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Trusts Of Land Notes

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Land 8- Trusts of Land Introduction Any trust whose trust property includes land is known as a 'land trust'. This is the case whether the beneficial interests are concurrent (A and B hold their interests at the same time) or sequential (A's interest passes to B upon A's death/marriage etc). The Trusts of Land and Appointment of Trustees Act 1996 stipulates special rules governing the management of land trusts. The trust of land TLATA 1996, Part 1, as amended by Trustee Act 2000: S.1 "trust of land" any trust of property which consists of or includes land S.4 In the case of every trust for sale of land created by a disposition there is to be implied a power for the trustees to postpone sale of the land; and the trustees are not liable in any way for postponing sale of the land, in the exercise of their discretion, for an indefinite period. S.6(1) Trustees have the same powers as a full legal owner, for the purpose of exercising their functions as trustees. (2) They may vest the land in the beneficiaries. (3) The trustees have the power to acquire land. (5) In exercising the powers conferred by this section trustees shall have regard to the rights of the beneficiaries. S.7 (1) Trustees may partition the land and make equality payment to the beneficiary. (3) To do so they have to gain the permission of the beneficiaries. (4) Where a share in the land is affected by an encumbrance, the trustees may either give effect to it or provide for its discharge from the property allotted to that share as they think fit. S.8 (1) ss6-7 don't apply where the trust stipulates that they shouldn't, nor where the trust requires consent of the beneficiaries and this has not been obtained. S.9(1) a trustee can delegate any of their powers to a beneficiary. S.9A: trustees have a duty of care in delegating their powers. S. 10(1) If a disposition creating a trust of land requires the consent of more than two persons to the exercise by the trustees of any function relating to the land, the consent of any two of them to the exercise of the function is sufficient in favour of a purchaser. S.11 Trustees shall consult beneficiaries so far as possible in exercising their powers

S.12 A beneficiary who entitled to an immediate (not sequential) interest in the land has a right to occupy the land S.13 Where two or more beneficiaries are entitled to occupy the land, the trustees may exclude or restrict the entitlement of any one or more (but not all) of them. The power must be used reasonable and must consider the intentions of the settlor, the purposes for which the land is held, and the circumstances and wishes of each of the beneficiaries who would be entitled to occupy the land under. The beneficiary permitted to occupy can be made to compensate the excluded beneficiary. S.14 A beneficiary, trustee or creditor can apply to the court to sell the property. S.15 In considering whether or not to sell, the court shall consider the intentions for the settlor, the welfare of occupiers, and the interests of creditors. This is not an exhaustive list of factors.

Regulating trusts of land Consultation TLATA 1996 s11- see above Rights of occupation TLATA 1996 ss 12, 13- see above (and Gardner's explanation) French v Barcham [2008] EWHC 1505: A beneficial tenant in common who continued in occupation of a property following the bankruptcy of the other beneficial tenant in common could be required to compensate the bankrupt's estate for that continued occupation. Also, sections 12 to 15 of the 1996 Act did not provide "an exhaustive regime" for compensation for exclusion of a beneficiary from occupation of property held subject to a trust of land. Where the statutory scheme applied then it should be applied but where it plainly did not there was no reason why the party not in occupation of the land in question should be denied any compensation at all if recourse to the court's equitable jurisdiction would justly compensate him. However, as it happened, this case did fall within s.13(6). Disputes between interested parties NB: Where a mortgagee can't get a sale via the normal route (if a mortgagor defaults) due to, for example, a partner's defence of undue influence, s.14 orders may give the mortgagee some relief. Furthermore, the mortgagee could sue the mortgagor on the contract, forcing the latter into bankruptcy. The factors that would then be used to decide

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