Chapter 3 - What am i buying - Estates and Interest in the Land

Question 1

Tenure - old way of “owning” land

Answer 1

he Crown is the ultimate owner
o A landowner does not own land
 A landowner hold land from the Crown

OBSOLETE

Question 2

Holding land free from any service or payment to the Crown

Answer 2

Freehold

For a set amount of time = leasehold

Question 3

Rights (4)

????

Answer 3

Estates
Legal estates (property)
Equitable interests

Interests
Legal interests
Equitable interests

Question 4

Estate

Answer 4

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

Question 5

Legal estates LPA 1925 s 1(1)

2 types of

Answer 5

Freehold estate/ fee simple absolute in possession

Leasehold estate/ term of years absolute

Question 6

Freehold estate/ fee simple absolute in possession meaning

Answer 6

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,

Question 7

Leasehold estate/ term of years absolute meaning

Answer 7

Term of years- leases can be fixed-term or periodic

Fixed term/ periodic/ weekly/ monthly- LPA 1925 s 205(1)(xxvii)

Question 8

Freehold estate known as

Answer 8

fee simple absolute in possession

Question 9

Leasehold estate known as

Answer 9

term of years absolute

Question 10

More lease info

Answer 10

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

Question 11

Right =

Answer 11

a right over someone elses land

Question 12

5 legal interests- LPA 1925 s 1(2), the most important of which are-

Answer 12

Easements
•Rentcharges
•Charges by way of legal mortgage
•A landlord’s right of re-entry

All other interests are equitable

Question 13

Legal interests LPA1925 s 1(2)

Answer 13

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)

Question 14

Legal easements & profits

Answer 14

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

Question 15

Legal rentcharge

Answer 15

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.

Question 16

Charge by way of legal mortgage

Answer 16

To be legal, the charge must be by deed & expressed to be by way of legal mortgage.

Question 17

Certain charges arising under statute- these are of little practical significance

Answer 17

little practical significance

Question 18

Rights of entry in legal leases & legal rentcharges

Answer 18

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.

Question 19

Equitable interests

LPA 1925 s 53(1)- must be in writing

Answer 19

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

Question 20

Equitable interests

Answer 20

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

Question 21

Distinguishment

Legal estates & interests

Answer 21

Developed by common law

Bind the world

Question 22

Distinguishment

Equitable interests

Answer 22

Developed by courts of equity & based on the principal of fairness

Not all buyer will be bound Notice of interest

Question 23

Commonhold estate

Answer 23

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.