) - The grant of a lease to take effect in possession more than three months after the date of the grant (i.e. future leases.) - A first legal mortgage of the freehold or of a leasehold with more than seven years to run.

Answer 13

the buyer would always know precisely what it was buying, and the holder of the interest would always know that, by recording it on the register, the interest would be enforceable against a new owner.

Answer 14

- Put simply the register should reflect all matters that the property has the benefit of and all the matters that the property is subject to. The register should be a clear and comprehensive account of the ownership and rights that benefit and burden a piece of land, and a purchaser should only need to look at the register to understand who owns a property and what third party rights will bind the property. - The transparent simplicity of the mirror principle for recording third party interests against an estate has never been fully realised due to the existence of overriding interests. - Overriding interests have attracted criticism since the system of land registration was first established in 1925. They are, nevertheless, retained by the LRA 2002, although their number has been vastly reduced.

Answer 15

an interest that does not appear on the register but will still be binding on the owner of the legal estate and any buyer of it. Their full title under the LRA 2002 is 'unregistered interests which override registered dispositions’.

Answer 16

- The register records the ownership of the legal estate in the property, the legal title. - If a property is held on trust, the purchasers need not be concerned the beneficial or equitable ownership of the land (‘what lies behind the curtain’), which is often far more complicated than the legal ownership. This information is kept off the title. - This principle simplified land conveyancing, making the process of investigating ownership to a piece of land much simpler and quicker.

Answer 17

- The accuracy of the register is guaranteed by the state. This is one of the advantages of registered land over unregistered land. - If there is an error with the register, it will be corrected and anyone who has suffered any loss will be compensated (LRA 2002, schedule 8, para 1). - You often see the compensation referred to as 'state indemnity'.

Answer 18

- When a piece of land is registered for the first time, it is given a unique title number and the details of the land owner and rights that benefit/burden a piece of land are recorded. - The title plan the Land Registry creates for each property ensures that there is an accurate plan of the property. - First the Property register. This contains: o A description of the property by reference to a filed plan. o The nature of the estate ie whether it is freehold or leasehold. o The details of any proprietary rights that benefit the land. For example, if the property benefits from a right of way over another property – an easement – then the details of it would appear here. - The Proprietorship Register contains: o Details of owner of the legal estate. o The class of title, such as title absolute, possessory title o Any restrictions on the owner(s) ability to deal with the land – such as a mortgage restriction preventing a sale without lender’s consent.

Answer 19

Absolute Title: This is the best form of ownership and is really what you would want to see on the official copies if you were buying a property. Most properties are registered with this class of title. The land is only bound by interests that are registered on the title or overriding interests. Qualified Title: An owner may be registered with qualified title if the Land Registry is of the opinion that the title has some defect which it will then specify on the register. It is very rare to see someone registered with qualified title in practice. Good Leasehold Title: Good leasehold title will be granted where the Land Registry is satisfied as to the title of the leaseholder only and not the freeholder. This could be the case where the freehold title is unregistered and where the applicant fails to submit evidence of the freehold title when applying to register his leasehold title. Possessory Title: May be given by the Land Registry where the applicant is in possession of the property or is in receipt of rents and profits and there is no other class of title that can be given. Where there are no title deeds to prove ownership, or the deeds have been destroyed Possessory Title would be given. It is usually given to those with a claim under ‘Adverse Possession’ or ‘Squatters Rights.’ Possessory title may mean that third party interests created before the date of first registration will bind the property even though these are not noted on the title.

Answer 20

- LRA 2002, s 27 provides a list of transactions involving already registered land which must be registered i.e. the Land Registry must be notified of the transaction so that the register can be updated accordingly. - Failure to register means the transaction is not legally recognised (LRA 2002, s 27(1).)

Answer 21

* There is a much higher degree of formality required to transfer land compared to other forms of property. A deed must be used to transfer land. * A buyer of a piece of land will want to know what is included. A buyer of land gets everything that falls within the legal definition of land (LPA 1925, s 62). * If there is a shed in the back garden, is this part of the land? What about the carpets? * If a third party is digging under a piece of land or swinging a crane over the land, is this trespass? A landowner will want to know what action they can take (if any). * If a mortgage lender initiates possession proceedings because a borrower stops making their payments due under the terms of the mortgage loan, the lender will want to know exactly what they can take possession of and then sell. A lender will have a mortgage over ‘the land’ and therefore a right to sell everything that counts as being part of land.

Answer 22

physical things attached to the land – called ‘fixtures’ in practice.

Answer 23

the benefit of any proprietary rights that the land has but which have no physical substance.

Answer 24

- An owner’s rights in the airspace above his land are restricted to such height as is necessary for the ordinary use and enjoyment of the land and the structures upon it. - In other words something on your neighbour’s land that overhangs yours is likely to be a trespass as they are, by definition, using space that you could utilise. Conversely, above that height, the owner has no greater rights than any other member of the public: Bernstein of Leigh (Baron) v Skyviews and General Ltd [1978] QB 479. - The law makes a distinction between the upper airspace and the lower airspace

Answer 25

- There is no exact height from where the upper airspace begins - The Civil Aviation Act 1982, s 76(1) grants immunity from trespass or nuisance for any innocent flight of aircraft.

Answer 26

- The lower airspace is to such height as is necessary for the reasonable enjoyment of the particular piece of land. - If a structure overhangs your property so that it is in the ‘lower airspace’, that is a trespass irrespective of whether damage is caused to your property.

Answer 27

- This issue of who owns the ground beneath the surface of the earth came before the court in the case of Grigsby v Melville [1974] 1 WLR 80 - The Court of Appeal held that the cellar was owned by the claimant and based their reasoning partly on the fundamental principle that a conveyance of land ordinarily carries with it all that is beneath the surface. - There are some exceptions to the principle that a landowner owns everything beneath the surface of its land: * A landowner is not entitled to all minerals under its land. All mines of gold and silver belong to the Crown. * If a landowner finds "treasure" (as defined under the Treasure Act 1996) then that also belongs to the Crown. * Any coal under land belongs to the Coal Authority by virtue of the Coal Act 1938. The Infrastructure Act 2015, s43 effectively states there is no trespass at depths below 300 metres and therefore there is no need for the consent of the freehold owner to deep-level drilling.

Answer 28

this is an ancient Latin maxim. It means he who owns the land owns everything up to the heavens above and the depths below.

Answer 29

- This ancient Latin maxim, upon which the modern law is based, means ‘whatever is attached to the land becomes part of the land’. - This principle is encapsulated in modern land law in the LPA 1925’s definition of ‘land’ which includes “other corporeal hereditaments” ie things attached/fixed to the land, what we ‘fixtures’ in practice.

Answer 30

1. The degree of annexation test - this is the first test to be applied: the more firmly the object is fixed to the land or building, the more likely it is to be classified as a fixture. Even if it is fairly easy to remove, its character is still prima facie that of a fixture. If, on the other hand, it rests on the land by its own weight, it is generally considered to be a chattel. 2. The purpose of annexation test - the second test considers why the object is attached to the land/building. It asks whether the annexation was for the more convenient use or enjoyment of the chattel as a chattel, or to enhance the land or building in some way. This test takes priority over the degree of annexation test. The ‘purpose test’ prevails over the ‘degree test’ where there is a discrepancy between them; but what is the point of having two tests if whenever they produce differing results you choose one over the other? - The degree of annexation test raises a presumption, that the thing in question is or is not a fixture. - This presumption can then be rebutted by objectively looking at the purpose.

Answer 31

- Under LPA 1925, s 62, a conveyance of land (ie a transfer) automatically includes all fixtures in the property, unless the items are specifically excluded from the sale in the contract under the LPA 1925, s 62(4). - If the contract is silent and does not specifically exclude any items from the sale, the seller may not remove a fixture after they have contracted to sell the property to another. - To avoid a dispute about whether an item is a fixture or chattel, it is common practice for the buyer and seller to agree which items are to pass on the sale by completing a Law Society Fixtures and contents form (Form TA10) which forms part of the contract.

Topic 1 Flashcards

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