REGISTRATION AND PRIORITY
• In the majority of contracts, what is being sold is
- The fee simple
- Something equivalent to the fee simple
• Interests that amount to a fee simple e.g. property that’ll be conferred for many many years
• Important for the receivers to understand what the interest is, as most come with
restrictions.
• Fee simple is the closest to no restrictions at all.
Land Registration system function
➢ To aid understanding of the types of interests that affect certain packages of land
PRIORITY CONFLICTS
• Nightmare scenario in all conveyancing, where:
- More than one person has a claim to be entitled to the same interest in land for the
same period of time.
• Usually result of fraud
• Rare
• we tolerate multiplicity of interests, fragmentation of owners, trusts, co-owners/ joint
tenants etc. this is different.
• Why is it different? They KNOW they are in a multiplicity of ownership.
- There is no fraud.
- There MUST BE CONFLICT.
• Classic ex:
➢ An interest is acquired, the land is mortgaged in favour of a financial institution, meaning the
land is given as security for the taking out of a loan, the land is sold to a new owner without
giving them the knowledge that it is on mortgage.
➢ The previous owner then stops paying, and the institution seeks assets or payments to
enforce the security
➢ Cannot get it from the previous owner, because it is not their property anymore
➢ The new owner is not liable for this security as they did not know
➢ The institution Is shafted.
➢ By the time the fraud is discovered, A will have usually
(i) Spent the money acquired
(ii) Fled
, ➢ So an order for damages under contract law is not sufficient
➢ Instead, institution and the new owner are In conflict and one shall win.
➢ Someone, gets shafted > there is no real reason why either have better title, but
- the law must make a choice
➢ This is rare, though.
More frequently:
• They can arise accidentally
• Where there is a clash
• The complexity of land law means that these accidental conflicts DO arise, usually due to
shoddy conveyancing.
• Lack of knowledge of easements etc.
• Carelessness rather than fraud – more negligence
How do we resolve a conflict where there are two people fighting over the same property?
TYPES OF INTEREST
• Priority conflicts are solved differently based on the interest >
1. Common law legal rights
2. Equitable interests – trusts
3. ‘mere equities’ – arise where someone has entered into a contract, but there is a
problem with the contract so that it can be set aside in equity (duress etc.). the contract
effects and purchaser gets title, but the title has a flaw – if they did not know of the prior
agreement – they are equity’s darling?
COMMON LAW and EQUITABLE INTEREST CONFLICTS
The general principles that both common law AND equity use –
COMMON LAW
• A owns a legal fee simple, sells it to B, A subsequently sells it to C
• Everyone is fighting over the same thing – the interest in Blackacre
Nobody can give that which he does not have
- The second conveyance from B to C is invalid.
- A has transferred the land to B – the land is gone from his hands.
- The new owner is B and B is now in control of the land, and has not conveyed it to C so C
does not have interest.
- The order is the date of the creation of the transaction – and the oldest one is the best
EQUITY
• A owns the fee simple, and says he will hold it on trust for B (beneficiary)
• The following day he says he will hold the same thing on trust for C
• Primary dispute between B and C – who has beneficial interest?
First in time prevails.
• It is possible in EQUITY
• In the majority of contracts, what is being sold is
- The fee simple
- Something equivalent to the fee simple
• Interests that amount to a fee simple e.g. property that’ll be conferred for many many years
• Important for the receivers to understand what the interest is, as most come with
restrictions.
• Fee simple is the closest to no restrictions at all.
Land Registration system function
➢ To aid understanding of the types of interests that affect certain packages of land
PRIORITY CONFLICTS
• Nightmare scenario in all conveyancing, where:
- More than one person has a claim to be entitled to the same interest in land for the
same period of time.
• Usually result of fraud
• Rare
• we tolerate multiplicity of interests, fragmentation of owners, trusts, co-owners/ joint
tenants etc. this is different.
• Why is it different? They KNOW they are in a multiplicity of ownership.
- There is no fraud.
- There MUST BE CONFLICT.
• Classic ex:
➢ An interest is acquired, the land is mortgaged in favour of a financial institution, meaning the
land is given as security for the taking out of a loan, the land is sold to a new owner without
giving them the knowledge that it is on mortgage.
➢ The previous owner then stops paying, and the institution seeks assets or payments to
enforce the security
➢ Cannot get it from the previous owner, because it is not their property anymore
➢ The new owner is not liable for this security as they did not know
➢ The institution Is shafted.
➢ By the time the fraud is discovered, A will have usually
(i) Spent the money acquired
(ii) Fled
, ➢ So an order for damages under contract law is not sufficient
➢ Instead, institution and the new owner are In conflict and one shall win.
➢ Someone, gets shafted > there is no real reason why either have better title, but
- the law must make a choice
➢ This is rare, though.
More frequently:
• They can arise accidentally
• Where there is a clash
• The complexity of land law means that these accidental conflicts DO arise, usually due to
shoddy conveyancing.
• Lack of knowledge of easements etc.
• Carelessness rather than fraud – more negligence
How do we resolve a conflict where there are two people fighting over the same property?
TYPES OF INTEREST
• Priority conflicts are solved differently based on the interest >
1. Common law legal rights
2. Equitable interests – trusts
3. ‘mere equities’ – arise where someone has entered into a contract, but there is a
problem with the contract so that it can be set aside in equity (duress etc.). the contract
effects and purchaser gets title, but the title has a flaw – if they did not know of the prior
agreement – they are equity’s darling?
COMMON LAW and EQUITABLE INTEREST CONFLICTS
The general principles that both common law AND equity use –
COMMON LAW
• A owns a legal fee simple, sells it to B, A subsequently sells it to C
• Everyone is fighting over the same thing – the interest in Blackacre
Nobody can give that which he does not have
- The second conveyance from B to C is invalid.
- A has transferred the land to B – the land is gone from his hands.
- The new owner is B and B is now in control of the land, and has not conveyed it to C so C
does not have interest.
- The order is the date of the creation of the transaction – and the oldest one is the best
EQUITY
• A owns the fee simple, and says he will hold it on trust for B (beneficiary)
• The following day he says he will hold the same thing on trust for C
• Primary dispute between B and C – who has beneficial interest?
First in time prevails.
• It is possible in EQUITY
