A Century of Land Law (and the Legacy Lives On)!

2025 will mark the 100th anniversary of the Law of Property Act 1925 (“the LPA 1925”). The Act was designed to simplify the complex and often confusing land law system in England and Wales. Before its enactment, land law was described by Oliver Cromwell as a "tortious and ungodly jumble". The LPA 1925 is still very much alive in property law practice today.

For the Property and Affairs Deputy, the key is in the name. A Deputy will inevitably need some understanding of the laws of our land to be able to help our clients to manage their affairs. Most of us will have of course experienced a sale or purchase at some point or perhaps even worked in a property team.

It is still important to keep updated on property matters so I have highlighted a few recurrent issues that apply in practice:

Orders with a general authority clause

There have been recent discussions on this issue both at the CUG and on the forum. Some older Property and Affairsl Orders can be silent on specific authority to purchase or sell property. Such Orders may provide a “general authority clause” allowing the Deputy to deal with P’s property. If the general authority clause was inserted at the time of making an Order, it was likely the intention of the court to allow the purchase of a property by the Deputy, however this is not always a given. The Land Registry may interpret that same clause quite differently upon registration of your client’s property. If the Land Registry decides to reject the Order as not being the correct authority to purchase by the Deputy then it will mean a retrospective application to the Court whilst also protecting the client’s priority on the Land Registry title whilst they are not officially owners.

Purchase of Property for a minor under a Trust

Going back to the LPA 1925, S1(6) states that a minor cannot hold legal title to any estate of land. General practice therefore is that we appoint trustees to “hold” the legal title for our minor clients. In Deputyship cases, the Trustee is most likely to also be the Deputy and therefore additional Court authority is required to act as Trustee (as it is not within a Deputy’s general powers to act as Trustee). The requirement for two trustees to hold legal title is primarily derived from S34(2) Law of Property Act 1925. This ensures that there is a check and balance in the management of the property, preventing any potential misuse of power by a single trustee.

One question that often confuses conveyancers, the Land Registry and Deputies is: Is a Trust Corporation classed as one or two trustees? I have had mixed advice on this over the years from various conveyancers and land registry representatives. Some consider that if a Trust Corporation acts as Deputy for P, then the Trust is one entity/represents one person only and therefore can only act as one of the Trustees. Consequently, another single trustee would need to be appointed as co- trustee (for example a solicitor of the firm or a parent) in addition to the Trust Corporation Deputy.

Others consider that two Directors of the Trust Company can individually be appointed to act as Trustee and therefore sign the TR1 and Contract for purchase in their individual capacity but appointed as two Trustees. Good practice would be to ask the Court to clarify the position in any Order for sale so that there is no question when it gets to Land Registry registration.

A Declaration of Trust would be required alongside this process to explain the situation and usually in accordance with any Directions in the Order. Declarations of Trust will also usually need to be filed with the OPG following completion of any purchase. Don’t forget to advise the OPG once P turns 18 and the trust is discharged.

On that point, the Court was recently asked whether authority is needed to transfer a legal title back to P once P turns 18. Again, this is another conflict point between the Court and conveyancers in practice. Some consider that court authority is needed because there could be a clause in the general Order restricting “disposition of property” and technically a TR1 would be required to transfer the legal title from the Trustees to P which is classed as a disposition. The Court’s view is that this is a matter for the Trustees to deal with upon P turning 18 and the court would not necessarily be required to provide specific consent. The Land Registry may of course disagree.

100 years on and we still have questions!

Asha Beswetherick
December 2024