Chapter 2 Map and thinking points: Registered land

Registered Land

Adam McIntosh is the sole registered proprietor of the above property, Bramley House, in which he resides with his partner, Zara Braeburn, their two children, Evelina and Gala. Zara’s mother, Granny Smith, lives in a specially-built flat above the garage. The house also includes a home office from which Zara works and an attic flat which has been leased out to a student, Jazz, for 1 year who is currently studying at the local university. Whilst Zara and her mother contributed to the purchase price, only Adam’s name was recorded on the legal title. This gave Zara and her mother equitable interests in the property under a trust of land. No restriction has been entered on the Proprietorship Register to protect either Zara or her mother’s interest. Zara has conducted considerable renovation works to the property including getting in builders to rebuild garden walls and remedy other structural problems. Without discussing his plans with Zara, Adam put the property up for sale. Adam waited until Zara was out of the country visiting her sister, Fuji, who lives abroad before inviting the prospective purchaser, Opal, to conduct an inspection. Granny Smith, the children and the builders were, however, present on the land during the inspection. The purchase was completed and Opal duly registered as the new owner before Zara returned.

Question: Zara, Granny Smith and Jazz seek your advice. They want to know if they is able to argue that they were in ‘actual occupation’ under Schedule 3 paragraph 2 of the Land Registration Act 2002 at the date of completion of the sale to Opal and therefore, whether their equitable contribution-based interests are binding on Opal? Looking at the above image, what factors or considerations will be important to a court when considering whether Zara and Granny Smith will be taken as having been in actual occupation of the property despite her absence at the date of completion of the sale?

There are a number of aspects discernible from the image that will be highly relevant to a court when determining if Zara, her mother and Jazz will be taken as being in actual occupation at the date of completion of the sale. By way of preliminary observation, under Schdule 3 paragraph 2, they will need to be demonstrate: (1) that they has proprietary interests in Bramley House (Provincial Bank v Ainsworth (1965); and (2) that they were in actual occupation at the date of completion (Abbey National v Cann (1991)). Zara and her mother both enjoys equitable, contribution-based interest and thus the first element is satisfied (Boland (1981)). So too does Jazz, as a tenant, enjoy a proprietary interest. Whether they were in ‘actual occupation’ involves a consideration of the degree of permanence of their occupation, the reasons for Zara’s absence, her intention to return as well as, crucially, the discoverability of Zara, Granny Smith and Jazz’s occupation. It is this latter aspect that is most relevant for this question. From the image, a number of factors/issues arise:

  • Granny Smith was on the land at the time of Opal’s inspection. Her occupation in the granny flat should therefore have been entirely discoverable. This will surely mean that Granny Smith’s interest will be overriding and binding on Opal under Schedule 3 paragraph 2.

  • Equally, Jazz was on the land in the attic flat at time of Opal’s inspection. Her occupation in the attic flat should therefore have been entirely discoverable. This will surely mean that Jazz’s interest will be overriding and binding on Opal under Schedule 3 paragraph 2.

  • Zara, however, was out of the country. Absences from the land are not a complete barrier to actual occupation (Chhokar (1994); Link Lending (2010)) but the court will look closely at the period and reason for the absence (Stockholm Finance (1995)). It seems Zara has every intention to return (it was a short visit to see her sister) thus her absence should not alone prevent her proving she was in actual occupation.

  • As to Schedule 3 paragraph 2 (c), Zara will lose overriding status if (1) her occupation would not have been obvious on a reasonably careful inspection and (2) Opal did not know of Zara’s interest. It seems Opal did not know of Zara’s interest meaning that the central issue is whether Zara’s occupation ‘would have been obvious on a reasonably careful inspection’. Looking at the image, a number of factors going to the issue of discoverability may be pertinent:

    • Can the children playing in the treehouse be regarded as being in actual occupation in their own right or on behalf of Zara? Seems not: Hypo-Mortgage Services Ltd v Robinson (1997)

    • Can Zara be regarded as in actual occupation through the builders as her agent? It is possible: Lloyds Bank v Rosset (1991)

    • The two cars stored in the garage – if the house is seemingly being sold by a single vendor (Adam), does the presence of a second car indicate a second occupier and thus render Zara’s occupation discoverable?

    • As regards an inspection of the other rooms of the house, what would Opal have seen and be expected to have seen ‘on a reasonably careful inspection’ that could indicate more than a single occupant? From the image:

    •      > In the Kitchen, the number of wellington boots;

           > In the Dining Room, the two storage boxes emblazoned with initials that do not correspond to the vendor: ‘Z.B’ (Zara Braeburn) and the family      photo on the wall (which includes an image of Zara);

           > In the Bedroom, women’s shoes that might prompt Opal to inquire as to whether a woman is residing in the property – did Opal make inquiries?      If so, is Schedule 3 para 2(b) in play?;

           > In the Bathroom, multiple toothbrushes;

           > In the Business Office (Zara’s office) - would it have been discoverable that the office was the place of work of someone other than Adam?

  • All these factors will be highly relevant to a court when deciding if Zara is in actual occupation and, in particular, whether any of the exceptions in Schedule 3 para 2 are made out.