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Sales Of Land Notes

Law Notes > LAWS203 Property Law Notes

This is an extract of our Sales Of Land document, which we sell as part of our LAWS203 Property Law Notes collection written by the top tier of Univerity Of Otago students.

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Sales of Land Stage one: contract Equity and part performance in sale of land agreements PLA s24: (1) Contract not enforceable by action unless: 1) Contract('s terms) is(/are) in writing 2) The defendant has signed the (k) (2) Doesn't apply to short-term leases or court-ordered sales of land. But s 26 holds that s 24 doesn't affect doctrine of part performance If there has been a step taken in performance of a contractual right or obligation so it would be unconscionable to go back on the contract, equity will prevent s 24 from being relied upon. Unless the purchaser has acted unconscionably himself - equity is discretionary. Stage two: transfer S 41 LTA: Instruments for disposition are not effectual to pass any estate or make land liable as security until entry into the register. Solicitor submitting register alteration form electronically effects change in title. In between contract and transfer Carruthers v Whitaker [1975] 2 NZLR 667 (CA) There is a legal presumption that if parties intend to have a written agreement, the agreement will only be enforceable once there exists a formal, signed document. Both expect the agreement to be final only upon signing a formalised document, checked by lawyers - must read parties intentions objectively in light of this common practice. Until this, no enforceable agreement , just an agreement to agree (unenforceable) Need evidence to rebut this inference. Welsh v Gatchell (2007) [2009] 1 NZLR 241 Gatchell subdividing land, Welsh offered to buy. Both walked around it, at one point shook hands and said "we have an agreeme nt". Gatchell wanted 'no fuss' - Welsh saw to surveyors, documentation, extra fees, etc. Gatchell faxed a message to Welsh with record of agreement's terms, ('signature' on fax not intended to be binding, placed on every message) Welsh telephoned Gatchell and expressed agreement - but no signatures. Welsh sent Gatchell a SFC, asking if he wanted to sign it. G threw it out, wanted no fuss, but accepted Welsh's deposits. SFC not a counter-offer, as offer + acceptance complete on fax. Gatchell later died, his widow found the price was too low, tried to claim it was just an agreement to sell. Held: There was a contract at 'shaking hands', but not enforceable due to PLA s24, no evidence to rebut presumption. Swapping of faxes was a contract intended to be final; rebutted presumption. The later acts of wanting a SFC signed and lawyers' conduct could not retrospectively negate this agreement. Welsh eventually won through part performance - G accepting deposit, W paying surveyors' fees, etc. Process for the sale and purchase of land: Offer for sale

Formal contract

(negotiation over price) May be conditional upon (negotiation over terms) 1. Title (Welsh v Gatchell)

2. Finance

3. Land Info Memorandum

4. Building report



Into title Into conditions (can set aside contract if conditions not met)

Payment, transfer of title, possession (can be earlier)

Stuff can get messy here.

Equitable interest After signing the formal contract but before settlement, the purchaser has an equitable interest in the land, and the vendor is a "sort of trustee". Extent and nature of vendor's obligations to purchaser are uncertain. S 137 LTA - As a consequence, the purchaser may caveat their unregistered interest on the register. Any person may lodge a caveat if they claim to be beneficailly interested in land by virtue of unregistered interest. S 141 - Caveat acts as an injunction on the registrar from changing the register. Stops a second party entering contract after the caveating party, getting onto the register first and having indefeasible title (s 62 LTA) Ademption When the vendor dies after a contract to sale, but before title, and in their will has left the house to a person. Re: Richards (1987) Richards left house on Opie st in will to Ms McTague. Richards later contracted to sell to Eade. Richards died before transfer of title, and his executors completed the sale. Executors also completed the purchase of a house on Meyer st, the contract for which had become unconditional. Held: McTague had no claim to the house on Meyer st as the gift had adeemed. Test: whether, at the date of the deceased, there was a right to sue for specific performance. If this right existed, the purchaser has an equitable right to the property, the will's intended beneficiary does not. Specific words in the will are necessary for a substitute gift to arise through ademption. Not present here. Would be the same if house had actually been transferred at death. Trespass during contract/settlement gap Under the general law, the vendor remains the legal owner and is entitled to possession during the contract/settlement gap.

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