Sheila's Right of Way: Unregistered Easement and the Land Registration Act

Nature of the rights of Sheila, Edna, Andrew, Betty and Tony

With regard to Sheila, the right of way was granted in 2002 to pass and repass on foot across the back garden of the property but the right was never registered. According to the Schedule 3, Land Registration Act 2002, legal easements created before 13 October 2003 have an overriding interest under the Land Registration Act 1925, Section 70(1)(a) and equitable implied easements are overriding easements. This means that Sheila has an overriding interest of right of way and will bind the new owners of the property. Because the easement was not registered, it is an equitable interest and is created by prescription. For this, Sheila has to establish that the new purchaser has knowledge of the easement on date of transfer or it was possible for the purchaser to know about the easement with a careful inspection of the property or the easement holder has exercised the easement right at least once in the year preceding the purchase.

With respect to Edna, in 2009 Tom told her that ‘the property was as much hers as his’. This has created a beneficial interest under trust and common intention that she should have equal beneficial interest based on the conduct of the parties with reference to inferred intention and reflected in the sharing of mortgage payments, household expenses, and home improvement expenses. In this case, based on the declaration of Tom, Edna moved into the property, paid one third of the monthly mortgage payments and paid for improvements to the kitchen and bathrooms.

With regard to Andrew, in 2015 Tom allowed him to live at the property for a fee of £50 per week and Andrew has his own bedroom, which means that he is in possession at this time. The Land Registration Act 2002, Schedule 3 protects short term legal lease of a person in actual possession and a lease for less than seven years, is treated as registrable disposition under Section 29(4).

With regard to Betty, in 2018 Tom allowed her to use the large shed at the property as an art studio for free and this is confirmed in an exchange of emails. This is in the nature of a bare licence, which does not create a right in rem and is only a right in personam. Under the Land Registration Act 2002, such licences cannot be registered. The exchange of emails signifies a contract, but is not recognised in a deed.

With regard to Tony, in 2019 Tom gave him the right to pick apples every year by deed and this is noted in the charges part of the land register for the property. The rights registered in the Charges Register are in the nature of encumbrances. This interest is in the nature of profit a prendre, which means a right to take something (natural products) from another’s land. Profits are overriding interests under the Schedule 3, Land Registration Act 2002 if the purchaser had knowledge of the easement or could have known of it with careful inspection of the property or that it was exercised at least once in the year preceding the purchase.

• Thatcher v Douglas [1996] 146 NLJ 282.
• Land Registration Act 2002, Schedule 3, Para 3.
• Lloyds Bank v Rosset [1991] 1 AC 107.
• Jones v Kernott [2011] 3 WLR 1121.
• Ashburn Anstalt v WJ Arnold & Co [1988] EWCA Civ 14.
• Judith-Anne MacKenzie and Aruna Nair, Textbook on Land Law (Oxford University Press 2017) 525.
• Land Registration Act 2002, Schedule 3, Para 3.

Whether new owners bound by the rights of Sheila, Edna, Andrew, Betty and Tony

With respect to Sheila, the new purchasers would be bound by the implied easement of right of way if she can establish that the new purchasers had knowledge on the date of the transfer, or could have known with inspection, or she has exercised this right at least once in the year preceding. This would be an overriding interest. Where she has used this right without force, secrecy and permission continuously, then she can claim the right.

With respect to Edna, the new purchasers are bound by her interest in the property as per Land Registration Act 2002, Schedule 3, para 2, which protects the person with proprietary right and actual possession. As an occupier, Edna’s right will be protected. In Williams & Glyn’s Bank v Boland, the court held that a proprietary interest whose priority could be protected by an entry on the register is an overriding interest if the owner of that interest is in actual possession.

With regard to Andrew, the new purchasers will be bound by the right as Schedule 3 protects short term leases as overriding interests and all legal leases made for a duration of 7 years are overriding leases and are overriding irrespective of occupation or non disclosure of interest to the new purchaser.

With regard to Betty, the new purchasers cannot be bound by the licence to allow her to use the shed. The licence to use the shed is not an overriding interest. In National Provincial Bank v Ainsworth, Lord Wilberforce held that purely personal rights cannot bind the purchaser of the property.

With respect to Tony, the new owners will be bound by the profits a pendre because it is registered in the Charges Register.

Steps to prevent Edna from having any enforceable rights against new owners

The new purchasers should do a thorough background check of the property to assess if there is any people in possession because failure to inspect also leads to constructive notice. As there is more than one trustee, the principle of overreaching can be applied if the purchaser pays the purchase price to both trustees.

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How Raj and Janet might best organise their intended co-ownership of the property on a 70:30 split between them respectively, if the purchase goes ahead.

Raj and Janet can use tenancy in common route to organising their co-ownership because the owners can then have individual shares in the property and the rule of survivorship is not applicable to them. As they want to organise a 70:30 split between themselves, this is the appropriate way to do so. In the case of unequal contribution to the purchase of the

• Land Registration Act 2002, Schedule 3, Para 3.
• Ibid.
• Williams v Sandy Lane (Chester) Ltd [2006] EWCA Civ 1738.
• Williams & Glyn’s Bank v Boland [1981] AC 487.
• National Provincial Bank v Ainsworth [1965] AC 1175; also, Scott v Southern Pacific Mortgages [2014] 3 WLR 1163.
• Lloyds Bank v Carrick [1996] 4 All ER 630.
• Birmingham Midshires Mortgage Services Limited v Sabherwal [2000] 80 P&CR 256.

property, there is a presumption of tenancy in common. Tenancy in common is preferable in this situation because then the two parties can havebeneficial interest aligned with the share in the purchase contribution and severance of the interest is also not complicated.

Cases

• Ashburn Anstalt v WJ Arnold & Co [1988] EWCA Civ 14.
• Birmingham Midshires Mortgage Services Limited v Sabherwal [2000] 80 P&CR 256.
• Jones v Kernott [2011] 3 WLR 1121.
• Laskar v Laskar 1 WLR 2695 [2008].
• Lloyds Bank v Carrick [1996] 4 All ER 630.
• Lloyds Bank v Rosset [1991] 1 AC 107.
• Malayan Credit Ltd v Jack Chia-MPH Ltd [1986] AC 549.
• National Provincial Bank v Ainsworth [1965] AC 1175.
• Scott v Southern Pacific Mortgages [2014] 3 WLR 1163.
• Thatcher v Douglas [1996] 146 NLJ 282.
• Williams & Glyn’s Bank v Boland [1981] AC 487.
• Williams v Sandy Lane (Chester) Ltd [2006] EWCA Civ 1738.

Books

• MacKenzie JA and Aruna Nair, Textbook on Land Law (Oxford University Press 2017).

• Malayan Credit Ltd v Jack Chia-MPH Ltd [1986] AC 549
• Laskar v Laskar 1 WLR 2695 [2008].