The law of the Property Act 1925 is a statutory document that was enacted by the United Kingdom Parliament. All the laws that relate to property transfer, by lease and deed, and the law of property in England and Wales are amalgamated by this Act. Its strategy was to cut down the number of legal estates to two and simplify the handing over of interests in land for purchasers. Between 1922 and 1925 Lord Birkenhead presented it as part of an interconnected programme of regulation, it was given the royal assent in 1925 and on the first day of 1926 the law begun to be in force. Section 53 of this Act states that instruments are required to be in writing, under section 53(1) Subject to the provision hereinafter contained with respect to the creation of interests in land by parol.
It is important to present a declaration of trust and a disposition of an equitable interest in writing since it prevents fraud. Any fraudulent activities, especially by trustees on beneficiaries, pertaining to the transfer of properties may be reduced in the case where a written document is presented. A written document has the signature of the settlor, trustee and beneficiary. This makes it reasonably tough for a fraudster to make any changes since they will need the approval of all the concerned parties. Most disputed cases have reported fraud involved in one way or another and in the case of legal and equitable interests where disposition of estates is involved proper caution has to be employed. Once an estate has been possessed by someone it takes too much effort and finance to take it away from that person and in some events it is next to impossible. As much as it is hard to identify each and every part’s intentions in the division of the trust it is wise to have a hint or keep up with the proceedings until an agreement is reached at.
It is also noteworthy to have a written document since everyone will be entitled to a copy that they refer to when the need arises. Issues of trust transfers are not light and to enhance on their gravity documentation is vital. No erasures or alterations can be made by the beneficiary or trustee without the settlor affirming it. In case of any amendments all the individuals concerned with the disposition have to be summoned. At some instances there may be discussions that will end up making the amendments fair and just and in compliance with every party’s interests and benefits. Most importantly it is worthy to note that reasoning or rational thinking is in employment when making amendments.
Having a written instrument will be useful to the beneficiary since it cannot be revoked unless the settlor changes the document. Written instruments come in handy just in case the beneficiary passes on then the transfer can be legally changed to another beneficiary and the trustee may not be the one perpetrating the changes to his benefit. The written documents also serve as reference whenever a dispute arises concerning a property transfer. A human’s memory may forget tiny details and in most cases those that are not in their favour or at times those that ought to declare the favour the trustee more than the beneficiary or in the case where a third party is involved. This also makes the beneficiary conform to the conditions that are listed in the document that when adhered to may force the termination of the transfer.
As stated in the Act, a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will. This section 53(1) (b) is an evidentiary value prerequisite which is normally presented to the state and used when creating a trust of land or property. The trust is not nullified when one fails to conform to this section; the courts will not acknowledge parol evidence in order to prove the existence of the trust. This will imply that the commitments that are in line with this trust will not be enforced.
In some parts one can satisfactorily affirm the trust and is not needed to make the writing at the same time. This is not widely conventional. It accepts one to declare a trust by word of mouth and the trust become binding then, when one is beseeched they can provide a written document that approves the oral declaration of the trust by the settlor. When this is done not all the items of the property is accounted for and this is subject to change whenever the settlor deems it necessary. Putting all the items in the list is vital since when it comes to the handing over the settlor can know what was offered and what was not in the list. The beneficiary is at liberty to claim what is on the list and is not physically present. In line with this the third party or solicitor or trustee is not entitled to keeping any of the listed items to themselves for all that is found in the document has to be passed to the beneficiary.
The Act may also imply that the trust of land requires to be manifested in writing that is signed by the settlor and not the declaration is mandated to be in writing. It just has to have evidence to show intentions of the trust’s existence and the nature of the beneficial interests. The document with the trust declaration has to have a list with items of the property that are pertinent to the trust. In this case the settlor may have decided that they have chosen a beneficiary for their estates but may not have made the final decision. They may just declare that in the event that they pass on or are ready to transfer their property to another person for maintenance and ownership then the legal and equitable interests are handed over to the beneficiary. In some situations where an individual is in debt and has to make a quick agreement they may just make a declaration which has the disposition details in writing. A written and duly signed declaration guarantees transparency in estates transfer and helps out in a quick situation.
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In regard to section 53(1)(c), a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will. This Act means that a trust that is not presented in writing is null and void and will not be enforced. A solicitor may be consulted to sign the agreement on behalf of the owner of the equitable interest. A disposition is when a settlor transfers property to a trustee as settlement of an issue, in this case from person A to person B. In some cases a settlor may choose to order legal ownership of the property to be transferred directly to the name of a third party. The settlor doesn’t require a trustee to hold the equitable interests on trust for the third party. He intends that that the equitable interests are passed directly and the third person has legal ownership as compared to when they have mere rights to the property. A disposition can also be when a settlor gives a trust to a trustee to manage it for a beneficiary or the owner of the equitable interest in property may also declare himself to be the trustee.
The beneficiary may also order the trustee to declare the trust in favour of a third party in place of the intended beneficiary. Creating a sub-trust, where the beneficiary with an equitable trust in property that is held by a trustee decides to permit the trust to a third party and not in the name of the original beneficiary. In this case all the benefits and liabilities are transferred to the third. A bare sub-trust is a disposition while a discretionary sub-trust does not qualify to be a disposition. Under this section it has to be in a written document for it to be valid.
In a court case that involved Kinane versus Mackie- Conteh of 2005 where Kinane loaned A Â£50,000 and was to receive the loan repayment with a 100% return. Mackie-Conteh was the administrator of A so Kinane demanded a requisite to have security for his advance. Mackie-Conteh gave him a second charge on a house. The house which is owned by Mackie and his wife was located in Kent. They, Mackie and his wife, wrote a letter that they called ‘the security agreement’ and attached their signatures along with it. Since the loan was not refunded Kinane started proceeding on the loan repayment and wanted a precise enactment of the agreement.
Mackie claimed that the agreement did not comply with Section 2 Law of Property, Miscellaneous Provisions, Act of 1989 so there was no imposable agreement. Kinane argued it on the bases of two sections: He said that it is covered by one of the exceptions found in section 2(5) which denotes that a constructive trust arose. He further asserts that this is due to the fact that he and Mackie had a common intention in which he was to be in charge. Using section 53(1) (c) of the Law of the property Act of 1925 the security agreement written in form of a letter qualifies him to be in charge and the agreement is enforceable.
The use of section 53 (1) (c) was annulled in this case, this is due to the circumstances detailed in the case, that lead to the ruling that there was no disposition of an equitable interest. In addition to that before the security agreement was made the legal and equitable estates had not been divided. In this case one can be certain that the agreement is enforceable due to the fact that there was a written document that should be in honour of the agreement but that only does not solve the case. The incorporation of other sections of the Property Act of 1925 clearly shows that the agreement could have held waters had it come after a genuine division of the legal and equitable estates. Kinane’s argument seems to genuinely be in his favour of owning the estate although the law does not confirm the presence of the letter as a disposition. This accentuates the fact that all written documents should be clear enough on how the handing over is conducted. All items should mandatorily be listed in the document. Kinane should have brought up the contradictory fragment which states that a declaration is also acceptable during transfer of legal equitable interests of an estate.
Controversy also arises when the property is in the hands of the trustee, it is not clear if the settlor has any known control on the disposition. It is indistinct whether their signature is needed in any issue that pertains to the handling of the trust. The Act does not state whether they have any beneficial interests since they have given the trust to the trustee to hold it for someone else, intended beneficiary. This is due to the fact that the settlor technically owns the equitable interests. When it comes to equity the settlor’s right would be acknowledged. The trustee may not be liable to repairs if there is any damage on the estate since it is not clear on whether they have full possession until they hand over the property or not. I such a situation this may be a disadvantage to the beneficiary since the longer they stay without managing the property the more it disintegrates in value.
It may also imply that in case that the equitable interest’s holder gets into a valid agreement and allocates the trust to any other person then a disposition has been made despite the fact that they may not have handed over the trust. Immediately they enter into an agreement then the settlor has a grip on the equitable interests for the trustee. It is suggested that a contract that assigns an equitable interest is a disposition it is not mandatory for it to be in written form. This mandates the presence of a witness who is a third party or a neutral person, who oversees the disposition and can be reliable when validating the agreement. An intense look at this portion brings up contradictions on the fact that section 53(1) of the Property Act of 1925 demands the transfer agreements have to be in writing. The section does not offer any exceptions and further declares the agreement null and void in the event that no written document is produced in court.
The clause “in writing” has enthused debates in several courts and depending on how it is explained then the meaning is not fixed unless amendments are made and it is explained in detail. Tax evaders have been at task to ensure the removal of these sections since any beneficial interest transfer with a document necessitates a stamp duty. This has always met opposition from the judges and their attempt to remove the section is futile. As much as section 53(1) aims at reducing fraud cases it may be a dodgy trustee’s way of fraudulent behaviour on the beneficiary. The fact that one can orally declare a trust and hand over the holding of a trust to a trustee leaves him at liberty to change his mind when it comes to the enforcement of the declaration be it at the court or when he prepares a write up. In a bid to curb this it is highly advised that written requirements should be subdued to a general requirement. This does not allow the existence of a secret trust. The only amendment to be made will be one that incorporates the new technology into the Act.
This Act has been enforced since 1926 and due to its enactment transfer of property has been easy thus the policy that it was set upon has been achieved. With the emerging technology the writing is easier since through transcription machines spoken words can be written down in verbatim. Record keeping has also improved, both in soft copy and hard copy system, so producing evidence is not as difficult as it was before. One can comfortably produce evidence from their electronic gadgets most of which are portable to the courtroom or wherever they are needed. As much as technology has made it easier it is also risky since the documents can be tampered with if security measures are not put in place. Altering a document when it is in soft copy is easy and one saves the changes making it hard to know what was there previously. Being tech savvy can be advantage since one can right protect the documents. The settlor can also be the one with the only copy of the written instrument and produce it only when it is needed.
Having a written document is a key fact in ensuring that whatever ruling that will be passed in the courtroom incorporates utmost fairness and justice will be provided. The controversies surrounding section 53 (1) of the Property Act 1925 may call for revision of the section but what will make the section more clear is addition of parts that are in line with the current trusts and estates transfers issues rather than do away with the demand that every declaration has to be in writing. Sensitization on the adoption of written agreements to the general public should be in the chief focus of strategy in judicial awareness.
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