Part 1 : Co-ownership
Ahmed (17), Bluto (17), Beatrice (18), Freddy (17) and Surbjit (18) were the best of friends all throughout their school years. In early September 2018, they were getting ready to head off to Leicester to start their law degrees. Before they went, their parents, who were delighted that all their children were going off to study together, decided to pool together some money so that the children could buy a freehold house to live in for the period of their studies. It was also hoped that, upon graduation, all of the children could then benefit from the future sale of the house to help start their careers. The house they chose cost £250,000 and has 5 bedrooms. Not all of the parents, however, were able to make the same financial contribution. Ahmed, Freddy and Surbjit were able, with their parents’ help, to put in £50,000 each. Bluto could only afford to contribute £25,000, but Beatrice was able to put in the final £75,000 necessary to reach the purchase price.
Discuss the ownership issues likely to be faced by the 5 students considering both legal and equitable interests in the property.
LLBP 2205_2021 Land Law Assessment 1 (part 2 of 4)
Part 2: Lease/License
Tragically, a week before term started, Ahmed and Bluto were involved in a traffic accident in which Bluto was killed. Bluto’s parents announced that they were happy for all the others to proceed as planned and enjoy the benefit of the house until they graduated. At this point, Beatrice decided that she did not want to waste the now spare room and insisted on finding someone to live with them. Having made friends with Sally during Freshers’ Week, Beatrice decided to offer her the spare room on the basis of a license agreement due to end in the summer holidays. However, the document that Sally signed described the agreement as a lease. At the start of the summer holidays, Beatrice asks Sally to move out, but Sally refuses, insisting she can stay until the middle of summer.
Discuss the agreement that Sally has entered into and any possible problems which may arise.
LLBP 2205_2021 Land Law Assessment 1 (part 3 of 4)
Part 3: Mortgage
By the beginning of 2nd year in September 2019, Sally has now left. Beatrice has started a relationship with Jeremiah, who is well known among students as a local drug dealer. He has been delighted to make use of the empty bedroom for his cannabis farm, and has decided to expand his drug dealing business. In order to fund this expansion, he confronts Beatrice and insists that she approach Leicestershire Savings and Loan Bank to enter into a mortgage agreement to release funds. In their discussions with the bank, Beatrice and Jeremiah pass themselves off as the sole owners of the property, and the Bank transfer the funds into an account held in their names jointly. None of the others know about this. At first things go well for Jeremiah and Beatrice, but, after some students became ill after using his products, word spreads and his business dries up. As a consequence, they default on their mortgage payments and receive word that the bank is beginning proceedings against them.
Discuss any issues of concern about the mortgage agreement. Please consider the actions of Jeremiah, Beatrice, and the Bank.
LLBP 2205_2021 Land Law Assessment 1 (part 4 of 4)
Part 4 Registration
Having received word from the bank about proceedings, Beatrice panics and, in an attempt to raise funds and pay off the loan, decides to sell the house. She knows that Sally, the former lodger, has recently won the lottery and so approaches her offering the house at the cut price of £100,000. Sally, having always liked the property, and having been upset at being forced out, was happy to accept such a good offer and immediately got Beatrice to sign a deed of transfer. Sally then contacts the Land Registry to have her new ownership registered. The bank subsequently discover this, but Ahmed, Freddy and Surbjit only find out what has happened when Sally turns up and tells them to leave.
Discuss any possible protection for the Bank; and for Ahmed, Freddy, and Surbjit.