Chapter 3 Scenario questions

. Hafiz purchased the unregistered freehold of a plot of land from Ingrid. However, since then, a bank has come forward asserting that the land is subject to a legal mortgage taken out by Ingrid. Mortgage instalments have not been paid and the bank argues that Hafiz is bound by the mortgage. Ignoring issues of first registration, which of the following statements most accurately summarizes the legal position in this unregistered land scenario?

In unregistered land, legal interests are binding on the whole world under the principle of universal enforceability. As a result, this legal mortgage will be binding on Hafiz.

In unregistered land, legal mortgages are protected by the doctrine of notice. Hafiz will escape being bound if he can be shown to be Equity's Darling.

In unregistered land, legal interests are binding on the world under the principle of universal enforceability. If this is a first legal mortgage, it will be binding on Hafiz. If however, this is a second or subsequent legal mortgage, the mortgage must have been registered as a class C(i) land charge under the LCA 1972 if it is to be binding on Hafiz.

In unregistered land, legal mortgages are overriding interests and when coupled with actual occupation will be binding on Hafiz.

. Hafiz purchased the unregistered freehold of a plot of land from Ingrid intending to start his new business on the land. However, since then, Jen has come forward asserting that the land is subject to a restrictive covenant (created post-1926) that the land cannot be used for any commercial purpose. Hafiz wishes to run his business on the land but Jen objects. Ignoring issues of first registration, which of the following statements most accurately summarizes the legal position in this unregistered land scenario?

Assuming the restrictive covenant is valid, in unregistered land, as an equitable, commercial interest, a restrictive covenant must be registered as a Class D(ii) land charge under the LCA 1972 otherwise it will be void against Hafiz as a purchaser for money or money's worth.

Assuming the restrictive covenant is valid, in unregistered land, whether a restrictive covenant created post-1926 is binding on a purchaser is determined by the doctrine of notice.

Assuming the restrictive covenant is valid, in registered land, as an equitable interest whether the covenant is binding will be at the absolute discretion of the court. Given the clear terms of the covenant, it will most likely be enforceable against Hafiz.

In unregistered land a restrictive covenant can never be binding on a purchaser.

. Ken owned the unregistered freehold of a plot of land. He granted to his daughter, Lisa, an option to purchase the freehold but then changed his mind and, to avoid her exercising the option, sold the land to his friend, Mick. Lisa, who did not register the option as a Class C(iv) land charge under the LCA 1972, now wants to enforce it against Mick. Can she?

Yes, provided she can persuade the court that she has acted, at all times, in good faith, she can enforce the option under the court's broad equitable discretion.

Yes, provided she can demonstrate that her father, Ken, acted in bad faith in selling the land to Mick, the court will allow her to enforce the option despite its non-registration.

No, the sale of the land to Mick 'overreached' Lisa's option meaning the interest is converted into money and not enforceable against Mick.

No, the effect of non-registration is that the option is void against Mick who is a purchaser for value. Lisa's good faith and Ken's bad faith are both irrelevant to the effects of non-registration of land charges.

. Nisha and Ollie are the legal owners of a parcel of unregistered land held on trust for themselves and Ollie's parents, Peter and Queenie in equity. Peter and Queenie enjoy equitable interests under the trust. Without Peter and Queenie knowing, Nisha and Ollie sold the land to a purchaser, Rita. Peter and Queenie were shocked to discover what had happened and ask for your advice as to the status of their rights here. Ignoring the issues of first registration, which one of the following more accurately reflects the position of Peter and Queenie in this unregistered land scenario?

In unregistered land, equitable interests under a trust are 'family' or 'non-commercial' interests which cannot be registered as a land charge. They are protected by the doctrine of overreaching. As Rita has paid the purchase price to two trustees (Nisha and Ollie), Peter and Queenie's equitable interests have been overreached and converted into money.

In unregistered land, equitable interests under a trust can be registered as Class F land charges. As Peter and Queenie have not registered their interests, they will be void against Rita as a purchaser for value.

In unregistered land, equitable interests under a trust can be registered as Class C(iv) land charges. As Peter and Queenie have not registered their interests, they will be void against Rita as a purchaser for value.

In unregistered land, equitable interests under a trust are 'family' or 'non-commercial' interests which cannot be registered as a land charge. They are protected by the doctrine of notice. Rita will not be bound by their interests as she is Equity's Darling.

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