Estates and Interests - 1

Question 1

2 types of Estates

Answer 1

Freehold Estate = ownership is potentially forever –> fee simple absolute in possession

Leasehold Estate = period ownership is fixed (e.g. a lease for x months/years) –> terms of years absolute

If there is a lease, more than one estate will co-exist in the same land

Question 2

What is an interest? Different types?

Answer 2

= ownership of a right in someone’s land

Different types include:
> easements
> restrictrive covenants in freehold land
> mortgages
> home rights
> estate contracts
> interest of a beneficiary under a trust of land

Question 3

easement

Answer 3

‘a right which the owner of land X enjoys over land Y for the benefit of land X’

Not just a personal benefit to the occupier but also benefits the land itself

e.g. A has to walk over B’s driveway to get to the shops quicker –> demonstartes how its benefitting the land as A doesnt have to walk further

Question 4

Restrictive covenants in freehold land

Answer 4

> I sell part of my land.
I continue to live in the adjoining land.
How do I prevent the purchaser from using his land for business purposes?
In the transfer, the purchaser covenants (promises by deed) to use the land for residential purposes only.

Question 5

Mortgages

Answer 5

> I borrow money from the bank
In addition to promising to repay,
I ‘charge’ my house to give the
Bank a security for my debt
If I fail to repay the money, the Bank can sell my house to recover its money

Question 6

Home Rights

Answer 6

Family Law Act 1996

Gives a spouse/civil partner a right to occupy the matrimonial home (if the other spouse/civil partner is the sole legal owner)

Question 7

Estates Contracts

Answer 7

A contract to create or transfer a legal estate in property

Conveyancing & place of an estate contract
* Initial decision to buy/sell (not binding) –> estate contract –> completion = transfer of legal ownership on payment of money

AN OPTION TO PURCHASE –> Ali promises to sell her legal estate to Ed if he wants to buy it in the next 10 years –> he doesn’t have to buy AND she has to sell if he wants to buy

A RIGHT OF PRE-EMPTION (= a right of first refusal) –> Ali promises that, if she decides to sell her legal estate within the next 10 years, then she will offer it first to Ed –> she doesn’t have to sell BUT if she decides to in the next 10 yrs, she must offer Ed first

Question 8

Interest of a beneficiary under a trust of land - 1

Answer 8

There are often multiple rights in land

Ali owns the freehold of Greenacre over which she gives the following:
> Beth a lease for 2 years
> Neighbour Caron – a right of way over the garden (easement)
> Neighbour Dillon - a promise that Greenacre will never be used for business purposes (resrictive covenant)
> North Bank plc which had lent money to Ali – a mortgage

Which creates an issue…If Ali sells Greenacre to Ted, is he bound by?
> Beth’s lease
> Caron’s right of way
> The promise to Dillon
> North Bank’s mortgage

Question 9

Interest of a beneficiary under a trust of land - (personal & proprietary rights)

Answer 9

Proprietary rights exist in the land itself while personal rights are personal to the parties

Proprietary rights include –> leases, easements, covenants, mortgages, home rights and estate contracts

Charactertistics of proprietary rights
> Enforceable – capable of binding a new owner of the land
> Transferable – capable of being transferred to another person

HOWEVER for personal rights they are NOT enforceable or transferable