In the summer of 2014 Alison purchased the registered freehold to Sleepy Hollow for £280,000. Alison’s mother, Barbara, lived in France but provided the deposit of £28,000 for Sleepy Hollow, with Alison becoming the sole proprietor. Alison raised the remainder of the purchase price with a mortgage, which was arranged through Cantander Bank.
ASSESSMENT QUESTIONS
Answer any TWO from the following four questions. You should allocate roughly 1,500 words per question and ensure that your total does not exceed 3,000 words.
You must answer ONE question from PART A and ONE question from PART B.
PART A
Question 1
In the summer of 2014 Alison purchased the registered freehold to Sleepy Hollow for £280,000. Alison’s mother, Barbara, lived in France but provided the deposit of £28,000 for Sleepy Hollow, with Alison becoming the sole proprietor. Alison raised the remainder of the purchase price with a mortgage, which was arranged through Cantander Bank.
Alison gave Barbara a receipt to evidence her contribution to the purchase price and she always allowed Barbara to use the annexe at the back when she was in the UK.
A neighbour, Dev, has been given permission to use the shed at the rear of Sleepy Hollow during the winter, as he has nowhere dry to store his Harley Davidson.
Alison’s sister, Enid, really loves Sleepy Hollow. One night the girls had a night in and enjoyed a few glasses of wine. In that moment Alison promised that, were she ever to sell the house, she would give Enid a ‘good price’. They jokingly wrote this on the back of the Freshco receipt for the wine.
Alison now wishes to sell Sleepy Hollow, as she finds it too sinister and scary as a residence. A number of interested parties have offered her more than the market value of £320,000.
Advise Alison what her legal position is in relation to the rights of the other parties, and how those rights could/should have been protected. Additionally, consider to what extent a new buyer may be bound by those rights were she to sell Sleepy Hollow.
OR
Question 2
In 2015, when they were going to University in Sheffield, the quadruplets Alun, Badun, Calum and Danun decided to invest their inheritance money in a house for them all to live in. Together they purchased the registered freehold of 16 Acacia Avenue.
After University, they decided to keep the property but did not all intend to live there. Alun and Badun sat down with the others and outlined their plans to set up a smoothie bar in London. They explained that it had been fun sharing the house while at uni but that things had changed and it was ‘time to start living separately like grown ups and handle our own finances’. The others agreed that Alun and Badun were free to do this but Calum and Danum still wanted to pool their resources and pay for things collectively.
Unfortunately Alun and Badun’s smoothie business did not go well, as the trend for smoothie-drinking passed, and they were forced to close the shop. Alun took the news badly and started drinking heavily. Sadly he was hit by a fruit lorry on his way home from the pub one night. His will leaves his entire estate to the ‘Good Boy’ dog rescue charity.
Badun was left with a large amount of outstanding personal debts, due to the business failure, and he had no choice but to declare bankruptcy. Fidelity Finance have been named as his trustee in bankruptcy, and will ensure that his assets are used to pay back any creditors. Additionally, as he cannot afford to live in London any longer, he has decided to move back to the house in Sheffield.
Calum and Danum are still living in the house but are reluctant to allow Badum to move back in with them.
- Explain how the estate would devolve in both legal and equitable title.
- Advise Calum and Danum whether they should allow Badum to move back into the property.
- Advise Calum and Danum as to whether there is any threat to their hold on the property, or whether any other interested party could force its sale.
PART B
Question 1
In 2015 Andy inherited the registered freehold of 24 Kitty Corner, a four-storey townhouse, but the property felt too large for him to live in alone.
He decided to live on the ground floor and generate some income from the other floors. He made the following agreements:
- Berni (Andy’s best friend) occupied the 1st floor in return for £200 per month for ‘1 year in the first instance’.
- Carey occupied the top floor in return for payment of £800 per month for a term of 6 years. This was written on a piece of paper, which they both signed, and entitled ‘licence agreement’.
- Denny lives on the 2nd floor and works as a chef in Andy’s restaurant nearby. Denny moved in to the house when he split from his partner and pays Andy £100 per week.
Andy has a key to the entire property but has ensured that he also has a copy of the keys for each floor’s separate entryway. He is a keen animal lover and has encouraged the others to have pets if they so wish. He occasionally uses his key to put out water and food for the pets and to take Berni’s dog for a walk.
Earlier this year he met Evan and they fell in love. He is now considering selling number 24 in order to move into a smaller property with him. Advise Andy as to whether he can sell the property free of the other parties’ interests or whether a future purchaser would be bound by any of the agreements he made.
OR
Question 2
Amy and Bez bought their dream house, Clover House in 2010, with the creation of a mortgage to Notwest bank. In 2015 Amy wanted to try IVF so that they could become parents. She persuaded Bez to sign the mortgage agreement for a second mortgage on Clover House, with Cantander bank. This was done in order to finance the fertility treatment, and Amy had threatened at the time to leave Bez unless he ‘supported her dream to become a parent’.
Unfortunately, they have been experiencing financial difficulties and they are struggling to keep up with both mortgage repayments.
Amy went on maternity leave a few months ago and that was when they started to miss payments: They are currently 3 months in arrears. Amy is due to return to work in September.
Their second bank, Cantander, have sent them a letter, telling them that there will be ‘no choice but to take serious measures’ in the event of continued non-payment.
Amy and Bez are concerned and come to you for advice.
Please advise them as to:
- what steps the bank can take against them in relation to the repossession and sale of the property to satisfy the debt,
- what they can do if they would like to remain in the property and pay off their arrears, and
- whether any defences are available to either of them in such an action.
END OF ASSESSMENT
