This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
Where the purchaser is already in possession as tenant at will the purchase contract puts an end to the tenancy (a) from the time at which possession is agreed to be given to the purchaser. But a lease from year to year or for a longer term is not aifected by a contract which depends upon a good title being deduced (b); though Equity will restrain the landlord from enforcing payment of rent pending completion (c).
Tenancy of purchaser, whether determined by contract; from year to year or for a term.
A purchaser who is authorised to enter into possession of the estate, may, to some extent, act as owner without thereby accepting the title. He may take a fall of underwood in due course (d): and, in the case off a timber estate, a fall of timber would not necessarily, it is conceived, be an acceptance of the title, though it might be restrained at the suit of the vendor upon the ground of its diminishing his security for the purchase-money: nor, it seems, would any act of management of the estate in a due course of husbandry, or in a fair exercise of the supposed right of ownership (e). Thus, upon a purchase of four acres, stubbing up an osier bed of nine perches, levelling the land, and filling, up a pond was held not to amount to a waiver of title (f).
Purchaser authorised to enter into possession and acting as owner does not waive objections.
As by altering property.
The statement of Lord St. Leonards (g) that "acts of ownership after an authorised possession are of no importance," is too wide to be supported by reported cases or upon principle (h). If the purchaser of a residential property, let into possession pending the investigation of title, were to fell the ornamental timber, or otherwise destroy or permanently injure any feature of the estate, which conferred upon it an adventitious value, it cannot be supposed the Courts would allow him to avoid his bargain upon the ground of the title being not strictly marketable.
Whether universally so.
(a) Daniels v. Davison, (1809) 16 Ves. 252, 253; Sug. 14th ed. 178.
(b) Doe v. Stanion, (1836) 1 M. & W. 695, 701; 5 L. J. N. S. Ex. 253; Tarte v. Darby, (1846) 15 M. & W. 601; 15 L. J. Ex. 236; Sug. 14th ed. 178.
(c) Daniels v. Davison, (1809) 16 Ves. 253.
(d) Burroughs v. Oakley, (1819) 3 Sw. 170; (1815) 1 Mer. 52.
(e) Small v. Attwood, (1832) You. at p. 506.
(f) Osborne v. Harvey, (1841) 1 Y. & C. C. C. 116; 12 L. J. N. S. Ch. 66; and sec Turquand v. Rhodes, (1868) 37 L. J. Ch. 830. Qucere whether the result would have been the same had the purchaser known of the defect, and that it was irremediable.
(g) Sug. 14th ed. 344.
A distinction must be made between acts of ownership previously to, and those exercised after, the discovery of a serious objection to the title (i); for acts which materially affect the property are justifiable only under the purchaser's belief that he is in fact the owner. And it is conceived that a purchaser in possession may so act as to preclude himself from ultimately rejecting the title, without necessarily waiving his right to have the title perfected to the best of the vendor's ability; and also that a distinction must generally be made between acts affecting residential or building property and acts affecting mere agricultural land.
Whether so after discovery of defect in title.
Where a purchaser, who had been long in possession of the property, and had taken frivolous objections to the title, refused to receive any further explanations, and yet retained possession, he was held to have accepted the title (k).
Retention of possession and refusal to discuss the title.
An act which amounts to a waiver of the purchaser's right to reject a defective title, is not necessarily a waiver of his right to compensation for the defect (l).
Waiver of objections but not of compensation.
So, acts by a purchaser in possession, which might otherwise have been considered as a waiver of objections to the title to a portion of the estate, have been held to be modified by his continuing to ask for the title (m).
Modification of waiver.
(h) Donovan v. Fricker, (1821) Jac. 165; Wallis v. Woodyear, (1856)
2 Jur. N. S. 179.
(i) Dixon v. Astley, (1816) 1 Mer. at p. 135.
(k) Hall v. Laver, (1838) 3 Y. & C. 196.
(l) Calcraft v. Roebuck, (1790) 1 Ves. 221; Hughes v. Jones, (1861)
3 D. F. & J. 307, 316; 31 L. J. Ch. 83. The clerk of the vendor's solicitor has no implied authority to bind the client to allow compensation; Burnell v. Brown, (1820) 1 J. & W. 168.
A purchaser should decline to take possession while the title is in dispute, except under a special agreement (n): if he take possession and then refuse to accept the title, he may be ejected by the vendor (o); and cannot at Law claim any allowance for improvements or repairs; nor will Equity afford him any relief unless there has been fraud on the part of the vendor (p). Upon taking possession, the purchaser becomes, in the absence of any special agreement (q), tenant at will to the vendor, though there is a stipulation for payment of interest until completion (r); and the right of the vendor to recover possession by ejectment will be subject to s. 7 of the Real Property Limitation Act, 1833 (s). When a purchaser in possession of part of the property desires to rescind the contract, and assert a paramount title to the property, he is not bound to give up possession before asserting such paramount title by making a formal entry (t).
Purchaser rejecting title may he ejected without compensation for expenditure.
If the contract is rescinded in Equity, even on the ground of fraud in the purchaser (u), the Court will, in general, direct an allowance to be made to the purchaser for substantial improvements and repairs (x). This allowance, however, when the sale is set aside at the suit of the purchaser, will not extend to improvements, or even repairs - except such as are essential to the preservation of the property (y) - made subsequently to the discovery of the matter on which he grounds his right to relief; nor to a greater extent than is specifically claimed (z).