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    Raymond is negotiating to sell his café, title to which is registered, to Alice. Having checked the Land Register and visited the café several times, Alice has discovered the following:
    (a) Gail, a neighbour, tells Alice that she has an easement to use the drains belonging to the café. She explains that last year, a month before Raymond renewed the lease of her house, he gave her permission to use the café’s drains.
    (b) Peggy, a local bistro owner, meets Alice in the street outside the café and shows her a copy of an option agreement by which Peggy may buy the café at any time during the next five years.
    (c) Hayley, Raymond’s partner, paid half of the purchase price when Raymond acquired the café some years ago. Hayley had also personally renovated the café to cater for the large morning crowd that visits the café. Raymond tells Alice that Hayley is currently in New Zealand where she is helping a friend start a catering business. Hayley has also put up many of her hand painted pictures on the walls of the café and her signature is on all of them.
    (d) Rita, the owner of the local newsagents shop, has four years left to run on a lease to use a shed in the backyard of the café in which she stores newspapers and magazines.
    (e) Tom, who owns the neighbouring land to the café had been promised by Raymond through a deed that he will not build tall buildings or extensions on that land.
    (i) Advise Alice, who wants to know about the impact of all of the matters she has discovered if she goes ahead and buys the registered title of the café from Raymond.
    (ii) Indicate how your advice would differ if the proposed purchase of the café could be undertaken solely subject to the principles of unregistered title.

    Any kind souls that could help tackling this question or provide me a direction as to how should i go?

    Thank you!
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    hey if youve gotten feedback on this i would really appreciate if you could tell me how you tackled issues A and B or how you managed to tackle it on your own and also how would you approach A if she had a deed to the easement.

    Thanks a lot. And I would appreciate anyone that has knowledge on this areas feedback as well.
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    Hi,

    (i) In the case of registered title Alice wants to know if any of these rights will take priority if she purchases the freehold. In each case you need to work out exactly what type of right you are dealing with and, in some cases, whether that right is legal or equitable. When you have done this you then need to consider whether they will take priority.

    I would start with a general explanation of how third party estates and interests can take priority i.e. briefly explain about interests capable of overriding registration ('overriding interests'), interests which can only be completed by registration and minor interests and their effect on the sale of the freehold (which is a qualifying estate). Then deal with each interest. A good way to impress the examiner would be to group similar rights together e.g. minor interests and then overriding interests. Then you can make the point that if a minor interest has not been protected on the register it may be overriding under LRA 2002 Schedule 3, para 2.

    With regard to (a) I assume that it is not an expressly granted easement by deed (see an earlier post) as the facts do not suggest that there is one. This one is tricky. You need to establish how the easement was granted. The clue is that a lease was renewed (' a conveyance') after informal permission has been granted. Take a look at the position under LPA 1925, s.62. If this applies (I think that it does), then you have a legal easement which has not been expressly granted. These easements are overriding if the requirements of schedule 3, para 3 are met.

    (c) Establish an interest under a trust from the facts (purchase price and renovations will do it) before you consider what will happen if the land is sold. Haley has a right which is a 'minor interest'. If registered against the title as a restriction: it takes priority. If not, it is potentially overriding under schedule 3, para 2 because Haley has a proprietary interest in the land.
    The issue here surrounds whether Haley is in actual occupation of the land.She is not physically there at present. The nature of the land has to be taken into account and the question is whether she can 'occupy' by leaving her paintings there (indicating an intention to return?) . Even if she is in occupation (this can't be conclusively established from the facts) the next question must be whether her right can 'lose' overriding status under schedule 3, para 2 because her occupation was not obvious on a reasonably careful inspection of the land. Signed pictures in the cafe? - probably not, so her interest will not override.

    When dealing with (ii) I would again start with a brief general explanation of the consequences on sale of a legal estate by reference to the potentially 'binding' effect of third party legal and equitable estates and interests. Then explain that equitable interests are dealt with either under the doctrine of notice or Land Charges. The third party rights are exactly the same as in (i) but their consequences (i.e. are they 'binding'?) need to be dealt with using different legal principles (i.e. legal rights bind the world, bona fide purchaser etc.). The thing to remember that you don't know if any of the interest which can be registered as a land charge have been. If not, don't fall into the trap of then considering the doctrine of notice. The two systems are mutually exclusive.

    good luck. There is lot to cover in the question!

    BiteSizeLawyer
 
 
 
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