LEVEL 3 - UNIT 4 LAND LAW SUGGESTED ANSWERS - JANUARY 2015

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1 Note to Candidates and Tutors: LEVEL 3 - UNIT 4 LAND LAW SUGGESTED ANSWERS - JANUARY 2015 The purpose of the suggested answers is to provide students and tutors with guidance as to the key points students should have included in their answers to the January 2015 examinations. The suggested answers do not for all questions set out all the points which students may have included in their responses to the questions. Students will have received credit, where applicable, for other points not addressed by the suggested answers. Students and tutors should review the suggested answers in conjunction with the question papers and the Chief Examiners reports which provide feedback on student performance in the examination. SECTION A 1. The landowner owns and has rights in the airspace above his land up to a height for reasonable enjoyment (see Bernstein v Skyviews Ltd. [1978]). Intrusion below this height is a trespass although under s.76 Civil Aviation Act 1982 the landowner cannot object to the passage of an aircraft at a reasonable height over his property. 2. Term of years absolute is a legal estate under s.1 Law of Property Act 1925 (LPA 1925), and is otherwise known as leasehold. It may be for a fixed term or periodic. It is absolute whether starting immediately when granted or up to 21 years in the future. 3. (a) Candidates should name three out of the leases which must be registered, those: with at least seven years to run; which will not start until at least three months after grant; granted under the right to buy legislation under the Housing Act 1985; discontinous leases. 3. (b) Candidates should name two out of: (i) profits (ii) franchises (iii) rentcharges. 4. The insurance principle means that the State by way of the Land Registry guarantees the accuracy of the land register and will compensate in the event of any error. 5. Absolute leasehold title is granted when the landlord s title is registered at the Land Registry or is proved to the Registry. Good leasehold is granted when the landlord s title is not produced to the land registry, or the Registrar is not satisfied that the landlord could grant the lease. 6. (a) Candidates should explain one of the following methods: written notice under s.36 LPA 1925 mutual agreement which may be informal Page 1 of 5

2 act of one joint tenant operating on his own share, for example bankruptcy a course of dealing sufficient to show joint intention to sever. 6. (b) Candidates should then explain the result. The co-owners will hold, as tenants-in-common, separate shares, which can be left by will or transferred. The right of survivorship no longer applies. 7. The case of Re Ellenborough Park [1956] relates to easements. It sets out the essential characteristics of easements. Any claim to an easement must show these characteristics. Candidates could give an example of a characteristic, such as the requirement to have two pieces of land. 8. A profit a prendre is the right to enter another s land to take something from it, such as timber. 9. Candidates are required to give an outline description of one of the following grounds for discharge: that the covenant is obsolete due to changes in the property or neighbourhood that the continued existence of covenant would prevent reasonable use of land that the person entitled to the benefit has expressly or impliedly consented to the discharge that discharge of the covenant will not injure the person entitled to the benefit. 10. An endowment mortgage is a loan of capital over a fixed period. During the period only interest is paid on the loan. In addition the borrower will take out an investment vehicle designed to pay off the capital of the loan at the end of the period. This might be an insurance policy for the length of the loan, on which premiums are paid to the insurance company. 11. The conditions necessary for the benefit to run at common law are: the covenant must touch and concern the land of the covenantee; the original covenantee owned the legal estate in the land to be benefited when the covenant was made; the original parties intended that the benefit should pass; the successor in title derives title from the original covenantee. Page 2 of 5

3 Scenario 1 Questions SECTION B 1. This question requires Candidates to recognise in their answers that the agreement is a freehold covenant. Candidates should then state that for the agreement to be binding: the covenant must be restrictive the burden of the covenant must be intended to pass such intention is assumed under s.79 Law of Property Act 1925 unless stated otherwise there must be two pieces of land, one benefited (the dominant) and the other burdened (the servient) by the covenant the covenant must benefit the dominant land the covenant must be registered against the servient land. As 1 Oaktree Close has registered title, there should be a notice of the covenant in the charges register of its title at the land registry. 2. Candidates should apply the conditions identified in the previous answer to the facts of Scenario 1. The covenant is restrictive as it prevents any use other than a residence. There are 2 pieces of land (Oaktree Towers and 1 Oaktree Close). The covenant wording shows a benefit to Oaktree Towers (the dominant land). Intention to pass on the covenant burden is assumed under s.79 Law of Property Act 1925 and there seems to be no contrary statement. There is a need to check whether the covenant is registered in the charges register of 1 Oaktree Close, but if it is then all conditions for the covenant to be binding will be present. 3. The covenant could be ended by: merger of dominant and servient (benefited and burdened land) i.e. common ownership of them mutual agreement by owners of the dominant and servient land an express release by Lord Kempston (the covenantee) probably by deed an implied release, for example by non-enforcement of breach order of Upper Tribunal (Lands Chamber) under its power in s.84 Law of Property Act In their answer Candidates should identify first the issue of fixtures and define them as items forming part of the land which pass with the land unless removal is agreed between seller and buyer beforehand. They should then discuss (with appropriate case-law) the tests for assessing whether an item is a fixture or just a fitting (chattel) which a seller can take. So they should refer to the tests of degree of annexation if an item is securely fixed to land other than by its own weight, the presumption is that it is a fixture, as in Holland v Hodgson [1872]; purpose of annexation whether the item is fixed for the benefit of the land or just for enjoyment of the item itself, such as a picture; the permanence of annexation the less permanent the object, such as curtains or carpets, the less likely it is to be a fixture. Candidates should then apply these tests to the paving stones. As they were placed in the ground and presumably not there to be enjoyed as objects in themselves, they are likely to be fixtures. Candidates could refer to the case of Taylor v Hamer [2002] for similar facts. Therefore Annette was not entitled to remove the stones as nothing had been agreed beforehand. Page 3 of 5

4 5. A deed was necessary under s.52 Law of Property Act The formalities of A deed, as set out in s.1 Law of Property (Miscellaneous Provisions) Act 1989, are that it must be in writing, show on its face the intention to be a deed, be signed by the person making it and the signature witnessed. Scenario 2 Questions 1. Candidates should recognise that the issue in this question relates to the advantages of registered title compared to unregistered title. They should explain up to five advantages, which can be chosen from the following points: The proof of title is easier with the Official Copy of the land register; The need for repeated examination of title deeds as in unregistered land, is eliminated for registered land; It is easy to see third party interests from the Official Copy; There is an accurate title plan showing the extent of the property; The documentation is straightforward, a simple form is needed to transfer ownership of the property; There is a State guarantee of the accuracy of the title. 2. (a) Julia should expect to receive Absolute Freehold title. This is the best form of title to registered freehold land. Candidates should give a reason why this title is expected, for example that Julia is buying from an outright owner, or that her mortgage lender is almost certain to insist on it. (b) The evidence supplied will be an Official Copy of the land register for Florence s title. The benefit of any rights which the property has over other land, for example a right to use the driveway of Number 19, will be shown in Property Register of Florence s Official Copy. 3. Candidates should here identify the possibility of the brother Harold having an overriding interest under Schedule 3 paragraph 2 of the Land Registration Act They should explain that this is the overriding interest relating to a person in occupation with an interest in the property. An overriding interest is not shown on the land register but is binding on the purchaser, unless, in this case, enquiries are made of the occupier who fails to disclose having any interest. 4. In this answer Candidates would be expected to explain that, as there are only occasional visits, there is insufficient occupation for the Schedule 3 para.2 interest. The gifts of money seem to be intended as outright gifts rather than to obtain a share in the property. Candidates could refer to the case of Williams & Glyn s Bank v Boland [1980] for the elements of this overriding interest. It is therefore safe to proceed. 5. (a) The Building Society should register the mortgage in the charges register of Julia s title at the land registry. (b) The power of sale is exercisable under s.103 LPA The mortgage redemption date must have passed. One of these three conditions must be present: interest payments are more than two months in arrears; or the capital has been called in and there has been no repayment after three months; or there has been some other breach of a mortgage condition. Page 4 of 5

5 Scenario 3 Questions 1. In answering this question Candidates should explain that Greensleeves was originally held by George and Kate as beneficial joint tenants. They seem to have decided to remain as joint tenants throughout. Joint tenants do not have separate shares. The survivorship rule applies so that on the death of one of the joint tenants the survivor (George in this case) is entitled to the whole property despite any will. As a result Marco does not have an interest. 2. Candidates are expected in answering this question to identify the likelihood of an interest for Fiona under a constructive trust, occurring where one party has an interest in a property held in the name of another. They should explain the elements of a constructive trust: a common intention or agreement between the owning and non-owning parties that the non-owner will have an interest, and a sufficient financial contribution by the non-owning party. Candidates should apply these principles to the scenario facts. The common intention or agreement can be implied by conduct. Here it can be shown through George s promise of a home for Fiona and her reliance on it (as in Grant v Edwards [1986]). Fiona has made sufficient financial contribution through her payment towards the mortgage instalments, (see Lloyds Bank v Rosset [1991]) where the court said that only payments relating to the purchase price would do. 3. Candidates should explain in their answer that Laura would not have a share under a constructive trust as there seems to be no common intention or agreement that she should have an interest. Household chores are insufficient to be a financial contribution for the purpose of such a trust, as shown by cases such as Gissing v Gissing [1970] and Lloyds Bank v Rosset [1991]. 4. (a) Candidates should identify that the court has power under S.14 Trusts of Land and Appointment of Trustees Act 1996 to hear an application for the sale of trust land. The applicant will be a person with an interest in the trust, such as a trustee, a beneficiary, or a creditor of trust assets. So either Fiona or the Kempston Bank plc could apply. (b) The relevant factors are those listed in s.15 Trusts of Land and Appointment of Trustees Act Candidates should select those which are relevant to the facts of the scenario and show how each applies. They should select: intention of creating trust the purpose for which the property is held the welfare of any child who might occupy as home the interests of secured creditor (c) Applying these to the scenario: - the current trust is that between George and Fiona, the intention being to have the house as a joint home; - the purpose is still for George to occupy it as a home; - Alisa, a minor, may well occupy as her home; - the Kempston Bank plc is a secured creditor Candidates should assess the likely outcome of an application. As the house is still needed as home for George and probably Alisa, a sale is unlikely. Page 5 of 5