Land - Landlord & Tenant (5)

6. When Dan retired from his job, he decided to sell his house and to go and live near his son, Simon. Simon, who owned a row of cottages, contracted to sell one of them (unregistered land) to Dan for $75,000. Dan paid the purchase-price to Simon and moved into the cottage, but the conveyance was never executed. Two years later Simon, unknown to Dan, mortgaged the cottage to the Bister Bank. Simon did not inform the bank about Dan’s occupation of the cottage, nor did the bank make any enquiries about it. When Simon defaulted on the mortgage instalments, the Bank sought possession of the cottage.
Advise Dan. Would your advice be the same if the cottage had been registered land?

Dan’s interest in land
- Pre-1925: Follow doctrine of notice
- Post-1925: Registrable under LCA, if not registered, bank takes free
- It’s unregistered land’s estate contract, there is no need for the Bank to inspect; the Bank just needs to search LCA for registered land charges
- Apply Lloyds Bank v Carrick

What if it is registered land?
- If Dan’s interest is registered, it binds the bank
- If Dan’s interest is not registered, under 1925 Act, actual occupation is required; under Schedule 3 of 2002 Act, actual occupation which is obvious via reasonable inspection
- Apply Midland Bank v Green