Unlocking - Summary

Chapter 1

- Land law is the study of the relationship between land and the owner of that land. When
we say ‘owner’ we do not only include the owner in law but also others who have lesser
rights (such as the right to walk on the land).

- Definition of LAND (by the Law of Property Act 1925) Land includes land of any tenure,
and mines and mineral, whether or not held apart from the surface, buildings or parts of
buildings and other corporeal hereditaments also a manor, an advowson, a rent and
other incorporeal hereditaments; and an easement, right, privilege or benefit in,over or
derived from land…. And mines and minerals include any strata or seam of minerals or
substances in or under any land, and power of working and getting the same.

- Concepts extracted from the previous definition:

1) Corporeal hereditaments: rights that have some real or tangible quality. They would
include anything growing on the land or anything found underground, such as minerals.
2) Incorporeal hereditaments: intangible rights in land. They cannot be physically seen but
their effect can be felt by the owner of the plot and in most cases by the owner of the
adjoining property as well. An example would be the right to use your neighbor's garden
as a short cut: this affects your neighbor’s enjoyment of of his land. These rights will also
affect the exact nature of your neighbor’s rights over his plot of land.
3) Mortgages: security for money lent usually in the form of land.
4) Leases: are one of the two legal estates in land which gives the tenant exclusive
possession of the property but for a limited time.

- Land also has a three-dimensional quality: a surface area, the airspace above it and the
ground below. There's also the possibility of a fourth one: rights and interests in the land,
and more importantly, the length of time that you can enjoy the land.

TENURES AND ESTATES IN LAND

Definitions:
- Tenure: was an exchange of landholding for the performances of services to the
superior.

After 1066, it was held that all the land was owned by the king and his subjects were granted
rights to that land. They could then enjoy the land on condition that they carried out certain
duties for the king—--- TENURE. Tenures could be spiritual, military or agricultural.
TENURE TODAY

Many tenants, around the 1530s, who held the tenure of knight service preferred to make a
money payment (scutage) rather than provide armed knights.
Socage tenures were also largely commuted to monetary payments and these payments had
generally ceased to be made.
Today, all of the early tenures have ceased to exist with the exception of common socage. All
freehold tenures are therefore equivalent to socage tenure. (That is why it is true to say that all
freehold land is owned by the Crown).

ESTATES

In law an estate in land means that you have a right of possession to that land. It refers to how
long a person is allowed to enjoy the plot of land.

(skipped estates in 1066)

ESTATES IN LAND FROM AND AFTER 1925

- Two legal estates in land:

1. An estate in fee simple absolute in possession (the freehold estate)

2. An estate for a term of years absolute (the leasehold estate)

So the freehold estate in land is also called a fee simple absolute in possession: 3 different
parts.

a) FEE SIMPLE: meaning freehold ownership giving absolute rights over the property
during someone's lifetime but also the chance to leave it to anyone you wish on your
death. (the life estate was a legal estate before 1925, but the property would revert back
to the grantor when the grantee died)
b) ABSOLUTE: meaning no limits on ownership.
 c) IN POSSESSION: meaning immediate occupation and enjoyment of the land. There
would be no question of anyone else having a prior claim.

LIMITATIONS ON OWNERSHIP

There may be terms imposed on ownership which will affect the nature of ownership and may
limit enjoyment. These generally take one of two forms:

1. a conditional fee simple

2. a determinable fee simple

A conditional fee simple

Property may be given to someone but a condition may be attached which imposes conditions
on the enjoyment of the land.
This does not prevent the gift from taking effect in law. If the condition is carried out then the gift
does not automatically return to the grantor but he has the choice of whether or not to reclaim it.
The grantor could ignore the condition and it will remain with the grantee.
A condition which is uncertain or a condition which encourages divorce or separation would be
void on grounds of being contrary to public policy. The grantee would then be able to take the
land free from condition.

A determinable fee simple

In some cases the gift may give rise to a determinable fee simple, in which case the grantee
does not receive legal estate with all the consequences of ownership but instead receives an
estate in equity. These rights will last until the determining event occurs.

EXAMPLE OF DIFFERENCE BETWEEN THE TWO:

A. ‘to A until he marries’.

It has a determinable estate which will not take effect in law and if A marries, the land will revert
to the grantor automatically.

B. ‘to B provided that he remains a barrister’.

It has a conditional fee simple which takes effect as a legal estate unless B leaves the Bar, in
which case the grantor can reclaim the land.

THE DIFFERENCE BETWEEN THE TWO RESTS LARGELY ON THE WORDS USED. Words
such as ‘unless’, ‘on condition that’, ‘if’, ‘provided that’, suggest a conditional fee simple but
words such as ‘until, so long as, whilst or during suggest a determinable fee simple.

OWNERSHIP OF THE SURFACE OF THE LAND: BOUNDARIES

Any landowner will want to be quite clear about the extent of rights that he may have over a plot
of land he has purchased. It depends on the site of the plot, sea or river.

LAND BORDERING THE COAST OR A RIVER

Over a period of time, masses of water can increase or decrease, affecting the ownership of
land. Thus, the doctrines of accretion and diluvion may be applied; (legal mechanisms
employed to resolve disputes of this nature.)

Accretion: any naturally occurring additions of soil to the waterside land become property of the
owner of the land which is increased.

Diluvion: reduction in an area of land by naturally occurring movements of soil.

Qt: Lord Willberforce “The changes must take place very slowly, gradually and by imperceptible
movements”. Sudden changes as a result of flooding: the rules do not apply and the boundaries
remain the same. (past application)

Modern treatment:
It has to be decided whether the interest in land which is the subject of accretion is fixed or
movable, made clear by looking at the wording of conveyance.

Land Registration Act: registered estate in land as shown in the register as having a particular
boundary does not affect the operation of accretion or diluvion.

OTHER BOUNDARIES

Even in cases where land does not border rivers or the sea, there may be uncertainty. The Land
Registration 2003 accept that maps and plans are imprecise and the plan to any registered title
is ‘deemed to indicate the general boundaries only’: the exact line of boundary is left
undetermined. A map lodged at the Land Registry does not prove the location of a boundary.

However, the Land Registration Rules 2003 Act allows the registrar to determine an exact
boundary line himself.

NATURAL RIGHTS OF SUPPORT OF THE LAND

Landowners have certain rights which are incidental to ownership and could give rise to an
action in tort if they are interfered with. It is accepted that every landowner has the right to enjoy
his land in its natural state and this means it must not be put at risk by a neighbor who
undermines the foundations: e.g, mining operation.

OWNERSHIP OF THE SURFACE OF THE LAND: ITEMS FOUND IN OR ON THE SURFACE

OF THE LAND, INCLUDING MINERALS.

FIXTURE AND FITTINGS

‘Whatever is attached to the soil becomes part of it’: any fixture also passes automatically to a
purchaser.

If the item has not become a fixture then it will be a mere chattel and so will not pass with the
property to the purchaser and the seller can legally take it as its own on the sale of the property.
(chattel? Something that the seller takes after selling? check)

Specific forms are used in conveyancing a deal with the ownership of movable items on the sale
of property. Where these forms are silent on an issue or are ambiguous, then the common law
will apply.

The law applies two tests:

1. The degree of annexation: it depends on whether the item is resting on the land by its
own weight or whether it has been fixed.
2. The purpose of annexation: more decisive. Even where items have been attached to the
land, making them appear to be part of that land, the question of whether they were put
there for the better enjoyment of the property or for the better enjoyment of the item.

EVERYDAY OBJECTS IN A HOUSE

When property is sold, certain everyday domestic items which are found in most people’s
homes are presumed to be fixtures but some will also be presumed to be chattels.
(personal note of a case explained in the source material): the different items were defined as
chattel or fixtures depending on the original intention of the owner and applying the theories of
annexation. One further observation about ownership was suggested: if the item had been
installed a builder will be more likely to be a fixture but where it has been affixed by a
householder then it is more likely to be a chattel.

ITEMS BOUGHT UNDER HIRE PURCHASE

Normally, items being purchased under a hire-purchase agreement and which continued to be
owned by the hire purchase company does not prevent the item becoming a fixture, regardless
of the existence of the agreement. However, the owner may have a right to enter and remove
the item even when it has become a fixture.

INTENTION OF THE PARTIES

The intention of the parties is only relevant to the extent that it can be part of the tests which
look at the degree and object of the annexation. The subjective intention of the parties cannot
affect the question whether the chattel has in law become part of the freehold.

THE TENANT’S RIGHT TO REMOVE FIXTURES

The general rule was that the tenant had to leave any fixture that he had affixed to the premises
during the tenancy. They became the property of the landlord. However, there are some
exceptions:

- Trade fixtures: a tenant has always been able to remove trade fixtures that he has
installed during the term of his lease necessary for his trade or business.
- Ornamental and domestic fixtures: purely for ornamental or domestic purposes,
removable if no damages are sustained by the structure upon removal.
- Agricultural fixtures: some items can be removed if certain conditions apply (e.g giving
notice to the landlord, rent must be paid, no damages upon removal.)

THE EXERCISE OF THE TENANT’S RIGHT TO REMOVE FIXTURES

A tenant continues to have the right to remove fixtures after tenancy has ended IF:

- He has the right to remain in possession or

- He did not have time to remove these items.
The tenant must make good any damage which occurs when he removes the items from the
property.
EXPRESS REFERENCE IN THE CONTRACT FOR SALE

+ THE SELLER AND THE PURCHASER

Where items are expressly referred to and ownership is agreed in the contract, then the rules
concerning fixtures and fittings are [Link] cannot challenge the removal of a
fixture (even if firmly attached to the property) if expressed in the agreement.

+ THE MORTGAGOR AND THE MORTGAGEE

Since fixtures are assumed to be part of the land then they will become part of the property
subject to the mortgage. Any chattels could be removed by the seller.

CHATTELS FOUND IN OR ON THE SURFACE OF THE LAND

The ownership and claim of an object found resting on the ground usually responds to the finder
of said object. However, in land law, this case applies sometimes. If a ring, for example, is found
on the ground, then the claim is of the finder’s. But, if the ring is buried on the ground, then the
owner of the land is entitled to claim the ring.

The claim to ownership depends on where the object is found and the extent to which the object
is attached to the ground-

MINERALS FOUND IN THE GROUND

- NORMALLY, owner of the land.

- EXCEPTIONS: coal and natural gas vested in various privately owned corporations
under statute, petroleum, gold and silver owned by the Crown exclusively.

OBJECTS FOUND IN THE GROUND

- Owner of the land

- Finder
(it depends on the circumstances and if the finder trespassed or other)
TREASURE:

Item found that comes within the definition of treasure, it belongs to the Crown. Failure to report
the discovery of a treasure is a criminal offense.
OWNERSHIP OF AIRSPACE ABOVE THE LAND

Land must include part of the airspace above the ground, otherwise building above ground level
would be a trespass. However, it cannot be an unlimited part of that airspace.
To define how much of the airspace is owned by a landowner, airspace has been split into two
levels: the higher stratum and the lower stratum

+ THE HIGHER STRATUM

(where the planes fly) the courts are unwilling to allow ownership in the higher stratum.
 + THE LOWER STRATUM

The law accepts that the landowner has rights over the airspace immediately above his
property. ‘You own as much as is necessary for the reasonable enjoyment of your property.’ So
this will vary according to the type of property that you own. However, it probably stops short of
the altitude over which aircraft can legally fly (usually no lower than 200 mts.)
CHAPTER 2
COMMON LAW AND EQUITY

- Common law as the initial legal system of England.

- Fair at first, but it started to become defective.
- A new system spawned from this need: equity; to supplement common law.

THE GROWTH OF COMMON LAW

- Before 1066, local law was the main source of law but varied from region to region.
- After 1066, William the Conqueror, introduced a system of law that was uniform in all
England: common law; administered by the Royal Courts.
- Defects in common law: started by a writ (only a number of writs were available). In
1215, if there was no writ to apply to a certain case, the person had no right to bring an
action to the courts (common law had only a limited range of remedies available.); CL
did not recognise certain types of right like the mortgagor or the beneficiary of a trust;
dissatisfied litigants had no place to go except directly to the king.

THE GROWTH OF EQUITY

- When litigants could not find success in their claims, they resorted to petitioning the
King, who was not restrained to following common law.
- The popularity of this source of law increased and more and more people started
petitioning the King to hear their claims.
- The King was unable to meet the increasing demand, and therefore cases were passed
to his adviser, the Lord Chancellor.
- A new court was developed: the Court of Chancery. This court would decide cases
according to what seemed just and equitable whereas the common law courts were
concerned with the strict enforcement of legal rights. It was prepared to grant a range of
remedies,which were often more appropriate in the circumstances. It was also willing to
recognise new rights such as the mortgage and the trust.
- By the 16th century, the position of Lord Chancellor was given to a lawyer and the rules
which bound the court became far less flexible.

THE JUDICATURE ACTS 1873-75

- Having two separate courts and systems of law was wasteful and inefficient.
- Reform came in the shape of the Judicature Acts, which combined both systems.
- Both rules should apply but conflict arose between the two, equity must prevail.
 - Some consider that, in practice, both systems haven’t completely fused. Rights of the
two kinds can still exist even in the same piece of property.

DEVELOPMENT OF THE TRUST

- One of the contributions of equity was the recognition of new rights, particularly, the trust.
- Historical development of the trust: the first appearance of the trust was during the
Crusades. During that time, men went to fight and left the administration of their property
to a friend, under the condition that all profits were used in benefit of the family of the
owner (the third party). When these cases were heard by common law, it wouldn’t
recognise the right of beneficiaries to the profits as the property was put into the name of
the trustee (admin) for him to control. However, the Lord Chancellor or the King heard
these cases and the rights of the owner were recognised because it would be
unconscionable to do otherwise. (my own retelling of the text)

THE TRUST TODAY

The trust involves three sets of interest:

1. Initially, the settlor has

absolute ownership of his property.
If he decides that he wants
someone to benefit eventually from
all or some of his property, but not
immediately, he could transfer his
property to another called the
trustee who gets absolute
ownership of the property, but not
to enjoy himself. He owns it on
behalf of the beneficiaries.

2. The trustee receives the property but holds it on trust for the benefit of the beneficiaries.
The trustee holds the legal title to the property. (it would possess the title of the property
and would be registered as owner) However, the trustee cannot claim the land for
himself. He must keep the trust property separately from his other property.
3. The beneficiary has a personal right to force the trustees to act on his behalf if they
refuse to act. He does not own a legal interest in the property but only an equitable
interest. He cannot deal with the legal title so he cannot create a lease or a legal
mortgage over the property; only the trustees can do this.

Once the trust has been created or constituted, the settlor loses all control over the property
unless he is also a beneficiary or he acts as trustee himself.
Once it is constituted, THE SETTLOR CANNOT CHANGE HIS MIND AND TRY TO RECOVER
HIS PROPERTY .

Some trusts arise EXPRESSLY because the settlor wants to create a trust over his property but
some trusts arise by IMPLICATION.

THE EXPRESS TRUST

These arise by deliberate act of the owner of the property. The settlor may appoint as a trustee
either himself or a third party known to the settlor who agrees to act as a trustee.
Whenever there is an express declaration of trust in land INTER VIVOS it must be evidenced in
writing.

THE IMPLIED TRUSTS: resulting and constructive trusts

Not deliberately imposed by the settlor but arise by implication of law. The parties themselves
may noy even be aware that a trust has been created.
They do not require writing or any formality for their creation.

+ Resulting trusts: trusts imposed because of the circumstances, such as where a partner
to a relationship contributes to the purchase of property but is not registered as joint
owner; the law will give that person a share in equity. The owner of the legal estate is
said to hold the property on trust for both. The trust is said to give effect to the intentions
of the parties. No requirements apply.
+ Constructive trusts: trusts imposed by the court because it would be ‘unconscionable’ for
the owner of the property to hold that property for themselves. E.g the legal owner
agrees that the non-legal owner is to have a share of the property if she carries out some
work on the property. It would be unconscionable to later deny her an interest.

Under the trust we see the possibility of property being owned by one or more persons on
behalf of themselves and/or several different people. They will all have rights but the nature of
those rights will vary according to whether the beneficiary is unable to own property at law
because of a disability.

THE DIFFERENCE BETWEEN LEGAL AND EQUITABLE INTERESTS IN PROPERTY

Whenever property is shared between two or more persons a trust is said to arise, splitting the
legal and equitable ownership.
In many cases the trustees and beneficiaries are the same people. This is because the law will
impose a trust where property is co-owned.
Today, legal rights are distinguishable from equitable rights because the owner of a legal estate
can deal with the estate at law and the owner of an equitable estate only has rights to deal in
the equitable estate.

RIGHTS IN REM AND RIGHTS IN PERSONAM

The law draws an important distinction between rights which are said to be proprietary in nature
and rights which are said to be purely personal:

- If you have a proprietary right then you can claim rights in the property itself. These
rights will endure when the property passes into the hands of a third party.
- By way of contrast, a personal right is only good against the owner but a right in the
property itself—- This difference can be traced back to the first division between legal
and equitable rights.
- Historically, legal rights were enforceable only in the common law courts of the king and
the equitable rights were only enforceable in the Courts of Chancery but at the discretion
of the king and (later) the Lord Chancellor.
- Another difference between lay in the fact that legal rights are rights in rem, giving rise to
real actions, and equitable rights are rights in personam, giving rise to personal actions.

Leases are still classified as personalty (as opposed to realty; real property) but it makes little
difference and under s1 of the Law of Property Act 1925 they give rise to a legal estate in land.

THE EFFECT OF EQUITABLE RIGHTS ON THIRD PARTIES

Another important difference between legal and equitable rights is the way such rights are
enforceable against a third party. It used to depend on whether the land was unregistered or
registered. The difference between the two was that ownership of unregistered land depended
on possession of documents called deeds which proved that the property was yours. If you had
a legal interest in registered land (Land Registry made by the Registrar) then the right had to be
registered at the Land Registry if it was to be a right binding on the land.

Equity would only enforce rights against certain persons. When the trust was first recognised by
the courts of equity, the beneficiary could enforce the trust against the trustee. Later the trust
was enforceable against third parties who purchased the land knowing that there were third
party rights in that land.

Only the bona fide purchaser without notice of rights will be able to take land without being
subject to rights in equity.
THE BONA FIDE PURCHASER FOR VALUE WITHOUT NOTICE

- Bona fide: in good faith

A purchaser could acquire a legal estate without being subject to equitable rights in the land if
he could claim to be a bona fide purchaser without notice of the rights.

(outsourced: A beneficial interest in real property that gives the title holder the right to acquire
legal title to the property. Equitable title holders cannot transfer legal title to real property, but
they derive benefits from the property's appreciation in value.)

If someone purchases property honestly, not knowing that there are any other rights in the land
then he will not be bound by those rights. Once the purchaser could establish that he was a
bona fide purchaser for value, then he has an absolute, unqualified, unanswerable defence
against an equitable right. It makes no difference that a later purchaser does have notice of
these rights.

HE COULD ONLY TAKE FREE OF SOMEONE’S RIGHTS IF HE WAS UNAWARE OF THEM.

- BONAFIDE PURCHASER FOR VALUE:

+ To act in good faith.

+ Purchaser for value: something of value must have been given. In money or in kind.
+ Of a legal estate: the purchaser must have purchased a legal estate in land rather than
an equitable estate.

NOTICE

- The bona fide purchase must be w/o notice of the equitable rights. 3 different forms of
notice:

1) Actual notice: a purchaser had actual notice if he knew of any rights affecting the land
because he had been told of the rights or had found out for himself. After that,
registration. There is a duty to check.
2) Constructive notice: by checking the property or checking whether registrable rights had
been registered.
3) Imputed notice: (past) he would have imputed notice if his legal agent had made
investigations.
OVERREACHING

It arises on the sale of property which is held under a trust.

It can apply to any jointly held property.
Where overreaching applies rights arising under a trust in equity which attach to the land are
transferred from the land to the capital monies.
It allows land under a trust to be sold free of certain rights.
The purchaser may have notice of the rights of the beneficiaries but will still be held to take free
of these rights.
Overreaching can apply to all land held in trust, whether it has registered or unregistered title.

- PURPOSE

It allows land to be disposed of free of equitable rights affecting the land. It allows the rights of
beneficiaries to be safeguarded by making the trustee statutorily obliged to transfer the capital
money to them.

- CONDITIONS FOR OVERREACHING

It will apply where there are 2 or more trustees or a trust corporation and the purchase money is
paid over to both of them.
Overreaching will not apply where the capital money is only paid over to a single trustee.

(outsourced: Overreaching is a legal process that occurs when a property held under a trust of
land is sold or transferred. It’s a protective mechanism designed to ensure that the interests of
beneficiaries are safeguarded, especially in cases involving land. In simple terms, overreaching
involves the conversion of the beneficial interests of the beneficiaries into a monetary sum. This
sum is then paid to the beneficiaries when the property is sold or transferred.)
 - THE HISTORICAL BACKGROUND TO THE PROPERTY LEGISLATION OF 1925

Before 1925, prospective land purchasers would buy lands bound by unknown rights of third
parties.

The purchase itself was a lengthy and difficult procedure because the title required proof that
the seller owned the property and initially there were several estates in land.

Main problems:
1. The complication of proving title to the land you were buying
2. Finding out whether other people had rights in the land you were buying

This led to legislation on land, most significantly: the Land Registration Act and the Land
Charges Act 1925, which has been replaced by the Land Registration Act (2002) but the basic
structure remains.

- LEGAL ESTATES UNDER THE LAW OF PROPERTY ACT 1925

The only legal estates that could exist in land were reduced to 2:

1. The term of years absolute in possession

2. The fee simple absolute
 - LEGAL INTERESTS UNDER THE LAW OF PROPERTY ACT 1925

The following interests could exist by law:

+ An easement, right or privilege in or over land for an interest equivalent to an estate in

the fee simple absolute in possession or a term of years absolute.
+ A rentcharge in possession issuing out of or charged on land being either perpetual or
for a term of years absolute.
+ A charge by way of legal mortgage,
+ Any other charge on land which is not created by an instrument.
+ Rights of re-entry of the rentcharge exercisable over a legal term of years absolute,

- EQUITABLE INTERESTS:

Other proprietary rights in land therefore are said to be equitable under the Act:

- PROPERTY LEGISLATION

The Land Registration Act 1925 introduced a system of registration of title to replace the
unregistered system of conveyancing. Before the Act, there had been a limited system of
registration of title.
The main principle that was established was the idea that every title should be registered, so
there would be no need to actually ‘prove’ good title every time the property changed hands.
 - THE LAND CHARGES ACT 1925

Where title remained unregistered because it was outside the area of compulsory registration, a
system of registration of equitable interests in land was introduced in the Land Charges Act
1925. This replaced the different types of notice.

(outsourced: Local land charges are generally financial charges or restrictions on the use of
land which are governmental in character and imposed by public authorities under statutory
powers, otherwise known as originating authorities. They affect whoever owns the land and so
there is an obligation that they are registered, to alert purchasers to their existence. Their
existence would not normally be apparent from an inspection of land or from the register of title
(or title deeds if the land is still unregistered land))

CLASSES OF LAND CHARGES

● Class A: charges that arise under statute but come into operation when the owner
applies for registration.
● Class B: rights under statute which come into operation directly from the statute rather
than on the application.
● Class C: subdivisions:

+ Puisne mortgage: mortgage not protected by title deeds.

+ Limited owner´s charge: a right in equity which can be registered against the estate.
+ The general equitable owner’s charge: number of rights which are not registrable under
any other heading.
+ Estate contracts: important in conveyancing. It consists of any contract to convey or
create a legal estate in land or any option to purchase a legal estate or any right of
pre-emption in respect of a legal estate. When a purchaser of land exchanges contracts
with the seller, the purchaser acquires an equitable estate in the [Link] estate is
capable of registration. Once registered, it attaches to the land,. If the seller tries to sell
to sb else the second purchaser will be bound by the rights of the first one.

● Class D:
+ Inland revenue charges: for inheritance payable on death.
+ Restrictive covenants: once the interest is registered then the purchaser is bound
by the covenant. If the holder of the right fails to register the right then the fact
that the purchaser knows about the right is irrelevant.
+ Equitable easements: a legal easement in unregistered land would not be
registrable under this category since it would take effect in law and be binding on
the world, irrespective of registration.

● Class E: annuities.
● Class F: matrimonial home rights. The right can only be claimed by a spouse or civil
partner who is not a legal owner of the matrimonial home. Once registered the spouse or
 civil partner has the right to occupy the home which is owned by the other spouse or civil
partner.

- REGISTRATION OF LAND CHARGES

Registration under the Land Charges Act 1925 is made by the person claiming the right.
Registration is made against the name of the owner of the property and not the name of the
property.

● Registration in the wrong name

● Search against incorrect game: a purchaser who claims a search against an incorrect
name will be bound by any charges that are registered against the correct version of the
owner’s name.
● Purchaser may not know the names of all previous owners of the land: all charges
properly registered will continue to be binding on the land.

- THE EFFECT OF REGISTRATION

- RIGHTS THAT ARE INCAPABLE OF REGISTRATION UNDER THE LAND CHARGES

ACTS 1925-72

There is no requirement compulsorily to register your land unless you carry out a transaction
that acts as an event which triggers registration.

One of the most important rights in unregistered land cannot be registered is the right of a
beneficiary under a trust of land.
 - UNREGISTERED LAND IN THE TWENTY-FIRST CENTURY

Unregistered land still remains a significant part of the total land ownership in the United
Kingdom today.
The principles of unregistered land continue to be relevant because any transfer of title will be
subject to the unregistered land rules and it is only when title is transferred to the purchaser that
the purchaser then applies to have the title registered in his name. Ownership of land then is
proved by the title deeds and the purchaser must investigate the title and satisfy himself if the
title cannot be challenged by others.
CHAPTER 3
REGISTRATION

This process was wasteful and repetitive and there was always the risk that undiscovered rights
attaching to the land would be found and bind the purchaser.

In 1897, compulsory registration was introduced in London, which led to the system of
registration of land becoming compulsory for all dealings in the land.

- FEATURES:

The scheme aims to create a system in which one register will disclose all the relevant details
concerning who owns any piece of land and all the rights and interests that bind that land.
Registration allows registered estates in land, freehold and leasehold, to be separately
registered.

It is divided into:
+ The property itself
+ Rights affecting the property
+ Ownership of the property

At first it was voluntary; but gradually more instances required to be registered. Even now, some
pieces of land remain unregistered but incentives are given to register land.
 - THE KEY FEATURES OF THE REGISTRATION SYSTEM

THE MIRROR PRINCIPLE

THE INSURANCE PRINCIPLE

THE CURTAIN PRINCIPLE

THE LAND REGISTRY

- ENTRY OF A TITLE AT THE LAND REGISTRY

Several different estates in land are capable of substantive registration-

- The fee simple absolute

- The term of years absolute

There are other estates as well:

- Profits a prendre (right to take from land belonging to another produce or soil),
rentcharges (right to claim a money payment from land that is neither a mortgage or rent
from a lease), franchise (estate in land which entitles the claimant to claim over the land
such as the right to hold an annual fair on the land.)
 - HOW LAND REGISTRATION WORKS:

FIRST REGISTRATION:

SUBSEQUENT REGISTRATION

1. Where registered land is sold, then the new purchaser applies to the Land Registry to be
registered as the new proprietor of the land.
2. Prior to sale, the purchaser investigates the land by visiting the land itself to find out if
there are any rights not capable of registration and also by checking the Charges
Register.
3. The title has already been investigated so this part would be straightforward. Any new
incumbrances affecting title would have been added as they came into existence. (like
an easement, which would have no legal effect if it hadn’t be entered into the register)
4. A title information document is issued which is evidence of the state of the register at the
time of issue of the document.
5. THE REGISTER ITSELF REPRESENTS PROOF OF OWNERSHIP,
 - REFORM OF THE ACT

The purchaser of land will only be bound by certain categories of rights provided the purchaser
has provided valuable consideration.
The rights that will be binding are those that enjoy priority because they are:

+ A registrable charge or
+ An interest which has been protected by the entry of a notice against the title or
+ It is an unregistered interest which will override a registered disposition.

The 2002 Act has extended the type of leasehold estate capable of registration from any lease
in excess of 21 years to any lease in excess of 7 years. Any lease which is to take effect more
than 3 months after the grant of the lease must be registered.

Provisions in the Act

1. First registration of title: a title may be voluntarily registered. An event does not trigger it.
Not applicable in a transfer of title. (s. 3)

Voluntary registration will give the property owner a small financial saving rather than waiting for
a trigger making registration compulsory.
Certain other rights which take effect as legal interests can be voluntarily registered as legal
estates with their own titles (they can only take effect as legal interests)

→ a. Profits a prendre: rights to take sth from another’s land.

b. Franchises: rights or privileges granted by the Crown.
 c. Rentcharges: right to receive a periodic sum of money from the owner of land
charged with that payment (not lease or tenancy).

2. First registration as well: compulsory registration when an event triggers the need to
register. Transfer for valuable consideration, gift, etc. (s.4) The registration of a land
charge in unregistered land will not trigger registration of title.

3. Estate or charge already registered: have to be registered to take effect. (s. 27)

- EFFECT OF THE DUTY TO REGISTER

 - DIFFERENT CLASSES OF TITLE

The Land Registry has a choice of classes of title to grant to a registered estate. All seven
classes of title can still be registered under the 2002 ACT

.
S.27 TRANSFER OF THE FREEHOLD ESTATE. TRANSFER OF A LEASEHOLD ESTATE it
depends whether the freehold estate is already registered. If the landlord’s title is unregistered
then, on the creation of a lease, registration should take place under s.4.
If the title is registered then registration takes place under s.27.

OTHER DEALINGS THAT REQUIRE REGISTRATION TO TAKE EFFECT:

a. Legal easements
b. Legal charges (mortgages)

- INTERESTS IN REGISTERED LAND

Four types of rights that can exist over registered land:

1. Registrable estates and interests

2. Registrable charges
3. Registrable incumbrances (any interest which affects the registered title which cannot
take effect as an overriding interest; minor interests)
4. Overriding interests (interest which override a disposition or interests which override a
registered disposition but which are not protected by an entry on the register which still
bind the land. Not on the registry, a purchaser can discover their existence by making
enquiries and visiting the property)
 - METHODS OF PROTECTION FOR REGISTERED BURDENS ON
REGISTERED LAND

1. THE NOTICE: entry in the Register in respect of the burden of an interest affecting a
registered estate or charge. Once a notice is entered in the Charge Register then a
purchaser will be bound by the interest.

Excluded interests: trust of land (protected by the use of a restriction: anyone entering a
restriction will be notified of any dealings in the land by the Registrar); settlement; lease
granted for a term of 3 years or less from the date of the grant, restrictive covenant,
interest capable of being registered under the Commons Registration Act, interest in coal
or coal mine.

A NOTICE CAN BE
A. AGREED: (applicant registered proprietor ot person entitled to be registered as
proprietor of the estate or charge; consent is given by the registered proprietor;
registrar is satisfied as to the validity of the applicant’s claim)

The applicant must provide evidence to the Registrar that the notice should be
entered. The agreed notice is not usually challenged since its entry is usually with the
agreement of the proprietor.

B. UNILATERAL: can be entered without the consent of the proprietor of the legal
estate. It is used where there is hostility between the parties. Upon entry, the
proprietor of the registered legal title must be notified.

THE RESTRICTION: an entry in the register regulating the circumstances in which a disposition
of a registered estate or charge may be the subject of an entry in the register. They will restrict
any dealing with the registered estate or charge.

The most common case is when the land sold is held under a trust. If there is a restriction on the
Register then the purchaser will insist on compliance with the restriction. The terms of the
restriction will be that the purchase money is paid to two trustees, so overreacting the equitable
interest arising under the trust).
 - UNREGISTERED INTERESTS WHICH OVERRIDE A REGISTERED DISPOSITION
UNDER SCHEDULE 3 OF THE LRA 2002 (OVERRIDING INTERESTS)

Despite the register having the mirror principle (portraying the state of a piece of property), there
remain some rights which are not discoverable by searching the register. These were called
overriding interests. They are called ‘overriding’ because in law they override the sale and
remain binding on the purchaser irrespective of the fact that they are not discoverable by
searching the Land Register.
Under the LRA 2002, overriding interests are renamed ‘unregistered interests which override a
first disposition’ and unregistered interests which override registered dispositions.

- REFORM OF OVERRIDING INTERESTS UNDER THE LRA 2002

 - INTERESTS OF PERSONS IN ACTUAL OCCUPATION:

The interest is based on two criteria:

1) Interest in the land: based on proof of a proprietary right in land. A claim cannot be
based on a purely personal right such as a licence to remain on the land or a right based
on status. For an interest to take effect as a burden that overrides the register it still
requires both an interest in land and also actual occupation.

2) Actual occupation of the land: it includes someone living in property as their sole
residence. Claims of actual occupation will depend on proving that you have a
proprietary right in the property. Claims based on contributions in kind rather than
financial contributions cannot be considered as giving an interest in the property unless
there has been a prior agreement.
 - THE DUTY TO DISCLOSE RIGHTS UNDER THE LRA 2002

Any applicant for registration has a duty to disclose any overriding right of which they are aware.
The right will however be preserved if the applicant fails to do so.

- ALTERATION AND INDEMNITY

There is a provision for changes to the Register which is referred as an ‘alteration’ which
includes 2 categories of changes: a) those that prejudicially affect the title of proprietor and b)
those that do not.
Rectification continues, but as just one way of altering the Register. There continues to be
provision for the payment of an indemnity where the register is rectified because a mistake has
occurred and a person suffers loss.

Alterations: purely administrative.

CHAPTER 5
EQUITABLE RIGHTS IN LAND

Definition
Rights that can give enjoyment of the land but are not rights which give ownership at law.
Ownerships are law give ultimate control over the land, although rights in equity may give similar
rights decision-making always rests with the legal estate owner.

Nature

a) Failure of formalities: the creation and transfer of legal rights in land is subject to certain
formalities. If these formalities are not complied with, then rights cannot be transferred in
law. In some circumstances, equity may step in and recognize these rights: these affect
the legal owner’s enjoyment of the property and also his right to transfer the property to
a third party.
b) Equitable rights arise under a trust imposed by law: the law in some situations may
impose a trust because of the circumstances, in which case equitable interests and
rights will be created.

Whenever there are two or more owners of property, the law will automatically impose a
trust even when they both have a legal title.
The legal owner is said to own as trustee on behalf of another called a beneficiary.

- TRUST

A trust allows ownership in property to be split between legal and equitable ownership.

● The legal title to property is held by one or more persons (trustee/s)

● The equitable title is owned by the beneficiary or beneficiaries

The trustee holds the legal title on behalf of the beneficiaries who take the benefit of the trust. In
land, where a trust is frequently implied, the trustees and beneficiaries are often the same
people.

A TRUST OF LAND is a statutory trust imposed whenever two or more people have an interest
in one piece of land.

- TYPES OF TRUST

1. THE EXPRESS TRUST:

Based on the declared intentions of the parties and created by the settlor who wishes his
property to be held under a trust.
The settlor either asks the trustees expressly to hold on trust for the beneficiaries on the terms
named by the settlor, or the owner of the property declares himself to be trustee of the land on
behalf of the beneficiary.
An express trust can also arise under a will. A will takes effect on death, which distinguises wills
from inter vivos transfers.

Failure to comply with the section hereinabove will render the will ineffective.
Inter vivos must provide evidence in writing. This does not mean that the trust will be void but it
is unenforceable.

The trustees of an express trust of land are under a duty to act in the best interests of the
beneficiaries and according to the settlor’s instructions.
The beneficiaries have the right to compel the trustees to carry out the terms of the trust. If the
court finds the trustee to be in breach of his duties then he must compensate the trust for any
loss.

2. IMPLIED TRUSTS:

The implied trust is generally based on the presumed intentions of the parties. The legal owner
may not have consciously thought about his property being held under a trust but the law
imposes a trust.

The parties have not taken any express steps to do so. The law simply imposes a trust because
it is appropriate to do so.

Where one person owns land but two or more persons own equitable interests in the land, a
trust of land will arise.

The rights in equity may arise because there have been contributions to the purchase. Thse
rights will take effect in the form of an implied, a resulting or constructive trust.

a) Resulting trust: gives effect to the presumed intentions of the parties. They arise where
the parties have not declared any express intention to create a trust but the law will imply
 a trust because of particular circumstances. It is said that the owner does not own the
property absolutely for himself but on behalf of another or others. The ownership is then
said to ‘result’ back to the person who owned the property at law.

- PRESUMED INTENTION

The resulting trust then depends upon the presumed intention of the transferor for its operation.

If both parties make contributions then the courts will presume a resulting trust for both.

- REBUTTAL OF THE PRESUMPTION OF RESULTING TRUST

● GIFTS: the resulting trust is based on the presumed intentions of the parties and this
presumption is REBUTTABLE. Each of the parties is free to come to court with evidence
to show that the transferor intended to make a gift or perhaps a loan.

● LOANS: a resulting trust will not be inferred where there is proof that the money
advanced was by way of a loan. In this case the money is not referable to acquiring as a
purchaser and so the lender cannot argue that they can take an interest in the property.
The loan is personal to the borrower. It will be enforceable in contract and under
common law rules but the lender does not get an equitable interest in the property.

- PRESUMPTION OF ADVANCEMENT: another presumption that can rebut the

presumption of a resulting trust is the presumption of advancement; it has traditionally
arisen in certain relationships, usually where the DONOR has an obligation to provide for
the DONEE (father and child, husband and wife), or from loco parentis:someone who
has taken the responsibility of maintaining another (not between parents and children).

- IMPROPER MOTIVE IN TRANSFER OF PROPERTY: there may be an improper or

illegal motive for the transfer of the property in some cases. The transfer may be done
purely to defeat creditors, in which case the court will look carefully at the motive of party
making the transfer (to avoid creditors, for example).
(rebuttal of presumption of resulting trust)

- TYPES OF CONTRIBUTIONS THAT GIVE RISE TO A RESULTING TRUST:

A resulting trust will arise on the basis of different types of contributions towards the purchase of
property. The key feature is whether they are referable to the purchase of the property.

+ Direct contributions to the purchase price:

Acts such as a direct cash payment is sufficiently referable to the acquisition of title to generate
a trust and the contributor will be presumed to have intended that they should acquire a
beneficial share of the property.

+ Contribution to the deposit or legal expenses:

If a person, for example, gives their partner a cheque towards the deposit on, or even legal
expenses of, the purchase of a flat put into their partner’s name, there is a presumption that the
property is held on resulting trust for the first person.
 + Contribution to mortgage repayments:
These are treated as the equivalent to a contribution to the purchase price and will give rise to a
resulting trust. Timing is difficult here, because contributions towards the mortgage do not arise
until the property has already been purchased. However, if one of the parties contributes
payments on a monthly basis towards the mortgage debt, then this should be enough to
establish a resulting trust. A contribution towards mortgage installments is strictly interpreted.

+ Household expenses: Unless there is an express agmt that household expenses will
give rise to rights in the property, the courts have taken a very harsh approach to this
type of contribution because they cannot automatically be linked to the acquisition of the
rights in the property itself.

- ASSESSING THE SHARES OF THE PARTIES IN A RESULTING TRUST:

Where the property is held on resulting trust, it is assumed that the shares will be proportionate
to the contribution that has been made. These are said to crystallize at the date of acquisition.
If at the date of acquisition of the property A pays one third of the purchase price, B will hold one
third of the value on resulting trust for A.

Generally the size of the share under a resulting trust will follow the size of contribution made.

Where there is an initial contribution to the purchase price, however small, by the claimant, then
a resulting trust is presumed.
If there is no further evidence of intention with regards to the property then a resulting trust is
declared and the property will be apportioned according to the size of the contributions.
 b) Constructive trust

It can arise in a large number of diverse situations:

1) CONSTRUCTIVE TRUSTS ARISE BY OPERATION OF LAW:

These trusts are imposed because it would be unconscionable for the owner at law to claim the
legal estate wholly or in part for himself. They arise in many situations both in land law or law of
trusts.
For example, the court imposes a constructive trust if an express trustee of a trust fund takes
part of the property for himself, then the court will impose this type of trust and the trustee will
hold the property and any profit he makes from it as a constructive trustee.
 - ELEMENTS IN CONSTRUCTIVE TRUSTS:

It depends on three elements:

1. The common intention or a bargain between the parties: a CT depends on proof that
both parties were to have an interest in the land.

a) Evidence of an agreement that the parties are both to have a share in the
property. This must be supported by evidence that the claimant relied on this and
acted to his detriment. Sometimes common intention must be proven.
b) No evidence of an agreement between the legal owner and the claimant to
share the equitable interest. Only direct contributions to the purchase price will be
enough to infer a constructive trust in these circumstances.

2. A change of position by the claimant or the fact that he can show that he relied on the
bargain and suffered to his detriment.
3. The fact that the legal owner has denied the rights of the claimant.

- IMPLIED COMMON INTENTION INFERRED FROM THE CONDUCT OF THE

PARTIES:
- QUANTIFICATION OF THE SHARES IN A CONSTRUCTIVE TRUST:
CHAPTER 8
CO-OWNERSHIP

Concurrent ownership

Definition:

When two or more people own an interest in land either in law or in equity.

Nature:

The land becomes subject to co-ownership, which can only take place behind a trust of land,
under the Trusts of Land and Appointment of Trustees Act 1996.

Features:

- Legal title: there will be co-ownership of the legal title if there is more than one owner of
the land in law.
- Equitable interests: co-owners in equity share the equitable ownership of the land behind
a trust.

- TYPES OF CO-OWNERSHIP:

1) JOINT TENANCY
2) TENANCY IN COMMON

1) JOINT TENANCY:

Three main aspects to a joint tenancy:

a. The main feature of a joint tenancy is that the co-owners are each entitled to the whole
of the co-owned land. However, they do not own shares of the land.
b. RIGHT OF SURVIVORSHIP
c. Existence of FOUR UNITS

B) THE RIGHT OF SURVIVORSHIP:

THE KEY PRACTICAL DIFFERENCE BETWEEN A JOINT TENANCY AND A TENANCY IN

COMMON IS THAT THE PRINCIPLE OF SURVIVORSHIP OPERATES BETWEEN JOINT
TENANTS.

+ Definition: when one joint tenant dies, any interest held by that joint tenant will
automatically pass to the remaining joint tenants.
 + The joint tenant who dies cannot therefore leave any interest in the land by will, nor will
his or her interest pass under the rules of intestacy.

- THE DOCTRINE OF SURVIVORSHIP

1. It simplifies probate: (cheaper and more simple than to administer the assets after death)
2. It simplifies purchases from joint tenants: if the title of every co-owner needed to be
investigated then it would be time consuming and there would be a risk of many
problems arising.
3. It gives effect to the wishes of the majority on sucession

C) FOUR UNITS

1) Unity of possession: all of the joint tenants must be equally entitled to possess the
whole of the co-owned land. One joint tenant cannot exclude another from any part of
the land. (when you are kicked out: ousted)
2) Unity of interest: each of the joint tenants must have the same interest in extent,
nature and duration in the land. (one cannot have a freehold interest and the other a
leasehold interest)
3) Unity of title: the joint tenants must derive their title to the land from the same document
or alternatively where they have acquired title under adverse possession.
4) Unity of time: the interests of all the joint tenants must vest at the same time.

- SEVERANCE:

Joint tenants can effectively separate their equitable interest from that of the other joint tenants
by means of severance. Their interest is then converted into a tenancy in common and the
principle of survivorship will no longer operate.
2) TENANCY IN COMMON:

Definition:

Tenants in common are said to own an undivided share in land. This means that they actually
have notional shares of the ownership of the land. They cannot claim any specific division of the
land into specific areas to represent a separate share. Just as in the case of a joint tenancy, no
tenant in common can claim ownership of a part of the property.

The tenant in common can sell his share or mortgage his share and leave it to someone in his
will, and that provision will be effective. The shares of the tenants in common may be equal or
unequal.

- CREATION OF CO-OWNERSHIP IN LAND

+ LEGAL TITLE: IF THE LEGAL TITLE IS REGISTERED IN THE NAME OF MORE THAN
ONE PERSON THEN CO-OWNERSHIP OF THE LEGAL TITLE WILL RISE.

* The legal estate cannot be severed (under s of the Law of Property Act 2925 it is impossible
for there to be a tenancy in common of the legal title of land. So co-ownership of the legal title
must Be in the form of a joint tenancy)
* There is a limit as to how many people can own the legal title at law: no more than four
persons can hold the legal estate. (under another section of the act a joint tenancy of the title
cannot be severed so there can never be a tenancy in common of the legal title)

- CO-OWNERSHIP IN EQUITY:

In equity the title can be held either as a joint tenancy or a tenancy in common. THIS
CONTRASTS WITH THE LEGAL TITLE WHICH CAN ONLY BE HELD JOINTLY. There is a
common law presumption in favour of a joint tenancy in equity based on the equitable maxim
‘equity follows the law’.
There are other circumstances, however, which indicate a tenancy in common.

JOINT TENANCY OR TENANCY IN COMMON?

1- Intentions of the parties: any words that suggest severance will indicate a tenancy in
common.
However, where there is an express statement in the conveyance as to how the shares are to
be held, that will be conclusive.

2- Unequal contributions to the purchase price: where parties have contributed unequally to the
purchase price of land, it is implied that there is a tenancy in common.

3- Loan on mortgage: where money is loaned by two or more mortgagees the interest that they
take in the property will be held as tenants in common.

4- Business partnerships: where land has been purchased by persons as business partners the
assumption is that they would not have wanted their relationship to be determined by
survivorship, which is inappropriate in the business context. A tenancy in common will be
implied.
However, where the transfer of land in a business context expressly states that they are formin
a joint tenancy, it will take effect as a joint tenancy.

5- Individual business tenants: it will also apply where businessmen have taken a lease of
premises together but for individual purposes.
 - SEVERANCE

It is possible for a joint tenant in equity to sever the tenancy and become a tenant in common in
equity of his share. The size of the share will be the proportionate share as at the date of
severance. The shares of the other tenants, however, will continue to be held under a joint
tenancy.

The interest will no longer be subject to the right of survivorship. The benefits that arise under
the right of survivorship will be lost.

There will not be severance, however, if the proposal to sever is merely part of proposals during
negotiations. So if severance of the legal estate is proposed during divorce, the court will not
accept that this is sufficient severance to satisfy the 36 s of the LPA 1925.

Severance will only be effective if the joint tenant manifests an intention of an immediate desire
to sever his interest. It would not be sufficient to express an intention to sever sometime in the
future.

● METHODS OF SEVERANCE

+ Severance by written notice:

+ served on the
other tenants. It is an
unilateral act, so consent
from the other tenants is
not necessary.
+ No specific form
is required but the
intention to sever must
be contained in a written
document.

+ Severance by conduct:

● Act of one party operating upon his share (sale of one’s share because it destroys one of
the unities: unity of title)
● Bankruptcy
● Transfer by one party to a third party
● Severance by means of sale of a share
 + Severance by mutual agreement:

If severance relies on mutual agmt, there must be some contact and measure agmt by the
parties. It cannot be an unilateral act.
The KEY FEATURE is that the joint tenants act together so an agreement can be inferred.

+ Severance by mutual conduct:

Severance may be effected by any course of dealing sufficient to intimate that the interests of all
were mutually treated as constituting a tenancy in common.

THERE MUST BE A COURSE OF CONDUCT THAT SHOWS THAT THE PARTIES INTENDED
TO TREAT THEIR SHARES AS SEPARATE AND DISTINCT.

- Long term assumptions about ownership

- Mutual wills
- Physical division of the property
- Inconclusive negotiations over the property
- Commencement of litigation
 + Severance by operation of law:

Forfeiture: a further means of severing a joint tenancy arises where one joint tenant kills a fellow
joint tenant. The effect of this is the severance of the joint tenancy and through forfeiture the
murderer is prevented from profiting from the unlawful killing.

+ Severance by court order:

Certain court orders can effectively sever an equitable joint tenancy (court in matrimonial cases,
for example).
CHAPTER 9
TRUSTS OF LAND

Whenever two or more people have interests in property, their interests are held under a trust of
land.
These rights can be concurrent or successive and according to that, different rules apply.

CONCURRENT RIGHTS

Where property is purchased by two or more persons at the same time, their rights are
concurrent.
They hold the legal title for themselves on trust.

SUCCESSIVE INTERESTS

Where property is held by one or more persons for their lifetime with the property passing to one
or more persons on their death, their rights are said to be successive.

(PAST)
Trusts of land: a trust for sale or a strict sale.

Strict settlement:
A trust comprising land which gave effect to successive interests.
2 circumstances: 1. Where limited successive equitable interests were carved out of ownership
of a legal estate in land; 2. Where an absolute interest in land was conferred to a grantee who
was subject to some disability which qualified his capacity or entitlement to hold such an
interest.
 - TRUSTS OF LAND

TOLATA 1996 introduced a new system of trusts for land which combined both strict settlements
and trusts for sale.
The trust of land covers both successive ownership as well as concurrent ownership.
Under the trust of land the trustees have dual powers of either selling or retaining the trust land.
The most important feature is that there is no longer a duty to sell.

- POWERS AND DUTIES OF THE TRUSTEES:

+ The trustee have the powers of absolute owner (the trustees can treat the land as if they
were the absolute owners)
+ Powers to buy, lease and mortgage land (it allows the trustees to invest in land either to
provide accommodation for the beneficiaries or as an investment or for any other
reason)
+ Power to partition the land (divide the land between beneficiaries, on condition that 1.
They are of full age, 2. They must all consent, 3. They must be absolutely entitled)
+ Power to force the beneficiaries to take a conveyance of the land (beneficiaries of age
and entitled; the trustees will cease to be trustees ad the land will be held by the
beneficiaries)
+ Power to delegate their powers in relation to the land
 + Duty to consult the beneficiaries
+ Duty to seek consents

- RIGHTS OF THE BENEFICIARIES OF THE LAND:

● A right to occupy the land

 ● A right to be consulted about any sale: confers a general duty on the trustees to consult
with the beneficiaries where they are of full age and entitled to an interest in possession.
Express trusts.
So far it is practicable and consistent with the general interest of the trust.

● The right to require that consents be obtained

● The right to appoint trustees and to remove trustees (beneficiaries of full age and legal
capacity, act unanimously, in writing, when the instrument does not designate a
particular trustee)

- RESOLUTION BY THE COURT OF DISPUTES IN A TRUST OF LAND

- MATTERS TO BE CONSIDERED IN COURT:

a) The intention of the person or persons who created the trust

 b) The purposes for which the property subject to the trust is held
c) The welfare of any minor who occupies or might reasonably be expected to occupy the
trust land as his home
d) The interest of any secured creditors of any beneficiary

- POSSIBLE DISPUTES:

+ Occupation of trust property

+ Disputes over the sale of the trust property
+ Application by creditors for sale of the property
+ Disputes over the need to consult the beneficiaries

- THE PROTECTION OF THE PURCHASER:

When the purchaser buys land from the trustees he wants to be sure that he purchases free of
the rights of the beneficiaries under the trust.
- CONDITIONS FOR OVERREACHING

+ The conveyance must be made by trustees of land

+ The equitable interests must be capable of being overreached
(general burdens: it is an interest which is readily convertible into monetary terms: the
rights of joint tenants, the rights of tenants in common,holder of a life interest, holder of
an interest in remainder, rights behind a bare trust) (real burdens: these interest were
always intended to be rights in the land: estate contracts, easements, restrictive
covenants, rights of re-entry)
+ Capital money must be paid over as laid down in the LAP 1925
CHAPTER 12
MORTGAGES

A mortgage is one of the most important interests in land. In essence, a mortgage is a form of
security interest in land which will guarantee the amount of a loan made so that the mortgagee
has confidence he will be able to recover his money. Today, mortgages provide a means by
which people are able to purchase their homes and raise cash for improvements.

The security will ensure that the mortgagee has an asset to claim if the mortgagor fails to repay
the money borrowed.

- IT IS A TRANSACTION WHEREBY PROPERTY, EITHER LAND OR PERSONAL

PROPERTY, IS GIVEN AS SECURITY FOR THE REPAYMENT OF MONEY
BORROWED. NORMALLY, THE SECURITY USED IS REAL PROPERTY,
PARTICULARLY A HOUSE, BUT IT CAN BE PERSONAL PROPERTY SUCH AS A
VALUABLE PIECE OF PROPERTY.

MORTGAGOR: BORROWER
MORTGAGEE: LENDER

- The mortgagor grants the mortgagee a mortgage over his property.

- The property can be realised if the mortgagor defaults in repayment.
- If the borrower runs into debt and cannot repay the sum borrowed, the mortgagee can
force the sale of the property and recover the sum borrowed from the proceeds of sale.

Difference between mortgage and charge:

Under a mortgage, the mortgagee gains rights in the property whereas under a charge,
the chargee only gets rights against the property.

HISTORICAL BACKGROUND
MORTGAGES AT COMMON LAW
Historically, common law didn’ recognise a mortgage as lending money at a fixed of
interest was forbidden. The mortgagor’s rights were not enforceable in common law
courts, which had disastrous effects on the mortgagor.
The original mortgage took the form of a conveyance of the property. The mortgagee
literally became the owner of the property and the mortgagor did not recover rights in the
property until the loan had been repaid.
At common law, the mortgagee owned the property but the mortgagor had the chance to
recover his property (on a particular day and time specified in the contract): right to
redeem.

MORTGAGES IN EQUITY
EQUITY OF REDEMPTION

The equity of redemption describes the rights that a mortgagor retains in the property
used for the security of the loan.
The rights go beyond the right to redeem the mortgage.
Today the equity of redemption has become a separate proprietary right in the property
and has a value of its own, which can be transferred or sold.
The equity of redemption arises as soon as the mortgage is created.

THE POSITION AT COMMON LAW

Under common law, the mortgagee of capital would become the owner of the
mortgagor’s property subject to the mortgage. It gave him rights, including the right to
sell the property, and the mortgagee was also able to claim any income which arose
from the property while the mortgage was in existence (until the mortgagor repaid the
mortgage).
There was only one day on which repayment could take place: legal date of redemption.
If the mortgagor was late, the land was lost and the mortgagor was still liable for debt.

THE EQUITABLE RIGHT TO REDEEM

It allowed the mortgagor ro redeem, even after the repayment had passed.
Therefore he could ignore the date set out for redemption set out in the mortgage deed
and repay whenever was convenient.
At first, this was only allowed in certain situations, such as accidents, mistakes on dates,
or by proving special hardship.
Later, redemption was allowed in all cases.
 Equity also allowed the mortgagor the right to any income derived from the property
while the mortgagee was in occupation.
So the nature of a mortgagee changed and the mortgagor would remain the property
and now the property was now seen simply as security for the loan.

CREATION OF MORTGAGES

● Before 1925: mortgage of freehold land was created by conveying the fee simple
estate to the mortgagee, who became owner of the property.
● After 1925: conveyance and reconveyance made impossible
Two methods: a demise for a term of years absolute,subject to a provision for
cesser on redemption (long lease for like 3000 years that would cease after loan
was repaid) or a charge by deed expressed to be by way of legal mortgage (no
conveyance; mortgagee merely gets a charge over the land giving him rights
which attach to the property).

● Post 2002: the only way that a mortgage of registered land can be created is by
registered charge. The mortgage will come into legal effect at the same time it is created.
The legal mortgage is regarded as a conveyance of land and will trigger the
overreaching provisions. (failure to complete the legal charge by registration will have
the effect that the mortgage will not operate at law and will only take effect in equity).
 - CREATING EQUITABLE MORTGAGES

Three main ways that an equitable mortgage can be created:

1) A contract to create mortgage: the contract to create a mortgage must be in writing.

The document must:

- Be in writing
- Be signed by both parties
- Contain all terms

The parties may have accidentally created an equitable mortgage because they intended to
create a legal mortgage by deed and they failed to satisfy the formalities necessary for a deed
(such as having signatures witnessed). An equitable mortgage will also arise where the
mortgage has been created by deed but registration has not been formally completed at the
land registry.

2) An equitable mortgage created by the deposit of the title deeds: before 1989 it was
possible to create a mortgage by depositing title deeds in unregistered land with the
lender (short term mortgage w/o formalities; intention had to be proved)

3) Mortgages of equitable interests: the mortgagor may only have an equitable estate in
property because he is an equitable owner behind a trust. In such a case he can only
create an equitable mortgage. The mortgage is created by transferring the whole of the
interest to the mortgagee with a provision for re-transfer of the interest once the debt has
been repaid. It must in writing under risk of becoming void.
 - THE MORTGAGOR IS PROTECTED FROM THE MORTGAGEE GAINING ANY
COLLATERAL ADVANTAGES

Equity developed other ways of protecting the mortgagor.

If the mortgage deed contained a term which prevented the mortgagors from redeeming the
mortgage for a reason, this term would be void.
The rights of the mortgagee were limited to the return of the loan, the interests and costs. Any
attempt to get extra benefit would be shut down by the courts.
However, the courts have been less strict on collateral terms.
(outsourced: Restraint of trade: A restraint of trade is any activity that tends to limit a
party's ability to enter into transactions.)

- A MORTGAGE WILL BE SET ASIDE IF IT HAS BEEN OBTAINED THROUGH

UNDUE INFLUENCE OR OPPRESSION:

A mortgage can be set aside or the terms modified where there is evidence of undue
influence or misrepresentation.
A mortgagor can be pressured by the mortgagee in such a way that the transaction that
he enters is not from his own free will.

+ What constitutes undue influence?

Equity has always sought to protect the weaker of two parties from oppression and
exploitation.
In the context of a mortgage, equity will seek to intervene where the terms are
oppressive.

UNDUE INFLUENCE: two different forms

1) Actual undue influence

2) Presumed undue influence (it is assumed that one party is more powerful than
the other so they could easily take advantage of this position to pressure in
negotiations)
- EFFECT OF A SUCCESSFUL PLEA OF UNDUE INFLUENCE

+ A successful plea will have the effect of complete voidance of the security.
+ In some cases only that part of the security will be voided over which the undue
influence was operative, the rest of the property remains a security.
 - THE RIGHT TO APPOINT A RECEIVER

Useful way of recovering the interest owed on the mortgage.

The receiver takes control of the mortgaged property and then sells it or manages it and
uses the income from it to repay the loan. The receiver acts as an agent of the
mortgagor and the effect of this is the mortgagor becomes solely liable for any acts or
defaults of the receiver.

- FORECLOSURE
 - PRIORITY OF MORTGAGES

There may be more than one mortgage and there may be insufficient funds to coverthe
outstanding amount.
Rules:
1) Are the mortgages legal or equitable?
 2) Is the title to the land registered or unregistered?
3) When were the mortgages registered?

LEGAL MORTGAGES OF REGISTERED LAND DEPEND ON THE DATE OF

REGISTRATION, WHEREAS EQUITABLE MORTGAGES DEPEND OND DATE OF
CREATION.

PROPERLY REGISTERED LEGAL MORTGAGES WILL TAKE PRIORITY OVER ALL

EQUITABLE MORTGAGES.