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Law Notes Land Law Notes

Regulating Trusts Of Land Notes

Updated Regulating Trusts Of Land Notes

Land Law Notes

Land Law

Approximately 987 pages

Land Law notes fully updated for recent exams at Oxford and Cambridge. These notes cover all the LLB land law cases and so are perfect for anyone doing an LLB in the UK or a great supplement for those doing LLBs abroad, whether that be in Ireland, Hong Kong or Malaysia (University of London).

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Regulating Trust of Land

Occupation under TLATA 1996

  • When is there a right to occupy?

    • S.12(1) Only beneficiaries with interests in possession can occupy – means that beneficiaries must be ascertainable

      • (a) Purposes of trust must include occupation

      • (b) Land held must be available for occupation

      • (2) Land must also be suitable for occupation by beneficiary.

    • Smith: Do these condition have to be satisfied only at commencement of occupation? Or must they have to continue to be satisfied?

      • Problem = if the latter view, what happens if some surprising event happens?

        • Purpose “changes”

          • E.g. that a house meant for joint occupation of a widowed mother and daughter becomes only occupied by daughter as mother goes and remarries and leaves?

            • Can the purpose of the trust still be effective?

        • Availability changes

          • Section purports to confer right to occupy – unless snapshot view taken of trust only at time of creation

            • Then to describe occupation as a right seems meaningless as it depends upon a continuing intention upon the part of the trustees.

        • Suitability of property changes

          • Chan v Leung [2003]:

            • Held that this subsection looked not just at the property, but the personal characteristics and requirements of the beneficiary.

            • Smith: suppose a widow has a life interest in a house – if she gets too old to look after house, can trustees insist she moves to more suitable accommodation?

  • Trustee control of the right to occupy

    • S.13(1): Trustees have power to determine the exercise of entitlements where two or more beneficiaries have right to occupy, but must allow at least one to occupy

    • S.13(2): Trustees can’t

      • (a) unreasonably restrict beneficiary’s entitlement to land

      • (b) restrict any right to an unreasonable extent

        • Rodway v Landy [2001]: Doctors co-own surgery. L suggests that split up practise by physically partitioning building equally.

        • Gibson LJ: Would make no sense if beneficiaries were all excluded from occupation of land

          • However, in a building which is able to be equally partitioned,

            • the trustees should be able to exclude a beneficiary’s entitlement to occupy one part + vice versa

    • S.13(3): Trustees can impose reasonable conditions on beneficiary in occupation

      • S.13(6) Where beneficiary entitled to occupation excluded

        • Beneficiary in occupation may be required to

          • (a) make payments by way of compensation to beneficiary excluded/restricted

          • (b) forgo any payment otherwise entitled to compensate beneficiary

      • French v Barcham [2008]: X and Y are tenants in common of house. X declared bankrupt. X and Y marry. C, trustee in bankruptcy, 12 years later attempts to sell house and take 50% and gain occupation rent against Y for being excluded from occupation.

        • Blackburne J:

          • Operation of s.13 only excluded where trustee in bankruptcy who is entitled to interest in possession of land

            • has no such right of occupation (and neither do the creditors). Fact that no statutory right irrelevant.

          • The essential point = where it would be unreasonable practically to expect co-owner-not-in-occupation to exercise his right as a co-owner to take occupation,

            • it will normally be fair to charge the occupying co-owner an occupation rent in compensation.

  • S.14(2) allows the court to make orders relating to exercise of trustees’ powers

    • So the court itself can step in and make orders relating to s.13(3) and (6) itself

      • This will particularly be the case where the trustees are also the beneficiaries and are at a disagreement

        • However, where the occupier is paying the mortgage, this will probably cancel out the excluded occupier’s claim to rent.

      • Smith: Court it less likely to step in where independent trustees have made arrangements/ not done something in good faith.

  • Interplay with Family Law

    • Family Law Act 1996 gives wings to specific other situations to regulate occupation

      • It is unclear how far this statute interplays with TLATA 1996

    • Spouses and Civil Partners

      • S.30: Party with no property interest or merely equitable interest is entitled to retain occupation of Family home

        • And with leave of court, to go into occupation of said home.

      • S.33 however gives powers to court to regulate who can remain/go into occupation.

        • Relevant criteria = children, schooling, financial resources, likelihood of harm to children/party involved

      • S.62 extends similar considerations to co-habitees (1) living together as husband and wife or civil partners.

        • Considering the nature and length of the relationship

          • But order can only be up to 6 months in length and only extended once

The Power of Sale

  • Core Propositions

    • Smith: Trustees manage the land – s.6 TLATA confers unlimited powers upon them

      • Except that they must act in the best interests of the beneficiary and exercise care (s.6(5), (6), (9).

    • Equally, while settlor can exclude all other powers in terms of trust

      • The settlor cannot exclude the power of the trustee to postpone sale of the land.

  • Requirements for sale:

    • Consent

      • S.8(2): First protection is that trust may require the consent of a person (normally, but not always, the beneficiary) before trustee’s powers are exercised

        • Smith: although words of statute appear to require express consent, courts were willing in old days to imply consent

          • Even though old statute had similar wording to new statute.

    • Consultation

      • S.11(1) requires trustees, before exercising any function, to consult with beneficiaries who are adults with interests in possession

      • S.11(2) can exclude this in disposition creating trust if wished.

    • Unanimous agreement of all trustees

    • OR court application

      • S.14 confers wide power on court to deal with disputes

        • Normally happens where trustees disagree

        • Or where beneficiaries disagree with trustees

      • Smith: courts unlikely to interfere with decisions of independent trustees where not unreasonable decision

  • S.15 (1) Court should look at following considerations when deciding to use s.14 discretion:

    • (a)...

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