Land Law ISSUES Help me please Watch

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Report Thread starter 3 years ago

i am going through past papers and this problem question has come up twice in the past few years but I'm not entirely sure what the issues are to address, would be awesome if some one could help me out?


Ann owns the fee simple estate in a house where she used to live, which she inherited from her grandmother in 1985. She formed a relationship with Betty in 1995 and Betty came to live with Ann in 1996. In the course of the past 18 years as their relationship developed, Betty has paid for, and carried out, significant improvements to the cottage which have doubled the value of the house.

In the past year, Ann and Betty’s relationship has deteriorated and, unknown to Betty, Ann has formed a relationship with Colin. Ann planned to leave Betty and go and live with Colin in Thailand. In order to raise capital, Ann arranged a mortgage of the house to the Die-Hard Bank plc for £450,000 which represented 90% of the value of the house. Ann ensured that the Bank’s surveyor inspected the house at a time when Betty was away on an overseas business trip. The mortgage was completed before Betty returned from the trip. On her return, Ann told Betty that she intended to go to Thailand for an extended holiday. Ann promptly resigned from her employment, transferred the £450,000 mortgage moneys to her new bank account in Thailand and caught the first available flight to Bangkok. Ann never made any of the monthly repayments under the mortgage.

During the course of the past three months, Betty was surprised by the number of signed for delivery letters which have arrived at the house for Ann. They all have a return address of the Die-Hard Bank. She was shocked when the area manager of the Die-Hard Bank called at the house last evening and she explained that the Bank were about to commence possession proceedings for the house with a view to selling it to recover their outstanding debt, interest and costs from Ann.

Advise Betty as to her interest, if any, in relation to the house and whether she can resist the Bank’s possession proceedings.
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Report 3 years ago
This is a question on creating a beneficial ownership. You need to advise Betty as to how she can create an implied trust as per S53(2) of LPA 1925.

There are three ways she can create a trust i.e resulting trust, constructive, and proprietary estoppell. Talk all three of them especially constructive trust and proprietary estoppell in quite detail.

After creating a beneficial ownership you need to consider whether the beneficial interest binds the 3rd party(The bank). To do that consider overreaching, where Betty's equittable property interest will be dissolved once purchaser (In this case the bank) must have paid to at least two trustees in monies. If paid 2 trustees under s2 of LPA 1925 Betty's occupation rights will automatically be extinguished.

If it's not overreached you can consider overriding interest. Under Sch3 Para 2 of LRA 2002 actual occupation can override 3rd parties interest and conclude.

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