Chapter One: The Nature of Land Flashcards
What is an estate in land?
A person with an estate in land has the right to enjoy, possess, control and dispose of it and receive any income produced form the land.
What is an interest in land?
A person with an interest inland has a right against land owned by another person. For example, a right of way.
What is a freehold?
This is the freehold estate which lasts indefinitely. Its full legal name is ‘fee simple absolute in possession’.
What is a leasehold?
This is the leasehold estate which lasts for a fixed period. Its full legal name is ‘term of years absolute’. It is also described as a lease or tenancy. A freehold estate owner can grant a lease for any duration. A leasehold estate owner can only grant a sub-lease for a shorter duration than their own lease.
What is a mortgage?
An interest over land granted by the borrower to the lender as security for a loan. If the borrower fails to repay the loan, the lender can enforce its security.
What is a restrictive covenant?
A promise by one landowner in favour of another landowner that they will not do certain things on the land. For example, not to use the land for any use other than private home.
What is an easement?
A right for one landowner to make use of another parcel of land for the benefit of their own land. For example, a right of way.
What is a profit-a-prendre?
A right to go onto somebody else’s land and remove from land something which exists naturally. Eg, a right to catch and take fish or a right to graze animals.
What is a resulting trust?
A person, who is not the legal owner, contributes directly to the purchase price of the property. The person acquires an interest proportionate to their contribution.
What is a constructive trust?
An interest in land is created when a person, who is not the legal owner of the property, makes a contribution to the property other than direct financial contribution at the time of the purchase. This can include contributing to the mortgage payments or making substantial improvements to the property.
What is an estate contract?
The sale and purchase of land normally has two stages.
The first stage is when the seller and the buyer enter into a contract in which it is agreed that the estate in land should be sold.
Contracts are exchanged and the buyer holds an equitable interest.
The second stage involves the seller transferring the property to the buyer. The sale is completed and the legal estate is transferred to the buyer. There is usually a short interval between the two stages.During that interval the buyer owns an estate contract, (which is an equitable interest).
What is an option?
An option enables the owner of option to insist that the land is sold to them at any time during the fixed period of the option (the period must not exceed 21 years). An option fee is usually payable, but the full purchase price only becomes payable if the option is exercised.
What is a home right?
This is a statutory right for a non-owning spouse or civil partner to occupy the matrimonial home under the Family Law Act 1996. It does not create an interest in the land.
What is alienation?
The sale or underletting of leasehold land.
What is an assignment?
The transfer (or sale) of a lease between the tenant/ lessee (an assignor) and a purchaser (an assignee).
What is a beneficial interest?
The interest of a beneficiary under the trust (express, resulting or constructive).
What is a charge?
An alternative word for a mortgage also expressed as a charge by way of legal mortgage.
What is dominant land?
The land that benefits from a restrictive covenant or easement.
What is a fine?
A sum of money paid to the landlord in return for granting a lease. Usually paid in addition to rent.
What is a fixed term lease?
A fixed term lease may be for a period of time as long s the maximum period is fixed.
What is a lessee/ tenant?
The owner of the leasehold estate.
What is a mortgagee?
This is the lender who owns the mortgage interest in land.
What is a mortgagor?
This is the borrower, the person who owns the legal estate in land and grants the mortgage to the mortgagee as security for the loan.
What is a periodic lease?
A lease for one period, which extends automatically until either the landlord or tenant give notice to quit. The period is usually a week., month or a year.
What is personal property?
Rights in property except for land (goods and chattels).
What is a positive covenant?
An obligation which requires effort or expenditure in order to perform the obligation.
What is a puisne mortgage?
A legal mortgage over unregistered land which is not protected by the deposit of title deeds.
What is real property?
All property rights relating to land (estates and interests, i.e mortgages and easements).
What is servient land?
The land which is subject to or burdened by the covenant or easement. The easements are exercised over this land. The servant land is bound by the restrictive covenant.
What is a tenancy?
This is the leasehold estate which lasts for a fixed period of time. Its full legal name is ‘term of years absolute’. it is also described as a lease or a leasehold. A freehold estate owner can grant a lease for any duration. A leasehold estate owner can only grant a sub-lease.
What is time immemorial?
1189 also known as the date of legal memory.
What is a transfer?
A document transferring legal ownership in registered land.
What is meant by corporeal hereditaments?
Refers to the physical and tangible characteristic of land which are capable of being inherited. Eg, trees, rocks
What is meant by incorporeal hereditaments?
Refers to the intangible property rights which are capable of being inherited. Eg profits and easements.
What is the distinction between fixtures and chattels?
Fixtures are included within the definition of land, whereas chattels retain their characteristics as personal property.
When land is sold what happens to the fixtures?
Fixtures must be passed to the buyer, unless provisions have been made in the contract for the seller to remove the fixtures.
What is the two-stage test to determine whether an object is a fixture or a chattel?
a) the degree of annexation
b) the purpose of annexation
What is meant by the degree of annexation?
How firmly affixed is the object to the land?
The object can be resting on the land by its own weight.
If the object cannot be easily moved without causing damage this is likely to be a fixture
If it can be easily removed it can be argued to be a chattel.
The degree of annexation is the initial test which raises a presumption, it can be rebutted.
What is meant by the purpose of annexation?
Why has the object been attached to the land?
This is the key test and takes priority over the degree of annexation.
If the object was attached to the land to enhance the land or to create a permanent improvement then it is a fixture.
If it was attached for improved enjoyment then it remains a chattel.
Examples of fixtures
A split level cooker with a built in oven and inset hob
Kitchen units
Items installed by a builder
Bathroom fittings
Examples of chattels
Items which are ornamental such as pictures
A free standing cooker
Kitchen appliances
Carpets and curtains
A gas fire connected purely to function as a fire
Light fittings attached by screws
What happens when a chattel is an item that is attached to the land as part of an architectural design?
Likely to be held as fixtures if it is a part of an architectural design.
What are two categories can rights in land?
Estates
Interests
What needs to be worked out in order to decipher whether a buyer would be bound by legal or equitable rights?
a) what is the nature of the interest?
b) is the right legal or equitable?
c) has the right been protected?
When will a right be legal?
If:
a) it appears in ss1(1) or ss1(2) LPA 1925
b) if it meets the necessary formalities
Anything that falls outside of ss1(1) or ss1(2) LPA 1925 is only capable of being equitable.
What are the two estates that are capable of being legal (s1(1) LPA)
Freeholds
Leaseholds
What is a freehold?
An estate in fee simple absolute in possession
What is a leasehold?
An estate in land where the tenant is granted exclusive possession of land for a fixed period. A lease cannot last forever.
What are two types of leases?
a) fixed-term lease
b) periodic lease
What is a fixed-term lease?
A fixed-term lease can be for any period, provided that the maximum duration is certain
What is a periodic lease?
One for a period, which goes on extending itself automatically until either the landlord or the tenant terminates the lease by notice.
What is an easement?
A right of one landowner to make use of another nearby piece of land for the benefit of their own land.
What is a profit?
A right to go on somebody else’s land and take from that lad something which exists naturally.
When are easements and profits capable of being legal?
If they are for a duration equivalent to an estate in fee absolute in possession or a term of years absolute.
Only easements or profits lasting forever for a fixed duration are capable of being legal.
What is a rent charge?
A right to receive a periodic payment charged on the land. They are uncommon.
They are only capable of being legal if they are perpetual, (forever), or for a term of years absolute, (a fixed duration).
What are charges by way of legal mortgage?
A mortgage is an interest over property granted by the borrower to the lender as security for a debt or the discharge of some other obligation.
What is a right of entry?
A right of entry is either:
- a landlord’s right to forfeit the lease (bring the lease to a permanent end) if the tenant breaks a term of the lease
- a rent charge owner’s right to reclaim the land if money owed is not paid.
What property rights are capable of being equitable?
All property rights are capable of being equitable.
How can equitable property rights be created?
- by contract to create or transfer a legal estate or interest
- by trying to grant a legal estate or interest but failing to comply with the relevant formalities.
- by grant of an estate or interest by a person who owns only an equitable right.
- by grant of an estate or interest by a person who owns only an equitable right
-by grant of an estate or interest which can only exist in equity - by express trust
-by implied trust
What is an express trust?
The defining characteristic is that the legal title ro the property is separated from the equitable interests.
How can an express trust be created?
a) self declaration- the settlor retains legal title but in trust for the beneficiary
b) declaration plus transfer- ownership is transferred to a trustee to hold in trust for the beneficiary.
What is an implied trust?
Trusts can arise impliedly without any express declaration of trust by the legal owner.
There are two forms of implied trust:
Resulting
Constructive
What is a resulting trust?
A person who is not the legal owner contributes directly to the purchase price of the property.
The person acquires an interest proportionate to their contribution.
What is a constructive trust?
An interest in land is created when a person who is not the legal owner of the property makes a contribution to the property other than a direct contribution at the time of purchase. Eg mortgage payments.
What makes an interest equitable by natures?
If they do not appear in s1(1) or s1(2) LPA.
Including:
A beneficial interest under a trust
A restrictive covenant
An estate contract
The sale of a freehold or leasehold estate
An option
A right of pre-emption
The grant of a lease
The grant of an easement or profit.
What is a home right?
A statutory right of occupation of the matrimonial home for a non-owning spouse or cdivil partner
The right arises provided that:
(a) the parties are legally married or civil partners
(b) the home is, has been, or is intended to be the matrimonial home
What is a license?
A personal right. It does not create an interest in land
They are only binding between the original parties and would not bind a successor in title.
A license can be revoked at any time.
What are the formalities for the creation or transfer of a legal estate or interest?
Section 52(1) LPA 1925 provides that a DEED is required.
Exceptions to certain short-term leases that require no formalities, (parol lease)
What are the requirements for a deed?
It must be
in writing
clear on its face that its a deed
signed
witnessed and
delivered
How can a parol lease be made legal?
Must meet criteria set out in s54(2) LPA 1925
Must be three years or less
Lease must take effect in possession
The tenant must pay the best rent that can reasonable be obtained, (market rent)
The landlord must not charge a fine or a premium
What two distinct stages will many property transactions be in?
Stage 1- Investigation of title leading up to exchange of contracts; and
Stage 2- Completion when the legal estate is created or transferred
In order to be valid, what must contracts dealing with creation or transfer of rights in land comply with?
S2 LPMPA
To be valid, the contract must:
be in writing
incorporate all the expressly agreed terms in one document
be signed by or on behalf of all parties
What transactions would need to comply with the requirements of s2 LPMPA?
The sale of a freehold or lease
the grant of a lease
the creation of an option
the creation of an easement
Any variation to a contract must also comply.
How can equitable property rights be created?
a) by grant of an estate or interest which can only exist in equity.
b) by grant of an estate or interest by a person who only owns equitable rights
c) by contract to create or transfer a legal estate or interest
d) by trying to grant a legal estate or interest but failing to use a valid deed
e) by express trust
What is the doctrine in Walsh v Lonsdale?
He who seeks equity
must do so with clean hands.
For equity to recognise an arrangement there must be:
a contract
complying with s2 LPMPA
clean hands
How is an express trust created?
Must be created baby signed written document s53(1) LPA
It can be created by deed but it is not necessary
How do you analyse an interest?
STEP 1- identify the interest
STEP 2- is the interest capable of being legal, or is it equitable by nature
STEP 3- have the correct formalities been used?
STEP 4- the interest is capable of being legal but there is no deed
STEP 5- legal, equitable, or statutory
