Unregistered land — SQE1 Land question
A worked single-best-answer question on unregistered land, with why each wrong option is wrong — the way SQE1 traps candidates.
In 2001 Walter, the owner of a farm with unregistered title, granted his son Xander an option to buy the farm for £300,000. Xander did not register the option as a land charge. Walter later fell out with Xander and, to defeat the option, conveyed the farm to his wife Yvonne for £5,000, although it was worth far more. Yvonne knew all about the option. Xander now seeks to exercise it against Yvonne.
Can Xander enforce the option against Yvonne?
- AYes, because Yvonne had actual notice of the option and so was not a purchaser in good faith.
- BNo, because an unregistered estate contract is void against a purchaser of a legal estate for money or money's worth, regardless of her knowledge or motive.
- CYes, because Yvonne did not pay full market value for the farm.
- DYes, because the sale was a sham designed to defeat Xander.
- ENo, because options to purchase cannot be registered as land charges in unregistered land.
Show answer and reasoning
Rule: An unregistered Class C(iv) estate contract is void against a purchaser of a legal estate for money or money's worth, whatever her knowledge.
- A Under the Land Charges Act 1972 notice and good faith are irrelevant to an unregistered registrable charge. (wrong rule)
- C Any money or money's worth suffices; adequacy of consideration is irrelevant. (wrong rule)
- D The House of Lords held that a genuine sale at an undervalue is still a purchase, whatever the motive. (right rule, wrong facts)
- E An option is an estate contract registrable as a Class C(iv) land charge; that is why non-registration is fatal. (wrong rule)
Source: Land Charges Act 1972, ss 2(4), 4(6); Midland Bank Trust Co Ltd v Green [1981] AC 513