Lecture 5 - Voluntary Transfer — The Rules (WORD) PDF

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Voluntary transfer the rules...

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Lecture Five

Voluntary Transfer — The Rules

Conveyancing • Missives— the plural is an exchange of letters meaning that they have concluded the contract through he exchange of correspondence which leads to the transfer of ownership and they must include details of parties involved in the transaction, property being transferred and the price paid for the property. You can receive an unqualified acceptance or a qualified acceptance where the buyer might agree to pay the price but only fi they also receive the curtains etc. • Disposition— this s effectively the deed which seeks to transfer the ownership of the property between parties and once it has been registered in the General Register of Sasines (old one) of the Land Register (current one) then the property has transferred • Registration

Inhibition • Order of court— which affects the inhibitee’s power to grant deeds to heritable property. • Register of Inhibitions— the is administered by the keeper which is the government body which runs the land register. • This is important to know as it is an implied term of contract for sale that the seller has unrestricted power to dispone and is hence uninhibited • If an individual is inhibited and they transfer the property then the transaction is voidable but not immediately void Completion of Conveyance • Settlement date, more commonly known as the date fo entry, is they date when someone gets the keys and pays their money but generally does not yet receive their real right • Disposition — executed by seller on the date of entry to say they are going to transfer the property • “Uninfeft proprietor” — when they are in the property but, while they are capable of, they have not yet become the owner • Remember that missives create personal rights, but registration of disposition creates the real right. Warrandice • If in effect a warranty • Guarantee from granter to grantee that title to the property is good. • Three types: • Simple — where there is no subsequent prejudicial deed which means the granter promises to give guarantee that they will give no subsequent deed that will prejudice the grantee e.g. A sells to B but before B registers disposition A enters into contract with C who registers first and then A would ave committed a subsequent prejudicial action • “fact and deed” — where the seller commits that they will carry out no prejudicial future or past act • Absolute — is in many ways implied in a contract if they contract is silent and is the ideal term for the buyer Absolute Warrandice • Absolute Warrandice: • The grantee will acquire ownership • The title will be unaffected by any encumbrances (consider, in particular, subordinate real rights)

• Title conditions is an exception to the above and might relate not a real burden which is something incumbent upon you as a landowner such as right of passage etc and are not considered an encumbrance • Does a subordinate real right create a prejudice? • Lothian and Border Farmers Limited v McCutcheon 1952 • property sold but buyer unaware that seller had previously granted a long lease which is a subordinate real rights and gives the tenant rights int hat property subject to their lease and a subordinate real right attaches to the property so the tenant could not be summarily rejected • could the buyer claim in warrandice • the court said a lease was not an unfair prejudice as the buyer would unfit form the rental income • Warrandice exists in both the missives (personal right) and deed (real right) • If the deed has been breached then your remedy in that situation is damages against the selle • In order for warrandice to take place you must prove eviction • required to challenge “good” title • eviction or threatened eviction • not necessarily physical removal but a court act or challenge with the successful assertion of true owner • Cases • Clark v Lindale Homes Limited 1994 • C bought flat from LHL and in later investigation it was found to be partly built on neighbouring property but because the neighbouring land owner hadn’t noticed and it wasn’t them who challenged there was no eviction or threatened eviction • Palmer v Beck 1993 • B sold to P and in her investigations after buying she found that part fo the land she had been sold was not good and was probably sold in error so P sued B for breach of warrandice but because the owner of the land did not raise the challenge again there was no breach of warrandice • Morris v Rae 2013 • challenge not by a neighbour but by a non-owner • HoL held that so long as the party making the claim could become the owner if successful then warrandice will apply • Breach of warrandice in the missives • if you have registered your dispotion you rely on your deed but there is also a guarantee at the contract stage • if in the course of concluding the contract you find an error you are in a much stronger position as you just rescind the contract but if you are querying with the seller as to whether they own the property it could be remedied by them proving ownership Risks After Settlement but Before Registration • Letter of Obligation historically dealt with these risks and was an undertaking but he solicitor of the seller that as long as the buyer registered their disposition within 14 days they were safe • Advance Notices (Land Registration (Scotland) Act 2012) replaced a letter of obligation and if effectively a protective period fo 35 days from settlement date to register the disposition. If the buyer registers their disposition on day 36 they lose their protected status • Solicitor responsibility is important Corporeal Moveable • Sale of Goods Act 1979 (SOGA) covers the transfer of property but only for money consideration has been replaced by the Consumer Rights Act • SOGA s2 ‘contract of sale’

• If goods are being transferred not for consideration then it is covered by the common law, this could be gifts, donations etc • The key requirement of the transfer fo property under the common law is the delivery (still mad about higher english prize) SOGA • “Goods” • Existing – where the seller already has it • Future – where it is still to be manufactured after contract for sale • Specific – where they are known and identifiable • Unascertained – they are a quantity, but not specific e.g. if J goes to sweet shop and gets 100 bonbons out of a jar fo 1,000 J can pay but the property is unascertained as it is one of a larger quantity but once the 100 has been taken from the jar it is an ascertained quantity • Transfer is usual “external act” which is distinct form transfer of land which requires registration • Some acts of moveable registration: cars with DVLA, aircraft mortgages and ships registration none of which actually relate to ownership but is instead for administrative purposes SOGA s17 • Assuming that the goods are specific, or have become ascertained… • “the property in them is transferred to the buyer at such time as the parties… intend it to be transferred”. • No external act (including delivery) is needed • Ownership can be transferred prior to delivery • Contract – consensus in idem – parties can decide Transfer: Default Rules • Usually this is agreed but if the contract is silent we look to s.18 of SOGA • Rule 1 – “where there is an unconditional contract for the sale of specific goods in a deliverable state, ownership passes when the contract is made and it is immaterial whether the time of payment or the time of delivery, or both, be postponed.” • Rule 6 (s.19) – presumption that there is a reservation of a right to disposal – any imposed conditions would need to be satisfied • ownership only cases if imposed conditions are met Other Issues Arising • If ownership transfers without payment then s41 of SOGA ‘Seller’s Lein’ is a protection of ownership until they deliver goods and this is a subordinate real right in the property • Retention of title – “reservation of title” is more common e.g. if you buy sofa from DFS and you take a monthly instalment payment plan while you have the sofa from day one you don’t technically own it as DFS reserve title to ownership until all payments are made because if you default on the payment they can take the sofa back • Contractual clause – title transfers only on conditions being met • Risks— in the DFS situation if you have sat on it for years or cut in into bits then if you default on payments the goods will have lost their value or if you buy a large quantity of cooking oil but you don’t pay for it and they try to repossess it but you’ve turned the oil into margarine and they cannot claim the oil back as it no longer exists Nemo Plus • s.21 SOGA • “Where goods are sold by a person who is not their owner, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no

better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell” • If the ownership is void/voidable then the subsequent transaction for transfer of ownership would become void/voidable Exception to Nemo Plus • s.24 > non delivery • e.g. A owns a shop with sellers A and D and sells property to B who pays their money but has not yet picked up the product but unbeknownst to B, D sells the same property to C who pays and takes it there and then so the the shop has received two payments but because C has picked it up there is protection for C • S.25 > complex – concerns payment • S.23 > if voidable goods are sold in good faith then the title becomes good Incorporeal Property Rights • Incorporeal— stocks, debts • Assignation (cession) — is the concept of transferring incorporeal rights • Assignor (cedent) — the person who transfers the rights • Assigness (cessionary) — the party who receives the rights • Transferability of personal rights • Can assign contractual rights but not contracts • How? - notice or intimation on debtor is given so the principle is that if you are receiving money you can transfer the right • Assignatus utitur jure auctoris — the right is only as good as the right which was originally held • Scottish Widows Fund v Buist (1876) • Mr Moir took out life insurance policy which promised to pay out a sum on his death to his successors but rather than going to his successors he entered into a contract with Mr B that he could get the life insurance money • as part of obligation to take out life insurance policy you had to undertake a statement of health and Mr Moir state the was sober and in good health but he had alcoholism and syphilis • Mr B sought to claim under life insurance policy but SWF refused as because Mr M had lied the money would never have been paid to his estate so he only gets the same right • Binstock Miller & Co Ltd v E Coya & Co Ltd (1957) • sale between parties of large quantities of orange juice • buyers paid part of the price to the sellers but there was a balance due • in satisfaction of another commercial debt the sellers assigned that debt to another party • when the assignee said they had right to payment the buyers refused to pay as the product was faulty and this non-conformative to the contract so they wouldn’t pay the original seller for it • they sought back the money they had paid but the court said no as only the right to collect debt had been transferred...