Property Analysis - Case Study Example

The Case Scenario Mr. Crane, the client, is in his 80s and have lived at the Ivy House all of his life. His father owned what is now ‘Ivy House’ together with the adjoining property called ‘The Hollies’, which were once one property. The Hollies was sold off in the 60’s. When Mr. Crane’s parents died, a will was left to him who then inherited this property. He became the sole owner of the property. The Ivy House (and it’s neighbour the Hollies) are both registered titles. There is a mortgage existing and land charges registered. There is a very unusual layout of properties, such as the interlinking of rights and responsibilities, the dog-leg boundary at back, not much space for access to The Hollies at the back, lots of trees which are close to buildings, drains are running along rear elevation (wall) of building, the manhole covers are evident, and leaking water in approximate position of line of supply to the adjoining property. Although he is the sole owner of Ivy House, he did have a long-term girlfriend for fifteen (15) years, Miss Chandra, who lived with him in the said house. She gave up her council house tenancy at his request and put all her savings (including money inherited from her mother) into improving the Ivy House updating the standards and making it a valuable property. Mr. Crane has done or paid for basic maintenance ever since but did not introduce improvements to it. When Miss Chandra left him, she didn’t say anything about getting her money back. However, when the word got around that Mr. Crane is thinking of selling the house, he had a “visit” from her sons intimating that their mother wants a substantial share of the sale proceeds. Another concern of Mr. Crane also is with the present owner of the adjoining house, The Hollies, known as Mr. Johnson. There have been issues over access to the rear, parking and water supply. There is an extract of a deed regarding an easement. Finally, Mr. Crane’s concern is about his friend Mr. Brown. Mr. Crane allowed Mr. Brown to use the basement at Ivy House almost daily and for the last 6 years, for his artwork business. He signed a document at Mr. Brown’s request but is not sure if it means anything. He doesn’t have a copy of the said document. He remembers that he and Mr. Brown were the only ones who signed the said document and that Mr. Brown was to be able to use the basement for ten (10) years but has paid nothing for the arrangements. He wonders whether or not he should tell Mr. Brown that he is selling up as he is concerned of what Mr. Brown should say to prospective purchasers when they look round and is also thinking if he should he ask Mr. Brown to leave. Mr Crane now wants to sell the Ivy House and wants to move to smaller place. Issues 1. Whether or not Ms. Chandra has the right to a substantial share of the proceeds of the sale if ever the Ivy house is sold. 2. Whether or not Mr. Johnson, the owner of The Hollies, has a right to demand against Mr. Crane about the access to the rear, the parking and the water supply. 3. Whether or not Mr. Crane has the right to ask Mr. Brown to leave the basement. 4. Advice that would be given if the properties were unregistered. 5. Other information needed from Mr. Crane. Discussion Bromley and Lowe explain that property adjustments orders are not available in case of property rights of unmarried cohabitants (Bromley and Lowe, 1987, p. 584). The ordinary legal rules applicable to strangers would therefore apply to unmarried cohabitants in case of disputes in the ownership a property (Bromley and Lowe, 1987, p. 584). However, if said couple have children, the Family Law Reform Act 1987 would apply in the settlement of the property (Bromley and Lowe, 1987, p. 584). Section 53(1)(b) of the Law of Property Act 1925 provides for the requirement that a declaration of trust respecting any land or any interest therein to be manifested and proved by some writing signed by the person declaring the said trust (Law of Property Act 1925). However the same law states that this requirement “does not affect the creation or operation of resulting, implied or constructive trusts,” (Section 53(2) of Law of Property Act 1925). Hence it is important to identify the trusts presented under particular circumstances (Stack v Dowden, (2007) UKHL 17). And in order to establish a constructive trust, a party must show two things; “a) that the parties had a common intention that both should have a beneficial interest in the property acquired and b) that the claimant has acted to his or her detriment on the basis of that common intention” (Grant v Edwards [1986] Ch 638, [1986] All ER 426, CA). Equity will not allow the other party to deny that the claimant has an interest and will create a trust to give effect to it (Bromley and Lowe, 1987, p. 532). A relevant case related to the first issue is the case of Stack v Dowden, (2007) UKHL 17. The said case involves the determination by the House of Lords regarding the property rights of an unmarried couple living together in a house which they inhabited and considered as their home until their relationship lasted (Stack v Dowden, (2007) UKHL 17). The House of Lords took notice of the case being of general public interest since there is no legislation which directly relates to the beneficial interests and other property rights of unmarried cohabiting couples (Stack v Dowden, (2007) UKHL 17). The case makes a distinction between legal ownership and beneficial ownership where in the first ownership is acquired in law by the title, while the second may be acquired as a result of the title or improvements made on the property (Stack v Dowden, (2007) UKHL 17). The House of Lords explains that, “in case of a sole legal ownership, the onus is on the party who wishes to show that he has any beneficial interest at all, and if so what that interest is” (Stack v Dowden, (2007) UKHL 17). Although parties can enter into any agreement with regard to the property, the House of Lords states that it must be clearly expressed and proved so that the court may give effect to it (Stack v Dowden, (2007) UKHL 17). It further explains that it is important to consider the improvements made by a party which add significant value to the property (Stack v Dowden, (2007) UKHL 17). Hence, in the case of Ms. Chandra, she has the burden to prove beneficial interest before the court to be entitled to the proceeds of the sale if ever the sale pushed through. Another relevant case is Oxley v Hiscock regarding a property, which was conveyed to one of the parties or cohabitants (Oxley v Hiscock [2005] Fam 211). In this case, it was ruled that the claimant should show first, if he or she had any beneficial interest and secondly what the interest was (Oxley v Hiscock [2005] Fam 211). The first issue could be determined if there was some kind of financial contribution made by each party in the purchase of the property. The second can however be determined by what the court considers after having a fair regard “to the whole course of dealing between them in relation to the property (Oxley v Hiscock [2005] Fam 211). The whole course of dealings would then include arrangements made from time to time for the upkeep of the property. With these cases then, the court now has the obligation to determine the intentions of the parties whether actual, inferred or imputed (Sweet and Maxwell Ltd. And Contributors, 2007). On the second issue of easements, the Land Registration Act 2002 should be taken into account. Under the Land Registration Act 2002, if a notice of easement is entered in the register of the burdened land, any succeeding disposition of said land will be subject to the claimed easement but only in so far as the claim of easement may be valid (Section 32(3), LRA 2002). Notice may be entered in the register either in the form of an agreed notice or a unilateral notice (Land Registration Act 2002). An agreed notice is that entered in the register with the consent of the proprietor or if the applicant satisfies the registrar as to the validity of his or her claim of interest (Section 34(3), Land Registration Act 2002). A unilateral notice on the other hand, may be entered without the consent of the proprietor and may only be notified after completion of the application, where he or she can apply at any time to cancel the notice and require proof of the validity of the claim from the person claiming the benefit of the protected interest (Section 36, Land Registration Act 2002). Rights which are not required to be registered are those in Schedule 3 of the Land Registration Act 2002 which may either be legal easements or interest of anyone under actual occupation, among others (Schedule 3, Land Registration Act 2002). Actual occupation was explained in Abbey National Building Society v Cann as “involving some degree of permanence and continuity which would rule out mere fleeting presence” (Abbey National Building Society v Cann [1990] UKHL 3, 29 March 1990). Hence, it is important to determine whether these requirements of the law are followed. As regards to the lay out of the properties, the Housing Act of 2004 must be taken into account. Under the said Act, the local housing authority may review, inspect and enforce an appropriate action on any residential premises where hazard may be found to exist (Sections 3, 4 and 5, Housing Act of 2004). Under Section 2(1) of the Act, hazard was defined as “any risk of harm to the health or safety of an actual or potential occupier of a dwelling or HMO which arises from a deficiency in the dwelling or HMO (house in multiple occupation) or in any building or land in the vicinity (whether the deficiency arises as a result of the construction of any building, an absence of maintenance or repair, or otherwise)” (Section 2(1), Housing Act of 2004). This must therefore be followed and complied with. The issue with Mr. Brown on the other hand, is explained in the case of Mansfield District Council v Paul Langridge, 2007 EWHC 3152 (QB). In this case, it was explained that “in order to constitute a tenancy the occupier must be granted exclusive possession for a fixed or periodic term certain in consideration of a premium or periodical payments” (District Council v Paul Langridge, 2007 EWHC 3152 (QB). The said case further explained that it does not necessarily mean that an occupier may automatically be considered as a tenant once he or she enjoys exclusive possession, as he or she may still be considered as a trespasser, a mortgagee in possession, an object of charity or service occupier (District Council v Paul Langridge, 2007 EWHC 3152 (QB). Hence the rights of each of the parties would depend on the agreement made between the parties. Furthermore, one may be considered as an excluded occupier under Protection from Eviction Act 1977 as revised if accommodation is granted other than for money or money’s worth, or in short, one does not pay rent for his or her accommodation (Section 3A, Protection from Eviction Act 1977). Eviction may also be had even without having to go to court and requires only reasonable notice to the said excluded occupier which depends on the agreement entered into by the parties (Shelter.org website). Hence, Mr. Brown in this case may be considered as an excluded occupier for not having paid the rent for the use of the basement. He can therefore be evicted but the notice may depend on what was agreed upon by the parties. If the properties however were unregistered, both parties must prove beneficial interest in the property in order to be entitled to the right to the proceeds of the sale and the intent of the parties should also be determined on whether they intended the shares to be equal as explained in Stack v. Dowden case. Finally, there is a need to have the following information: the intention or agreement of the parties if ever there is as to the sharing of the proceeds of the sale; the easements whether it is registered or not and the determination of what kind of notice of the easements were made to determine if cancellation could still be made in case of a unilateral notice; and finally, a copy of the agreement with Mr. Brown to determine the contents of the said agreement for the benefit of Mr. Crane. References Abbey National Building Society v Cann [1990] UKHL 3, 29 March 1990). Bromley, P. and Lowe, N. (1987). Family Law. London: Butterworth and Co. Ltd., pp. 532 and 584 District Council v Paul Langridge, 2007 EWHC 3152 (QB). Grant v Edwards [1986] Ch 638, [1986] All ER 426, CA Housing Act of 2004 Sections 2(1), 3 and 4. Land Registration Act 2002 Sections 32(3) , 34(3) and 36 and Schedule 3. Law of Property Act 1925 Sections 53(1)(b) and 53(2). Mansfield District Council v Paul Langridge, 2007 EWHC 3152 (QB) Oxley v Hiscock [2005] Fam 211 Protection from Eviction Act 1977 Section 3A. Shelter.org (2006). Eviction of Excluded Occupiers. Retrieved January 28, 2008 from, http://england.shelter.org.uk/advice/advice-4150.cfm Stack v.Dowden, (2007) UKHL 17 Sweet and Maxwell Limited and Contributors (2007). Equity: Division of Beneficial Interest. Property Law Bulletin, 28(6), 43. Read More