Qu.1 Explain to the partners the effect of the transfer of the legal title to them and what each will be entitled to in equity if the shop were sold and whether Elena can force a sale?

LAND LAW SUMMATIVE ASSIGNMENT

In January last year, seven friends (Letizia, Elena, Anna, George, Karen, John and Simon) paid £1.6 million for the transfer of title of a lease of 50 years of commercial premises, including residential flats on the first and second floor, to run on a co-operative basis selling their own hand-crafted cultural products from the ground floor shop. Elena contributed £100,000 to the lease premium, the other six, £250,000 each, to the lease premium. Simon’s financial contribution included a substantive sum from a marriage gift to himself and his wife Janet. The grant of the lease was to all of them as ‘beneficial joint tenants’. A few weeks after the acquisition of the shop Letizia realised that she was no longer interested in the business and wished to sell her interest within six months so she could start up her own mystical gem craft business. She met with the other six partners and handed them each a copy of a letter expressing this desire, but when they all burst into laughter at the concept, she died of a heart attack. In April, finding herself short of money, Elena mortgaged her interest in the property to Anna. Elena managed to repay the loan two months later. Jonathan had become addicted to gambling and in June, having failed to pay a gambling debt to a casino, proceedings were commenced to have him declared bankrupt. On the evening of the bankruptcy hearing Jonathan committed suicide. In June, George finished an existing course he had been taking to become an acupuncturist and decided that he wanted to leave the business and release the money he had invested for his new career. His solicitor drew up notices of severance which George handed to all the other partners at one of their weekly meetings. Soon afterwards George and Karen argued over the future direction of the business, the two fought and Karen stabbed George to death. George left a will giving all his assets to Simon. Short of staff, Elena, Anna and Simon agree that Janet can assist in the shop and she and Simon move into the flat above the shop. Elena is now disillusioned with the business and wants to sell it (including the premises), believing that the enterprise is jinxed, and she has found a prospective purchaser, Colin. The others believe the worst is behind them and want to keep running the shop.

Questions: Answer both of the following questions:

Qu.1 Explain to the partners the effect of the transfer of the legal title to them and what each will be entitled to in equity if the shop were sold and whether Elena can force a sale?

Qu.2 Colin has consulted you about his proposed purchase, what ought he to be aware of in respect of the acquisition of this estate?