Land Law Problem Q Watch

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Report Thread starter 7 years ago
I am trying to answer the problem Q below - I am not sure if my answer is correct so far....

So if anyone could let me know if it is along the right lines or whether I have answered any of it incorrectly, that would be very helpful.

[QUOTE]The Question

Andrew is the owner of a large country house, Bryon Manor, which he purchased 5 years ago. In April last year he was offered an opportunity to move to Australia with work, and rather than selling the house, decided to rent it our for a year. His friend Brenda agreed to move in and pay £100 a month. As Brenda was doing Andrew a favour and they had known each other since childhood, she agreed that there was no need to formalise the arrangement.

In November Brenda received a letter from a solicitor stating that she had been left £750,000 by a long lost elderly relative. Since was was enjoying living in the house so much she emailed Andrew to see if he would be willing to sell the property to her. He said that he would be happy to do so, but wasn't sure yet whether he would be returning to the UK. However, if he decided to sell the property then she would have the first right of refusal to purchase the property for £500,000.

In December Brenda's son Charlie lost his job in a record store and moved in with Brenda, filling two of the bedrooms with his records and DJ equipment. Fed up with the noise from his music, Brenda decided to take a holiday and she went to visit Andrew in Australia. However, on the first day she and Andrew argued, and rather than staying with him she spent the month travelling round the country.

In the meantime Andrew received a letter from Dominic, a local hotelier, offering to Byron Manor for £600,000 in order to convert it into a luxurious retreat. Concerned about the downturn in the property market in the UK, Andrew immediately accepted the offer and contracted to sell the property. Dominic had not visited the property (against the advice of his solicitor) but when he asked Andrew whether anyone was living at the property, Andrew replied that his friend Brenda was house sitting.

Before Brenda returns to the UK she is shocked to discover through her local newspaper website that the property is shortly to be sold to Dominic's hotel group. The news story has also worried Elena (Andrew's neighbour) who has used a path through the grounds of Byron Manor as a shortcut to her property for the past 30 years, and Frederick (Andrew's uncle) who helped him to purchase the property in 2004 with a contribution of £350000.

What would your advice be to each of the parties?
Badges: 11
Report 7 years ago
(Original post by HMA)
I am trying to answer the problem Q below - I am not sure if my answer is correct so far....

So if anyone could let me know if it is along the right lines or whether I have answered any of it incorrectly, that would be very helpful.
Where there is an absence of exclusive possession, Brenda has acquired a license which is personalty. If Brenda has a licence, she will not have any overriding interest. Only interests in land can enjoy an overriding status .
Brenda has been given a right to be given the first opportunity to buy the land. An oral contract may be enforceable under the doctrine of proprietary estoppel if Brenda can show she relied on the agreement to her detriment and a constructive trust may arise if the courts think that it would be unconscionable for Andrew to back on the agreement.
In order for the option to be protected, Brenda would need to register it at the Land Registry.
Fine but it would be good to make a decision while acknowledging that certain info is missing. Do you think she has exclusive possession? Reading it, i'd lean towards yes.

Quote statute. I believe the protection point is S.27 LRA 2002?

whether the elements of the doctrine of notice have been met.
Watch your language. D does need notice under Sch 3, Para 2 LRA. This is *not* the doctrine of notice. That has been taken out of law by the LRA.

Equity will deem a purchaser to have notice of existence of interests affecting the land as they would have if they had made all reasonable inquiries . Failure to make any inspection of that land at all will cause a purchaser to be deemed to have constructive notice of the existence of the rights of all persons whose existence he would have discovered by making an inspection .
I believe D is making the inspection under Sch3 Para 2 rather than a requirement of equity. This is why he needs to make reasonable enquiries.

Where a user has rights over the use of land belonging to another, this is called an easement. In order for this to be a legal interest, it must be listed within s.1(1) , be granted for a period equivalent to the freehold estate and meet the formalities requirement for express legal interests (ie a deed and registration at the Land Registry). Failure to comply with the formalities may create an equitable interest.
Due to the absence formalities being met, Elena’s right of way can only be an equitable easement. Equitable easements must be registered to be binding.
You need to give this more consideration. Consider easements by prescription for which the time limit is twenty years...

Fredrick – contribution of £250,000 to purchase price
Fredrick’s contribution to the purchase price will mean that he has an equitable interest in the property. This interest would arise as a result of a resulting trust and therefore to protect it, Fredrick would need to register his interest. As a result of him not being in actual occupation, this equitable interest would not be an overriding interest under Schedule 3, paragraph 2 .
You don't register trusts. The idea behind them is that there will be 2 trustees and so the interest will be overreached upon sale.

Before you consider actual occupation, make the point that his interest has not been overreached.

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