IntroductionIn order to advise Angelina with regard to the potential third party rights in the Hatfield Property (“the Property”) it will be necessary to evaluate the nature of the right (whether equitable or non-equitable) and on the assumption that the Property is registered, the provisions of the Land Registration Act 2002 (“LRA). The LRA sets out the requirements regarding registration of third party rights and the extent to which such rights bind the interests of the purchaser. The LRA distinguishes third party rights that are required to be registered and those that are considered overriding.
As a general rule, the prior estate will have priority over the buyer subject to the exceptions in the LRA. Under the LRA, if a right is subject to the requirement of registration in order to have priority, (unless the right is an overriding interest under Schedule 3), failure to register will forfeit priority and the right will not bind a purchaser on a disposition. However, the right may still be enforceable subject to the principles of equity and I shall consider any potential equitable rights when considering Angelina’s legal position.
(i) Informal arrangement to park Bartholomew’s car on Ravi’s driveway. With regard to the current informal arrangement enabling Bartholomew to park his two cars on Ravi’s driveway, the central issues are the nature of the right to be granted under any proposed formal arrangement and ensuring that the formalised arrangement is binding on third parties. Under section 1(2) of the Law of Property Act 1925, an easement such as a right of way can be created at law however the current informal arrangement fails to comply with the legal requirements and as such, operates as an equitable easement.
Furthermore, under the 2002 LRA, equitable easements no longer constitute overriding interests on third parties. With regard to the formal arrangement, the right of way must be recorded in a deed and a legal easement must be defined, in terms of duration of the entitlement, in analogy with either a freehold or a leasehold estate; either with no limit of time or for a fixed period. It is arguable that ‘until such time when P sells his property’ complies with this.
Moreover, in order to be valid against a third party, the interest must be entered as a notice in relation to both the Property and Ravi’s land as the servient and the dominant tenement. Under the LRA, an expressly granted legal easement is a registrable disposition and as such cannot take effect as an overriding interest binding on third parties in the event of failure to register. In summary, the right of way should be recorded formally in a deed and registered at the Land Registry in order to be enforceable at law and binding on third parties.
ii) Deed Promising Jock that “neither he nor his successors in title shall use the property for business purposes”. In order to advise Angelina as to her legal position in respect of the covenant in the deed between original owner Bartholomew and Jock, it will be necessary to consider the nature of the obligations in the covenant and determine whether the benefit and burden of the covenant have become attached to and run with the land to be enforceable against Angelina by Jock as Angelina is not party to the original covenant.