1. In 2018 Boris borrowed £500,000 from the Careful Bank, secured against Boris’ registered freehold property, Dunleavin, by first legal charge. In 2019, Boris needed to raise more money to pay off business debts and so borrowed £100,000 from the Optimistic Bank, secured by a second legal charge on Dunleavin. Boris’ financial situation has deteriorated further in the last year and he is currently over three months in arrears of the Optimistic Bank’s mortgage repayments. With property prices falling sharply, the Optimistic Bank wish to realise their security on Dunleavin.
a) What powers they have to sell Dunleavin and how any sale would affect the Careful Bank.
b) How they must apply the proceeds of any sale of Dunleavin.
c) If they wish to sell at an undervalue (less than the open market value) for a quick sale, what remedy(s) might be available to Boris.
d) If they would be better advised to repossess Dunleavin and rent it out whilst the property market recovers?
2. Natasha is considering buying the freehold of the Malibu Mansion estate (the title to which is unregistered) from Tony. Clint, a local conveyancer who Natasha has appointed to act for her in the purchase, discovers the following:
i) That Steve had contributed a quarter of the purchase price when Tony bought the Malibu Mansion in 1987, and that Steve has lived in the Poolhouse (a detached dwelling in the grounds of the estate) ever since;ii) that last year Tony granted (by deed) a 5 year lease to a neighbour, Bruce, over some fields on the estate for keeping horses;
iii) that at the same time as granting the lease, Tony gave Bruce an option to purchase the fields for £100,000 anytime within the term of the lease; and
iv) that a restrictive covenant was entered into in 1979 between Wanda (Tony’s predecessor in title) and Carol (a neighbouring landowner) preventing any live music events from being held anywhere on the Malibu Mansion estate.
a) Advise Clint whether these matters would be binding on Natasha if the Malibu Mansion estate was conveyed to her and on the formalities needed to complete transfer of the legal title.
b) How would your advice differ if the title to the Malibu Mansion estate was already registered?PART B BEGINS OVERLEAF
PART B – Answer ONE question from this part.
3. The Trusts of Land and Appointment of Trustees Act 1996 did a great deal to clarify and protect the interests of beneficiaries under a trust where land was held as the trust property. These changes were reinforced by the amendments made to the registered land system by the Land Registration Act 2002.
Critically discuss by reference to specific legal examples.4. Recognising property claims based on possession opens the door to abuse by the unscrupulous and the courts have encouraged undeserving claimants to acquire title(s) to things that were never the claimants’ in the first place.Critically discuss by reference to specific legal examples
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