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Case law: Failure to change Land Registry record immediately oral agreement was made meant agreement was later unenforceable

Landowners involved in negotiations or transactions involving matters registered at the Land Registry should ensure they record the necessary changes at the Registry as soon as possible, or risk being unable to do so later, a recent ruling clarifies.

October 2019

This update was published in Legal Alert - October 2019

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

A homeowner had a right of way over a strip of land behind two properties owned by a neighbour. However, he had not exercised the right for some time and the strip had been blocked by a fence put up by the neighbour on his land. The neighbour wanted to extend one of his properties and the homeowner agreed, orally, to extinguish his right of way so the neighbour could do so.

However, nothing was done to change the record at the Land Registry to remove the right of way from the homeowner’s title.

The homeowner sold his home and the purchaser also subsequently sold it on. Meanwhile, the neighbour had finally obtained planning permission for his development, but when he approached the current homeowner to get the right of way removed from the Land Registry the homeowner refused to agree to this.

The neighbour argued that the legal principle of proprietary estoppel applied. Proprietary estoppel stops someone from backing out of a promise to do something (such as extinguish a right of way) if:

  • they made a representation or gave an assurance to a person that they will do so (this can be oral);
  • that person has reasonably relied on it; and
  • that person suffers a ‘detriment’ – which need not be financial but must be substantial - as a result; and
  • it is unconscionable, in the circumstances, for the person making the promise to renege on it.

If it applies, a court can order the person who made the promise to deliver on it, or to compensate the other person for breaking it.

The neighbour argued that the original homeowner had made such a representation, and he had reasonably relied on it to his detriment by applying for planning permission, etc. He also argued that the promise was binding on the original homeowner’s successors, so the court should therefore order the removal of the right of way from the homeowner’s registered title at the Land Registry.

The court agreed that the main elements required for proprietary estoppel to apply had been satisfied. However, it ruled that because the right of way was registered at the Land Registry, it would only be conscionable for the current homeowner to be bound by the original homeowner’s promise/representation if the neighbour had actually been in occupation of the strip of land at all times.

The fence he had erected was not enough to amount to occupation, even though it stopped the homeowner for the time being from using the right of way.

Operative date

  • Now

Recommendation

  • Landowners involved in negotiations or transactions involving matters registered at the Land Registry should ensure the necessary changes are recorded at the Registry as soon as possible, or risk being unable to do so later.

Case ref: Pezaro & Anor v Bourne & Anor [2019] EWHC 1964

Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.

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