Case law: Ruling brings home importance of formalities when buying land, no matter how small the purchase price

Buyers of land should ensure the sale agreement is in writing, sufficient to satisfy English and Welsh law, and that there is a formal transfer of title, after a person who believed he had bought a caravan pitch found he did not own it after all.

An original owner of a caravan pitch purported to sell it simply by handing over the title deeds to the buyer, assuming he would register his ownership of it at the Land Registry. Neither she nor her buyer entered into an agreement in writing for him to buy the land. However, the law in England & Wales requires agreements to buy land to be in writing or they are not effective. Nor was there ever any formal transfer of the title to the land, pursuant to the oral agreement to buy it. The original owner therefore remained registered in respect of it at the Land Registry

The buyer later sold it on – again, without any agreement in writing or formal transfer document. The second buyer also sold it on again to third buyer - for £3k – and, again, no legal formalities were observed.

In the meantime the original owner had received a bill for maintenance of the pitch, for more than £7k. She was approached by a third party who offered to buy it from her in return for paying the charges. She agreed ‘in desperation’ – and for this transaction there was both an agreement in writing and a formal transfer of the title to the land.

The third buyer – the man who had paid £3k - applied to register a restriction on the title, which would mean he could stop the land being sold, given away or mortgaged without his consent. However, the First-tier Tribunal (which deals with land disputes and issues) ruled that he had no legal title to the land, or any other interest (what lawyers call a ‘beneficial interest’) in it. His argument that the original owner should be treated as holding the land on trust for him failed. He could not therefore register a restriction.

He could now try to sue the second seller, to whom he paid his £3k to, but this is an uncertain route, and disproportionately expensive given the sums involved.

Operative date

• Now

Recommendation

• Buyers of land in England & Wales should ensure the sale agreement is in writing, sufficient to satisfy the law, and that there is a formal transfer of title, when buying land, even for the smallest transactions.

Case ref: Alan Bates v Curtis Guy & Anr [2017] UKFTT 882