Freehold of a Large Victorian House

Part 1 – Problem question

Nigel has just bought the freehold of a large Victorian house in Harpenden from Meryl. The house is set back from the road which a wide forecourt in front. It also has a large garden at the rear backing onto Harpenden Common. Title to the property is registered. Nigel obtained a law degree a number of years ago however he decided the law wasn’t for him and now has a successful career in the insurance business. Having studied land law, he decided to have a go at doing his own conveyancing rather than pay a solicitor to do it for him.

Nigel occupies the ground floor and basement of the house. The first floor of the house has been converted into a self contained flat and Meryl sold the leasehold of it to Richard in 1995, granting him a 99 year lease.

Two weeks after Nigel moves into the house, Richard complains that the roof must be leaking as he has rainwater coming through his bedroom ceiling. He has given Nigel 14 days to sort it out otherwise he is going to take legal advice. Nigel has a look at the lease which mentions that the landlord is responsible for external repairs however Nigel takes the view that as he was not a party to the lease, it is not his problem. He wishes to know however what action Richard can take if he, Nigel does nothing.

Further, since he moved in, Nigel has been disturbed by loud music coming from Richard’s flat and by young people arriving at the flat at various times and has discovered that Richard is running a business giving lessons to small groups of teenagers in drum and electric guitar. Nigel recalls that Richard’s lease states that the property is only to be used for residential purposes and he would therefore like to know whether there is anything he can do to stop the music lessons.

The following day Nigel is about to get into his car when he is met by a couple parking their camper van on the forecourt in front of the house and unloading camping gear. Nigel asks them why they are on his property. They introduce themselves as Kate and Paul and say that they have been on holiday for the past month. They say that they live in a cottage along the road and that they entered into an agreement with Meryl in 2004 allowing them to park their campervan on the forecourt. They also say that they have been using a shortcut through Nigel’s garden to a gate at the end leading out onto the Common to walk their dogs. They are surprised that he wasn’t aware of this. They said that neither Meryl nor the people who owned the house before her ever stopped them going through the garden which they have been doing since their children were very small. Their children are now aged 28 and 30.

Advise Nigel whether he can stop Kate and Paul parking their camper van and walking through his land.

The house has a large rear garden which Nigel is very keen to make full use of as he is a keen gardener and he is particularly interested in the large vegetable plot at the rear which he wishes to expand. He noticed that the garden is at least 30 metres longer than the garden to the house next door. Nigel has spent a great deal of time working on the garden since he moved in and adding to the vegetable plot. He is then shocked to receive a letter from the local council claiming that it has come to their attention whilst constructing a new play area on the Common that the boundary fence from the rear of his property appears to have been moved at some point and they would like the fence to be moved back within the next 28 days otherwise they will arrange for their legal department to take action to recover the land. Nigel phoned Meryl who tells him that when she bought the property in 1994 there was no fence at all at the end of the garden and the garden was in a mess. She landscaped the garden and when she started the vegetable plot she built a fence and positioned it further back than perhaps she should have done. She was aware that she might have been taking some of the land belonging to the Council but the Common was so overgrown she didn’t think it would matter. Nigel wishes to know whether the Council can reclaim the piece of land.

Advise Nigel accordingly.

Nigel seeks my advice on the following problems he has experienced since he purchased the freehold on a large Victorian house in Harpenden. The title to the property is registered and Nigel has done his own conveyancing. Nigel has purchased the property from Meryl who has occupied the house since 1994 and has split the house into two with a tenant living upstairs in the self contained flat. She has sold the leasehold for the upstairs house for 99 years to Richard, which is a fixed term lease.

The first problem Nigel faces is from Richard, the tenant, who lives upstairs. He has a leasehold on the upstairs flat of the property for 99 years which was given to him by Meryl.

A lease on the property has been defined as the grant of a right to the exclusive possession of land for a determinate term less than that which the grantor has himself in the land. The use of exclusive possession is vital when creating a lease as without it there is no lease. Lord Templeman in the case of Street v Mountford [1985] AC 809 at P.816 stated that ” The tenant possessing exclusive possession is able to exercise the rights of an owner of land, which is in the real sense his land albeit temporarily and subject to certain restrictions. A tenant armed with exclusive possession can keep out strangers and keep out the landlord.” [1]

From the information that we have we can tell that the lease of the flat for 99 years is a lease for a fixed term and it will expire once the time period has elapsed.

We will need to look at whether the lease is a legal lease and in order to do this we need to determine the requirements needed for it to be a legal lease. According to the Land Registration Act 2002 [2] a lease for more than seven years must be created by deed as stated in the Law of Property Act 1925 s.52 (1) [3] , and registered as well.

However we are not aware of whether the lease has been created by deed we will look into both legal and equitable leases. As I have stated before once the lease is created in deed it is legal and therefore it becomes binding upon any successors, the property must be registered as well, “…anyone who takes the landlord’s estate for valuable consideration will take subject to the lease (LRA 2002 s.29) [4] “. What this means is that if there is any covenants made between the original landlord and tenant, in our case the external repairs, then the new landlord carries on the covenant and he is bound by it [5] .

However if the lease has not been created by deed it can be an equitable lease, these are inferred by conduct such as resulting trust. An equitable lease arises when the formalities for creating a legal lease are in place but the lease takes possession before they can be created. Equitable leases, unlike a legal lease, do not bind the successor. This is the same position in regards to covenants, which in our case is the repair of the roof, they are enforceable between the original parties as well as any successors providing that the lease is a legal one. If the lease is an equitable one then they are only enforceable between original parties and not the successors or third party [6] . What this means for Nigel is that unless Richard can prove that the lease has been created legally, Nigel does not have to repair the roof as he is not a party to clause. In a long lease such as 99 years that was given to Richard by Meryl it is reasonably expected that the tenant is responsible for the structural repairs [7] , which was further back by the case of Lurcott v Wakely [1911] [8] .

In conclusion to Nigel’s first problem, which was whether he was a party to the original covenant, the answer would be to see if the lease was created legally and if it has then he is a party to original covenant as stipulated in (LRA 2002 s.29 [9] . However if the lease was not created by deed, then Nigel will not be a party to the lease as in Equity covenants do not override. It is also a general covenant on long leases that the tenant is responsible for external repairs to the property.

The second problem that Nigel faces is also from Richard who is running a business which involves lessons to a small group of teenagers learning to play the drums and guitar. This is a breach of his covenant that he signed with Meryl which states that the business must not be used for any business purposes. Nigel wishes to know what he can do to stop this.

The problem concerns covenants in leases. A covenant is described as a promise “contained in a deed”. there are two different types of covenants, a positive one which is where the land owner might erect a fence and a negative one where it restricts what you can do for example running a business from a residential property may not be allowed [10] .

At law, a covenant is enforceable even if the covenantor has no estate in law. However the person who gains the benefit, the covenantee, must have an estate in the land from which they will benefit from [11] .

There are four requirements to the passing of the benefit at law and the first one According to the case of P & A Swift Investments v Combined English Stores Group Plc (1989) [12] the covenant must be for the benefit of the land and not merely for the person benefit of the covenantee as the covenant must ‘touch and concern’ the land.

The second is that there must have been an intention that the benefit should run with the estate owned by the covenantee at the date of the covenant and this was stipulated in Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board (1939) [13] under s.78 LPA 1925 [14] ).

The third is that the property must be legally registered, which Nigel’s property is, as no benefit can pass where the original covenantee has only an equitable interest.

Finally the fourth is that the transferee, Nigel, must also have a legal lease, as this will give him a right to enforce the covenant.

The burden of the covenant cannot pass at common law with a freehold land of the covenantor as ruled in the Austerberry v Oldham Corp(1885) [15] . This decision has been highly controversial and criticised but it was confirmed in Rhone v Stephens (1994) [16] , however Lord Templeman has said it to be “…inappropriate for the courts to overrule the Austerbury case, which has provided the basis for transactions relating to the rights and liabilities of landowners for over 100 years… [17] ”

There is, however, four ways in which you can avoid the rule in Austerberry [18] . They are the doctrine of mutual benefit and burden, which takes the rule of Halsall v Brizell (1957) [19] which states that if the purchaser takes certain benefits then they cannot avoid any of the burdens as well. The second is chain of indemnity covenants which is where the covenantor remains liable even after the sale and can be sued for damages. It will fail if there is a break of the chain break by, for example, death. The third one is the conversion of leaseholds into freeholds which is hardly used as the covenants under a lease are still enforceable by the covenantee. Finally the fourth one is lease, which allows both a burden and benefit to run with a leasehold property. This means that as the property in question is a lease which means that the benefits and burden pass onto any successor of the land. In our case this means that Nigel can enforce the burden on Richard, which restricts him from using the residential property as a commercial property.

Now that we have established that it can be enforced we now need to see which enforceability applies to this scenario, as there is two different set of rules that apply to this which are old rules, which apply to leases created on or before the 31st of December 1995, and new rules which apply to leases created after the 1st of January 1996. Which in our case, Meryl had sold the lease to Richard in 1995 which means that the lease is under the rules of the old lease.

In our scenario, Meryl has sold the lease to Nigel and as such he is now Richards new Landlord, so ss141 [20] and 142 [21] of the Law of Property Act 1925 will apply.

S141(1) [22] Rent reserved by a lease, and the benefit of every covenant or provision therein contained…shall go with the reversionary estate in the land, or in any part thereof, immediately expectant on the term granted by the lease.

S142(1) [23] The obligation under a condition or of a covenant entered into by a lessor with reference to the subject-matter of the lease shall, if and as far as the lessor has power to bind the reversionary estate immediately…and as far as the lessor has power to bind the person from time to time entitled to that reversionary estate…

The benefit of this covenant is not to use the property for anything other than residential purposes will run since it touched and concerned the land of Nigel’s as illustrated in the case of P & A Swift Investments v Combined English Stores Group [1989]

As the requirements for the a Legal covenant has been met, the rules derived from Tulk v Moxhay (1848) [24] will not be applicable here. However if it was it will still run as the covenant in question is a restriction, which was one of the requirements in Tulk v Moxay (1848) [25] .

In conclusion I would advise Nigel that he can stop Richard from running a business as he can enforce the restrictive covenant and in order to do so he may seek to get an injunction. If Nigel can prove that there has been a blatant disregard for the is rights and if the damage caused can be equated by a small money payment. According to the case of Jaggard v Sawyer (1995) [26] an injunction will ne be given automatically even if there is a breach of contract.

The third problem that Nigel faces since he purchased the freehold of the house is easements. This question deals with two problems, the first being the campervan parking. Katy and Paul entered into an agreement with Meryl in 2004 for them to be able to park their campervan in front of the house. They do not live in the adjoining property but rather live in a cottage along the road. The second problem is to do with the shortcut used by the couple through Nigel’s garden and into the common, which the couple have used for over two decades.

Easements in short are proprietary rights which someone can enjoy over another’s land. They can be made legal under s.1(2) (a) LPA 1925 [27] if it is granted for a term that is equivalent to a legal estate.

The first problem deals with an agreement Meryl had entered with Katy and Paul in 2004, which would allow them to use the forecourt of the house to park their campervan. For this to qualify as an easement we must put this through the test from Re Ellenborough Park [28] , which was a Court of Appeal decision [29] . Firstly there must be a dominant tenement and a servient tenement; which in our case the dominant are the couple and the servient is Nigel. Secondly dominant and servient owners must be different persons; as illustrated in the case of Law Hill v Tupper (1863) [30] ; Moody v Steggles [31] (1879); Mounsey v Ismay [32] (1865). Thirdly the easement must accommodate the dominant tenement; which it has as Paul and Katy get to park their campervan and the right to park can constitute an easement according to London & Blenheim estates Ltd. v Ladbroke retail parks Ltd. [1992] [33] . Fourthly the right claimed must be capable of forming the subject-matter of a grant, which causes doubt upon the easement. As Meryl may never have owned a car so therefore allowed them to park outside her house, but we know that Nigel drives and if this interferes with him enjoying his property then it cannot be an easement as illustrated in the cases of Batchelor v Marlow [2003] [34] ; Hair v Gillman (2000) [35] , Central Midlands Estates v Leicester Dyers (2003) [36] and Moncrieff v Jamieson [2007] [37] .

We can tell from the information given that it is not a common intention or a necessity, so therefore it cannot be an Implied easement. The agreement was made in 2004, so the couple cannot rely on a prescription easement, as the necessary time period has not passed. So therefore it could be an Express easement. There are two types of Express easements and they are legal and equitable [38] . For an easement to be legal it must be created by deed according to s.52 (1) LPA 1925 [39] . Also it must be granted for a fixed period of time which is equivalent to a fee simple absolute in possession or a terms of years absolute (s.1 (2) LPA 1925) [40] , a legal easement cannot be made for life as it is not a specific period of time nor is it forever. Applying this to the case I can see that the agreement does not meet the requirements for it to be a legal easement, as it was not created by deed nor does it have a specific time period.

The other type of express easement is equitable and an easement that meets the criteria in the Ellenborough Park [41] case will only be equitable where the requirements for a legal easement have not been met. Equitable easements can be created by deed, but will fail as legal easements if they are not in fee simple or for a term of years absolute. Equitable easements can be created without a deed, but they must be in writing (s53(1)(a) LPA 1925) [42] . Rights ‘granted’ in licences are only rights; they are not equitable easements just because they fail to qualify as legal easements. So unless Kate and Paul can show in writing permission to park their campervan then Nigel can stop them from parking their campervan in his property and he can apply for an injunction.

The second part of this question relates to the shortcut Kate and Paul use through Nigel’s garden in order to get to the common to walk their dogs.

If we use the requirements for an easement from Re Ellenborough [43] then we can establish whether it is an actual easement or not. There must be a dominant tenement and a servient tenement; the dominant being Katy and Paul and the servient is Nigel. Secondly dominant and servient owners must be different persons; which it is. Thirdly the easement must accommodate the dominant tenement; Katy and Paul get to use a shortcut. Fourthly the right claimed must be capable of forming the subject-matter of a grant.

From the information we are given , there does not seem to be any formalities surrounding the easement, no deed, nor has there been any notice in writing so therefore it cannot be an express easement. It is also not an Implied easement as the shortcut is not a necessity or common intention. The rule from Wheeldon v Burrows [1879] [44] will also not apply here unless Katy and Paul can prove that Nigel’s house was once part of their property. So the only other form of easement left is prescription. Katy and Paul must show that right has been exercised without force, or secretly or with permission either since time immemorial or 20 years has passed. so long as there is no evidence that no one could have made the grant or for the 20 years immediately prior to the claim.

Unless Katy and Paul can show that they have acquired the right as an easement they will not be able to enforce their rights against the third party purchaser, Nigel, because licences cannot be enforced against a third party unless a constructive trust can be proved which is unlikely here.

Nigel’s fourth problem concerns an extension of his garden by 30 metres, when Meryl first purchased the house, there was no fence at the end of the garden, so she landscaped the garden and positioned it further than she should have. She took some of the land from the common, which belonged to the council. The council have now threatened him with legal action over the land if he does not take the fencing back 30 metres. Nigel wishes to know whether the council can reclaim the land.

This problem deals with adverse possession which involves the possession of land that is incompatible with the title of the owner leading to the adverse possessor giving title to the land.

The element for adverse possession are proof of adverse possession, running of the necessary time period and in registered title no objection by the registered proprietor or the exceptions in schedule 6 Land Registration Act 2002 [45] are fulfilled.

For Nigel to adversely posses the land he must show that the land is being used by himself and that he is excluding others. He does not need to show that he intends to acquire the title to the property. According to Slade J in Powell v McFarlane [1979] 38 P&CR 452 at p. 471 [46] “… the intention, in one’s name and on one’s behalf, to exclude the world at large, including the owner with the paper title…” which is exactly what Meryl had done when she fenced the garden off, as before it never had a fence which could exclude the world at large.

According to the Court of Appeal in the case of Prudential Assurance Co. Ltd v Waterloo Real Estate Inc [1999] 2 EGLR 85 at 87 [47] “…the claimant must, of course, be shown to have the subjective intention to possess the land, but he must also show but his outward conduct that that was his intention.” When Meryl first purchased the property she fenced and cultivated the land, which would constitute evidence of adverse possession according to Bucks CC v Moran [1990] Ch 623 [48] , she excluded the world when she did this and she knew the land belonged to the council so she has the intention to posses the land.

Nigel’s case is very similar to that of Bucks CC v Moran [1990] [49] Ch 623, Buckinghamshire City Council had threatened Mr. Moran with legal action as he had adversely possessed and cultivated land that he knew belonged to the council. Mr. Moran fenced and installed the gate which he had chained and padlocked to exclude the world at large. This alone was sufficient to amount to a “final unequivocal demonstration of the defendant’s intention to possess the land”.

It was also noted that the requirement here is not an intention to posses but the squatter does not have to show that the intend to acquire title to the property. So Mr. Moran knew that the land belonged to the council and he only wanted to keep the land until the council required it, so the Court of Appeal rejected the case brought by Bucks CC.

As we can see from that case that Harpenden Council will find it difficult to bring an action against the extension of the garden. However the Bucks CC case only dealt with the person who originally extended the garden and was actually living in the house, Nigel purchased the house from Meryl, so the question now is whether or not he will be successful in claiming adverse possession. Well we can tell from what we are told he is a keen gardener and that he took over cultivating the land from Meryl. So he has the intention of owning the land as although he knew the garden was extended he kept the fence where it was with the intention of expanding his vegetable plot.

Luckily for Nigel he is a successive squatter as he is a successor of an earlier squatter so he can add the two periods together to show the necessary 10/12 years possession. The house was bought in 1994, giving Nigel a total of 16 years and more possession. Once the necessary 12 years has passed, then the owner is banned by statue from suing to recover the land, under s15 of the Limitation Act 1980 [50] which states that “…no action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the tight action accrued to him”. This means that Harpenden Council cannot threaten to take any action against Nigel.

The reason for this is because under s17 of the Limitation Act 1980 [51] , after the 12 years the original owner or the “paper owners” title to the land is extinguished, so therefore Harpenden council no longer own the land and Nigel must now apply to the Land Registry as the first registered proprietor to the land. So in conclusion to Nigel’s fourth problem, Nigel is wondering whether the council can reclaim the land back and the answer is no as the title to the land has extinguished and if Nigel registers the land then he legally owns the extension to the garden.

In conclusion to Nigel’s first problem, which was whether he was a party to the original covenant, the answer would be to see if the lease was created legally and if it has then he is a party to original covenant as stipulated in (LRA 2002 s.29 [52] . However if the lease was not created by deed, then Nigel will not be a party to the lease as in Equity covenants do not override.Additionally in conclusion to Nigel’s second problem I would advise Nigel that he can stop Richard from running a business as he can enforce the restrictive covenant and in order to do so he may seek to get an injunction. Furthermore in conclusion to Nigel’s third problem unless Kate and Paul can show in writing permission to park their campervan then Nigel can stop them from parking their campervan. Also in conclusion to the second part of the third problem unless Katy and Paul can show that they have acquired the right as an easement they will not be able to enforce their rights against the third party purchaser, Nigel, because licences cannot be enforced against a third party.

Finally in conclusion to Nigel’s fourth problem, Nigel is wondering whether the council can reclaim the land back and the answer is no as the title to the land has.

BIBLIOGRAPHY

Books

• MacKenzie.J-A., Philips. M, Text Book on Land law, 13th ed., (Oxford University Press, Oxford, 2010)
• Thomas.M, Blackstones Statutes on Property Law 2007-2008, 15th ed., (Oxford University Press, Oxford, 2007)
• Bray.J, The Facts at your fingertips…Land Law, 3rd ed, (Bookpoint Ltd, Oxon, 2007)