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Land - Protection of estates and interests in unregistered land (How are…
Land - Protection of estates and interests in unregistered land
LRA 2002 - interests, categories and instructions on how to protect
Position pre-1st January 1926
Legal rights bound the whole world
Equitable rights bound everyone but 'Equity's Darling' - bona fide purchaser for value of legal estate without notice (includes lender and buyer)
Notice
Actual - actually know aka codified through LPA 1925 s198(1)
Constructive - ought to have known aka s199(1)(ii) LPA 1925
Imputed - employ agent - deemed to know what they know
Position post-1st January 1926
Legal rights still bind the world (Mercer v Liverpool)
Dramatic change for equitable interests in registered land
How are equitable rights protected?
Beneficial interests behind a trust - overreaching - usually family equitable interest
Only apply to beneficial interests behind trust - no other type of land
Detaches equitable interest from land and transfers it into money
Money must be paid to at least two trustees/legal owners
Buyer/lender takes land free of beneficial interests
Beneficiary still has interest in sale proceeds
Applies equally to registered and unregistered land
Interests which can be protected under Land Charges Act 1972 -registration will constitute actual notice
Registration at Plymouth constitutes actual interest of the notice - s198 LPA 1925
Midland Bank v Green (1981)
Incorrect entry of land charge
Diligent Finance Ltd v Alleyne (1972)
Standard Property Investment plc v British Plastics Federation (1985)
System deals with protection of equitable interests (and one legal interest aka puisne mortage) in unregistered land - predominantly commercial equitable interests
Each class of land charge protects a different type of interest
Which interests fall into which category?
Class C
C(i) - puisne mortgage (2nd or subsequent legal mortgage - defined by LCA 1972 s2(4)(i)
Consequences of failing to enter a Land Charge = void against purchaser for value of any estate or interest - s4(5) LCA
Pragmatic - first mortgagee (lender) entitled to take possssion of title deeds, informing subsequent lenders that land is subject to a mortgage - but then hard to know that land subject to more than one mortage - therefore mortgage not secured by deposit of title deeds is regsitrable
C(iii) - general equitable charge
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Residuary class - covers things like equitable mortgages of legal estate not protected by deposit of title deeds - frequently arose where failure to comply with common law formalities e.g. no deed as required by LPA 1925 s52(1)
C(iv) - estate contract
Consequences of failing to enter = void against purchaser for money of legal estate or interest - s4(6) LCA
Midland Bank v Green(1981)
Hollington Bros v Rhodes (1951)
Mercer v Fisher (2003)
Creates an equitable interest
Pre-emption in unregistered land only becomes an unterest from the date it becomes exercisable (not from creation as in registered land) - Pritchard v Briggs (1980) per Templeman LJ
Class D
D(ii) - restrictive covenant
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Negative covenant affect the land i.e. does not involve expenditure of money to be complied with
D(iii) - equitable easement for an uncertain term
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Class F
Does not protect an interest in land
Protects spouse's right to occupy home under FLA 1996 s2(7) - not an interest, merely a statutory right of occupation
Consequences of failing to enter = void against any purchaser for value of any estate or interest - s4(8) LCA
Registration must be against correct name as appears on the title deeds - otherwise void (Diligent Finance Co Ltd v Alleyne (1972))
Interests still subject to doctrine of notice (fallback position)
Only applies in two kinds of cases
Pre-1926 equitable interests - arose before LC system invented
Beneficial interests behind one-trustee trust
Overreaching ineffective
Interest remains in land - binding if purchaser has notice
Kingsnorth v Tizard
Mere equities?