a) What right does Rosie have in the property?
• Equitable property right
• A profit
• Implied Trust
Does not need to be created using a assigned written document
They can arise as result of the conduct of the parties
• Constructive trust
type of implied trust
Arises when a person who is not the legal owner of the property makes a significant contribution towards it
• Legal property rights
• Lloyds Bank v Rosset 1990 – Constructive trusts can arise in two ways:
Expressly agreed & Impliedly agreed
Expressly agreed & not Impliedly agreed
Expressly agreed constructive trust
Impliedly agreed constructive trust
• The legal owner of a property and a person who is not the legal owner expressly agree (evidence of discussions) that the person who is not the legal owner should have an interest in the property. The person who is not the legal owner then acts to their detriment (contributions to purchase price or making substantial improvements to the property at own expense) in reliance on that agreement.
• The legal owner of a property and a person who is not the legal owner expressly agree (evidence of discussions) that the person who is not the legal owner should have an interest in the property. The person who is not the legal owner then acts to their detriment (contributions to purchase price) in reliance on that agreement.
• In this case Rosie paid for a new kitchen and conservatory
contributions to purchase price
b) Can Rosie enforce her right against Mark? Why or why not?
• A constructive trust is a minor interest (Property interest in registered land)
• A constructive trust is not a minor interest (Property interest in registered land)
A purchaser for value of a registered title will not be bound by minor interests which have not been properly protected
• Section 29 (1) Land Registration Act 2002
Section 2 LP(MP)A 1989
• Protection of interests under trusts
enter a restriction on the title register of the estate which is subject to the interest
enter a notice on the title register of the estate which is subject to the interest
• In this case constructive trust not properly protected
• In this case constructive trust properly protected
• Overriding interests
They are binding even if they are not on the register
They are not binding even if they are not on the register
• Interests of a person in actual occupation (Overriding interest)
• If a person has a minor interest in a piece of land which would normally require protection by notice or restriction, that interest will be upgraded to overriding if the requirements of Schedule 3 paragraph 2 Land Registration Act 2002 are satisfied
• If a person has not got a minor interest in a piece of land which would normally require protection by notice or restriction, that interest will be upgraded to overriding if the requirements of Schedule 3 paragraph 2 Land Registration Act 2002 are satisfied
• Schedule 3 paragraph 2 Land Registration Act 2002 – Requirements for a minor interest to be upgraded:
o The person with minor interest must be in actual occupation of the land at the time of sale
o The actual occupation must be obvious on a reasonably careful inspection (or purchaser know about interest)
o If enquiry was made before the disposition of the person with the interest then that person must have disclosed the interest if it was reasonable to expect them to do so
o The right claimed must be capable of forming the subject matter of a grant (specific/precise definition)
• Does actual occupation have to be continued and uninterrupted presence?
• Chhokar v Chhokar [1984]
• City of London Building Society v Flegg [1988]
o Court was satisfied that Mrs Chhokar was in actual occupation as belongings still present at the house and she intended to return
o Some degree of permanence and continuity
• Rosie had overriding equitable right
• Rosie did not have an overriding equitable right
If the land is sold, the equitable rights of the beneficiaries under the constructive trust may not bind the purchaser
• Overreachable equitable rights
• To overreach the rights of the beneficiaries the purchaser must pay the purchase price to at least two trustees (trustees are simply the legal owners wherever there is a trust so they will be the vendors)
• A profit is a right to go on somebody else’s land and remove from that land something which exists there naturally – grazing rights
• Purchase monies then form a trust fund and beneficiaries will have equitable rights in the trust fund
• Purchase monies then will not form a trust fund and beneficiaries will have equitable rights in the trust fund
example of overreaching registered land
• Rosie’s equitable right in the land is overreached but she receives equitable right in the trust fund
• Rosie’s equitable right in the land is not overreached
