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Manchester Conveyancing Solicitors | Ford Banks Irwin Solicitors - The Property Lawyers in Manchester on Transfer, Equity and Trusts of Land

Please note: Not to be used or relied upon without legal advice. These notes are for illustrative purposes ONLY.

. . . continued from page 13

Private Trusts of Land / Property

Application by beneficiaries to protect their interest:

This is discussed in the headings:
When may a beneficiary apply for a Form A restriction
When may a beneficiary apply for a Form B restriction
When may a beneficiary apply for a Form C restriction
Other restrictions
Who can apply for a restriction
Bare Trusts
Constructive Trusts

Bankruptcy:

If one of two beneficial joint tenants becomes bankrupt, the Bankruptcy Order severs the joint tenancy. The registered proprietors should instruct Conveyancing Solicitors and Property Lawyers to apply for a Form A restriction, an the trustees in bankruptcy can also do so (as a person interested in the trust). The Registrar will not enter one automatically. The trustee in bankruptcy may also instruct Conveyancing Solicitors and Property Lawyers to apply for a form J restriction. This will ensure that the trustee in bankruptcy receives notice of any disposition by the trustees.

Although in general the Property of a bankrupt vests in their trustee in bankruptcy, this does not apply to Property which the bankrupt holds in trust for another. Consequently, when a joint proprietor is declared bankrupt, their beneficial interest (if any) will vest in the trustee in bankruptcy, but their legal estate will not. Any disposition of the legal estate must be executed by the bankrupt and other trustees, and, if capital money arises, the receipt for it must be given by them, not by the trustee in bankruptcy. Bankruptcy may, however, be a reason for replacing the bankrupt as a trustee.

Bare trusts:

A bare trustee or custodian trustee is obliged to act only on the instructions of the beneficiary. It appears that this limitation is one of the rules of equity in contravention of which the powers conferred by section 6 TLATA, must not be exercised. The rights of the beneficiary should be protected by applying for a form A restriction - if the application for registration is made by the trustee. Rule 94(2) Land Registration Rules 2003 obliges them to apply for this. Conveyancing Solicitors and Property Lawyers may wish to apply for a restriction in form N, preventing the registration of dispositions without the beneficiary's consent.

Constructive trusts, etc:

An implied, constructive or resulting trust is a trust of Land. If one arises, the registered proprietor must instruct Conveyancing Solicitor and Property Lawyers to apply for a form A restriction. In practice, the proprietor may not be aware that a trust has arisen, or , if they are, they may dispute the fact. The beneficiary can also apply for a form A restriction. Unless applying with the proprietor's consent, the beneficiary will need to satisfy the Registrar that there is a trust. In practice, this will involve completing panel 12 or 13 of form RX1 with sufficient information to do so. This will involve more than a bare assertion that a trust has arisen. Conveyancing Solicitors and Property Lawyers will need to explain the circumstances that have caused it to arise.

Unless the registered proprietor consents, the restriction will be a notifiable one, and Land Registry will send the registered proprietor a notice, giving them the opportunity to object. Any resulting dispute will have to be dealt with under section 73 Land Registration Act 2002.

Mental capacity:

A trustee who lacks capacity may generally be replaced under the provisions of the Trustee Act and TLATA. But if they have a sufficient beneficial interest in possession in the trust Property, they cannot be replaced under section 36 Trustee Act without leave of the Court of Protection.

It may not be necessary to replace a trustee who lacks capacity if they have executed an enduring power of attorney or a lasting power of attorney registered under the Mental Capacity Act 2005, providing that they have a beneficial interest in the trust Property. In such a case, the attorney can discharge their functions as trustee. No other power of attorney will be effective for this purpose. Other powers, even if they apply to functions which the donor has as trustee, are revoked if the donor lacks capacity.

(All italics in this page are Crown Copyright and reproduced here for your information with permission from HM Land Registry)

. . continued on page 15 (Property Lawyers and Conveyancing Solicitors in Manchester - Transfer, Equity and Trusts of Land page 15)

Please telephone Paul on 0161 866 8999 if you require any further information.

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Manchester Conveyancing Solicitors | Ford Banks Irwin Solicitors - The Property Lawyers in Manchester on Transfer, Equity and Trusts of Land