A Tale of Three Students
Read the following tale, before making notes on the following questions (these are a simplified version of the questions set out on page 26 of Land Law). Then follow the link to check your answers.
What legal or equitable interests may exist here?
If the interest is a beneficial interest under a trust, has it been overreached?
What else do we need to know to determine whether the interests are binding on the owner of the land?
Don’t worry about trying to come up with detailed answers to the questions. You will not be able to do this until you have read most of the chapters of Land Law or studied the subject for some time. Instead, try to get a feel for the types of questions that you need to ask (and answer) when approaching a land law question. Try to resist the temptation to follow the link before answering the questions for yourself.
Alexia and Brian had been very lucky in their search for accommodation for their second year. They had found a four-bedroom house within easy reach of the University, in a nice part of the town, at a very cheap rent (although the agreement they had signed referred to it as a ‘licence fee’). True, they hadn't planned on having a resident landlady, but Denise was hardly ever there. The house was fully furnished, apparently because most of the furniture had been left behind by the previous tenants. All the two friends had brought with them was their bed linen and computers.
Their only real worry had been about finding a third tenant, but not for long. Charlie, a friend of Brian's from korfball, had leapt at the chance. With the possible exceptions of his foghorn of an alarm clock and his alleged allergic reaction to washing up liquid, they were rubbing along quite well by the time the academic year finally got underway.
It was shortly after the start of the first semester that Denise dropped her bombshell. She had decided to sell the house. What was more, she told the three friends that she thought that they probably didn’t have any automatic right to stay in the house after it was sold. They would have to negotiate a new deal with the new owner. However, Denise was prepared to sell the house to the three friends for £140,000 if they wanted it. She thought she could get more than this on the open market.
Alexia had just inherited £70,000 from her great-uncle George. She had been planning to spend part of it and invest the rest, but she liked the idea of getting a foot on the property ladder, not least because there should be no difficulty renting the house out to other students once her studies had come to an end.
Both Charlie and Brian laughed, and then panicked. Neither of them had anything like the cash needed to make up the balance. However, Brian's dad came to the rescue. He would provide the rest of the money, possibly with the help of a mortgage, although he would expect his name to be on the title deeds in return. He also insisted that Brian contribute his savings of £1,000.
So all would be well after all - or so it seemed. But last night Alexia had a nightmare. First, Brian and Charlie had a row – Brain threw Charlie out – and threw his computer after him. Then Brian's dad moved into Alexia’s room and insisted that she sleep on the couch downstairs. Trying to get off to sleep she heard a noise outside. Peering out into the gloom she saw one of her neighbours knocking down the garage that had been erected on a strip of land at the bottom of the garden that had originally been part of a shared path between the neighbouring gardens and a side-road. Alexia rushed to the front door, only to be forced back into the house by a long queue of ghostly figures - Denise's previous tenants come to reclaim the property they had left behind. One of them pulled the washing machine from the wall, there was a jet of water, a loud bang, and ... Alexia woke in a cold sweat.
Perhaps it would be easier to find another place to rent?