Land law: DR traps

18 June 2012

David Burrows
Solicitor Advocate

A transfer of land is an inescapable consequence of most family breakdowns. Avoid the following traps:

1.  Any agreement on transfer of freehold property must be drafted in a form which complies with s 2 of the Law of Property (Miscellaneous Provisions) Act 1989. If there are heads of agreement compliant with s 2, problems with a resiling spouse or his bankruptcy will not upset the deal.
2. A sealed order takes effect on decree absolute. Any order should have immediate effect (subject to DA), otherwise a supervening bankruptcy of the transferor vests his share in his trustee.
3. A transfer on Mesher terms must be outright subject to a charge back; emphatically not a variation of the proprietary trusts. If the latter, a bankruptcy trustee can force a sale what ever the Mesher triggers may be.
4. It is possible for the parties to agree or the court to order a form of index-linking which will make simple, the defining of the amount to be redeemed under a charge and may remove later sources of friction.
5. MCA 1973, s 24A deals with orders for sale; but it has within it provision for security for a lump sum payment, and for enforcement of any lump sum award. Draft sale orders accordingly.

To read the rest of this article, see July [2012] Family Law journal.

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