Form A restriction and a sale by a surviving co-owner (registered title)
You act for Callum Reid, who is buying a registered freehold house in Bristol for £390,000. The official copies show Joan Petrie and Helen Okafor as registered proprietors, and the proprietorship register contains the standard Form A restriction: "No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court." Helen died last year. Joan is selling the house and has produced Helen's death certificate. Helen's will appoints her son, Daniel Okafor, as executor; he has not been appointed a trustee of the legal estate. Joan does not claim to have become solely beneficially entitled.
What should Callum's solicitor require in order to obtain good title and register the transfer?
Choose one answer to see the reasoning.
Worked answer
Correct answer D: A transfer by Joan together with a second trustee whom Joan appoints to act with her, with the purchase money paid to both trustees.
THE RULE TO REMEMBER
Where a sole surviving proprietor is registered with a Form A restriction and capital money arises, a second trustee must be appointed to join in so the money is paid to two trustees.
Form A restriction and a sale by a surviving co-owner (registered title)
A Form A restriction indicates that the registered proprietors hold the legal estate on a trust of land and that a sole survivor cannot give a valid receipt for capital money. Its purpose is to secure compliance with s.27(2) of the Law of Property Act 1925, under which capital money must be paid to at least two trustees (or a trust corporation) for the beneficial interests to be overreached. Joan holds the legal estate alone by survivorship, but Helen's beneficial share passed under her will. HM Land Registry's Practice Guide 24 states that where a sole surviving proprietor is registered with a Form A restriction and capital money arises, one or more new trustees must be appointed to join in the disposition. Joan should therefore appoint a second trustee (who may be Daniel, once formally appointed as a trustee) and both should execute the transfer and give a receipt for the price. Callum then takes free of the beneficial interests, and the transfer can be registered.
Why A is wrong: A sole survivor cannot comply with the Form A restriction where capital money arises; the transfer would not be registered and the trust interests would not be overreached.
Why B is wrong: Practice Guide 24 says it is incorrect for the deceased's personal representative to join in unless formally appointed as a trustee of the legal estate.
Why C is wrong: Joan does not claim sole beneficial entitlement, and a declaration about a joint tenancy does not displace the restriction where the facts show a beneficial share passing under Helen's will.
Why E is wrong: The restriction is complied with by payment to two trustees after appointing a new trustee; a court order is not the only route.
A little more practice done.
Related questions
Overreaching on payment to two trustees and a beneficiary in actual occupation (LPA 1925 ss.2 and 27; City of London BS v Flegg)
Which of the following best describes Margaret's position against the bank?
Priority period of an official search of registered land (OS1)
Which of the following best describes the protection the official search gives the buyer?
Length of title an unregistered seller must deduce (LPA 1969, s.23)
Which of the following best describes the title Grace must deduce?
A GOOD HABIT, DELIVERED
Tomorrow's question.
In your inbox.
One free question a day, with the answer and reasoning.
No course pitches. Just your daily practice.