2. Estates and Interests in Land Flashcards
The study of land law is the study of what?
Property/proprietary rights in the land
What makes a proprietary right useful?
- Use/possession of the right can be recovered - no need to settle for damages
- Burdens the land - can bind future owners
List of rights that have proprietary status
- The freehold estate
- The leasehold estate
- An easement
- A mortgage
- A restrictive covenant
- An estate contract
- A beneficial interest in a trust of land
Characteristics of personal rights
- Must settle for damages only
- Binds the original parties only (not a burden on the land)
Who owns all land in England and Wales?
The Crown
What is the practical implication of the rule ‘land should not be unnecessarily burdened’?
There are rules limiting proprietary rights
If the Crown owns all the land, what is the term given to a landowner’s interest in their land?
An estate
What are the two estates under the Law of Property Act 1925?
- Freehold estate (fee simple absolute in possession)
- Leasehold estate (term of years absolute)
In terms of duration, what is the difference between a freehold and leasehold estate?
Freehold is for an uncertain duration. Leasehold is for a fixed duration.
To have a better understanding of freehold estates for the purposes of tricky questions, what does the fee mean in fee simple absolute in possession?
That it can be inherited
What does the simple mean in fee simple absolute in possession?
That it can be inherited by anyone
What does the absolute mean in fee simple absolute in possession?
It will not end on a certain event
What does the in possession mean in fee simple absolute in possession?
Current/immediate and present enjoyment
(includes receiving rent if the property is
let to a tenant under a lease)
Separate from the two legal estates do (1) legal interests or (2) equitable interests confer ownership of land?
No, they concern rights over land the legal estate of which is held by another
What is an interest in land?
A proprietary right of limited use
no right to possess
What is another name for an interest (in land)?
Incumbrances
What are the categories of legal interest, and only how may they be created?
- Mortgages
- Easements granted for a term equivalent to a freehold or leasehold estate (ie forever or for a
certain term) - Rights of entry
Must be created by deed.
What is a mortgage?
loan of cash, secured by rights granted over
property.
These rights include the right to possess and sell the land in the event of default in the mortgage repayments
Who grants a mortgage?
The borrower (the mortgagor) grants the mortgage to the mortgagee (lender)
What is an easement?
a proprietary right to use land which belongs to somebody else; more limited than an exclusive right to occupy or use
How long must a legal easement be granted for?
A term equivalent to one of the legal estates, either:
- freehold
- lease length
Otherwise, it will be an equitable easement
What is a right of entry?
Either:
- A right for a landlord to re-enter leased premises and end the leasehold estate in the event
of tenant default or some other specified event occurring; or
* A rentcharge owner’s right to hold the land if money owed in not paid.
What is another name for a right of entry?
a ‘forfeiture clause’
What is a rentcharge?
An interest in land requiring the landowner to make a periodic payment in respect of land to the rentcharge owner, but is different to and cannot arise under a lease or tenancy
What does the the rentcharge owner’s right of entry allow him to do?
Enter and take possession of the premises in the event of a default
What is a profit a prendre and what are the two types?
An interest in land enabling someone to take something from the land of another
- Profit a prendre in gross
- Profit a prendre appurtenant
What is the difference between a profit a prendre in gross and a profit a prendre appurtenant?
Profit a prendre in gross:
- Exists independently of the land
- Can be exercised for personal benefit of the profit owner
- Can be bought and sold separately from the land
- Not attached to any piece of land
Profit a prendre appurtenant:
- Attached to a particular piece of land
- Is bought and sold with the land
What is a common situation in which an equitable interest may arise by accident?
When parties attempt to create a legal interest by deed, but the formalities for a deed are not met
For interests created after 1925 and interests which are not a beneficial interest under a trust, what is required for an equitable interest to be binding?
Notice. And other than the two examples, this requires the interest to be registered, otherwise there is no notice.
What are the four types of equitable interest?
- Freehold covenants
- Estate contracts
- Interests in a trust of land
- Easements granted for an uncertain term
When do covenants arise between freehold owners?
when one person sells part of their land
and wishes to ensure that the buyer does not do anything which could affect the amenity and
value of the seller’s retained land.
What is a restrictive covenant?
negative promises preventing a landowner from doing something on their land
What is an estate contract?
contractual right to either a legal estate (freehold
or leasehold)
What is the relationship between estate contracts and the equitable maxim equity
sees that as done what ought to be done?
Equity will order specific performance of a contract to create or transfer a legal estate
What is an interest in a trust of land?
trust exists where one person (the trustee) holds property for the
benefit of another (the beneficiary). When a trust exists, there is a split in the legal and
equitable title (ownership).
can the trustees and beneficiaries be the same people?
yes
example of express trust in land
A trust of land can be created expressly.
A piece of land is transferred to A to hold in trust for B.
A is the trustee, the legal owner of the land.
B is the beneficiary and has an equitable interest in the land.
example of implied trust in land
A trust of land can be created impliedly.
A and B buy a house together, each contributing 50% of the purchase price.
The land is transferred to A only. A is the legal owner of the land.
Equity recognises B’s contribution and implies a trust. A and B are both beneficiaries. B has an
equitable interest in the land.
Is the deposit of title deeds as security for a loan enough to create an equitable mortgage, and why?
No, because:
- Equity requires sufficient evidence in writing before an equitable mortgage can be created
- A contract for property must be in writing, and in this situation there is no written agreement capable of enforcement
What does the term concurrent interests describe?
The fact that a number of legal and equitable interests can exist in land at the same time
Requirements for a land/estate contract?
Needs to comply with LP(MP)A 1989, s 2:
1. in writing;
2. contain all the terms; and
3. signed by both parties.
The parties can sign duplicate contracts, which are then physically exchanged.
For a land contract, do the buyer and seller’s signatures need witnessing?
No
What is a deed?
A written document used to create a legal interest or right in land, or transfer ownership of land, or by which an obligation relating to land is confirmed
What three things are required for a deed to be valid?
- Intended as a deed
- Signed by the seller in the presence of a witness who attests their signatures
- Delivered (dated)
(2 + 3 are together sometimes referred to as ‘due execution’ )
What are the two requirements for a deed to be duly executed?
- Signed in the presence of an attesting witness
- Delivered
When is a deed delivered?
When the party expresses an intention to be bound by the deed
In what four situations is a deed not needed to transfer property?
- Assents by personal representatives
- Disclaimers under the Insolvency Act 1986
- Surrenders by operation of law
- Leases, tenancies or other assurances not required by law to be in writing
What is another name for the freehold estate?
fee simple absolute in possession
(LPA 1925, s 1(1)(a))
Until when does the freehold estate last?
lasts until the owner for the time being dies without heirs (without any blood relatives and without having disposed of it by will)
What is another name for the leasehold estate / lease?
term of years absolute
What is the freehold reversion?
residue of the estate after the granting of a lease
What is the leasehold reversion?
If the
grantor holds a leasehold estate, the residue = leasehold reversion (meaning the right to physical possession of the land automatically reverts to the
landlord)
can the same piece of land be subject to multiple rights of possession?
yes, the same piece of land may simultaneously be subject to a freehold, a lease and a sub-lease etc.
the holder of each right will own not the land itself but rather the right to possession of the
land
can there be more than one freehold over a piece of land?
no (but can have multiple leaseholds)
what is commonhold?
- a type of freehold
- not a new estate in land, but created out of a freehold registered estate
why have a commonhold?
- designed for owners are interdependent on each other
- no overall landlord
- but there is a freehold owner (company called ‘commonhold
association’) - commonhold association is responsible for
maintaining the communal areas - fewer than 50 blocks of flats across England and Wales are commonhold
What remedies are available for people with legal interests?
damages automatically (no discretion to account for the merits of the case)
+
equitable remedies (subject to requirements)
what are the ways in which a transfer of the freehold estate can be achieved?
- sale
- will
- gift
- operation of law (automatic transfer in certain situations e.g., bankruptcy)
what is the three-stage process of sale of a freehold?
- pre-exchange
- exchange of contracts
- completion of the deed
- registration
requirements for a valid land contract
- in writing.
- contains all expressly agreed terms.
- must be signed by both parties.
what does ‘contains all expressly agreed terms’ mean?
- terms can be in the contract itself; or
- by reference (e.g., commonly, the Law Society standard conditions of sale)
when does completion take place?
usually some weeks after exchange of contracts, but can take place at
the same time (‘simultaneous exchange and completion’)
what happens at completion?
a deed is created:
- known as a conveyance in unregistered land; or
- a transfer in
registered land
can a land contract be varied and what are the requirements?
yes
must also be:
- in writing
- contain all the expressly agreed terms
- signed by both parties
no oral land contract, neither any oral variation to land contract, if it is a material variation (McCausland)
what is the effect of a binding land contract?
to pass an equitable interest in the land to the buyer (an estate contract - Walsh v Lonsdale)
What is the relationship between land contracts and the equitable maxim ‘equity regards as done that which ought to be done’?
Land contracts can be given proprietary status
Walsh v Lonsdale - a contract to create or transfer a legal property right will
create a proprietary right in equity if the remedy of specific performance is available (i.e., the
claimant must have ‘clean hands’; not be in breach of contract etc)
examples of land contracts
- contract to buy land
- contract for lease
- option agreement
- right of pre-emption
- failed legal estate / interests can be recognised as an estate contract instead
can estate contract be enforced against a purchaser, and why?
yes, it is capable of being enforced because an estate contract is a proprietary right.
provided it is protected, it will be:
- binding
- enforceable against 3rd parties (ie subsequent owners of the freehold)
what is the exception to the need for protection of estate contracts?
Whether burdened land is registered or
unregistered:
If the interest holder fails to protect the estate contract and the third party is a donee
(someone who is gifted or inherits the land) they will be bound by a properly created estate
contract, regardless of registration.
what are the various remedies available for a breach of a land contract?
- damages
- specific performance (equitable)
- injunction (equitable)
equitable remedies are discretionary, not available as of right - court will have regard to the behaviour of both parties
requirements of a valid deed
LP(MP)A 1989, s 1:
- intended as a deed
- validly executed by the seller
- delivered (dated)
if the seller is a registered company, how can they execute the deed?
- Two directors signing in the presence of a witness; or
- One director and the company secretary signing in the presence of a witness; or
- Affixing the common seal of the company.
what is a transfer deed standard form called?
TR1
when does legal title pass in unregistered land?
completion
what is compulsory first registration?
unregistered land only:
certain things (e.g., a sale) will trigger a legal requirement to register the land for the first time at the Land Registry.
what happens if compulsory first registration does not take place within two months of completion?
legal title in unregistered land reverts to the seller
how does legal title transfer in registered land?
legal title does not transfer until registration has
taken place (LRA 2002, s 27(1)).
