Property transactions: legal formalities and requirements
9 May 2018
Former solicitor Nicola Laver is a freelance legal journalist/editor and an author and legal copywriter
A fundamental principle of land law in England and Wales is that an agreement for the sale of land must be in writing, incorporating all terms expressly agreed by the parties in the contract, or by reference to some other document (Law of Property (Miscellaneous Provisions) Act 1989 s2). There must also be a formal transfer of title. There is no exception to this rule for very ‘small’ transactions, as a recent caravanner discovered to his cost.
What was the case about?
In Bates v (1) Guy (2) Tebb  UKFTT 882 (PC), 20 November 2017, the dispute involved a series of informal ‘sales’ of a plot on a caravan park. The owner of a caravan pitch ‘sold’ the pitch by handing the title deeds to the buyer.
The registered proprietor, T, was the second respondent in the case, and she agreed informally to sell her plot. The ‘buyer’ gave her £1,200, in cash, in exchange for what she described in evidence as the ‘title deeds’ (para 2). No written contract was entered into.
Shortly afterward, the ‘buyer’ purported to sell it on; again, without any legal formalities and, once again, the plot was ‘sold’ on to yet another buyer, B, for £3,000 without the legal formalities. T, the original registered proprietor, remained the legal owner of the property.
T received a bill for more than £7,000 for maintenance of the pitch. None of the three purported ‘buyers’ of the property had paid any maintenance. However, another party, G, who was interested in buying a large number of the plots on the site, entered into talks with T to buy her plot: the consideration to include paying the accrued arrears. This transaction was completed in accordance with the required legal formalities for the sale and purchase of land, and title was transferred to him.
The maintenance company obtained summary judgment against G in respect of the outstanding arrears. However, B applied to have a restriction entered on the registered title.
What did the First-tier Tribunal decide?
The First-tier Tribunal (FTT) found that B had no legal title to the land or any beneficial interest in it. There was no legal contract between T and the first ‘buyer’, and if there was that ‘buyer’ could have brought an action for specific performance of the contract.
B also argued, unsuccessfully, that T should be treated as holding the land on trust for him. However, the FTT made clear that without a contract binding in law, there was no question of the registered proprietor holding the land on trust for the purchaser. B could only apply for the entry of a restriction on the registered title if he had a ‘sufficient interest in the making of the entry’ under LRA s43(1)(c) (para 18).
Without either a legal or beneficial interest, no restriction could be registered on the title in B’s favour. His only option was to take action against his ‘seller’ for the £3,000 he had paid.