The property broker convinced Mr. Auden to buy two bed roomed freehold house of Desolation Row in exchange of his desire of three bed-roomed house. It was explained as a sole proprietorship property of Mr. Pound, though practically some other people lived there. It is not clear here who where living there, does they tenants or have any equitable right.
The out side of the apartment was in very terrible condition and was not maintenance for long time though the surrounding roads were enough but there is lack of maintenance. It is not clear here who would be responsible for the renovation and if any covenant. Trees planted at the next door of 23 of Mr. Eliot and the fencing how to be maintained. Moreover, extension of the house would create obstacle for Mr. Eliot’s sea view. Therefore, it would be taken into account whether owner has any easements with Mr. Eliot regarding fencing and extension.
Prior to the 1925 reforms equitable interests were governed by the doctrine-of-notice, that is, they were binding on the whole world except the bona-fide purchaser of a legal-estate for value without notice which involved the purchaser in making inquiries and inspections on the land, and it was in order to obviate the necessity for such steps to be taken that the system of land-charges registration was introduced in 1925. The LCA 1972, which replaces the LCA 1925, provides for the registration of certain land charges in the land charges register. The land-charges are set out in s. 2 of the Act and the most important for this purpose. In Class D (ii), that is in section 2(5)(ii) of LCA 1972 the purchaser of a legal-estate in the land-charged for money or money’s worth can take free of the unregistered charge and once a search had been made at the Land Charges Registry a certificate would be produced and if a charge against the land had not been made, for whatever reason, then the charge would not be binding on the land.
Here Mr. Auden will investigate whether there present any covenants in case of maintenance of fence, roads, and tidiness though it is no longer mattered whether or not the purchaser actually knew about the exercise of equitable rights in land. In the case of Wilkes v Spooner the buyer did not have notice of the covenant, consequently, buyers was not bound by the covenant.
Before Mr. Auden enters into a contract with Pound to buy the house, he should know about the legal interest of another person’s on the house. Legal interests in another person’s registered or unregistered land, for instance- mortgage, legal leaseholds are, in the main, automatically effective against the land over which they exist, even if not granted by the current landowner. Consequently, they will bind automatically any person coming to the ownership or occupation of the land, be he a purchaser, donee of a gift or an adverse possessor.
Mr. Auden should have knowledge that the recent legislation provides the protection of third party interests in land, for example, s. 70(1)(g) of LPA 1925 has been replaced by paragraph-2 of Schedule-3 of LRA 2002. The provision of the constructive notice is fairer to a purchaser than was s. 70(1)(g) and under the new provision a buyer is only bound if the occupation is discoverable on a reasonably careful inspection of the house.
Now Mr. Auden should consider whether there is any equitable rights holder or not as he got evidence of the woman’s clothing in the wardrobe, which arise several questions for example- whether Mr. Pound is sole owner or not whether he is married or not. Before purchasing the house, Mr. Auden should investigate whether those women has any direct or indirect financial contribution or not. In Inwards v Baker where a father said to his son that he might build bungalow on the father’s land when buying other land proved to be very expensive, but when the father died, the land was left to some one else. The son was held to have a right to stay in the property indefinitely because the son had an expectation fuelled by his father’s active encouragement that he would be able to remain in the property for his lifetime; in this case, the CA considers the direct contribution of the property.
On the other hand, if Mr. Pound is not the sole owner or there have any equitable rights of others such as Mr. Pound’s wife or other relatives, then, it will be unconscionable conduct to sell property without their knowledge because may be they had actual occupation on the property. In Gillett v Holt the court found that Mr. Gillett who had worked for Mr. Holt for nearly 40 years, as a result, the court granted him proprietary rights on the property. From the fact of the question, it can be found the broker said that Mr. Pound is the sole owner; therefore, Mr. Auden should investigate about the presence of any misrepresentation.
The general principle is that when a purchaser buys land from the trustees he wants to be sure that he purchases free of the rights of the beneficiaries under the trust and it is important for Mr. Auden. Martin J. & Turner C, (2008) argued that the trustees of the land are the legal owner. All the trustees must join in the sale to pass ownership to the buyer, for instance, if there are two trustees then all four must join in the sale even though overreaching can take place with only two trustees. If a sole-trustee conveys the land to the buyer then the rights of the beneficiaries will not be overreached, therefore, Mr. Auden will investigate the members who have the actual occupation. However, in fact of the question it was assumed that Mr. Pound the sole trustee as a result the rights of other women would not be overreached.
In Williams & Glyn’s Bank Ltd v Boland a house was registered in the sole name of a husband but the wife had made contributions, which gave her rights in equity in the house. The husband therefore held the property on trust for them both. He mortgages the property to the Williams & Glyn’s Bank which was treated as a conveyance for the purpose of s. 2(1)(ii) of the LPA 1925. However, the wife’s right to remain in the property was upheld; her equitable rights would continue to attach to the land and would not transfer to the proceeds of sale, which gave her the right to continue living in the property.
Mr. Auden should consider whether there are any easement between Mr. Pound and Mr. Eliot in issue further extension of the house because extension may barrier of viewing the sea from Mr. Eliot’s downstairs kitchen window and this extension may block sunlight from entering into Mr Eliot’s garden. The last point to consider is the LRA 2002 to register the rights because under the 2002 Act, easements rely on registration for their effectiveness. Only those legal easements that have been acquired prescriptively or by implied grant can continue to exist as overriding interests, therefore if Mr. Auden knows that there have existing easements and after purchase, the burden will pass upon him then the easement will be effective. Moreover, where an easement passes under s.62 of the LPA 1925 the easement will be acquired impliedly and under Schedule-3, Para-3 to the 2002 Act, an easement will be overriding under only three circumstances:
- the purchaser for valuable consideration really knows about the easements,
- they are obvious on a reasonably careful inspection of the land and
- They have been used in the year preceding the disposition.
However, the legal-easement was defined in s. 1(2) (a) of LPA 1925 where it indicates that easement has to be granted by deed (express, implied or presumed) and which is either to last in perpetuity or for a fixed period of time. If it can be proved that Mr. Eliot has maintained the easement for a long-time, then the right could pass under this rule and in the case Wheeldon v Burrows allows quasi-easements to pass where they are continuous, apparent and necessary to the reasonable enjoyment of the land granted and, which were at the time of the grant used by the grantor for the benefit of the part granted.
Mr. Auden will be bound by the easement to using roads, maintenance the roads, fence if he purchases the land under s. 62 of the LPA 1925, which implies into the conveyance all liberties and privileges enjoyed. There must be diversity of occupation under Sovmots v Secretary for State for the Environment, which suggests that the right will be binding on Mr. Pound’s successor. From the above discussion, it can be said that before purchasing Mr. Auden should remember the issue of easement and covenants.
The most important reason of the introduction and development of a comprehensive system for the compulsory registration of interests in land in England and Wales are to make land more freely alienable and to decrease the onerous task of a purchaser in investing title, whilst at the same time affording protection to the owners of equitable interest in the land. The Property legislation such as Land Registration Act 1925, Land Registration Act 2002, Law of Property Act 1925, Land Charges Acts 1992 that brings the conveyancing system of registered title and its aim to provide a stable, effective land registration system. Now it should consider the aims and objectives and the extent to which the system adopted has achieved those aims and objectives –
- One of the main reason is to ensure that a purchaser of land obtains a good title without difficulty and cheaply.
- In order to accomplish the balance between the interests of a purchaser and those owners of an equitable interest in the land and this balance is necessary because when a purchaser does not get the equitable rights of the property but has legal right, law solve the matters.
- According to the property legislation, bona fide purchaser will be benefited from these acts.
- After the LRA 2002 the dilemma of registered and unregistered land has been removed and the problem of adverse position has also been solved for example now squatter has to demonstrate that a period after 10 years’ adverse possession, the owner of the land did not take any steps for two years, then the squatter will become the registered proprietor. At the same time, the original owner of the land will lose his title.
- The LRA 1925 provides for the title to land to be registered at the local-land registry and the register is intended to be a mirror of the title, as a result, this avoids the necessity for a vendor to deduce 15 years’ title to a purchaser each time the land is sold.
The Land Registration Acts provides specific solution of few problems such as in aspects of adverse possession, registered and unregistered land, and equitable interest of individuals – overriding interest formerly under s. 70(1)(g) of the LRA 1925 and now under Schedule-3, para-2, LRA 2002, freehold covenants, leasehold covenants, easement and land registration. In the case of Midland Bank Trust Co Ltd v Green, a father granted his son a 10 years option to purchase, afterward, the father was sold the farm to his wife at undervalue. Oliver J at first instance held that the option was not binding because it had not been registered before the ‘purchase’ by the wife. In Diligent Finance Co Ltd v. Alleyne the wife’s registration was held to be void against a mortgagee who obtained a clear search against his full name.
Bibliography:
Dr Dixon, M. (2005), Modern Land Law, 5th edition, Cavendish Publishing Limited, pp-29-101, Web.
Jackson N, (2008), Overreaching in Registered Land Law, University of Manchester – School of Law, Web.
Gray & Gray, (2006), Elements of Land Law, 4th edition, Oxford University Press, pp-38
Martin J. & Turner C, (2008), Unlocking Land Law, 1st edition, Hodder &Stoughton
Revised Statute from The UK Statute Law Database, (2008), Law of Property Act 1925, Web.
Thompson M.P. (2006), Modern Land Law, 3rd edition, Oxford University Press.
Wilkie M. & Luxton P., (2008), Land Law: Question and Answer, 6th edition, Oxford University Press.