This is the third of several case studies that partner Mike Lewis & Associate Ben Walters covered in their recent talk at Heathrow Airport for 80 surveyors as part of their CPD training.
The recent case of Pezaro v Bourne highlights the fact that landowners need to ensure that informal agreements between them need to be documented.
The case related to three terraced houses in Hampshire. The Claimants are the joint beneficial owners of numbers 149 and 151, and the Defendants are the joint owners of number 147.
The owner of 147 had a right of way over number 149 and 151. The Claimants saw an opportunity to obtain planning permission and develop a block of flats at the rear of all three properties.
An informal agreement was entered into between the Claimants and the previous owner of number 147, to remove the right of way. Neither of the parties took any steps to formally remove the right of way from any of the titles to the properties.
The land at the rear of the gardens was subsequently purchased by a developer on 18 October 2006 and given a new title at the Land Registry. When the previous owner of 147 was contacted to arrange the formalities to remove the right of way, it transpired that he had sold the property to the Defendants.
The Claimants argued that the verbal agreement between them and the previous owner should be enforceable against the new owners of 147 on the grounds of proprietary estoppel.
It was held in court that the right of way was still in existence and was properly registered against the titles of all three properties, as no steps were taken to remove it. The right of way was therefore enforceable.
The Claimants in this case were unable to rely on the informal agreement entered into between themselves and the previous owner of number 147. This case therefore emphasises the importance of making sure that all steps are taken to register any changes, when where the agreement is informal in nature.
Furthermore, all informal agreements should be confirmed in writing and signed by both parties at the earliest opportunity. It may also be useful to include a provision requiring one party to take the necessary steps to make any required changes.