Enforcement of Third Party Rights in Property Law, Study notes of Property Law

Download Enforcement of Third Party Rights in Property Law and more Study notes Property Law in PDF only on Docsity! Anna is the prospective purchaser of cafe which is owned by Roy: (a) Gail tells Anna that she has an easement to use the drains belonging to the café. She explains that, a month before Roy renewed the lease of her house, he gave her permission to use the café’s drains (easement) (b) Tracey, has a copy of an option agreement by which Tracey may buy the café at any time during the next five years (option) (c) Hayley (Roy partner) contributed to the purchase price of the cafe. Roy tells Anna that Hayley is currently in New Zealand where she is helping a friend start a catering business. (d) Rita has a four year lease to use a shed (lease) Answer: The advice would be focused on the enforcement of different third party rights against A, the prospective purchaser of Cafe which is a registered estate under s.27 of the LRA 2002. A would be advised about the potential impact of the statutory rules of priority under s.29(1) LRA 2002 of any proprietary interest that Jacob, Gali, and Rita may be entitled to claim. Under s. 29, a purchaser of a freehold estate may acquire land free of all rights save those recorded as charges, those protected by notices on the register, and those interests laid down in schedule 3 of the act that are binding on the purchaser without being entered on the register. It is worth noting that the LRA 2002 allows for various types of land law rights to be safeguarded differently according to their legal/equitable status and whether they were formed formally or not. The range of advice to B about enforceability can therefore be expanded by making careful use of the facts and any ambiguities/uncertainties they contain. Gali (implied easement) According to s.1(2)(a) LPA 1925 an easement is capable of being legal. According to the facts, Gali has an easement to use the drains of the cafe. As per the facts, last year, a month before Roy renewed the lease of her house, he gave her permission to use the café’s drains. We are not told if this was given using any formalities hence it is assumed that this is merely a license. However, according to the case of Hair v Gillman & Inskip a mere license would be converted into easement by virtue of s.62 LPA 1925. All rights formerly enjoyed for the benefit of leased property shall be converted into easement under section 62. After the renewal of the lease, the right to use the drainage facility of the cafe might be converted into an easement if certain conditions are met. 1) The owner of the servient tenement (i.e. Roy) uses a deed to renew the lease of the dominant tenement (i.e. Gali). If the renewal of the lease was done by deed only then S.62 may apply. 2) The right that is capable of being an easement as it meets the requirements of Re Ellenborough Park. The right of drainage is one of the recognized easements. 3) The requirement of diversity of occupation is also satisfied as Roy is the freehold and Gali is the leasehold owner of the land. 4) The right must have been used prior to the conveyance is also satisfied on our facts because the right was being used by Gali prior to the renewal of the lease. In conclusion, provided that the transfer in question was via a conveyance, the privilege of using the drains of the cafe would be converted into a legal easement as it would be implied into the conveyance documents under the operation of s. 62. Gali may rely on Paragraph 3 of Schedule 3 of the LRA 2002 as the easement would take effect as an overriding interest. Under this head, only legal easements that arise either impliedly or by prescription are capable of overriding without being registered hence take priority against the purchaser (s.29 LRA 2002). Additionally, the implied legal easement takes precedence if any of the following additional circumstances is met: 1) The person entitled to the benefit of the implied legal easement must establish that it was used within twelve months of the disposition. 2) Legal easements that were either within the purchaser's 'actual knowledge' or were obvious on a reasonably careful inspection of the land. 3) The easement is registered in accordance with the 1965 Commons Registration Act. On our facts, the first two conditions (i.e. 1 and 2) are satisfied as A has actual knowledge of the easement and moreover Gali can prove that he has exercised the alleged easement within 12 months of the disposition. Rita (lease with four years left) A lease is capable of being legal according to section 1(1)(b) of the LPA 1925. A lease would only be legal if created by deed (section 52(1) LPA 1925). The requirements for a deed is outlined in Section 1 of the Property Miscellaneous Provision Act 1989. If the lease is for more than three years but less than seven years, it must be created by deed. In terms of registration, legal leases of 7 years or less constitute overriding interest under Schedule 3, Paragraph 1 of the LRA 2002, and are therefore binding on the purchaser despite not being registered. There is no requirement to file a notice (section 33(b) LRA 2002). If the duration of the lease is more than 7 years, the document must be a deed, and it must be substantively registered at the land registry (27(2) LRA 2002) in order to bind the purchaser. There are 2 scenarios in which Rita will hold an equitable lease. Firstly, if the document he has is not a deed (s2(1) LP (MP) A 1989). Secondly, if s(27(2) LRA 2002 requirement above was not complied with (s27(1) LRA 2002).