2. Legal Estates and Interests in Land Flashcards
Law of Property Act 1925, s.1(1)
The only estates in land which are capable of subsisting or of being conveyed or created at law are- a) An estate in fee simple absolute in possession; b) A term of years absolute.
What is ‘an estate in fee simple absolute in possession’?
A fee simple, more commonly referred to as a freehold.
If you are purchasing a house, you are either buying a freehold or a leasehold.
What is an estate?
An estate refers to the legal interests or rights that a person has in land. It defines the nature, duration, and extent of a person’s ownership or possession of land.
What is ‘a term of years absolute’
A leasehold, more commonly referred to as a lease.
Law of Property Act 1925, s.1(2)
It tells us the other forms of permissible legal property rights in land. They are referred to as interests or charges.
What is the difference between legal estates under s.1(1) (the freehold and lease) and legal interests under s.1(2) (all other legal property rights in land)?
The legal freehold and the legal leasehold share a feature lacked by all other legal property rights: they confer rights of ownership.
What is a freehold?
A freehold describes ‘ownership of land for an unlimited period’. If A has a freehold, he has a right to exclusive possession forever of a piece of land. The rest of the world owes B an obligation not to interfere with their land.
What is a legal lease?
The content of a lease, like the content of a freehold, can be understood using the concept of ownership. A tenant is someone ‘able to exercise the rights of an owner of land which is in the real sense his land, albeit temporarily and subject to certain restrictions’ (Lord Templeman, Street v Mountford).
What is the difference between a freehold and a leasehold?
A leasehold consists of ownership for a limited period, a freehold consists of ownership for an unlimited period.
What is a property right?
A property right can be referred to as a ‘right in rem’, which literally means a right against a thing. A personal right is a ‘right in personam’, meaning a right against a person.
‘Any claim is either in rem or in personam, and there is an unbridgeable division between them’ (Nicholas, An Introduction to Roman Law).
Which case illustrates the distinction between personal and property rights?
Hill v Tupper (1863)
Hill v Tupper (1863)
Canal company made a contractual promise to Mr Hill that he would have the exclusive right to put pleasure boats on the canal and to hire out those boats to paying customers. Mr Tupper was the landliord of an inn which adjoined the canal. He started to hire out pleasure boats on the canal. Mr Hill objected, claiming that Mr Tupper was interfering with Mr Hill’s exclusive right.
Held: The canal company only granted Mr Hill a personal right against the company, so Mr Hill could not directly take action against Mr Tupper. Mr Hill did not have a property right, so his only choice is to assert this right against the canal company.
What did Pollock CB say in Hill v Tupper (1863)?
‘This grant merely operates as a license or a covenant on the part of the grantors and is binding on them as between themselves and Mr Hill, but gives Mr Hill no right of action in his own name for any infringement of the supposed exclusive right’.
‘A new species of incorporeal hereditament cannot be created at the will and pleasure of the owner of the property’.
What is an incorporeal hereditament?
An intangible, non-physical right in land that can be inherited. I.e., they do not consist of property but represent legal rights over land.
What is a covenant?
An agreement by lease, deed, or any other legal document. It creates enforceable rights and duties between landowners.
Which case illustrates the numerus clausus principle?
Keppell v Bailey (1834)
Keppell v Bailey (1834)
Kendalls owned ironworks. They were passed onto the Baileys following the death of the Kendalls. The Baileys planned to use limestone from a different quarry (the Kendalls had an agreement to use limestone from the Trevill quarry), and to build a new railroad to carry limestone to the ironworks. The Trevill quarry objected to the Bailey’s use of limestone from a different quarry because they were bound by the previous agreement when they took over the land.
Held- the Baileys do not need to use limestone from the Trevill quarry.
What does Lord Brougham LC state in Keppell v Bailey (1834)?
‘It must not therefore be devised and attached to property at the fancy or caprice of any owner’. ‘Great detriment would arise and much confusion of rights if parties were allowed to invent new modes of holding and enjoying real property, and to impress upon their lands and tenements a peculiar character’.
What does Lord Brougham LC state in Keppell v Bailey (1834)?
He sets out some of the dangers that would arise from enabling individuals to create new legal interests in land. The central point is that a third party, such as someone later acquiring the land, would find it difficult to know what burdens he may have to bear. Another point he makes is that if new burdens are imposed on land, the value of that land may be significantly reduced. This has resulted in the adoption of the numerus clausus (‘closed list’) principle: there is a set list of property rights in relation to land and, if B’s right is not on that list, it simply cannot count as a legal property right in land (but can exist as a personal one via contract).
Justifying the numerus clausus principle- potential purchasers of the land
‘One of the main reasons given for the numerus clausus of real rights is the problem a purchaser would find in finding out about fancies’ (Rudden). Lord Brougham supports this view, ‘it would be hardly possible to know what rights the acquisition of any parcel conferred or what obligations it imposed’.
What is the counterargument put forward by Rudden regarding the numerus clausus and potential purchasers of the land?
The problem could be mitigated by setting up a land registration system. ‘Why, if there is a functioning Land book, should not a fancy be registered and enforced, with its creator paying all recording costs’?
Criticism of setting up a land registration system to register new property rights
Information costs would be too high. Too difficult to manage such a land registration system (e.g. leases under 3 years do not need to be registered for this very reason). Too hard to keep track of and we cannot rely on people to register new property rights if only property lawyers understand how such a system functions. Regular home buyers do not understand the complexities of the land registration as it stands, nevermind if we add the additional burden of registering novel property rights.
Justifying the numerus clausus principle- sterilisation of land
The numerus clausus would ‘ensure that the efficient development of land be not sterilised by fancies’ (Rudden). ‘If an owner is permitted to bind his land to the performances of fancies, then his successors in title will expect the same power, and so the land will become encrusted with layers of obligations (‘pyramiding’)’. (Rudden).
This means that a multitude of burdens over land may render is valueless and hamper marketability.
Justifying the numerus clausus- controlling the non-consensual imposition of duties
‘One person has the power to alter another’s legal position without his consent […] The effect of creating a property interest may be to alter for the worse the legal position who did not consent thereto’. (Rudden).
Counterargument to controlling the non-consensual imposition of duties
Some argue that third parties are not worse off because of the creation of a new property right, as they already owed a duty to the owner of the land not to interfere with it. However, if B acquires a proprietary interest in the land that binds X, the third-party X may suffer some additional burden. If X owed a duty to B as well as to A, the power to enforce or waiver this duty is no longer in sole control of A. Hill v Tupper is a good example of the non-consensual imposition of duties.
Moncrieff v Jamieson [2007]
Jamieson appealed against a decision that a right of vehicular access from a public road included a right to park vehicles on the servient tenement (piece of land burdened by easement).
Held- ‘A right to stop vehicles on the servient tenement in order to turn, load and unload goods from them and set down and pick up passengers was accessory to the right of vehicular access’. Appeal dismissed.
Does Moncrieff v Jamieson threaten the numerus clausus principle?
No, it does not expand the scope of existing property rights because it falls under the terms of the easement. Easements come under the fixed or closed list of property rights (McFarlane).
Regency Villas Title Ltd v Diamond Resorts (Europe) [2018]
Issue- whether the right to use sporting and recreational facilities on servient land can be an easement for timeshare owners. Regency Villas (timeshare owners) claimed a right to use these facilities; Diamond Resorts disputed this.
Held- rights to use adjacent recreational facilities can be easements. Easements exist if they are necessary for full enjoyment of the land.
Does Regency Villas Title Ltd v Diamond Resorts (Europe) Ltd [2018] threaten the numerus clausus principle?
No, it broadens the scope of easements but does not create novel property rights. This links to McFarlane’s idea that ‘a right can only be given proprietary status if its content matches that of a right already admitted to the list’. Timeshare rights can be considered proprietary rights because they function in a manner similar to existing rights such as easements.
What is a timeshare agreement?
A timeshare generally is an agreement for parties to share ownership or to have exclusive right to use the property during certain predetermined allotments of time during the year, for a defined number of years.
Baffi- ‘The Efficiency Function of the ‘Numerus Clausus’
Justifies the numerus clausus principle
‘Property rights may become inefficient over time and cannot be eliminated using a contract because of the high transaction costs’.- provides a counterargument to Rudden’s proposal of registering new property rights via the registration system.
