Legal Analysis of Property Issues at Festive Street

Introduction

This essay discusses and analyses the law related to easement rights and applies this to the situation with respect to the rights of the two properties, i.e., numbers 8 and 10 at Festive Street. There are four issues that are explored here. The first issue relates to Dennis’ right of way and parking at number 10. The second issue relates to a possible easement right to light for numbers 8 and whether the actions of Mr Benn in erecting the high wooden fence between numbers 8 and 10 breaches this right. The third issue is whether Mr Benn has the right of way from Dennis’s land and the right to park on Dennis’ land. The fourth issue relates to the right of the banks that provided loan to Mr Benn for the purchase of his property in the event of non payment of loan payments and Mrs Benn’s rights as occupant of the family home.

Issue 1:

The first issue in this situation is whether Dennis has a right of way at number 10 Festive Street. The rule related to right of way as an easement right is contained in Land Registration Act 2002 (LRA 2002). Easement rights are provided as overriding interests in Schedule 3 of LRA 2002. The following part will first discuss and analyse the law related to easement of right of way and then applying the law to the current situation, it will conclude whether Dennis has this right of way in 10 Festive Street.

Easements are overriding interests under the Schedule 3, LRA 2002. At the outset, it may be noted that overriding interests are applicable only where title to the land is registered. Easements fall into two categories of easements created before 13 October 2003 and legal easements created by implied grant or prescription after 12 October 2003. As the date of easement creation is not mentioned here in the case scenario, it may be assumed that it is created after 12 October 2003. Legal implied easements prior to 2002 have an overriding interest under Section 70(1)(a) as do equitable implied easements created before 2002 Act.

It is also noteworthy that since there is no formal document that shows easement, there is no express grant of easement, however implied easement can be considered. In this context, Section 62 of the Law of Property Act 1925 (LPA 1925) and the rule in Wheeldon v Burrows is applicable. The continuous and apparent easements that are exercised by the other party (in this case Dennis) prior to the sale of a property can come within the implied easement.

With regard to unregistered land, easements bind the new purchaser only if the purchaser was aware of the existence of such easements and the existence was objectively obvious (Schedule 3, Para 3). Thus, different rules apply to registered and unregistered land, with the former allowing easements to have overriding interest and the latter allowing effect of easement if it is obvious on inspection or the purchaser was aware of the same. Easements that are not registered come within the scope of implied legal easements or the rule in Wheeldon v Burrows.

What the above brief discussion shows that for easements created after 2002, overriding interest of easements can be established provided the relevant conditions are met. In this situation, the easement is not registered although Dennis has been parking his car beside Duncan’s house within Duncan’s boundaries for almost 35 years. Therefore, the practice is prior to 2002. Two points are clearly made out which are relevant here, which is, that Dennis has always parked his car and Duncan has never opposed it. Does the absence of an express mention of this easement in the conveyancing documents affect the right of Dennis?

In case of implied easement, the easement holder has to satisfy any one of the following: knowledge of purchaser about the existence of the easement on the date of the transfer; possibility of knowledge of easement with inspection of the property, or exercise of easement right at least once in the year preceding the purchase by the new owner. In case any of these conditions can be established, then the easement holder can claim an overriding interest against the purchaser of the property. In the case of easement by prescription can be created when a freehold landowner uses the right as against another freehold landowner without force, secrecy and without permission and continuously, with the right being one that can be granted by deed.

In this case, if implied easement is claimed then Dennis can claim that Mr Benn could have reasonable investigation, come to know that there was a right of way to his property that led from the property that the latter was purchasing. If easement by prescription is claimed, then Dennis does not need to have it registered in order to be binding as against Mr Benn. As per the provisions of sections 11(3) and 12(3) of the LRA 2002, the benefit of all interests vests in the registered proprietor on first registration then passes on a transfer of the registered estate. In case of easements by prescription, the purchaser of unregistered burdened land is also bound by legal interests and legal easements are overriding interests under section 29 and Schedule 3 LRA 2002.

Issue 2:

The second issue in this situation is whether Dennis has easement right to light and whether the actions of Mr Benn in erecting the high wooden fence between numbers 8 and 10 breaches this right. In this situation, Mr Benn has built a high wooden fence between numbers 8 and 10, on the Benn`s side of the boundary, which is blocking the light to Dennis’ kitchen. The Prescription Act 1832 is applicable here because although the right to light is not expressly granted to Dennis’ land, the right may have arisen under prescription as per the provisions of the Prescription Act 1832, Section 3 of which allows right of light if for more than 20 years usage even without that right being given in a legal document. Therefore, if Dennis establishes that he has enjoyed the right to light without interruption for a period of at least 20 years, even in the absence of any written document or deed, and without force, secrecy and permission, then he may be able to claim that right now. Section 3 reads that where the access to light and its use is established for the full period of twenty years without interruption then it has the same effect as a right that is enjoyed by some consent or agreement expressly made or given for that purpose by deed or writing. When such a right is established, then it is a right in rem and is available against the whole world and entitles the landowner to an injunction in case of obstruction of this right.

It is also to be noted that interference with right to light is established when the interference is of such nature that it leaves insufficient light for normal purposes. Whether the interference is actually of that nature will depend on what is considered to be normal according to the ordinary notions of mankind and by considering the purposes for which the building was designed. This principle has been applied in a number of authorities and therefore, it can be reasonably supposed that in considering whether Dennis is entitled to injunction regard has to be given to the extent of interference and whether the kitchen which is affected continues to receive adequate quantity of light after the obstruction or not. If the matter goes to litigation, the court is likely to consider this question and if it is established that the quantity of light is not adequate then the court may give an order of injunction stopping Mr Benn from continuing this interruption of light.

Issue 3:

The third issue is whether Mr Benn has the right of way from Dennis’s land and the right to park on Dennis’ land. In this situation, Mr Benn started to park his car on the two metre wide strip across the end of Dennis’ garden in retaliation for the latter parking on his land. In this case, the express grant given by Dennis and executed by a deed related to ‘right of way on foot only’ to Duncan along a two metre wide strip of the end of Dennis’ garden.

Therefore, Dennis does have right of way that is expressly given to him. This right of way was given to enable Duncan to gain access to his paddock which is at the other side of and behind Dennis’ land. Where the easement has been expressly granted, there is a legal requirement to have it registered under the provisions of section 27 of the LRA 2002 says that the express grant of an easement needs to be registered to get legal status. In this case, a deed is made by Dennis, therefore, it can be assumed that the formalities of Section 27 are followed. Therefore, while Mr Benn can claim right of way, he cannot claim right to park his car because that is not part of the terms of the express grant of easement by executed deed.

Issue 4:

The fourth issue in this scenario is related to the mortgage on the property and the rights and liabilities arising for the mortgagee and Mrs Benn in this situation. There are two mortgagees in this case, Anytown Bank plc which is the first mortgagee and the loan was secured by a charge in their favour and registered in accordance with the provisions of the LRA 2002 (Section 27). The rights of the mortgagee to repossession of the property in case of default of repayment are conflicted with the right of Mrs Benn to remain in the residence as it is a family home.

In Royal Bank of Scotland Plc v Etridge (No.2), the court laid down some conditions to be followed by the mortgagee bank when dealing with a mortgages family home so that the rights of co-borrowers on the security of family home and the lender banks can be balanced. These conditions are part of what is called as the Etridge procedure. This is relevant to the discussion as the Benn home is a family home which was mortgaged and now there is a conflict between the interest of the banks that lent the money by mortgaging the property and Mrs Benn who resides in the home. However, as the loan by Mr Benn from Anytown Bank Plc was taken prior to the wedding, the Etridge procedure may not apply as it is applicable where the property is co-owned and is a family home at the time of mortgage agreement, so that undue influence in mortgage can be avoided. Although the loan from Yourtown Bank plc was taken after the marriage, and the Etridge procedure will be applicable to this if Mrs Benn has beneficial interest in the property. Even if Mrs Benn is not registered as the owner of the property, she has occupancy rights in the home by virtue of her marriage to Mr Benn, and this means that Etridge procedure is applicable to the second mortgage. In this case, Mr Benn borrowed £50,000 from Yourtown Bank plc ansd a duly registered second charge over the property was made.

The question would be whether Yourtown Bank plc advised Mrs Benn as per the Etridge procedure. If not, then the bank may not be able to establish the validity of the mortgage deed and it may be open to questions of undue influence or misrepresentation. In Abbey National v Stringer, the mortgage was held unenforceable on the basis of undue influence. In Wright v Cherrytree Finance Ltd, the court has explained that unless the lender ensures that all the financial arrangements are explained to the co-mortgager, and informed consent is received the mortgage is invalid.

Coming to the question of rights and liabilities arising due to the failure of Mr Benn to make the payments on the mortgage. In case of failure to repay the loan, the mortgagee has the right to possess the mortgaged property, but the Mrs Benn also has an interest as the resident of this property due to which she may claim adjournments of repossession of family home in order to give her time to protect their interest. Therefore, this part of the essay will consider how these rights and liabilities are likely to arise as per the principles laid down in existing caselaw. In this case, Mr Benn’s financial circumstances deteriorated and he has disappeared leaving Mrs Benn in occupation of the property with the repayments on both mortgages not being met. Therefore, the question arises whether the banks have the right to repossession or even sale of the property and if so which of them will take priority. Moreover, are there any legal options available to Mrs Benn in this situation.

In the event that it is considered that both mortgages are valid and give the right to the mortgagees to enforce possession and sale, then the as per Section 105 of LPA 1925, the sale proceeds are to be applied in the following way: first, payment of expenses of sale; second, payment of first mortgage; third, payment of balance to the second mortgagee for the payment of the due amount; finally, any leftover amount is to be paid to Mrs Benn. The legal options that are available to Mrs Benn are to request adjournment of repossession and sale on the basis of occupancy rights in a marital home. Discover additional insights on Property Law Assignments Sample by navigating to our other resources hub.

Conclusion

To conclude the first issue, it can be said that Dennis does have an easement right of way and parking by prescription. To conclude the second issue, it can be said that Dennis does have right to light under the Prescription Act and if the obstruction is of the nature that blocks adequate amount of light in his kitchen, he may have a remedy in injunction. To conclude the third issue, Mr Benn can claim right of way as per the executed deed, but he cannot claim right to park his car because that is not part of the terms of the express grant of easement by executed deed. To conclude the fourth issue, while the mortgage deed does create rights for repossession and sale for the mortgagee in the event of failure to pay the loan amount by the mortgagor, there are certain rights associated with family home occupation which may be claimed by Mrs Benn for adjourning the possession and sale of property in order to give her some time to make the payment. In the event of repossession and sale, the first mortgagor gets priority.

Table of cases

Abbey National v Stringer [2006] EWCA Civ 338.

Birmingham Citizen’s Permanent Building Society v Caunt [1962] Ch 883.

Colls v Home and Colonial Stores [1904] UKHL 1.

Midtown Ltd v City of London Real Property Co Ltd [2005] 1EGLR 65.

Regan v Paul Properties Ltd [2006] EWCA Civ 1319;;

Royal Bank of Scotland Plc v Etridge (No.2) [2002] 2 AC 773 (HL).

Thatcher v Douglas [1996] 146 NLJ 282.

Wheeldon v Burrows (1879) LR 12 Ch D 31.

White v City of London Brewery [1889] 42 Ch D 237.

Williams v Sandy Lane (Chester) Ltd [2006] EWCA Civ 1738.

Wright v Cherrytree Finance Ltd [2001] EWCA CW 449.

Books

Davys M, Land Law (London: Palgrave Macmillon 2015).