In this context, I feel the role of interest becomes very important. A registrable disposition, as said before, is binding on the part of the parties involved in the purchase of the estate. The interest has to be registered and there are only some cases under which the interest is not part of registrable disposition. In this case, it fails to be a part of the notice. In other cases, as in the case of overriding interests, the entire responsibility is of the purchaser of the land. This, according to me, means that in those situations where there is lack of equitable distribution of interest as regards the registrable disposition, it is generally the purchaser of the land who takes the charge and the responsibility to register the same.
b) Explain how and why other (minor) interests should be protected by registration under the Land Registration Act 2002.
The Land Registration Act 2002 does not explicitly mention the term minor interest. But the laws and mandates specified in the Act refer to other interests and one can very well assess the minor interest through the mention of these other interests. Minor or other interests include those interests that are unable to be created or transferred through registered disposition or not part of overriding interests and those which can be overridden by registered proprietors, if not registered. Majorly, the most pertinent examples of such other interests are the beneficiaries vide settlements and all charges subject to Land Charges Department in case it was an unregistered land. The protection of these cases was done directly by the erstwhile Act which was replaced by the Land Registration Act 2002. In the present act, the only provisions allowed are restrictions and notices. So it is necessary to understand the implication of these two terms in order to better understand the interest and implication of the minor interests.
A notice is of two types and is applicable for some interests that are not part of registrable dispositions. These two types are agreed and unilateral. An agreed notice is one that has been agreed upon by the parties involved and have to be entered along with the registered proprietor vide an agreement. This mandate of taking into account the role of the registered proprietor can be done away with through the enforcement of a unilateral notice. In this case, the consent of the registered proprietor is not required. But as per the latest Act, the proprietor is notified about the unilateral notice before the actual dealing takes place. So the proprietor also has the opportunity to object in case he does not give his consent.
Restriction, as the name suggests, refers to the guidelines or the ambit abiding which the registered proprietor has to deal with his estate. This restriction can be both in the form of putting some constraints or prohibiting absolutely the act of something on a given estate. For example, in many cases it so happens that during transfer of title, the money is compulsorily to be paid to both the trustees in case the land is under a trust and there is more than one trustee. This is a precondition and the Registrar takes this regulation automatically into account. The reason behind such an inclusion is that to ascertain equal claim to the land and avoid unlawful activities and fraudulent actions on the part of the parties to the agreement.
As mentioned earlier, the specific beneficiaries to these other interest groups of the Land Registration Act 2002 is the trustees who form a separate category and require separate attention. Minor interests are interests that are not overriding and are not registrable. These include the protection of interests of third parties. This has been a major amendment in the latest Act of 2002. But by putting an end to practices like caution and inhibition, the new amendment has actually reduced the scope of minor interests to object and fight for equitable rights. At the same time, as mentioned earlier, the procedure of notifying when unilateral notices are served has increased the scope to object when not in consensus with the other parties involved. So all together, it is clear that the rule has been got rid of the ambiguities and redundancies involved as regards the other interest groups involved in a land registration process. The beneficiaries and trustees, at the one hand, get their due, both in terms of rights and privileges and also in terms of objecting, but on the other hand, the proprietors also get their due when it comes to objecting a unilateral notice which is rather more equitable a law to be enforced in any country.
Word Limit: 1424
Question Two
(a) (i) advise Charles and Charmaine whether they are bound by Elizabeth’s equitable interest in Rose Cottage.
The Facts
- Derek and his partner Elizabeth, who is not married to him, pay GBP 150,000 for the purchase of Rose Cottage in the year 1995.
- Elizabeth contributed an amount of GBP 15,000 towards the final payment for the purchase of the property. This amount was what she had saved all through her life.
- The property in question was registered in the name of Derek, showing him as the Sole Registered Proprietor.
- This fact was duly registered with the office of the HM Land Registry.
- Charles and his partner Charmaine, who is also not married to him, make an offer to Derek for the purchase of Rose Cottage.
- The deal is finalized and closed, without Elizabeth coming into the deal.
- When the fact about Elizabeth was disclosed to Charles and Charmaine they met Elizabeth, who showed no interest in the deal.
- Charles and his partner Charmaine are worried about their ownership claim in the absence of any settlement with Elizabeth.
- The purpose of this essay is to assess the course of action Charles and his partner Charmaine should adopt under these circumstances.
The Theory
Trusts are the most notable of contributions made to the English Law. Trust originated in the late 12th and early 13th century and the broad meaning assigned was to take care of a property, in the absence of the owner, by a caretaker, until the owner came back to take charge of the property.
Over the period of time, various types of trusts came into existence and their roles started getting varied and the implications broadened. The English Law clearly defines the parties to the trust as investors or contributors, who contributed certain amounts for the final payments made for purchase of the party.
The case in study is of the implied trust and the facts are quite clearly defined and stated. When there are two parties involved in the purchase of a property and they are not related to each other and they make contributions towards the final payment for purchase of a property, the law of Implied Trust comes into force. This is applicable even if the two parties have not entered into a written agreement or deed and even if the property has been registered in the name of one of the investor.
The Law
The law is very clear and also very much in favor of the silent investor. But what happens if the silent investor shows no concern for the share it holds in the concerned property? Should the buyers deal with the Sole Registered Proprietor and close the deal and let the selling partners decide among themselves about their shares?
The buyers can do that, as legally the silent partner has not staked any claim and moreover the Law concerning the Implied Trust section is applicable to the two selling partners, in this case they being Derek and Elizabeth. The buying parties, Charles and Charmaine, are not involved in the provisions of Implied Trust applicable in this case to Derek and Elizabeth. There is no denying that Elizabeth has a legitimate right to her share in the sale amount of the property in question, that is Rose Cottage and her share shall be proportional to the amount of her contribution in the purchase price she and her partner Derek paid. There need not be a written agreement between Derek and Elizabeth to this effect.
The Conclusion
In the absence of a claim by Elizabeth at this stage does not absolve Charles and Charmaine of their responsibility towards her rights, especially since they have come to know of the facts and also of Elizabeth’s contribution in the purchase amount. To keep their investment in the concerned property, Rose Cottage, safe and free of any litigation in future also, they should make a clear and just offer to Elizabeth for the proportionate amount and get from her a written acknowledgement for this payment. In case she shows no inclination towards the deal, then Charles and Charmaine should get a written statement from Derek that the settlement of Implied Trust between him and Elizabeth shall in no way be detrimental to the ownership rights of Charles and Charmaine.
(a)-(ii) Would your advice to Charles and Charmaine change if Derek and his brother Bob were joint registered proprietors of Rose Cottage at the time of sale to Charles and Charmaine?
In the first scenario, the sellers Derek and Elizabeth were partners in a specific transaction involving an immovable asset. There was no written agreement, deed or contract between them for the specific purpose of this transaction. It was a clear case of Implied Trust and the Law is supposed to take its own course.
In the case discussed above, the silent partner is not a natural kin of Derek, the Sole Registered Proprietor and is also in no way related to him. But here the law applicable is different, as both the Registered Proprietors are brothers and the property in question, Rose Cottage, is owned jointly by them and there exists a valid and legal document to collaborate the fact.
In this case, Charles and his partner Charmaine should not enter into an agreement only with Derek, as the agreement would be legally null and void.
(b) Advise Alice as to whether she can insist that the previous owner of Winsley Manor returns these items.
Here the deal between two parties has been concluded and the issues of settlement have been settled between the two parties to the mutual satisfaction of both. The point of dissatisfaction raised by the buyer concerns certain fixtures, which she thinks have been removed after the settlement and conclusion of the deal. The facts stated are clear on the issue that there did not exist any record of the fixtures nor was there any understanding to this effect between the parties.
The contract for sale is also silent on the issue and makes no mention of the fixtures. The buyer in this case has to first ascertain certain facts and situations before taking any type of action against the seller.
- The buyer has to clearly establish the fact, with concluding evidence that the fixtures existed at the time of settlement of the contract between both the parties.
- The buyer has to clearly state the number of fixtures to which she is staking her claim and if possible give description of the fixtures.
- The buyer has to define the nature of the fixtures, whether they were fixed on some kind of pedestals or were rooted into the ground or were simply placed on the ground or any constructed area inside the premises which she has bought.
- The buyer should also make it clear whether the fixtures were in any way mentioned by the seller as intended to be removed by him.
The contract of sale with respect to the property that has been entered into by the buyer and seller is governed by the Law of Contracts relating to properties or real estate, as is commonly known in the business circles. This law clearly states that such a contract should be between two adult residents and should be enforceable by law of the land. It should be put on paper and should be notified to the concerned agencies and departments of the government.
The terms and conditions of transfer of rights concerning the property should be clearly mentioned in the contract document. It is very essential that the contract has a consideration clause it should have a closing date and a date specifying the handing over of possession to the buyer. At the time of finalizing of the sale between the two parties, i.e. the seller and the buyer, the condition in which the property has to be handed over should be clearly mentioned. Some properties are handed over in ‘as is Where is’ basis, but such properties are meant to be demolished, hence this clause. Flats, built-up homes and condominiums are sold with a clause of pre-inspection before actual possession is handed over to the buyer.
The question being answered here concerns to a built-up house, whose owner is selling it on the condition of ‘as is Where is’. Under this condition, whatever is the condition of the house and whatever has been installed, build, annexed and provided for in the house goes to the buyer in ‘As is Where is’ condition. There are generally no conditions or pre-inspection clauses in such sales, hence the buyer has no need of making an inventory of the fixtures affixed in the house. In certain cases, as has happened in this sale, the seller may take advantage of this situation and may remove some fixtures after the conclusion of the sale. That is why, in the beginning of this essay it has been pointed out that it is for the buyer to keep track of such things when finalizing the contract of sale.
The contract of sale in question here, may not have mentioned about the fixtures and the buyer may not be in a position to answer the questions raised at the start of the essay, but the buyer can definitely stake her claim to the fixtures and it is a moral, ethical and legal binding on the part of the seller to hand over the fixtures that the buyer is so definite about.
Word Limit: 1489
Land Registry Practice Guide 1, 2009, pp. 6-8.
The National Archives, 2002
Free Legal Encyclopaedia, Ministerial To National Education association
The Structure Of Land Law, 2008
Land Registration Act,2002