Chapter 3 - What am i buying - Estates and Interest in the Land Flashcards
Tenure - old way of “owning” land
he Crown is the ultimate owner
o A landowner does not own land
A landowner hold land from the Crown
OBSOLETE
Holding land free from any service or payment to the Crown
Freehold
For a set amount of time = leasehold
Rights (4)
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Estates Legal estates (property) Equitable interests
Interests
Legal interests
Equitable interests
Estate
Right
To be legal, the estate must be created by deed- LPA 1925 s 52
It is not possible for anyone under the age of 18 to hold a legal estate in land
Legal estates LPA 1925 s 1(1)
2 types of
Freehold estate/ fee simple absolute in possession
Leasehold estate/ term of years absolute
Freehold estate/ fee simple absolute in possession meaning
Fee- the land is capable of being inherited
Simple- there is no limitation on who can inherit
Absolute- no limitations
In possession- immediate right to possession
It exists in perpetuity,
Leasehold estate/ term of years absolute meaning
Term of years- leases can be fixed-term or periodic
Fixed term/ periodic/ weekly/ monthly- LPA 1925 s 205(1)(xxvii)
Freehold estate known as
fee simple absolute in possession
Leasehold estate known as
term of years absolute
More lease info
To be valid, a lease must come into effect in possession within 21 years of its creation- LPA 1925 s 149(3)
To be legal, a lease must be created by deed
Exception- lease taking effect in immediate possession at a market rent for 3 years/ less- may be created in writing/ orally- LPA 1925 s 25(2)
•legal estate despite the lack of any formal creation
Right =
a right over someone elses land
5 legal interests- LPA 1925 s 1(2), the most important of which are-
Easements
•Rentcharges
•Charges by way of legal mortgage
•A landlord’s right of re-entry
All other interests are equitable
Legal interests LPA1925 s 1(2)
Legal easements & profits & legal rentcharges (must be equivalent to a legal estate & be by deed)
Charged by way of legal mortgage (must be expressed to be by way of legal mortgage & be by deed)
Right of entry (a right reserved by a landlord in a legal estate)
Legal easements & profits
n easement- right which one property owner may have over a neighbouring piece of land, e.g., rights of way, and rights to use drains
•A profit- right to take something from another’s land, e.g., grazing, fishing & shooting rights.
•To be legal, an easement or profit must be equivalent to one of the two legal estates i.e., in FH/ LH & be by deed subject to some exceptions
Legal rentcharge
Right to a periodic payment of money, attached to land. A third party may be able to collect a sum of money, usually annually, from the owner of the land. Such a rentcharge, if perpetual or granted for a term of years absolute & if created by deed, will constitute a legal interest in land. The Rentcharges Act 1977 restricted the creation of new rentcharges.
Charge by way of legal mortgage
To be legal, the charge must be by deed & expressed to be by way of legal mortgage.
Certain charges arising under statute- these are of little practical significance
little practical significance
Rights of entry in legal leases & legal rentcharges
Where a landlord reserves the right to retake possession if the tenant does not comply with their obligations in the lease, this right of entry is a legal interest. A similar right of entry is usually contained in a rentcharge deed in order to ensure payment of the rentcharge.
Equitable interests
LPA 1925 s 53(1)- must be in writing
Beneficial interests under a trust
Interests which fail to comply with required formalities (such as equitable leases)
Estate contracts (which can raise on exchange)
Restrictive covenants
Equitable interests
Any interest which does not qualify as a legal estate under s 1(1) LPA 1925 or legal interest under s1(2) LPA 1925 will be equitable- LPA 1925 s 1(3)
•Unlike a legal estate in land which can only be held by someone aged 18 or over, an equitable interest can be held by someone of any age.
These are interests that the courts of equity were willing to recognise which the common law courts, because of their rigid rules, refused to accept, e.g., the concept of the trust
Even equitable interests must comply with some formalities.
•They must be created in writing- LPA 1925 s 53(1)…. Exceptions- implied trusts: resulting or constructive trusts
Distinguishment
Legal estates & interests
Developed by common law
Bind the world
Distinguishment
Equitable interests
Developed by courts of equity & based on the principal of fairness
Not all buyer will be bound Notice of interest
Commonhold estate
Not a new estate in land
•introduced by the Commonhold & Leasehold Reform Act 2002
•created out of an absolute freehold registered estate.
Property is registered at the Land Registry as ‘commonhold land’.
The owner of each individual unit/ flat/ apartment
•the unit-holder
•registered as its freehold owner- CLRA 2002 s 12
•interdependent on each other.
