Uk Land Law - Unregistered Land

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An equitable notice is good against the whole world except a bona fide purchaser for value of a legal estate who took notice of this equitable interest.
Proof of doctrine of notice - four elements

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1) Purchaser acted in good faith (bona fide)
2) Purchaser for value i.e. not inherited
3) Acquired a legal estate or interest
4) No notice of equitable interests

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Notice of equitable interest (EI) comes in three forms

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1)Actual - Lloyd v Banks / Barhart v Greenshields
2)Constructive - making enquiries a reasonable purchaser would - expected to inspect and investigate title. Hunt v Luck.
3)Imputed notice - knew or ought to know of EI Kingsnorth v Tizzard

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Type of Legal Estate under 1925 law s1 (1)

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1) Fee simple absolute in possession (owner os land and estate) 2) The term of years absolute
only other interests include easements and a charge by way of legal mortgage all other interests equitable.

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Overreaching

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Purchaser bound by legal interests- equitable rights overreachable or registrable. Overreaching process by which purchaser takes a legal estate free of pre existing equitable rights in the land (these convert to share in money from sale). Payment for land made to 2 trustees.

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Land Charges

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Interests registerable as land charges cannot be overreached i.e. those of commercial nature.
Robert Walker LJ in Birmingham Midshires Mortgage Services v Saberwhal [2000] 80 P&CR 256

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Land Charges System

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Prior to 1925 EI's of a commercial nature governed by doctrine of notice - binding except on bona fide purchaser without notice. Now LCA 1925 later 1972 provides for registration of such against the name of the estate owner.

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Significant case - Midland Bank Trust Co. Ltd v Green

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Son didn't register C(iv) land charge when offered to buy farm. Father and son fell out and father sold to his wife for greatly reduced price. In terms of consideration the H of L decided 'purchaser for value' given ordinary meaning and not for court to enquire whether consideration adequate or not.

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Where registration was made against an incorrect version of a person's name.

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Oak Co-operative Building Society v Blackburn (1968) where it was held that a registration in a version of an estate owner's full names was not a nullity against a purchaser who did not search at all or searched in an incorrect name.

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Registering against the wrong name

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Diligent Finance Co Ltd v Alleyne (1971) held that registering against the wrong name will not bind a third party who subsequently searches against the correct full name.

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s.23 LPA 1969

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A vendor is only obliged to go back to a good root of title which is at least 15 years old. Any earlier land charges may be compensable should a purchaser suffer losses from earlier undiscovered land charges.

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Diligent Finance Co v Alleyne (1971)

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A careless registration of the substantive estate against some informal or inaccurate version of a name may be insufficient to bind purchasers regarding the registerable equitable interests.

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What is the bona fide purchaser rule?

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-nowadays has a severely limited role.
-in order to establish immunity from interests in the land which are not overreached and are non-registerable equitable interests, the purchaser must demonsrate that:
1) his absence of notice was 'genuine and honest' - Midland Bank Trust (1981)
2) He must take a LEGAL estate in the land concerned.
3)He must be a purchaser FOR VALUE (i.e. not a gift)

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What is the result of the bona fide purchaser rule?

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If successful it defeats the equitable right involved so that it is not binding on the purchaser.

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Sainsbury's Supermarkets v Olympia Homes Ltd [2005] EWHC 1235, Mann J

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Complex scenario concerning failure to register an interest on unregistered land upon 1st registration under LRA 1925. Interest was not protected under Land Charges Act 1972 only as a caution upon first registration. Situation resolved by rectifying the register, to register the option. LRA 2002 SCH 4 para 3 (2) b

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Lloyds Bank plc v Carrick, The Times 13 March 1996, (1996) 146 NLJ 405.

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Brother in law held legal title on long lease of maisonette and mortgaged against this. Mrs Carrick had paid B in L full price for property, unprotected in law as she had not registered her interest (estate contract) in the property as a C(iv) land charge. unenforceable against the bank as nor registered.

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Hollington Bros Ltd v Rhodes (1951)

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The fact that the purchaser had actual notice of the tenant's lease was irrelevant as the tenant had failed to register it as a class C(iv) land charge against the estate.

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LPA 1969 section 24(1)-(2)

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A person who, after exchange of contracts but before completion, discovers a registered charge, is entitled to have the contract rescinded.

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What remains governed by the doctrine of notice

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Restrictive covenant (rc) made between lessor and lessee; rc made before 1926; equitable interest arising under doctrine of propreitary estoppel; interest held on constructive trust; equitable interest under a bare trust; beneficial interest where interest is not overreachable (Caunce v Caunce) money paid to one trustee.

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Hunt v Luck

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Unregistered land occupied by tenant. Buyer then purchased land. Tenant claimed rights. Held: inspection wouldve revealed tenant and buyer therefore had constructive notice. Buyer was therefore not equitys darling. Buyer lost. A buyer has constructive notice if inspection of the land would reveal 3rd party rights

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Kingsnorth Trust v Tizard

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Husband defaulted on mortgage and emigrated leaving wife, house in his sole name. Held - Wife in occupation.The mortgagee had constructive notice of the wife's interest, and therefore took subject to it. (Caunce disapproved in Boland)

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YAXLEY v GOTTS [2000] Ch 162, CA

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An oral agreement whereby the purchaser of a house promised to grant another, in exchange for materials and services supplied, an interest in the property, though void and unenforceable under 2 Law of Property (Miscellaneous Provisions) Act 1989, was enforceable on the basis of a constructive trust under section 2(5)