CILEX Professional Qualification (CPQ) Foundation Stage: Land Law Syllabus

What is a 'puisne mortgage' and why must it be registered as a land charge?

A puisne mortgage is a legal mortgage not protected by deposit of the title deeds (i.e. a second or later legal mortgage). Because the lender holds no deeds, it must be registered as a Class C(i) land charge to bind a purchaser of the unregistered land.

In registered land, what are the two main methods of protecting a third-party interest on the register?

A notice (which protects the priority of a burden such as a restrictive covenant, estate contract, or equitable easement by entering it on the Charges Register) and a restriction (which controls or prevents the registration of a disposition, e.g. requiring two trustees' signatures to overreach).

What is the difference between an agreed notice and a unilateral notice?

An agreed notice is entered with the registered proprietor's consent (or where the applicant has a valid claim/court order). A unilateral notice can be entered without consent; the proprietor is notified and may apply for its cancellation, which the beneficiary must then defend.

What does a restriction do, and give a common example.

A restriction regulates the circumstances in which a disposition may be registered — it does not protect the priority of an interest. A common example is the 'Form A' restriction on a tenancy in common, requiring capital money to be paid to at least two trustees so the equitable interests are overreached.

What are the 'four unities' required for a joint tenancy?

Unity of possession (all entitled to the whole), unity of interest (same extent, nature and duration), unity of title (deriving from the same document), and unity of time (interests vesting at the same moment). A tenancy in common requires only unity of possession.

What is the defining feature distinguishing a joint tenancy from a tenancy in common?

The right of survivorship (jus accrescendi): on the death of a joint tenant their interest passes automatically to the surviving joint tenants and cannot be left by will. Tenants in common hold distinct, undivided shares that pass under their will or intestacy.

Since 1925, how can co-ownership of the legal estate exist, and what is its maximum?

The legal estate can only ever be held as a joint tenancy (it cannot be severed), held by a maximum of four trustees (s.34 Trustee Act 1925). The legal joint tenancy holds the land on a trust of land for the beneficial co-owners.

What four words or circumstances of severance in equity create a tenancy in common despite a joint conveyance?

'Words of severance' indicating distinct shares (e.g. 'equally', 'to be divided between', 'in equal shares', 'amongst'); unequal contributions to the purchase price (presumption of TIC); business partnership purchases; and mortgagees lending money jointly — equity presumes a tenancy in common.

State the methods of severing a beneficial joint tenancy.

Under s.36(2) LPA 1925: written notice to all other joint tenants. Under Williams v Hensman: (1) an act of a joint tenant operating on their own share (e.g. sale/mortgage); (2) mutual agreement; and (3) a course of dealing showing all treated the tenancy as severed. Also by unlawful killing of one joint tenant by another.

What are the formal requirements for a valid s.36(2) LPA 1925 notice of severance?

It must be in writing, show an immediate and irrevocable intention to sever now (not in future), and be served on all the other joint tenants. It need not be signed by all; service is effective if left at or posted to the last known abode/business and not returned (s.196 LPA 1925; Re 88 Berkeley Road; Kinch v Bullard).

What statute governs trusts of co-owned land and what did it abolish?

The Trusts of Land and Appointment of Trustees Act 1996 (TOLATA), which abolished the old 'trust for sale' (and the doctrine of conversion) for co-ownership, replacing it with the 'trust of land' under which trustees have a power, not a duty, to sell.

What powers do trustees of land have under TOLATA 1996?

Under s.6, trustees have all the powers of an absolute owner (including to sell, lease, mortgage, or retain the land). Under s.12, a beneficiary with an interest in possession has the right to occupy the land in certain circumstances, subject to the trustees' s.13 power to exclude/restrict occupation reasonably.

What factors must a court consider under s.15 TOLATA 1996 when deciding a dispute about co-owned land?

(a) the intentions of the persons who created the trust; (b) the purposes for which the property is held; (c) the welfare of any minor occupying or expected to occupy the land as their home; and (d) the interests of any secured creditor of any beneficiary.

Who may apply to the court under s.14 TOLATA 1996 and for what?

Any trustee of land or any person with an interest in property subject to a trust of land (including a secured creditor/trustee in bankruptcy) may apply for an order relating to the exercise of the trustees' functions, most commonly an order for sale or declaring the nature/extent of beneficial interests.

How does the test for sale differ where a trustee in bankruptcy applies under the Insolvency Act 1986?

Under s.335A Insolvency Act 1986, after one year from the bankruptcy the interests of the creditors are presumed to outweigh all other considerations 'save in exceptional circumstances'. Mere hardship to the family is not exceptional, so a sale is usually ordered.

What is overreaching and what are its statutory conditions?

Overreaching (ss.2 and 27 LPA 1925) transfers beneficial interests under a trust of land from the land to the proceeds of sale, so a purchaser takes free of them. The conditions are that capital money is paid to at least two trustees (or a trust corporation). The beneficiaries' interests then attach to the money (City of London BS v Flegg).

Define an easement and identify the dominant and servient tenements.

An easement is a proprietary right enjoyed by one landowner over the land of another, e.g. a right of way. The dominant tenement is the land that benefits; the servient tenement is the land that is burdened. There must always be two separate parcels of land owned/occupied by different persons.

State the four essential characteristics of an easement from Re Ellenborough Park.

(1) There must be a dominant and a servient tenement; (2) the easement must accommodate (benefit) the dominant tenement; (3) the dominant and servient tenements must be owned or occupied by different persons; and (4) the right must be capable of forming the subject matter of a grant (a capable grantor and grantee, sufficiently definite, and not amounting to exclusive possession).

By what methods may an easement be created?

Expressly (by deed/registered disposition or reservation); impliedly by necessity, common intention, the rule in Wheeldon v Burrows, or s.62 LPA 1925; and by prescription (long use) under common law, lost modern grant, or the Prescription Act 1832 (typically 20 years' use as of right — nec vi, nec clam, nec precario).

Explain the rule in Wheeldon v Burrows.

On the sale of part of land, the buyer impliedly acquires as easements those quasi-easements that the seller previously exercised over the retained land, provided they are continuous and apparent, necessary for the reasonable enjoyment of the land sold, and were in use by the seller at the time of the grant.

How can the general words of s.62 LPA 1925 create an easement?

Section 62 implies into a conveyance all existing easements, rights, and 'liberties, privileges, easements' enjoyed with the land. It can upgrade a precarious permission (licence) into a full legal easement on conveyance, traditionally requiring prior diversity of occupation (e.g. Wright v Macadam), unless excluded by the deed.

State the four conditions for the burden of a restrictive covenant to run with the land in equity (Tulk v Moxhay).

(1) The covenant must be negative/restrictive in substance ('hand in pocket' test); (2) it must accommodate (benefit) the covenantee's dominant land; (3) the original parties intended the burden to run (presumed by s.79 LPA 1925); and (4) the buyer of the burdened land had notice — i.e. it is registered as a Class D(ii) land charge or by notice in registered land.

Why can the burden of a positive covenant not run with freehold land at common law or in equity?

The burden of a positive covenant (requiring expenditure or action) does not run with freehold land (Austerberry v Oldham; Rhone v Stephens). Only restrictive (negative) covenants bind successors in equity. Workarounds include chains of indemnity covenants, the benefit-and-burden principle (Halsall v Brizell), commonhold, or estate rentcharges.

How does the benefit of a restrictive covenant pass to a successor in equity?

By (1) annexation (express, or statutory under s.78 LPA 1925, fixing the benefit to the land — Federated Homes v Mill Lodge); (2) express assignment with each transfer; or (3) a building scheme/scheme of development imposing mutually enforceable covenants on a defined area of plots (Elliston v Reece).

How may a restrictive covenant be discharged or modified?

By the Lands Chamber of the Upper Tribunal under s.84 Law of Property Act 1925, on grounds such as the covenant being obsolete, impeding reasonable use without securing practical benefit/being contrary to public interest, the beneficiaries agreeing (expressly or by implication), or no injury being caused to the objectors.

Define a mortgage and distinguish the legal and equitable interests of the parties.

A mortgage is the transfer/charge of an interest in land as security for a loan, with a right to redeem on repayment. The borrower is the mortgagor (retains ownership and the equity of redemption); the lender is the mortgagee. Under s.87 LPA 1925 a legal mortgage is created by a 'charge by deed expressed to be by way of legal mortgage'.

What is the 'equity of redemption' and the rule against clogs and fetters?

The equity of redemption is the mortgagor's right in equity to redeem (recover the property free of the mortgage) on repayment, even after the contractual date. Equity forbids any 'clog or fetter' on this right — terms preventing or unduly postponing redemption, or unconscionable/collateral advantages, may be struck down (Fairclough v Swan Brewery; Kreglinger).

List the principal remedies available to a legal mortgagee on default.

(1) Sue on the personal covenant to repay; (2) take possession (a right arising from the legal estate, subject to s.36 AJA 1970 protection for dwellings); (3) sell under the statutory power (ss.101 & 103 LPA 1925); (4) appoint a receiver; and (5) foreclosure (now rare, requiring a court order extinguishing the equity of redemption).

When does a mortgagee's statutory power of sale arise and when does it become exercisable?

Under s.101 LPA 1925 the power arises when the mortgage is made by deed and the legal redemption date has passed. Under s.103 it becomes exercisable when: notice to repay was served and three months' default followed, OR interest is two months in arrears, OR there is a breach of another mortgage term. The mortgagee must take reasonable care to obtain a proper/true market price.

What are the essential requirements for a valid lease (Street v Mountford)?

A lease requires the grant of exclusive possession, for a fixed/certain term, at a rent (rent not strictly essential since Ashburn Anstalt). If these are present, it is a lease (tenancy) regardless of the label used; without exclusive possession it is only a licence. Certainty of term means a maximum duration must be ascertainable (Lace v Chantler; Berrisford v Mexfield).

What is the difference between a legal lease and an equitable lease, and the rule in Walsh v Lonsdale?

A legal lease over three years must be made by deed (s.52 LPA 1925); short leases of three years or less at market rent taking effect in possession can be legal without a deed (s.54(2)). A defective/contractual lease that fails the formalities but satisfies a specifically enforceable contract takes effect as an equitable lease — 'equity regards as done that which ought to be done' (Walsh v Lonsdale).

Distinguish privity of contract from privity of estate in leases, and the effect of the Landlord and Tenant (Covenants) Act 1995.

Privity of contract binds the original landlord and tenant to the lease covenants throughout the term. Privity of estate exists between the current landlord and current tenant, enabling covenants that 'touch and concern' the land to be enforced between them. For leases granted on or after 1 January 1996, the 1995 Act releases an outgoing tenant on lawful assignment (subject to an AGA), abolishing continuing original-tenant liability.