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United Kingdom

Off‑plan purchasers’ equitable liens where developments are unbuilt: attachment to identifiable land (including air‑space), enforceability and priority—Eason v Wong (Chancery Division, England and Wales)

Published on: 07 April 2017

Published by a LexisNexis Property expert
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Article summary

Original news Eason and another v Wong [2017] EWHC 209 (Ch), [2017] All ER (D) 196 (Mar)

The Chancery Division determined that investors who had contracted to acquire long leases of student flats and paid deposits held an enforceable equitable lien over the land comprising the subject of each individual bargain once the seller failed to progress the development. The court further ruled that enforcement of an equitable lien does not depend on the pre‑existence of the legal estate in the property; it is sufficient that the vendor agreed to create a legal estate out of an existing legal estate and that the estate to be created is identifiable.

What was the background to the case?

A company incorporated as a special purpose vehicle to purchase and develop a site for student accommodation entered into off‑plan contracts with a number of investors for the grant of leases of flats within the scheme. Each investor safeguarded their position by registering unilateral notices against the registered title of the site. The company subsequently went into liquidation at a point when no construction works had yet begun...

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Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

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