In Conveyancing, define "dispose", "transfer" and "sell"?

[i.dan]

For example, how are these three types of restriction different?
1. No Disposition of the registered estate..
2. No Transfer of the registered estate...
3. No sale of the registered estate...

And as regards 3. is "sale" a definition that could be applied to a restriction? and if not what is the appropriate word meaning to sell (only) and not any other type of transfer?

A conveyancer is trying to put a restriction on my property as a result of an agreement with an ex regarding an uplift in the event of a "sale". solicitor is trying to use the terms "disposition", or "transfer" instead, which I believe have a broader meaning..

[R0b]

The simple answer to your question is that it depends on how all three of those are to be interpreted absent any specific definition in the contract.

The phrase no disposition is generally well defined by court decisions which in its simplest form means that you cannot transfer any interest in the land usually without consent or some other condition attached. Disposition is probably the broadest which includes sale, transfer, mortgage, re-mortgage, lease, gift, etc.

The words transfer or sale will be determined by their ordinary meaning of those words unless there is a specific definition outlined in the contract that explains what those words mean.

You can create difficulties when you try to include several words within the same sentence or set of clauses such as no disposition, sale or transfer of the registered estate... because disposition has been interpreted by law to include sale or transfer, the inclusions of those words separately could be defined as either broader or narrower than their ordinary meanings. That's what a court might need to determine which will come at the expense of the parties.

Always best to keep it simple so it depends on the context and reasoning as to why the solicitor wants to include the word disposition or transfer instead of sale as including disposition is definitely much broader than the word sale.

What has your solicitor or conveyancer said about this, if you have one?

[i.dan]

The simple answer to your question is that it depends on how all three of those are to be interpreted absent any specific definition in the contract.

The phrase no disposition is generally well defined by court decisions which in its simplest form means that you cannot transfer any interest in the land usually without consent or some other condition attached. Disposition is probably the broadest which includes sale, transfer, mortgage, re-mortgage, lease, gift, etc.

The words transfer or sale will be determined by their ordinary meaning of those words unless there is a specific definition outlined in the contract that explains what those words mean.

You can create difficulties when you try to include several words within the same sentence or set of clauses such as no disposition, sale or transfer of the registered estate... because disposition has been interpreted by law to include sale or transfer, the inclusions of those words separately could be defined as either broader or narrower than their ordinary meanings. That's what a court might need to determine which will come at the expense of the parties.

Always best to keep it simple so it depends on the context and reasoning as to why the solicitor wants to include the word disposition or transfer instead of sale as including disposition is definitely much broader than the word sale.

What has your solicitor or conveyancer said about this, if you have one?

Thank you for your reply. I have recently had a long delay with a transfer (of equity) due to the fact of the title stating "no disposition of the registered estate.. without a certificate.. confirming that the provisions of the lease have been adhered to..", whereas the lease itself used the same restriction, but with "sale" in place of "dispose". So I am weary of repeating the same difficulty with any new restrictions.

You mention "transfer" as having its ordinary meaning. My worry is that transfer may be interpreted as effectively meaning dispose and having that same wide scope of interpretation, For example is to gift (such as by way of a will) a transfer?. Is a transfer of equity (eg new husband / wife on deeds) .. a transfer?

In this case the agreement between the parties was that in the event of any "sale" within five years of the settlement, i should pay the other party half of any profit above a set figure of the proceeds of that sale. an uplift agreement. it was not a requirement of the settlement, it was by mutual consent.

My understanding is that i agreed to what was stated there literally, it was a courtroom lobby agreement, confirmed as a schedule on the court order. Nobody discussed or agreed to it being a restriction on the title, or that the word sale could be rephrased as either dispose, or transfer.

My worry is that such a restriction will cause trouble later on..

[R0b]

You mention "transfer" as having its ordinary meaning. My worry is that transfer may be interpreted as effectively meaning dispose and having that same wide scope of interpretation, For example is to gift (such as by way of a will) a transfer?. Is a transfer of equity (eg new husband / wife on deeds) .. a transfer?

You are absolutely right and the court will have to determine what the parties actually meant by transfer, was it the ordinary meaning of the word or was it intended to be something more broader or narrower. It is a general principle of contract law that any agreement, contract or otherwise should be made clear an unambiguous wherever possible unless there is a plethora of case law that understands what certain words mean. Leaving it to a third party to interpret like a court is simply asking for trouble. It may be that case law has already understood what transfer means in the property and conveyancing world but every dispute is fact specific so that could be determined differently for each case.

In this case the agreement between the parties was that in the event of any "sale" within five years of the settlement, i should pay the other party half of any profit above a set figure of the proceeds of that sale. an uplift agreement. it was not a requirement of the settlement, it was by mutual consent.

My understanding is that i agreed to what was stated there literally, it was a courtroom lobby agreement, confirmed as a schedule on the court order. Nobody discussed or agreed to it being a restriction on the title, or that the word sale could be rephrased as either dispose, or transfer.

I am also inclined to agree with you on this also. Unless the Schedule explicitly states that the parties agree a restriction will be entered on the title of the property, I would argue that goes beyond what was agreed in the schedule. If it were the case that a restriction was intended, it would have been more likely than not, additional discussions on agreeing the actual wording of the restriction and that should have been entered into the schedule. Seems like the conveyancer acting for your ex-partner is trying to pull a fast one and if what you are saying is true, I would tell him/her where to go.

A settlement with a schedule sounds like a Tomlin Order which is effectively a consent order with terms in a schedule that forms part of a contractual agreement. If either party breaches that agreement then the other party can go to court for breach of contract. If you agreed in the schedule that there would be an uplift in the event of a sale within 5 years of the settlement, that's the extent of your obligation, nothing more.

Is the conveyancer trying to make an application to the Land Registry to apply the restriction and you have been notified of it? If so, you will need to make an objection in writing explaining why the application should not succeed. If I recall, once you object and assuming the reasons are not considered to be groundless, it would usually be referred to the tribunal for final determination.

[atticus]

Is the agreement with your ex written?

[i.dan]

You are absolutely right and the court will have to determine what the parties actually meant by transfer, was it the ordinary meaning of the word or was it intended to be something more broader or narrower. It is a general principle of contract law that any agreement, contract or otherwise should be made clear an unambiguous wherever possible unless there is a plethora of case law that understands what certain words mean. Leaving it to a third party to interpret like a court is simply asking for trouble. It may be that case law has already understood what transfer means in the property and conveyancing world but every dispute is fact specific so that could be determined differently for each case.



I am also inclined to agree with you on this also. Unless the Schedule explicitly states that the parties agree a restriction will be entered on the title of the property, I would argue that goes beyond what was agreed in the schedule. If it were the case that a restriction was intended, it would have been more likely than not, additional discussions on agreeing the actual wording of the restriction and that should have been entered into the schedule. Seems like the conveyancer acting for your ex-partner is trying to pull a fast one and if what you are saying is true, I would tell him/her where to go.

A settlement with a schedule sounds like a Tomlin Order which is effectively a consent order with terms in a schedule that forms part of a contractual agreement. If either party breaches that agreement then the other party can go to court for breach of contract. If you agreed in the schedule that there would be an uplift in the event of a sale within 5 years of the settlement, that's the extent of your obligation, nothing more.

Is the conveyancer trying to make an application to the Land Registry to apply the restriction and you have been notified of it? If so, you will need to make an objection in writing explaining why the application should not succeed. If I recall, once you object and assuming the reasons are not considered to be groundless, it would usually be referred to the tribunal for final determination.

Yes. thanks for the reply. the solicitor is trying to make a restriction. the first i heard of it was when the Land Registry sent me the opportunity to object to it. they (LR) then must have entered into some discussion with the solicitor, as they then wrote that the application was being delayed while some legal issue with the application was being resolved. i was then sent the new application which now included the period of the restriction and that "any disposition" had been replaced by "any transfer"... requires a certificate to be signed by the other party, or the solicitor...that the agreement had by dealt with etc.
No mention of what the certificate looks like, or how the process would be undertaken, or that the certificate must be provided within set time limit etc. All I think, potential future hassles that could easily delay or scupper selling the place if wanted..

I agree with you, it feels like they are trying it on. But would the LR see it that way? my experience of them has left me frustrated so far. What does a tribunal involve apart from the inevitable costs for me?

[atticus]

I do not think anything is being "tried on". The purpose of the restriction is to protect the other party's interest. This is usual in the case of overage agreements.

The wording of the restriction should match the underlying agreement. That is why I asked if it is in writing.

[i.dan]

Is the agreement with your ex written?

it is written as a clause on a "By Consent" settlement / court order. it is not written anywhere else
The relevant schedule in the heads of agreement states -

"The transfer is subject to an enforceable overage wherby if the property is sold within the subsequent 5 years, at a sale price over £xxx,xxx the claimant will be paid the equivalent of 50% of the surplus net proceeds above that amount"

[atticus]

then make sure the Land Registry is aware of that wording, and limits the scope of the restriction accordingly.

[i.dan]

it is written as a clause on a "By Consent" settlement / court order. it is not written anywhere else
The relevant schedule in the heads of agreement states -

"The transfer is subject to an enforceable overage wherby if the property is sold within the subsequent 5 years, at a sale price over £xxx,xxx the claimant will be paid the equivalent of 50% of the surplus net proceeds above that amount"

Do you think that the agreement allows for a restriction at all? no agreement to make a restriction was so agreed by mutual consent. Any restriction is an invitation for potential delay and complication or worse. The agreement we made was a contract in itself. How does that also enable the right to make the restriction, especially as it has not been discussed? To be fair I stick by the feeling that it is "trying it on" somewhat and that to some extent the Land Registry can fail at preventing these potential pitfalls?

[atticus]

You have my opinion. It is not beyond the wit of rational people and their lawyers to put in place an arrangement that the restriction will be released in exchange for the appropriate money. This happens all the time.

Of course if you prefer litigation in the First Tier Property Tribunal, that is your choice. I would not consider it a wise one.

[i.dan]

You have my opinion. It is not beyond the wit of rational people and their lawyers to put in place an arrangement that the restriction will be released in exchange for the appropriate money. This happens all the time.

the words "rational .... people .... lawyers" interpret, in my experience "confusion... people....costs". law in our country is adversarial, that does not place rationality or fairness as a priority. It is entirely rational to be suspicious, precisely if a solicitor for the other party is involved as that is their job.. rationality in this case means a contract has already been made. If as you describe, it is entirely rational for that contract to be protected by a restriction, then it goes that the restriction needs to be protected by fairness to fact. the contract says "sale", which does not mean "dispose", or that the agreement should allow for any party to unnecessarily delay or hamper any future events. all of that is obvious. the weak link is with the land registry, who can act as judge without having any right to do so. If I have learnt anything it is trust nothing to the expectation of decency.

[R0b]

In my view, unless there is something else in the settlement that obliges you to register a restriction or allows your ex to do the same, I would still be of the mindset that objecting to the restriction is not unreasonable as it is not absolutely necessary nor was it part of the settlement terms which the parties were free to agree how the overage should be dealt with. Simply agreeing an overage payment should not automatically mean they have a right to enter a restriction on title. If you fail to pay, you are in breach of the overage agreement and your ex can sue.

By the same token, why can't your ex instead register a unilateral notice or even an agreed notice instead of a restriction? As Atticus mentioned, the wording of the settlement should reflect the restriction at least and the phrase disposal is much broader than sale as that would prevent you from gifting the property if you wished to do so - something the settlement does not cover.

Since I am no property law expert I will qualify the above by suggesting that it may be a sensible idea to get some legal advice on it. There may be case decisions that have already dealt with this situation either in your favour or not but I would think that a Tribunal or court deciding that a restriction on the register is acceptable could be akin to re-writing the terms of your settlement by implying something that was never there.