Law of Property Act 1925

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 (Penner 2012).

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 (Ramjohn 2004). 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.

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 (MacKenzie & Phillips 2012). 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.

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.

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 (Hudson 2001).

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 becomes binding then, when one is beseeched they can provide a written document that approves the oral declaration of the trust by the settlor (Hayton & Mitchell 2010). When this is done not all the items of the property are accounted for and this is subject to change whenever the settlor deems it necessary. 

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 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 (Ramjohn 2004).

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 party (Hayton & Mitchell 2010). 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.

Controversy 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 (Penner 2012).

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 (Hayton & Mitchell 2010). 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.

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 (Hudson, A., 2001) .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 so producing evidence is not as difficult as it was before. 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.

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