21/04/2024
Property law can be a complex landscape, particularly when dealing with the rights and obligations that run with the land. This article delves into two significant aspects: the creation and enforceability of easements, such as rights of way and parking, and the implications of mortgages on property ownership, including the mortgagee's power of sale and the mortgagor's rights. Understanding these principles is crucial for anyone involved in property transactions, whether as a buyer, seller, landlord, or tenant.
Understanding Easements: Rights that Benefit Land
An easement is a right enjoyed by the owner of one piece of land (the dominant tenement) over the land of another (the servient tenement). For a right to be recognised as an easement, it must satisfy four key characteristics, as laid out in the seminal case of Re Ellenborough Park (1956):
- Dominant and Servient Tenement: There must be two distinct pieces of land, one benefiting (dominant) and one burdened (servient).
- Accommodation of the Dominant Tenement: The right must benefit the dominant land itself, not merely the current owner personally. It should enhance the utility or enjoyment of the dominant land.
- Separate Ownership/Occupation: The dominant and servient tenements must be owned or occupied by different people.
- Capable of Forming the Subject Matter of a Grant: The right must be clearly defined, not too vague, and fall within established categories of easements or be capable of being granted without imposing an undue burden on the servient owner, such as a positive obligation to do work.
The Right of Way: Access Granted
A right of way is a classic example of an easement. It grants the owner of the dominant tenement the right to pass over the servient tenement. The scenario involving Frank and Trevor highlights the complexities of implied easements. When one landowner sells part of their land, certain rights previously enjoyed may be converted into easements.
In this case, the laneway used by Trevor to access 'The Manor' from 'The Willows' raises the question of an implied grant. While not expressly mentioned in the conveyance, the rule in Wheeldon v Burrows (1879) suggests that rights exercised by the landowner over the land being sold may become easements upon severance, provided they are 'continuous and apparent' and 'reasonably necessary' for the enjoyment of the land. There is debate on whether 'reasonably necessary' means essential or merely beneficial, with different judicial interpretations. Furthermore, Section 6 of the Conveyancing Act 1881 can also imply easements into a conveyance, encompassing all 'privileges, easements, rights and advantages' enjoyed with the land. This section is generally considered to operate independently of the 'reasonably necessary' test, potentially creating an easement where Wheeldon v Burrows might not.
The key takeaway is that a right of way, if established according to these principles, creates a proprietary right that binds future owners of the servient land. It imposes a burden on the servient owner, obliging them to permit the exercise of the right, but typically not to actively maintain the way.
The Right to Park: A Modern Easement?
The right to park a vehicle has been a subject of much legal debate. While traditionally viewed with scepticism due to concerns about potentially granting exclusive possession of a portion of the servient land, modern case law has recognised that a right to park can indeed constitute an easement, provided it does not 'rob the servient owner of the reasonable use of his land' (Batchelor v Marlow (2003)). The crucial factor is whether the servient owner is left with any reasonable use of their land. If the parking right is limited to a specific area and the servient owner can still use the remainder of their property, it is more likely to be upheld.
In Jim's case, his right to park on Trevor's extensive grounds, where a car would occupy a small portion, is likely to be considered a valid easement. Similar to the right of way, this right, if impliedly granted, would become a proprietary right, binding on subsequent owners of Trevor's land. The conversion of a personal licence to park into a proprietary easement through the operation of statute, such as Section 6 of the Conveyancing Act 1881 during a lease renewal, is also a significant mechanism for establishing such rights.
Mortgages: Security and the Power of Sale
A mortgage is a loan secured against property. The lender (mortgagee) has a right to take possession and sell the property if the borrower (mortgagor) defaults on the loan. In registered land, a legal mortgage is typically created by a legal charge.
Creation of Legal Mortgages
Legal mortgages must be created by deed and, in registered land, must be registered to take effect at law. This registration converts the charge into a legal interest, providing the mortgagee with security over the property. Both mortgages in the scenario were legal mortgages, created by deed and assumed to be registered.
The Power of Sale
A mortgagee's power of sale arises automatically under Section 101 of the Law of Property Act 1925, provided the mortgage was made by deed and the mortgage money has become due. This power becomes exercisable once certain conditions are met, typically after a notice to pay has been served and a specified period has elapsed (Section 103 LPA 1925).
Once exercisable, the mortgagee has a duty to exercise the power of sale in good faith and to obtain a proper price for the property. They must act with reasonable care to achieve this, as established in cases like Cuckmere Brick Co v Mutual Finance Ltd (1971). The proceeds of sale are applied first to discharge prior incumbrances, then to the costs of the sale, followed by the repayment of the mortgage debt. Any surplus is returned to the mortgagor.
Possession Proceedings
A mortgagee generally has an automatic right to possession of the mortgaged property once the mortgage money is due. However, courts may adjourn possession proceedings, particularly for residential properties, if the mortgagor can demonstrate a realistic prospect of repaying the arrears within a reasonable time. The definition of 'reasonable time' can vary, with some cases suggesting the remainder of the mortgage term (Cheltenham & Gloucester Building Society v Norgan (1996)).
For commercial properties, the court's power to adjourn possession is more limited, often providing only a short period for the mortgagor to regularise their position. Philip's dire financial situation suggests that securing a possession order for both the residential and commercial properties would be a strong possibility for London Lending Bank (LLB), especially if Philip and Karen cannot present a viable repayment plan for their home.
Personal Liability for Deficits
If the sale proceeds are insufficient to cover the outstanding mortgage debt, the mortgagee can pursue the mortgagor for the shortfall. This personal action is typically available for up to six years from the date the debt became due, particularly for mortgages entered into after 31 October 2014.
Summary Table: Easement Requirements
| Characteristic | Description | Relevance to Scenario |
|---|---|---|
| Dominant and Servient Tenement | Two distinct pieces of land, one benefiting, one burdened. | Trevor's land (dominant) benefits from the right of way over Frank's land (servient). Jim's leasehold benefits from parking on Trevor's land. |
| Accommodation | The right benefits the land, not just the owner. | The right of way increases the utility of Trevor's land; parking enhances Jim's use of his leased property. |
| Separate Ownership/Occupation | Different owners or occupiers of dominant and servient land. | Frank owns 'The Willows', Trevor owns 'The Manor'. Jim occupies his leased property, Trevor owns the freehold of his. |
| Capable of Grant | Well-defined right, not too vague, no positive burden. | Rights of way and parking are recognised easements, provided they don't prevent reasonable use of the servient land. |
Frequently Asked Questions (FAQs)
Q1: Does a right of way impose a burden on the servient owner?
Yes, a right of way imposes a burden on the servient owner to permit the passage of the dominant owner. However, it typically does not impose a positive obligation to maintain the way unless expressly agreed.
Q2: Can a right to park be an easement?
Yes, a right to park can be an easement, provided it does not prevent the servient owner from making reasonable use of their land. The extent of the parking right is crucial.
Q3: What happens if the sale of a mortgaged property doesn't cover the debt?
If the sale proceeds are insufficient, the mortgagee can pursue the mortgagor personally for the remaining debt, usually for a period of six years.
Q4: Can a mortgagee take possession of a property?
Yes, a mortgagee generally has a right to possession once the mortgage money is due. However, courts may adjourn possession for residential properties if the mortgagor can provide a viable repayment plan.
In conclusion, property rights, whether they are easements granting rights over neighbouring land or mortgages securing loans, are governed by a complex set of rules and principles. Understanding these can help navigate potential disputes and ensure that rights are properly established and protected.
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