The Perils of Ending a Tenancy During the Registration Gap – With Comment From Michael Wear


In a recent appeal to the High Court[1], it was found that notices to quit served after a purchase of a property, but before the property is properly registered, will be invalid.

Facts

This case concerned an agricultural tenancy that the claimant (C) held on some 18 acres of land. Stodday Land Limited (Stodday) had held the entire freehold to this plot. On 19th June 2013, Stodday sold a small part of this land to Ripway Properties Ltd (Ripway). On 1st July Ripway served a notice to quit on the portion of the land that it had purchased and Stodday served a notice on the remainder. As registration of Ripway’s ownership of the land was not completed until 16th July however, Ripway had not yet obtained full legal title upon serving the notice and it therefore was not valid. Resultantly, Stodday’s notice also failed because notice to quit had not been given in relation to the entirety of the holding.

High Court Decision

Stoddey and Ripway challenged this unsuccessfully in the High Court. The three grounds of their appeal and the reasons for their rejection are as follows:

  1. Ripway was the landlord under Section 98 of the Agricultural Holdings Act (AHA), being entitled to the rents and profits of the land. This argument was rejected as Ripway was not the registered owner of the land and therefore Section 98 had no bearing.

  2. Having taken an equitable assignment of the rent, Ripway was entitled to the income of the land under Section 141(2) of the Law of Property Act 1925, creating an equitable right to serve the notice to quit. This was rejected, the judge finding that equitable title was not sufficient to serve a notice to quit and that strict legal title was required.

  3. Under Section 24 of the Land Registration Act 2002 (LRA), a person entitled to be registered as the proprietor of the estate could exercise owner’s powers. This argument was rejected for the same reason as ground 2; someone who is not yet registered as the proprietor does not have the legal title despite what Section 24 states.

Conclusion

This case demonstrates the importance of ensuring that any purchase of land is recorded in the register of title prior to serving a notice to quit, even where it meets the usual requirements specified for agricultural land. The case further demonstrates that Section 24 of the LRA will not save a notice from being invalid in these circumstances.

Comment

Although the case concerned an oral tenancy, the same principles will apply with a periodic tenancy in writing. Frequently in cases of writing there will be a clause permitting the service of a notice to quit as to part. This would have led to a different result in this case regarding the notice served by Stodday, although probably not in respect of the notice served by Ripway.

[1] Stodday Land Ltd v Pye [2016] EWHC 2454 (Ch)

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