Land Law — SQE1 practice questions
Estates and interests, formalities, registered and unregistered land, co-ownership and TOLATA, implied trusts of the home, easements, freehold covenants, mortgages and leases.
Practise 25 Land questions free
3 free questions with answers
Harold is the sole registered proprietor of a freehold house. His wife, Ingrid, paid one third of the purchase price when the house was bought ten years ago and has lived there ever since. Harold recently borrowed £150,000 from Lomond Bank plc, secured by a registered legal charge over the house. The bank's valuer inspected the property but the bank made no enquiries of Ingrid, who was at home. No restriction or notice protects Ingrid's interest. Harold has defaulted and the bank seeks possession.
Is Lomond Bank bound by Ingrid's beneficial interest?
- ANo, because an equitable interest that is not protected on the register cannot bind a registered chargee.
- BNo, because the bank paid the loan money to the registered proprietor and so overreached Ingrid's interest.
- CYes, because Ingrid's interest overrides the registered charge as the interest of a person in actual occupation, and it was not overreached as the loan money was paid to a single proprietor.
- DNo, because Ingrid's occupation would not have been obvious on a reasonably careful inspection.
- EYes, but only because the bank had actual knowledge that Ingrid had contributed to the price.
Show answer and reasoning
Rule: A beneficial interest of a person in actual occupation overrides a registered disposition unless overreached or one of the Sch 3, para 2 exceptions applies.
- A An unprotected interest can still bind a registered disponee as an overriding interest under Sch 3, para 2. (wrong rule)
- B Overreaching requires payment to at least two trustees or a trust corporation; payment to Harold alone is not enough. (wrong rule)
- D Ingrid lived at the house and was at home, so her occupation would have been obvious, and the bank made no enquiry of her. (right rule, wrong facts)
- E Actual knowledge is not required where occupation is obvious; the interest overrides because of actual occupation. (answers a different question)
Source: Land Registration Act 2002, s 29 and Sch 3, para 2; Williams & Glyn's Bank Ltd v Boland [1981] AC 487
Jasmine and Kieran are the registered proprietors of a freehold house which they hold on trust for themselves and for Jasmine's parents, who contributed to the price and live in the house. Without telling the parents, Jasmine and Kieran granted a legal charge to Marlow Building Society to secure a loan of £200,000, which was paid to them both. The charge has been registered. Jasmine and Kieran have now defaulted.
Is Marlow Building Society bound by the parents' beneficial interests?
- ANo, because the loan money was paid to two trustees, so the parents' interests were overreached and attach to the money instead.
- BYes, because the parents' interests override the charge as interests of persons in actual occupation.
- CYes, because the parents did not consent to the charge being granted.
- DNo, because a beneficial interest can only ever bind a purchaser if protected by a restriction.
- EYes, because the building society should have inspected the property and discovered the parents.
Show answer and reasoning
Rule: Payment of capital money to two trustees overreaches beneficial interests, even those of beneficiaries in actual occupation.
- B Actual occupation does not help an interest that has been overreached by payment to two trustees. (wrong rule)
- C Overreaching does not depend on the beneficiaries' consent where capital money is paid to two trustees. (wrong rule)
- D Unprotected beneficial interests can override if the holder is in actual occupation and the interest has not been overreached. (wrong rule)
- E Inspection is irrelevant once overreaching has occurred, as in City of London Building Society v Flegg. (right rule, wrong facts)
Source: Law of Property Act 1925, ss 2, 27; City of London Building Society v Flegg [1988] AC 54
Lucy owns a registered freehold house. Two years ago she granted Matt a legal lease of the house for five years by deed. Matt has been working abroad for the last six months; his furniture remains in the house but nobody is living there. The lease is not noted on Lucy's title. Lucy has now sold and transferred the freehold to Nina, who has been registered as proprietor. Nina says she is not bound by Matt's lease.
Is Nina bound by Matt's lease?
- ANo, because Matt's lease was not entered on the register by notice.
- BNo, because Matt is not in actual occupation, so his lease cannot be an overriding interest.
- CYes, but only because Matt's furniture amounts to actual occupation of the house.
- DNo, because a lease of more than three years must be completed by registration to take effect at law.
- EYes, because a legal lease granted for a term not exceeding seven years overrides a registered disposition whether or not the tenant is in actual occupation.
Show answer and reasoning
Rule: A legal lease of seven years or less overrides a registered disposition without any need for registration or actual occupation.
- A Leases of seven years or less need not be noted; they override under Sch 3, para 1. (wrong rule)
- B Short legal leases override under their own paragraph, which does not require actual occupation. (wrong rule)
- C Whether or not Matt is in actual occupation, the lease overrides as a short legal lease. (answers a different question)
- D Only leases of more than seven years are registrable dispositions; a five-year lease by deed is legal without registration. (wrong rule)
Source: Land Registration Act 2002, s 27(2)(b) and Sch 3, para 1
Subtopics
| Adverse possession | 3 questions |
| Co-ownership and trusts of land | 5 questions |
| Easements | 3 questions |
| Freehold covenants | 3 questions |
| Leases | 3 questions |
| Mortgages | 3 questions |
| Registered land and overriding interests | 3 questions |
| Unregistered land | 2 questions |