A recent High Court case, Pezaro v Bourne,* has highlighted the severe consequences that may result in delaying the registration of any agreement to remove or modify rights over land. In this case, a right of way belonging to Ayers, a neighbour, ran across the Pezaro’s property. The Pezaros wanted to develop that part of the land. The Pezaros and Ayers verbally agreed to remove the right of way so that development could take place.
Before registering the removal of the right of way, the Pezaros wanted to obtain planning permission. Once they had obtained planning permission, they contacted Ayers to arrange to have the right of way removed from the register. They discovered that Ayers sold his property to the Bournes, who did not agree to the removal of the right of way.
The Pezaros sought to bind the Bournes to the oral agreement made with Ayers by arguing proprietary estoppel and that they had an overriding interest as set out in Schedule 3 of the Land Registration Act 2002.
Proprietary Estoppel Argument
The proprietary estoppel argument went that it would be unconscionable to allow the right of way to be enforced by the Bournes because of Ayers’ oral agreement to remove it. However, the Court found that because the right of way was not noted on any title of any of the relevant properties, the proprietary estoppel argument would fail and the Pezaros had to rely on whether removal of the right constituted an overriding interest as set out in Schedule 3, Paragraph 2 of the Land Registration Act 2002.
Overriding Interest Argument
To show that the Pezaros had an interest in the land that overrides what was stated on the register, the Pezaros had to prove, among other things, that they were in actual occupation of the land, the subject of the right of way.
The Pezaros argued that blocking the right of way by a fence and two gates that displayed a site notice, were some of the reasons that proved they were in occupation of the land.
The Court rejected the Pezaros argument for a number of reasons including that a gate and fence constitutes an obstruction, not an occupation. Further, the Court found that the site notice showing a planning permission application is a notice of intent only and not evidence of occupation. Consequently, the Pezaros were not able to remove the right of way.
Ensuring Agreements involving Land are Enforceable
This case should serve as a stark reminder that any agreements relating to land ideally should be in writing and registered at the Land Registry immediately. Indeed, it may be well worth including in any written agreement that money will be held in escrow until the right is registered as a way to motivate parties to act quickly. Fencing off land and putting up notices will not be enough to override what is written on the register. If you are relying on an agreement, whether verbal or written, in relation to the disposition of land, take responsibility and act. The consequences of not doing so may be severe.
Pezaro v Bourne  EWHC 1964 (Ch)
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