BPP Study Notes Ch 4: Interests in Land

Question 1

What are the legal interests in land?

Answer 1

1) easements and profits
2) rentcharges
3) rights of entry
4) charge by way of legal mortgage
5) ‘any other similar charge…not created by an instrument’

Question 2

What is a legal easement?

Answer 2

• right to do something on the land of another

- or right to prevent a landowner doing something with, or using his land, in a particular way

Question 3

What are rentcharges?

Answer 3

• right to a periodic payment of money charged on, and paid out of, freehold land
• Rentcharges Act 1977: no new rentcharges

Question 4

What is a charge by way of a legal mortgage?

Answer 4

• an alternative to the normal mortgage process where a mortgagee (lender) takes a conveyance of the legal estate

Question 5

What is the purpose of allowing “any other similar charge…not created by an instrument” to exist?

Answer 5

• allows statutory charges (ie charges from Acts of Parl)

- obsolete area of law

Question 6

What legal rights of entry are there?

Answer 6

• right for a landlord to enter leasehold land to terminate a legal lease for breach of covenant
• right to enter freehold land to enforce a legal rentcharge

Question 7

What two issues have formality requirements in terms of legal interests?

Answer 7

1) creating a legal interest

2) transferring an existing legal interest to a new owner

Question 8

What else might an express grant of an interest need to satisfy?

Answer 8

• need for registration

- s27(2) LRA 2002

Question 9

How can an interest be assigned to another?

Answer 9

• by an assignation complying with s52 LPA 1925

Question 10

What happens if a transfer deed fails to comply with the formalities?

Answer 10

• equity may assist and recognise the attempt as a valid equitable contract
• would require the failed deed to comply with s2 LP(MP)A 1989

Question 11

What happens if an estate which has interests attached to it is conveyed to another party?

Answer 11

• unless a contrary intention is expressed, a conveyance of an estate includes all the interests attached to it
• s62 LPA 1925

Question 12

Why might an interest be recognised only in equity other than because it failed legally?

Answer 12

• if it isn’t capable of being recognised legally as it isn’t in the list in s1(2) LPA 1925
• if the person creating the interest only has an equitable interest themselves

Question 13

What case allows the creation of equitable solutions where legal formalities fail? Why?

Answer 13

• Walsh v Lonsdale

- treats the failed legal formalities as a fictional contract to create an equitable result

Question 14

What interests can only be equitable?

Answer 14

1) restrictive covenants
2) beneficial interest under trusts
3) estate contracts

Question 15

What is a restrictive covenant?

Answer 15

• a promise (covenant) made by one party to another

- in certain circumstances, will burden/bind the land belonging to the person who made the promise

Question 16

What is an estate contract?

Answer 16

• a contractual promise to a legal estate

- eg a promise to sell an estate to someone gives that person an equitable proprietary interest in that estate

Question 17

What is an option to purchase?

Answer 17

• right given by an owner to another person to purchase land within a certain time
• option to purchase gives an equitable interest in the land which can be protected and enforced against another buyer

Question 18

What is a right of pre-emption?

Answer 18

• right of first refusal

- no right to force a sale, just the right to be the first person land is offered to if the owner chooses to sell

Question 19

When does the right of pre-emption create an interest in land? What did the position use to be?

Answer 19

• from the moment it is created
• s115 LRA 2002
• Previously, no interest created until the owner decides to sell - Pritchard v Briggs

Question 20

How is an equitable interest not listed in s1(2) LPA 1925 created?

Answer 20

• if it can be an equitable interest instead

- must comply with minimum requirements for creating an interest in land - s53(1)(a) LPA1925

Question 21

What equitable interests might exist that are not listed in s1(2) LPA 1925?

Answer 21

• all restrictive covenants

- easements of uncertain duration

Question 22

Where are the requirements for the creation of equitable interests under express trusts of land found?

Answer 22

s53(1)(b) LPA 1925

Question 23

How are estate contracts or improperly granted legal interests construed as equitable interests?

Answer 23

• follow the rule in Lonsdale v Walsh; construed as a fictional contract
• must satisfy the formalities for a contract of land:
• s2 LP(MP)A

Question 24

What case sets out formalities for creation of a contract for mortgage?

Answer 24

United Bank of Kuwait v Sahib

Question 25

What part of an option to purchase must comply with s2 LP(MP)A 1989?

Answer 25

• just the initial grant of the option

- Spiro v Glencrown Properties

Question 26

What formalities need to be set out for transferring an equitable interest?

Answer 26

• must comply with s53(1)(c) LPA 1925
• if contracting to transfer must comply with requirements for a valid contract (s2 LP(MP)A 1989
• if the estate the interest is attached to is transferred, the interest will be implied to have been transferred to (s62 LPA 1925)

Question 27

Why does it matter if an interest is equitable or legal?

Answer 27

• difference in enforcement and remedies

Question 28

What remedies can a legal interest holder claim?

Answer 28

• legal remedies of damages is as of right (automatic regardless of the merits of the case)
• has access to all equitable remedies too, but their availability is discretionary

Question 29

What remedies can an equitable interest holder claim?

Answer 29

• only equitable remedies

- these are discretionary and will only be applied in relation to the usual equitable maxims.

Question 30

What are the equitable remedies?

Answer 30

• specific performance; honour a contract
• injunction; compel someone to put right a defect or refrain from doing something
• rescission; return parties to pre contract position
• rectification; correct an incorrectly written instrument

Question 31

How does enforcement work with a legal interest in land?

Answer 31

• interest can be enforced against any owner or buyer who came to own or occupy the land
• even if the new owner/buyer did not know or should not have known
• ‘legal rights bind the whole world’ Mercer v Liverpool, St Helen’s and South Lancs Railway Co

Question 32

How does enforcement work with equitable interests in land?

Answer 32

• not automatically binding on a successor in title to the land affected
• equity only enforces where the new owner’s conscience is affected
• e.g. by being aware of the interest upon purchase
• if the successor is a bona fide (good faith) purchaser he takes the land free from the interest (Re Nisbet and Potts’ Contract)