Estates and Interests - 2

Question 1

Distinguishing legal and equitable rights

Answer 1

Have to check wherher right is listed in s.1(1) or (2) LPA
> If listed = can be legal
> if not listed = equitable right

AND

Have to check if it was made/transferred with a certain DOCUMENT
> legal = needs a deed
> equitable = needs signed writing

Question 2

s.1 (1) Law of Property Act 1925 - Estates

Answer 2

FREEHOLD (fee simple absolute in possession)
> fee simple = can last forever
> absolute = no risk of failure
> in possession = the person has a right to immediate enjoyment of rights of the owner

LEASEHOLD (terms of years absolute)
> term of years = fixed period of time
> possible to grant a lease now that can commence in the future and still be a legal estate

Question 3

s.1(2) LPA 1925 - Legal Interests

Answer 3

There are 5 legal interests:
1 - easements
2 - mortgages
3 - right of entry
4 - rentcharges
5 - statutory rights

HOWEVER the 2 main legal interests are EASEMENTS which has to be granted in fee simple absolute possession or terms of year absolute and MORTGAGE

A RIGHT CAN ONLY BE LEGAL IF LISTED IN S.1(1) LPA AND MADE/TRANSFERRED WITH THE CORRECT DOCUMENT

Question 4

When do you need a deed and what is it ?

Answer 4

s.52 LPA - To create or transfer a legal estate or legal interest in land

s.1 LP(MP) Act –>
1 - Must be clear on face of document that it is a deed e.g. ‘this deed’

Question 5

Exception of s.54 (2) LPA 1925

Answer 5

• A LEASE for 3 years or less
• in possession
• at the best rent
• without the payment of a fine (premium)
• Applies to creation but not transfer
• All conditions have to be satisfied

Question 6

s.1(3) - Equitable Interests

Answer 6

s.1(3) - A right can only be equitable if it is not legal

So they are rights NOT listed in s.1 including:
> An easement for life
> Restrictive covenant in freehold land
> Home rights
> Estate contract
> A beneficiary’s interest under a trust

AND (may be in s.1) but which are NOT MADE BY DEED but instead made/transferred with the correct doc

Question 7

Documentary Requirment for equitable rights S.2 LP(MP) 1989

Answer 7

In writing

All expressly agreed terms contained or referred to in one document

Signed by each party (no need for witnesses)

Question 8

Beneficial interest under a trust (equitable right)

Answer 8

TRUST OF LAND:
> A trust is the means by which property may be held by one person (a trustee) for the benefit of another (a beneficiary) e.g. Sister is legal owner (trustee) and nephew is equitable owner (beneficiary)

Question 9

1 - Trust? 2- Trustee? 3- Beneficary?

Answer 9

1 - It is an arrangement under which 1 person (trustee) holds property for the benefit of another (beneficiary)

2 - Trustee is the legal owner and manages land for the benefit of the beneficiary

3 - Beneficiary is the equitable owner and has the benefit of the land