Note: Substitute ‘Tenant’, ‘Buyer’, ‘Neighbour’ etc. for the names given in the fact pattern.
REGISTERED LAND & THIRD-PARTY RIGHTS
Note: In a typical third-party rights question, a buyer will purchase a registered title – you will be asked
which third-party rights (e.g. leases, easements, mortgages etc.) are binding on them. Address these in
chronological order, making sure to follow the structure strictly (i.e. capable of being legal, formalities,
registration etc.). You may also be asked how this would differ if the title was unregistered.
LEASES
1) Is it a lease? (characteristics). Y – see below. N – see periodic tenancy section.
2) Is it capable of being legal? Yes (s.1.1(b))
3) Have formalities been met to make it legal? Y – is it registered/overriding? N – is it
capable of being equitable or a parol lease?
• If a parol lease, it will override. If not – licence only.
• If capable of being equitable, has it been registered/actual occupation? Y –
equitable. N – licence.
In Street v Mountford, Lord Templeman outlined the three essential characteristics of a lease:
exclusive possession, certainty of duration, and payment of rent. While it has since been accepted a
tenancy may arise even where no rent is payable (Ashburn Anstalt v Arnold), such payment may
support the view that both parties intended a formal relationship of landlord and tenant to arise. As
[state rent situation], it is therefore necessary to determine whether Tenant has exclusive possession of
the property which is for a certain duration. There is nothing on the facts to suggest that Tenant does
not have exclusive possession and this has been granted for a fixed term of [state]; the right is
therefore capable of being a legal lease under s.1(1)(b) LPA 1925.
In order for this to be a valid legal lease, it must be created by a deed (s.52(1) LPA 1925) which
satisfies the requirements under s.1 LP(MP)A 1989 – namely, the document makes it clear on its face
that it is intended to be a deed and is signed, witnessed and delivered. Here… apply one of the below:
Scenario Structure
There is a valid deed. …there is a valid deed. Legal estates/interests must also be registered to
be legal if they appear in the list of registrable dispositions in s.27 LRA
2002. That list includes leases but only those with terms exceeding
seven years.
If lease is for 7 years or less:
As Tenant’s lease is a lease for [number] years (and therefore less than
Sch 3 para 1 (overrides) seven), it does not have to be registered. Instead, it will be classified as
an overriding interest (Sch 3 para 1 LRA 2002) if it was in existence at
OR the date of the completion of the sale to Buyer. Thus… [conclude].
Registrable Disposition If lease if for over 7 years:
, As Name’s lease is a lease for [number] years (and therefore more than
seven), it needed to be entered on the charges register before Buyer was
registered as the new owner for Buyer to be bound (s.29 LRA 2002).
Here… [apply + conclude].
There is no valid deed, … there is no valid deed. However, as Tenant’s lease is for [duration], it
but lease is for 3 may fall under the parol lease exception. According to s.52(2)(d) LPA
years. 1925, a lease with a term of three years or less can be granted without a
deed (including orally) provided it satisfies the requirements under
s.54(2) LPA 1925:
a. The lease must take effect immediately in possession;
b. The lease must be granted at the best rate which can reasonably
be obtained without taking a fine (i.e. at market rent without
upfront payment).
If above are satisfied:
Here, there is nothing to suggest that the lease did not take effect
immediately and there is no mention of Name making an upfront
payment. If the rent Name is paying represents a “market rent” for
property, these conditions appear to be satisfied. The lease therefore has
Parol lease (overrides)
the potential to be a legal lease. As Tenant’s lease is a lease for
[number] years (and therefore less than seven), it does not have to be
registered. Instead, it will be classified as an overriding interest (Sch 3
para 1 LRA 2002) if it was in existence at the date of the completion of
the sale to Buyer. The lease would be binding upon Buyer, but only
until they terminate it with the correct notice:
weekly tenancy = minimum 4 weeks’ (Protection from Eviction
Act 1977); annual tenancy = 6 months’ notice
If a dwelling (not commercial) -> must be given in writing,
OR
containing prescribed information and at least 4 weeks in
advance (s.5 PEA 1977).
If above are NOT satisfied:
Given [fact], it is unlikely all of these conditions have been satisfied.
Licence only.
Since the requirements for a legal or equitable lease have failed, Tenant
holds only a contractual licence. Buyer is not a party to the contract and
since the licence is not a proprietary interest, it does not bind them.
There is no valid deed, …there is no deed. However, Tenant may still have an equitable lease
but there is signed under the doctrine in Walsh v Lonsdale – a type of estate contract
writing. which, to be valid in equity, would need to be created in accordance
with s.2 of the LP(MP)A 1989 (i.e. an agreement in writing, containing
all the agreed terms and signed by both parties). Here… [apply – right is
capable of being equitable (s.1(3) LPA 1925)]. The estate contract
Equitable lease should have been protected as an interest affecting a registered estate by
a notice on the charges register (s.32 LRA 2002) before Buyer was
, registered as the new owner (s.29 LRA 2002). Here… [apply +
OR conclude].
If equitable lease was NOT registered:
Lease of [property] was not registered on the title. However, Tenant
Sch 3 para 2 (overrides) may also have an overriding interest under Sch 3 para 2. In order for
this to be an overriding interest, Tenant must have been in ‘actual
occupation’ of the property and this must have been obvious on a
reasonably careful inspection of the land, or Buyer must have had actual
knowledge of their interest at the time of sale. According to Thomas v
Clydesdale Bank Plc, only 'visible signs of occupation which have to be
obvious on inspection' are required to satisfy the first condition; there is
no requirement for the person inspecting to make any reasonable
enquiries. However, this overriding interest will only bind Buyer if it
was in existence at the date of the completion of the sale to Buyer.
*Consider if any of the below are relevant and apply to the facts*
• CAR - According to Kling v Keston Properties Ltd, a claimant
need not necessarily be living or sleeping in the property where
a residential property is involved; in this case, parking a car in
the garage was sufficient to amount to actual occupation.
Thus…
• HOSPITAL - According to Link Lending Ltd v Bustard, a
claimant may still be deemed ‘in actual occupation’ even if
they are absent from the property due to medical care; this will
be overridden only if the patient has decided they will not
return to the property (Thompson v Foy). Here…
• FURNITURE - According to Chhokar v Chhokar, the
presence of furniture in the property and a continuing intention
to return may be sufficient to establish actual occupation (wife
was in hospital).
• DERELICT – According to Lloyds Bank plc v Rosset, regular
visits to a semi-derelict property whilst it is being renovated
may be sufficient to establish actual occupation (i.e. workmen
are occupying on their behalf).
• FIELD - In Malory Enterprises v Chesire Homes, it was held
acts such as fencing off the land were sufficient to establish
actual occupation.
Conclude – does the Tenant have an overriding interest under Sch 3
para 2?
There is no valid deed, … there is no deed. However, Tenant may still have an equitable lease
nor signed writing. under the doctrine in Walsh v Lonsdale – a type of estate contract
which, to be valid in equity, would need to be created in accordance
with s.2 of the LP(MP)A 1989 (i.e. an agreement in writing, containing
, all the agreed terms and signed by both parties). Here there is also no
signed writing.
Nevertheless, as they are paying a [weekly/monthly/quarterly etc.] sum
to Landlord, their occupation may amount to a periodic tenancy and fall
under the parol lease exception. According to s.52(2)(d) LPA 1925, a
lease with a term of three years or less can be granted without a deed
(including orally) provided it satisfies the requirements under s.54(2)
LPA 1925:
a. The lease must take effect immediately in possession;
b. The lease must be granted at the best rate which can reasonably
be obtained without taking a fine (i.e. at market rent without
upfront payment).
If above are satisfied:
Here, there is nothing to suggest that the lease did not take effect
immediately and there is no mention of Name making an upfront
payment. If the rent Name is paying represents a “market rent” for
Parol Lease
property, these conditions appear to be satisfied. The lease therefore has
the potential to be a legal lease. As Tenant’s lease is a lease for
[number] years (and therefore less than seven), it does not have to be
registered. Instead, it will be classified as an overriding interest (Sch 3
para 1 LRA 2002) if it was in existence at the date of the completion of
the sale to Buyer. The lease would be binding upon Buyer, but only
until they terminate it with the correct notice:
weekly tenancy = minimum 4 weeks’ (Protection from Eviction
Act 1977); annual tenancy = 6 months’ notice
OR
If a dwelling (not commercial) -> must be given in writing,
containing prescribed information and at least 4 weeks in
advance (s.5 PEA 1977).
If above are NOT satisfied:
Licence only Given [fact], it is unlikely all of these conditions have been satisfied.
Since the requirements for legal and equitable leases have failed, Tenant
holds only a contractual licence. Buyer is not a party to the contract and
since the licence is not a proprietary interest, it does not bind them.
Uncertain Duration – Periodic Tenancy
In Street v Mountford, Lord Templeman outlined the three essential characteristics of a lease:
exclusive possession, certainty of duration, and payment of rent. While it has since been accepted a
tenancy may arise even where no rent is payable (Ashburn Anstalt v Arnold), such payment may
support the view that both parties intended a formal relationship of landlord and tenant to arise. As
[state rent situation], it is therefore necessary to determine whether Tenant has exclusive possession of
the property which is for a certain duration. There is nothing on the facts to suggest that Tenant does
not have exclusive possession. However, this cannot be a fixed-term lease as it is for a period that is
uncertain. Nevertheless, as they are paying a [period] sum to Landlord, their occupation may amount
REGISTERED LAND & THIRD-PARTY RIGHTS
Note: In a typical third-party rights question, a buyer will purchase a registered title – you will be asked
which third-party rights (e.g. leases, easements, mortgages etc.) are binding on them. Address these in
chronological order, making sure to follow the structure strictly (i.e. capable of being legal, formalities,
registration etc.). You may also be asked how this would differ if the title was unregistered.
LEASES
1) Is it a lease? (characteristics). Y – see below. N – see periodic tenancy section.
2) Is it capable of being legal? Yes (s.1.1(b))
3) Have formalities been met to make it legal? Y – is it registered/overriding? N – is it
capable of being equitable or a parol lease?
• If a parol lease, it will override. If not – licence only.
• If capable of being equitable, has it been registered/actual occupation? Y –
equitable. N – licence.
In Street v Mountford, Lord Templeman outlined the three essential characteristics of a lease:
exclusive possession, certainty of duration, and payment of rent. While it has since been accepted a
tenancy may arise even where no rent is payable (Ashburn Anstalt v Arnold), such payment may
support the view that both parties intended a formal relationship of landlord and tenant to arise. As
[state rent situation], it is therefore necessary to determine whether Tenant has exclusive possession of
the property which is for a certain duration. There is nothing on the facts to suggest that Tenant does
not have exclusive possession and this has been granted for a fixed term of [state]; the right is
therefore capable of being a legal lease under s.1(1)(b) LPA 1925.
In order for this to be a valid legal lease, it must be created by a deed (s.52(1) LPA 1925) which
satisfies the requirements under s.1 LP(MP)A 1989 – namely, the document makes it clear on its face
that it is intended to be a deed and is signed, witnessed and delivered. Here… apply one of the below:
Scenario Structure
There is a valid deed. …there is a valid deed. Legal estates/interests must also be registered to
be legal if they appear in the list of registrable dispositions in s.27 LRA
2002. That list includes leases but only those with terms exceeding
seven years.
If lease is for 7 years or less:
As Tenant’s lease is a lease for [number] years (and therefore less than
Sch 3 para 1 (overrides) seven), it does not have to be registered. Instead, it will be classified as
an overriding interest (Sch 3 para 1 LRA 2002) if it was in existence at
OR the date of the completion of the sale to Buyer. Thus… [conclude].
Registrable Disposition If lease if for over 7 years:
, As Name’s lease is a lease for [number] years (and therefore more than
seven), it needed to be entered on the charges register before Buyer was
registered as the new owner for Buyer to be bound (s.29 LRA 2002).
Here… [apply + conclude].
There is no valid deed, … there is no valid deed. However, as Tenant’s lease is for [duration], it
but lease is for 3 may fall under the parol lease exception. According to s.52(2)(d) LPA
years. 1925, a lease with a term of three years or less can be granted without a
deed (including orally) provided it satisfies the requirements under
s.54(2) LPA 1925:
a. The lease must take effect immediately in possession;
b. The lease must be granted at the best rate which can reasonably
be obtained without taking a fine (i.e. at market rent without
upfront payment).
If above are satisfied:
Here, there is nothing to suggest that the lease did not take effect
immediately and there is no mention of Name making an upfront
payment. If the rent Name is paying represents a “market rent” for
property, these conditions appear to be satisfied. The lease therefore has
Parol lease (overrides)
the potential to be a legal lease. As Tenant’s lease is a lease for
[number] years (and therefore less than seven), it does not have to be
registered. Instead, it will be classified as an overriding interest (Sch 3
para 1 LRA 2002) if it was in existence at the date of the completion of
the sale to Buyer. The lease would be binding upon Buyer, but only
until they terminate it with the correct notice:
weekly tenancy = minimum 4 weeks’ (Protection from Eviction
Act 1977); annual tenancy = 6 months’ notice
If a dwelling (not commercial) -> must be given in writing,
OR
containing prescribed information and at least 4 weeks in
advance (s.5 PEA 1977).
If above are NOT satisfied:
Given [fact], it is unlikely all of these conditions have been satisfied.
Licence only.
Since the requirements for a legal or equitable lease have failed, Tenant
holds only a contractual licence. Buyer is not a party to the contract and
since the licence is not a proprietary interest, it does not bind them.
There is no valid deed, …there is no deed. However, Tenant may still have an equitable lease
but there is signed under the doctrine in Walsh v Lonsdale – a type of estate contract
writing. which, to be valid in equity, would need to be created in accordance
with s.2 of the LP(MP)A 1989 (i.e. an agreement in writing, containing
all the agreed terms and signed by both parties). Here… [apply – right is
capable of being equitable (s.1(3) LPA 1925)]. The estate contract
Equitable lease should have been protected as an interest affecting a registered estate by
a notice on the charges register (s.32 LRA 2002) before Buyer was
, registered as the new owner (s.29 LRA 2002). Here… [apply +
OR conclude].
If equitable lease was NOT registered:
Lease of [property] was not registered on the title. However, Tenant
Sch 3 para 2 (overrides) may also have an overriding interest under Sch 3 para 2. In order for
this to be an overriding interest, Tenant must have been in ‘actual
occupation’ of the property and this must have been obvious on a
reasonably careful inspection of the land, or Buyer must have had actual
knowledge of their interest at the time of sale. According to Thomas v
Clydesdale Bank Plc, only 'visible signs of occupation which have to be
obvious on inspection' are required to satisfy the first condition; there is
no requirement for the person inspecting to make any reasonable
enquiries. However, this overriding interest will only bind Buyer if it
was in existence at the date of the completion of the sale to Buyer.
*Consider if any of the below are relevant and apply to the facts*
• CAR - According to Kling v Keston Properties Ltd, a claimant
need not necessarily be living or sleeping in the property where
a residential property is involved; in this case, parking a car in
the garage was sufficient to amount to actual occupation.
Thus…
• HOSPITAL - According to Link Lending Ltd v Bustard, a
claimant may still be deemed ‘in actual occupation’ even if
they are absent from the property due to medical care; this will
be overridden only if the patient has decided they will not
return to the property (Thompson v Foy). Here…
• FURNITURE - According to Chhokar v Chhokar, the
presence of furniture in the property and a continuing intention
to return may be sufficient to establish actual occupation (wife
was in hospital).
• DERELICT – According to Lloyds Bank plc v Rosset, regular
visits to a semi-derelict property whilst it is being renovated
may be sufficient to establish actual occupation (i.e. workmen
are occupying on their behalf).
• FIELD - In Malory Enterprises v Chesire Homes, it was held
acts such as fencing off the land were sufficient to establish
actual occupation.
Conclude – does the Tenant have an overriding interest under Sch 3
para 2?
There is no valid deed, … there is no deed. However, Tenant may still have an equitable lease
nor signed writing. under the doctrine in Walsh v Lonsdale – a type of estate contract
which, to be valid in equity, would need to be created in accordance
with s.2 of the LP(MP)A 1989 (i.e. an agreement in writing, containing
, all the agreed terms and signed by both parties). Here there is also no
signed writing.
Nevertheless, as they are paying a [weekly/monthly/quarterly etc.] sum
to Landlord, their occupation may amount to a periodic tenancy and fall
under the parol lease exception. According to s.52(2)(d) LPA 1925, a
lease with a term of three years or less can be granted without a deed
(including orally) provided it satisfies the requirements under s.54(2)
LPA 1925:
a. The lease must take effect immediately in possession;
b. The lease must be granted at the best rate which can reasonably
be obtained without taking a fine (i.e. at market rent without
upfront payment).
If above are satisfied:
Here, there is nothing to suggest that the lease did not take effect
immediately and there is no mention of Name making an upfront
payment. If the rent Name is paying represents a “market rent” for
Parol Lease
property, these conditions appear to be satisfied. The lease therefore has
the potential to be a legal lease. As Tenant’s lease is a lease for
[number] years (and therefore less than seven), it does not have to be
registered. Instead, it will be classified as an overriding interest (Sch 3
para 1 LRA 2002) if it was in existence at the date of the completion of
the sale to Buyer. The lease would be binding upon Buyer, but only
until they terminate it with the correct notice:
weekly tenancy = minimum 4 weeks’ (Protection from Eviction
Act 1977); annual tenancy = 6 months’ notice
OR
If a dwelling (not commercial) -> must be given in writing,
containing prescribed information and at least 4 weeks in
advance (s.5 PEA 1977).
If above are NOT satisfied:
Licence only Given [fact], it is unlikely all of these conditions have been satisfied.
Since the requirements for legal and equitable leases have failed, Tenant
holds only a contractual licence. Buyer is not a party to the contract and
since the licence is not a proprietary interest, it does not bind them.
Uncertain Duration – Periodic Tenancy
In Street v Mountford, Lord Templeman outlined the three essential characteristics of a lease:
exclusive possession, certainty of duration, and payment of rent. While it has since been accepted a
tenancy may arise even where no rent is payable (Ashburn Anstalt v Arnold), such payment may
support the view that both parties intended a formal relationship of landlord and tenant to arise. As
[state rent situation], it is therefore necessary to determine whether Tenant has exclusive possession of
the property which is for a certain duration. There is nothing on the facts to suggest that Tenant does
not have exclusive possession. However, this cannot be a fixed-term lease as it is for a period that is
uncertain. Nevertheless, as they are paying a [period] sum to Landlord, their occupation may amount
