How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Matt Jones Your Own Question
Matt Jones
Matt Jones, Solicitor
Category: Law
Satisfied Customers: 671
Experience:  I am a qualified and practising Solicitor with over 7 years post qualification experience
13732703
Type Your Law Question Here...
Matt Jones is online now

In 2003 Tom entered into a written agreement with his niece

Customer Question

In 2003 Tom entered into a written agreement with his niece Stephanie, to the effect that, in consideration of £10, Stephanie was given the right to purchase the farm from Tom for a sum of £1 million, on the giving of one calendar month’s notice, within a period of 21 years
Last month and without any warning Tom sold and transferred the freehold title to the farm to a property speculator called Jim for £10 million, exchange of contracts and practical completion taking place the same day.
Jim is now the registered proprietor of the farm. Will Jim be bound by the possible ‘rights’ of Stephanie?
Submitted: 2 years ago.
Category: Law
Expert:  Matt Jones replied 2 years ago.
Matt Jones :

Hi I will try and help

Matt Jones :

few questions:-

Matt Jones :

1) is the property registered ?

Matt Jones :

2) was the agreement made by deed?

Matt Jones :

3) was the option registered?

Matt Jones :

4) was jim aware of the agreement in some other way?

Matt Jones :

5) what was the date of the option agreement?

JACUSTOMER-cr4k0a2g- :

Hello, yes the property is registered, the arrangement was not made by deed but through a written agreement. The option was not registered and I think Jim was not aware of the agreement. The date of the agreement was made at the beginning of 2003

Matt Jones :

do you know the specific date of the agreement?

JACUSTOMER-cr4k0a2g- :

Im afraid not, probably around January

JACUSTOMER-cr4k0a2g- :

Also, is this question regarding lease options? are there any cases similar to my case?

Matt Jones :

sorry I am not sure i understand, is this an option to lease?

JACUSTOMER-cr4k0a2g- :

I'm not sure what is is, i don't know if its an option to lease

Matt Jones :

Is this an exam question or real life?

JACUSTOMER-cr4k0a2g- :

it's real life

Matt Jones :

hi sorry just had to nip away

Matt Jones :

and so whom are you concerned with? Jim or Stephaine?

JACUSTOMER-cr4k0a2g- :

thats okay don't worry

JACUSTOMER-cr4k0a2g- :

for Jim

JACUSTOMER-cr4k0a2g- :

I need to know whether he would be bound by this right

Matt Jones :

Did Jim pay the pruchase money to just Tom, or was their a joint owner?

Matt Jones :

*there

JACUSTOMER-cr4k0a2g- :

Tom initially owned the property and the title was solely in his name, but he's not sold the property to Jim

JACUSTOMER-cr4k0a2g- :

Jim is now the sole owner of the farm

Matt Jones :

sorry to clarify, you say above "not" sold the property, dd you mean "now"

JACUSTOMER-cr4k0a2g- :

yes sorry i meant now

Matt Jones :

and finally, was Stephanie in occupation of the property at all?

JACUSTOMER-cr4k0a2g- :

no she was not in occupation

Matt Jones :

OK thanks

JACUSTOMER-cr4k0a2g- :

thank you

Matt Jones :

It is unlikely Jim will be bound by the agreement. It was an estate contract made before 2002 and so was not registrable but as the property is register the only way Jim would be bound if he had either actual notice (i.e a notice on the register, and there isn't one) or constructive (i.e. she was in occupation).

Matt Jones :

Stephoen would be able t Sue Tom however under the contratct for the loss of profit

JACUSTOMER-cr4k0a2g- :

okay so would Stephanie get back the £10 consideration and can sue more on top of that?

JACUSTOMER-cr4k0a2g- :

also what is an estate contract?

Matt Jones :

She could sue for the loss (assuming she could prove that she would have exercised the option at some point) and so she could sue for the loss on the basis that the contract was performed correctly i.e. value in the land being around £10 million

Matt Jones :

and estate contract is a contract sale of land, or other disposition in land (i.e. lease etc)

JACUSTOMER-cr4k0a2g- :

okay, and because tom and Stephanie signed a written agreement, wouldn't that bind jim? or does that not count because its not registered?

Matt Jones :

It is the registration or notification that is key. A buyer needs. to become aware of an "overrding interest" for it to become bound by it. So if Tom or his Solicitors made Jim aware then he would be bound, but otherwise from what you have said it sounds like he wasn't.

JACUSTOMER-cr4k0a2g- :

an overriding interest includes occupation of the house, which Stephanie was not, but propriety interest is isn't it? does she not have a propriety interest in the land?

JACUSTOMER-cr4k0a2g- :

also what other things could count as an overriding interest which may bind jim?

JACUSTOMER-cr4k0a2g- :

and how could Stephanie prove that she has exercised the option?

Matt Jones :

the contract is a proprietary interest yes, as it is basically a conditional contract for purchase of land (the condition being the notice etc), but to be binding the buyer has to have notice of it.

Matt Jones :

I am not sure what you mean by the second question. It is a bit too wide, could you clarify.

Matt Jones :

I thought you said she hadn't exercised? If she had she would have to prvove that she had serve a correct notice, in the manner prescibed by the agreement

JACUSTOMER-cr4k0a2g- :

so she cannot bind Jim just because she has a propriety interest in the land? when you say the buyer has to have notice to it, do you mean Tom would have had to tell Jim about it?

JACUSTOMER-cr4k0a2g- :

sorry what do you mean by exercised?

Matt Jones :

so she cannot bind Jim just because she has a propriety interest in the land? Yes : when you say the buyer has to have notice to it, do you mean Tom would have had to tell Jim about it? Yes.

Matt Jones :

exercised the Notice

JACUSTOMER-cr4k0a2g- :

ohhh okay

JACUSTOMER-cr4k0a2g- :

erm im not sure about that one

JACUSTOMER-cr4k0a2g- :

i don't know if she has exercised it or not

JACUSTOMER-cr4k0a2g- :

she did not live in the property

JACUSTOMER-cr4k0a2g- :

ohh do you mean if she registered it or not?

JACUSTOMER-cr4k0a2g- :

she did not register it, but what does a written agreement include?

Matt Jones :

I think this is getting a bit confused. You asked above how could stephanie prove she exercised the option. I said she would have to prove that she correctly served the 1 months notice as set out in the option agreement, usually in writing and delivered by post.

JACUSTOMER-cr4k0a2g- :

ohhh i understand, and if she has not yet exercised the option then would she still be entitled to sue Tom?

Matt Jones :

yes because the right was still live at the time he sold the property, assuming she could reasonably have eventually exercised the option.

JACUSTOMER-cr4k0a2g- :

okay i understand! just another question, if i were to read further about this topic what would i look at, is this option to purchase or lease option?

JACUSTOMER-cr4k0a2g- :

also do you know any cases what i could rely on which have had similar issues?

Matt Jones :

It depends what the actual agreement says between Tom and Stephanie - it could be either.

JACUSTOMER-cr4k0a2g- :

what information would be needed in order for it to be a option to purchase?

JACUSTOMER-cr4k0a2g- :

so is an option to purchase and estate contracts the same thing?

JACUSTOMER-cr4k0a2g- :

because you said to me this is an estate contract

Matt Jones :

It is more accurate to say an option to purchase is an estate contract *as is a contract to purchase, lease, etc). It is difficult to give you specific cases as there are disparate legal principles being discussed here

Matt Jones :

you could start with

JACUSTOMER-cr4k0a2g- :

okay thank you, ***** ***** any laws on this? for example anything in the land registration act or the land of property act?

Matt Jones :

Well there is the Law of Property 1925 that this all begins with and then the more recent Land registration Act 2002

Matt Jones :

also perhaps consider further Hunt v Luck

JACUSTOMER-cr4k0a2g- :

okay thank you i will have a look at that

JACUSTOMER-cr4k0a2g- :

what sections shall i look in the law of property act and the land registration act?

Matt Jones :

1925 act - too wide a question as it depends on what you want to look at; 2002 act check out the Schedules 1 and 3 as a starting point, and sec. 11, 29-30.

JACUSTOMER-cr4k0a2g- :

okay thank you, ***** ***** i understand

JACUSTOMER-cr4k0a2g- :

bascially overall

JACUSTOMER-cr4k0a2g- :

Jim cannot be bound because Stephanie was not in occupation, and even though she has a propriety interest in the property, she cannot rely on this solely. However she can sue under breach of contract and claim damages

Matt Jones :

yep

Matt Jones :

hope this help. Please click to leave me positive feedback so I can be paid for my time tonight

JACUSTOMER-cr4k0a2g- :

yes i will do

JACUSTOMER-cr4k0a2g- :

thank you very much

Matt Jones and other Law Specialists are ready to help you
Customer: replied 2 years ago.

Hello, I was just wondering can't option to purchase be protected by notice?

Customer: replied 2 years ago.

In 2003 Tom entered into a written agreement with his niece Stephanie, to the effect that, in consideration of £10, Stephanie was given the right to purchase the farm from Tom for a sum of £1 million, on the giving of one calendar month’s notice, within a period of 21 years, Tom has now sold his farm to Jim, will Jim be bound by Stephanies rights?