Seminars - seminar questions and answers for weeks 1-9 PDF

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seminar questions and answers for weeks 1-9...

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English Property Law Seminars Contents Seminar 1: Problem Solving in English Property....................................................................................2 Seminar 2: Land Registration.................................................................................................................6 Seminar 4: Co-ownership and Trusts for Land.....................................................................................13 Seminar 5: The Leasehold Estate.........................................................................................................19 Seminar 6: Easements.........................................................................................................................23 Seminar 7: Freehold Covenants...........................................................................................................27 Seminar 8: Mortgages..........................................................................................................................32 Seminar 9: Registration and Interests in Land......................................................................................37

No seminar in week 3 due to assessment.

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Seminar 1: Problem Solving in English Property This class will be dedicated to working with the materials from the last lecture on fixtures to practice doing problem solving questions in English Property Law. One lesson you should learn from this tutorial is that the law of property is not so much about things but about the relationship of people with other people in respect of things. Question: Jemma and Sophie are looking for a property to purchase. They go to look at 10 West View. The property is unfurnished but has fitted carpets in some of the rooms. In the kitchen there is a built-in cooker, a free-standing large fridge and roller blinds on the windows. Outside the house there is a small wooden garden shed, a brick barbecue, two large ornamental urns for plants, six rose bushes, an apple tree and a windy dryer. On the gate posts at either side of the entrance are two reclining greyhounds made of some kind of metal. The front door has a door knocker in the shape of a dolphin and there are door chimes which sound when the door is opened. If they buy the house how many of these items will be impliedly included in the conveyance? What are the issues in this question? How would you go about answering this question? Cases to consider: -

Holland v Hodgson(1872)LR 7 CP 328

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Berkley v Poulett[1977] 1 EGLR

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D'Eyncourt v Gregory (1866)LR 3 Eq 38

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Leigh v Taylor [1902] AC 157

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Elitestone v. Morris [1997] 1WLR 687

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Botham v. TSB Bank plc (1996) 73 P & CR D1

Issues: The issues in this question revolve around fixtures and chattels. Fixtures are included with the purchase (unless specifically stated in the contract of sale) and chattels are not included. The purchasers, Jemma and Sophie, need to know what are considered fixtures and so will be included in their purchase, and what are considered chattels and so will not be included. Once they know this, they can express if they wish to keep any chattels in the contract.

Answer: ILAC structure- Issue, Law, Application and Comment/conclusion. 2

ISSUE: The issues in this question revolve around fixtures and chattels. Fixtures are included with the purchase (unless specifically stated in the contract of sale) and chattels are not included. The purchasers, Jemma and Sophie, need to know what are considered fixtures and so will be included in their purchase, and what are considered chattels and so will not be included. Once they know this, they can express if they wish to keep any chattels in the contract.

LAW: The general rule on fixtures is; ‘Quicquid plantatur solo, solo credit’ – whatever is attached to the soil becomes part of it. Therefore, any chattel (an item of moveable, personal property, such as a piece of furniture) which becomes attached or fixed to the land becomes a fixture and then forms part of the land. When the land is being transferred or sold, any fixtures will pass onto the new owner but chattels will not.

Blackburn J in Holland v Hodgson (1872) set out two principles to be considered when deciding if something is a fixture or a chattel; the degree of annexation and the purpose of annexation. In today’s law, the purpose is considered to have far greater weight in practice today than the degree.

The degree of annexation: This looks at whether an item is merely resting on land by its own weight or is actually annexed (fixed) to the land. In the courts traditional approach, an item resting by its own weight was deemed to be a chattel, unless evidence was brought under the purpose of annexation to prove otherwise. In Holland the beams fitted for the loom mill had only been nailed in and thus could easily be removed. Yet, because they had been put there for the convenience of the land (using the mill) they had annexed to it.

The degree of annexation is not as much of a decisive factor as it once was. The question seemed to move to; how easily can it be removed? As opposed to, it’s degree of annexation. In Elitestone, a decisive factor of the case was that the bungalow could not be removed without it being largely destroyed. Therefore, it was a fixture despite it not being physically annexed to the ground and instead resting on its own weight. Compared with Leigh, where tapestries were nailed to a wall. The tapestries were held to be chattels. This is because they could easily be removed and was out up for the enjoyment of the house.

The purpose of annexation: However, with technology moving forward it is far easier to remove items without causing damage. This is why the purpose of annexation is more important, emphasised in Berkley. Here, Scarman LJ indicated that the object of annexation has greater significance than the degree of annexation. The paintings were affixed for the better enjoyment of them as paintings and the statue and sundials

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were also placed for the better enjoyment as chattels. Therefore, their purpose was to enjoy the objects better.

Therefore, at its simplest form the purpose test boils down to; if the item was annexed merely to increase the enjoyment of it, it will remain a chattel (as seen in Leigh). If the purpose was for the chattel to permanently improve the land then it will become a fixture (D’Eyncourt v Gregory (1866)). Post-Berkley, the question seems to be; was the item in question intended to constitute a permanent, lasting improvement to the land, or was it attached merely temporarily for the purpose of increasing or making more convenient the use and enjoyment of the item?

Botham: The case of Botham is also very useful. It sets out various considerations, along with a list of items with clear instruction if they are a fixture or chattel: (1) (2) (3) (4) (5) (6) (7) (8)

Kitchen appliances and white goods = chattels Curtains and blinds = chattels Light fittings = chattels Decorative fire places = chattels Carpets = chattels Bathroom fittings such as taps and plugs = fixtures Bathroom mirrors and marble fixed to wall = fixtures Towel rails, toilet roll holders, soap dishes = fixtures

Roch LJ also set out a series of consideration; (1) Whether the item is ornamental and attachment is simply to enable the item to be enjoyed = then it is a chattel (e.g. picture or painting). (2) The damage that removal of the item would cause = the greater the damage, the more likely it is a fixture. (3) The lifespan of the item = the more limited the lifespan, the more likely the item is a chattel (e.g. a free-standing cooker). (4) The type of person who installed or attached the item to the land = a builder is more likely to install a fixture and a contractor or landowner is more likely to attach a chattel.

APPLICATION: Fitted carpets: as in Botham it is a chattel. Botham v TSB -> the fitted carpets were not affixed enough to count as fixtures therefore the court held that they were chattels. BUT, sometimes they could be fixtures- depend on the shape of the room. They could be more strongly affixed in other circumstances. or they may have been affixed for the purpose of enjoying the carpet, they are intended to be permanent and afford lasting improvement to the building Can they be removed without destruction? Elitestone Built-in-cooker: fixture. The word built-in makes it sound like it is intended to stay with property 4

Free-standing large fridge: the word large is the concern here- cases that talk about things being large Elitestone, Dibble. If it is difficult to move Roller blinds: this will depend largely on the shape of the window- if they are bespoke o the window shape or size, then likely a fixture. Otherwise it is likely a chattel. CURTAINS are the same. Small wooden garden shed: the word SMALL suggests it can be removed easily chattel as it was placed there for the convenience of use of land/ enjoyment. a brick barbecue: if it is built in then likely a fixture as it would be destroyed if moved. Definitely a fixture. two large ornamental urns for plants: the word large is an issue. Are the urns park of the landscape and ornamental garden? chattel as used for the purpose to enjoy the plants six rose bushes: fixtures, roots in the ground an apple tree: fixtures, root in the ground a windy dryer (a washing line/ whirligig): these are normally set in a concrete block in the ground, this is just to hold the actual device – but the pole, the device, is very easy to take out. It is complicated, but likely a chattel two reclining greyhounds: relatively grand place as these are at the gate, they are made of metal. Are they adding to some architectural design? Or are they there for ornaments. Dolphin door knocker: its purpose is to knock on the door, and could ruin door. Attached to permanently improve the use of the land ie the door, and not just for enjoyment of the item itself Wind chimes: what kind of door chimes? Electrically wired ones, or just musical ones that chime. The electric one specifically is likely to not be seen and only heard, therefore there for the purpose of signalling someone is there, not for enjoyment. In a question like this where you aren’t sure what it is, describe your own image of it- is it electrical? Etc.

There are a lot of maybes here- when answering assume one thing and make your answer based on that. You must explain your assumptions.

There is a second part to this question- can you get out of a fixture? Yes, the law of fixtures can be contracted out of. If you are the vendor (the seller) and want to take something specifically with you, then take it down or remove it- show the house as you intend to sell it. As a lawyer, you should encourage your client to be as clear as possible. As a buyer, ask questions- is that carpet coming with the property.

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Seminar 2: Land Registration This website is helpful in giving a picture of what the register looks like and how registered estates and interests are presented on the register: https://www.landregistry-titledeeds.co.uk/frequently-asked-questions/information/using-the-titleregister.asp

Questions 1. How do rights in unregistered land bind purchasers?

The enforceability of third-party rights in unregistered land will depend on the nature of the right in question; is it legal or, equitable? Under the principle of universal enforceability, legal rights in unregistered land are binding on the world. You must also show good title for 15 years and the title deed. This means any purchaser of unregistered land will take the land as it is, with any third-party rights attached. There is one exception to this rule; puisne mortgages; which are second legal mortgages. These are not universally enforceable rights despite being legal rights. Different rules exist for equitable legal rights. Equitable rights are personal rights which are not binding against the world. It is easiest to split them into categories in order to analyse their binding extent. There are three kinds of equitable rights; Commercial interests (e.g. mortgages, easements) which are registerable as land charges under the LCA 1972. Family interests (e.g. a life interest in a property) which are not registerable as land charges but are subject to the doctrine of overreaching. These include equitable interests under a trust. Non-registerable, non-overreachable, and nonoverreached rights which are governed by the doctrine of notice.

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(i)

How are commercial interests protected?

Commercial interests are registerable as land charges. Where registered, the right is binding on a purchaser irrespective of whether that purchaser would or would not have had notice of it under the old doctrine of notice principles. S.2 of the LCA 1972 provides a list of interests which are registerable as land charges. These are different classes of rights. Land charges registration is dealt with in Under S.3(1) of the LCA 1972, when a land charge is registered, it is registered against the name of the owner of the unregistered estate and not against the title itself. It is therefore a register of names rather than title. After a purchaser has exchanged contracts and investigated the title, they will move to the Land Changes Register to search against the proprietor’s name. In order to be binding, the commercial interests must be registered. S.4 of the LCA 1972 sets out the effect of non-registration. Simply, if an interest is capable of being registered but is not then it will be void against the purchaser of the land.

(ii)

How are family interests protected?

Family interests are chiefly interests arising under a trust of land, they are not protected by the LCA. There has to be 2 trustees. The trust allows for ownership to be split into ownership at law and ownership in equity so that there can be more than one owner of land. The result is that one person holds the legal title whilst the other holds the equitable title. The legal owner, known as the trustee, holds the land on trust for the equitable owner, known as the beneficiary. The effect is that the trustee almost acts as the manager of the land for the beneficiary who is entitled to the land’s benefits.

These interests are protected first and foremost, by the law of overreaching. The same rules apply to unregistered land as they do registered land. The only difference between the two systems and overreaching relates to interests which are capable of overreaching but have not been over reached. In unregistered land such interests are determined by the doctrine of notice. This is the third category of equitable third-party rights.

2. What is the principle of overreaching? Overreaching describes the process under which particular equitable interests in land (particularly under a trust) that might otherwise potentially bind a purchaser of that land are detached from the land and are translated into the proceeds of sale (S.2 and S.27(2) of the LPA). It refers to a situation where a person's equitable property right is dissolved, detached from a piece of property, and 7

reattached to money that is given by a third party for the property. This it is often done during the conveyance of a property. It is most commonly relied upon as a defence by purchasers as a means of proving or guaranteeing that they have acquired the land free from beneficial interests under a trust. The interests are wiped clean from the land if overreaching occurs (benefitting the purchaser) and compensation is given to the previous owner of the interests. Overreaching is the only common principle between registered and unregistered land. There are two requirements for overreaching: (1) There must be an equitable interest which is capable of being overreached, and (2) the statutory conditions for overreaching must be met: ss. 2 and 27 of the LPA 1925. (1) The first requirement: S.2 of the LPA 1925 tell us which interests can be overreached and which interest are excluded under S.2(3). We can think of overreaching as applying principally to equitable interests under a trust. For interests that cannot be overreached, the normal rules on priority under ss. 28 and 29 of the LRA 2002. (2) The second requirement: Ss. 2 and 27 conditions must be met, these are: there must ‘be a conveyance to a purchaser of a legal estate in land’ (S.2(1)), AND purchase/ mortgage monies must be paid to at least two trustees or a trust corporation (S.27). Conveyance is defined in S.205(1)(ii) as including a mortgage, charge, lease…’. We also know that reference to a ‘legal estate’ means both freehold and leasehold land. Where the two conditions are not met then overreaching will not apply. This means those equitable interests remain attached to the land. The question then becomes’ do these non-overreached interests become binding on a third party acquiring the land? Is overreaching fair? Is it fair to translate a right enjoyed by someone into monetary values? Overreaching does however help people more as land is harder to transfer where it is burdened by different rights. By detaching these it is much easier to sell and avoids stagnant land.

3. What is registered land? Land which is registered under the LRA. Registered land means that the title to the land has been recorded in a register that is maintained, controlled and overseen by Land Registry. It is more a system of title registration than land registration. This means that where there is more than one title to land, both are registered. If it was purely just the land, then we would not be able to see all the potential titles. The purpose of the register is to provide as an accurate account of the land and titles binding it. Registered land aimed to tidy up the old ‘Title deeds conveyancing’ system, where whoever had possession of the paper title held ownership. In this system, people would have to manually search through all the papers. The new system is much clearer; every title is given a unique number. The 8

goal of the Land register is the mirror principle; to mirror what exists in real life on the register. There is the curtain principle (this means the land register acts as the only place to find the info yo need, you don’t have to look behind the curtain of trustees and ownership) and the insurance principle (you are entitled to money compensation where the register is wrong).

4. What do the various parts of the register establish? The register is referred to as one thing, however, it is made up of three registers; the Property Register, the Proprietorship Register, and the Charges Register. The property register describes the land, identifies the title (freehold or leasehold) and details interests benefitting the land (e.g. easements, covenants and privileges. The proprietorship register detail the class of title; absolute, qualified, possessory, good leasehold etc. It will also detail the name, address of registered proprietor, date of registration and price paid for the title. It states if there are any restrictions on the title. The charges register details third-party rights adversely affecting the title such as registered charges (mortgages, restrictive/ freehold covenants and easements).

5. What are registrable estates/interests? A registerable estate is defined in S.2(1) of the LRA 2002 as ‘interests capable of subsisting at law’ which are created by a disposition of an interest the title to which is registered’. S1(1) of the LPA 1925 then explains what ‘capable if subsisting at law’ means; which is wither an estate in fee simple absolute possession, and a term of years absolute. You don’t then want every single lease that is created to be registered, so the 2002 Act adds more information such as the 7 year lease rule. Once registered the title of the property moves from the old regime to the new. The conclusiveness of the title will be...