FLK2 Land Flashcards
What is the test for a fixture/chattel?
- The degree of annexation test.
This creates the presumption that if something is fixed/attached/bolted to the building it is a fixture.
If it is moveable or resting on its own weight then it is a chattel.
- The purpose of annexation test
This asks whether the chattel was put there to make use of the chattel more convenient or to improve the property.
The presumption created by the degree test can be rebutted by the purpose test if there is a discrepancy between them.
What are examples of fixtures?
a) Bathroom fittings
b) Kitchen fittings
What are examples of chattels?
a) Curtains
b) Blinds
c) Fitted carpets
How can fixtures be transferred?
By conveyance/deed
How can chattels be transferred?
Delivery
What happens to property that is a fixture on the date of the sale/mortgage?
It is part of the sale/mortgaged property so cannot be removed without express permission.
What are interests in land?
They are lesser rights over land that fall short of granting possession.
These are generally rights over land which a person has over land owned by someone else.
There are two types of interest in land: rights which are recognised by law (legal interests) and rights which are only recognised by equity (equitable interests).
Which interests in land are capable of being legal?
a) Leases
b) Mortgages
c) Easements
Which interests in land are only capable of being equitable?
a) Freehold covenants
b) Estate contracts
c) Matrimonial home right
d) Beneficial interest under a trust of land
Can a lease be both equitable and legal?
Yes, it can be either, depending on the formalities used to create it.
What is the distinction between a lease and licence?
A lease is a proprietary interest in land, granting the owner the right to exclude all others, including the landlord from the land for the duration of the term.
A licence gives the licensee personal permission to be on the land.
Licences can be granted formally or informally.
A licence is not a proprietary interest so it will not bind third parties and can only be enforced against the original licensor.
A court will likely grant damaged for breach of licence.
What is a lease?
A lease is capable of being either a legal estate in land, or an equitable interest, depending upon the formalities used to create it. A lease allows multiple parties to exploit the benefit of owning an estate in land simultaneously.
A lease is a proprietary interest in land, granting the owner the right to exclude all others, including the landlord, from the land for the duration of the term.
What is a licence?
A licence merely gives the licensee personal permission to be on the land - “no man (sic) can set his foot upon my ground without my licence”.
Licences can be granted formally or informally.
A licence is not a proprietary interest, so it will not bind third parties, and can only be enforced against the original licensor. Even so, the court will not necessarily enforce a licence by granting the licensee access to the land but may grant damages instead.
What are the requirements for a lease?
There are three requirements essential to a lease, as established in Street v Mountford:
1: Exclusive legal possession of defined premises…
2: … for a term and… (certainty of term)
3: … at a rent.
NOTE: the requirement for rent is no longer an essential component of a lease. However, Street remains the leading authority.
Certainty of term
This means that the beginning and end of the lease are known. There are two types of term:
Fixed term - Where the maximum duration of the lease is known from the outset. A certain date must be known - stating “for the duration of (the war)” is not certain. It must be expressly created. It can only come to an end when the term expires, if the lease is forfeited, or if there is a break clause in the agreement.
Periodic term - Where the duration of the lease runs in periods that are automatically renewed, unless either party serves a notice to quit. It may be expressly created by a written agreement, or impliedly by the payment of rent on a periodic basis.
Exclusive possession
This means that the tenant has the legal right to exclude anyone from the property, including the landlord.
The court will look at all the circumstances to see whether there is exclusive possession. Where an employee is required to live in a place to do a job, that does not confer a tenancy, even though rent might be paid.
The courts have held that the burden of proof is on the tenant Claimant to show that they had the power to exclude all others from the property.
Where there is multiple occupancy (i.e. where two or more people share premises) the occupants can still have exclusive possession if they have the right together to exclude all others.
To have exclusive possession they must have the four unities laid out in AG Securities v Vaughan:
1: Possession - everyone has equal right to occupy all of the premises;
2: Interest - everyone has the same leasehold interest for the same term;
3: Time - all the interests start at the same time; and
4: Title - all the interests derive from the same document, or from separate identical documents.
What is a mortgage?
A mortgage is a proprietary interest in land given by the mortgagor (the landowner) as security for a loan. The mortgagor receives a loan in return for giving the mortgagee (often a bank) security over the land. A mortgage has been defined as “a conveyance of land … as a security for the payment of a debt or the discharge of some other obligation”.
What is the difference between legal and equitable mortgage?
- A mortgage is an interest capable of being legal.
- To be legal it must be created by deed (i.e. signed, witnessed, dated, and headed a deed). If the requirements for a deed are not met, but there is a valid estate contract to create a mortgage (i.e. in writing, signed by both parties and containing all agreed terms, then it will instead be an equitable mortgage). It would also be equitable if the landowner only had an equitable interest.
- A mortgage is a triggering event for the purposes of land registration. A legal mortgage must be entered on the charges register of the title in order to be protected against a purchaser for valuable consideration. For unregistered land, the mortgagee / lender takes the title deeds instead of registration.
- Land can be mortgaged several times. A second mortgage is known as a puisne mortgage. It must be registered as a C(i) at the Land Charges Department or it will not be
A mortgage should be solely security for a loan, with no extra benefits or terms added.
How is this ensured in light of the date of redemption?
The date of redemption
In Equity, the mortgagor is described as having the “equity of redemption” which represents the mortgagor’s equitable interest in the property and consists of the sum total of the mortgagor’s rights in relation to the land. There is a general rule that there must be no “clog” (i.e. impediment) on the equity of redemption.
Redemption (the first date that mortgage can be repaid in full) cannot be prevented altogether, but it can be postponed if the date of redemption is not so far in the future as to render the right to redeem illusory - which is a question of degree.
Options to purchase
- Will generally be held void if included in a mortgage.
- Can only be valid if granted afterwards in a separate agreement.
A mortgage should be solely security for a loan, with no extra benefits or terms added.
How is this ensured in light of options to purchase?
- Will generally be held void if included in a mortgage.
- Can only be valid if granted afterwards in a separate agreement.
A mortgage should be solely security for a loan, with no extra benefits or terms added.
How is this ensured in light of collateral ties?
These arise, for example, in circumstances where a mortgage might be granted over a pub with a requirement that the mortgagee will buy all its beer from the mortgagor. These will be struck out if unconscionable, a penalty, a restraint of trade or a “clog on the equity of redemption”.
A collateral advantage will be allowed if wholly independent of the mortgage arrangement.
A mortgage should be solely security for a loan, with no extra benefits or terms added.
How is this ensured in light of interest rates?
The court can strike down a penal rate of interest, i.e. one that is:
1: Exorbitant, extravagant or unconscionable; or
2: In conflict with the:
- Consumer Rights Act 2015;
- Unfair Terms in Consumer Contract Regulations 1999; or
- Consumer Credit Act 2006.
The rate must not arise from an unfair relationship (Consumer Credit Act 2006; also Financial Services and Markets Act 2000).
It must not be an unfair term, i.e. contrary to good faith and arising from significant imbalances in the parties’ rights to the detriment of the borrower (CRA 2015).
NOTE: the CRA applies between traders and consumers, so this is only relevant to retail banking.
Compare the case law:
Examples of unconscionable interest rates:
* The court reduced a 19% interest rate (that increased to an effective rate of 38% if the borrower defaulted) to 7%.
* A double interest rate (8.99% increasing to 13.99% if the borrower defaulted) was held to be unfair under the UTCCR 1999 (now replaced by the CRA 2015).
Examples of acceptable interest rates:
* Mortgagees do not need to reduce their interest rates following a Bank of England rate cut, as this is acceptable commercial practice.
* Commercial agreements between two parties of equal bargaining power are likely to be upheld.
* A mortgagor with a bad credit history may be subject to interest rates which are higher than high street lender’s rates.
What are the lenders powers?
1: Debt action
This will be the lender’s first option to reclaim the loan and interest, but the mortgagor may be unable to pay, so consider the following alternative options.
2: Other options
Foreclosure:
An equitable remedy (very rarely) awarded at the court’s discretion; the land is taken in satisfaction of the property and the lender keeps any surplus proceeds of sale.
Appointing a receiver:
Someone who oversees the sale and prevents the lender being liable for a negligent sale.
3: Right to take possession
- Lenders can take possession as soon as the mortgage is signed. This is as a prelude to sale; it allows the lender to make the best financial recovery by selling with vacant possession.
- Self-help is possible, but entry must not be forced, so this is risky.
- Lender could instead apply for a court order, though this gives the mortgagor extra protection: possession will be postponed (at the court’s discretion) if the borrower can repay within a reasonable period (i.e. the outstanding mortgage term).
- The court will postpone an order for possession if the mortgagor has a sound financial plan to repay the instalments. Postponement is less likely to be awarded by the court if the lender is prejudiced by falling property prices and there is no clear repayment plan.
- The lender is liable to account to the mortgagor for any rent they could have made whilst in possession.
- Lenders should follow pre-action protocol by discussing alternatives with the mortgagor before taking possession as a last resort.
4: Power of sale
This power arises as soon as the first capital instalment is due. NOTE: this means falling behind on a repayment mortgage, but not on an interest-only mortgage.
* This power can be exercised by the lender even if the lender has not taken possession - but the land’s resale value will be less because the mortgagor will still be in possession.
* But the power can only be exercised if notice is served, and if the mortgage is in arrears or there is some other breach.
What are the lender’s duties?
Lenders must take care to obtain a proper price. The “proper” price does not mean the “best” price - it means the true market value of the land. The lender should get one or more independent valuations of the property. The duty to obtain a proper price is not necessarily breached if the court merely has misgivings about the price - the market value is not an exact figure.
Lenders can sell whenever they choose, even if they could have obtained a higher price by waiting but must do so in good faith (i.e. advertise the sale property and obtain independent advice and valuations).
Lenders can choose how to sell the property. Auctions are often used, as they are public events, with adverts for opportunities to view the property in advance, with a price set through a clear and transparent bidding process. This means auctions help to show that a proper price was obtained in good faith, even if the auction is poorly attended and the bidding is low. Reserve prices (the lowest amount that a property may be sold for) should be determined by a qualified valuer.
Any surplus proceeds of sale remaining after the lender has sold the property are held on trust for the borrower (or for the second mortgagee if there is one, then the borrower).
What is the priority order of mortgages?
1: Legal mortgages of registered land: the first mortgage to be registered is repaid in full before any other mortgages.
2: Equitable mortgages of registered land: the first mortgage to be created is repaid in full before any other mortgages.
3: Mortgages of unregistered land: the first mortgage takes priority over the
What is an easement?
An easement is a right benefiting one piece of land (the “dominant” tenement) that is enjoyed over another landowner’s land (the “servient” tenement). An easement is not an estate in land.
An easement may be positive, in that it allows the owner of the dominant land to do something on the servient land, such as use a road. An easement could also be negative, in that it limits what the owner of the servient land may do on the servient land.
What is the criteria for an easement?
- Dominant (land benefited by the easement) and servient (land burdened by the easement) tenements must exist.
- The easement must accommodate the dominant tenement (i.e. benefit the dominant tenement by improving it or making its use more convenient in some way connected with the normal use of the property).
The dominant and servient tenements must be sufficiently proximate (i.e. nearby, even if the properties are not direct neighbours). - Prior diversity of occupation (i.e. tenements must be owned by different people).
Note that subsequent case law has cast doubt on how essential this requirement is: it is possible to create a “quasi-easement” benefiting one piece of land over another piece of land where both pieces of land are owned by the same person (this can include rights of way). - Capable of lying in grant, i.e. of being the subject matter of a deed. Grantor and grantee must own the dominant and servient tenements and be sui juris legal personalities. The right must be capable of reasonably exact description, e.g. it can be pointed to on a plan.
Additional criteria to consider:
- The grant must not require expenditure by the servient tenement owner.
- The grant must not amount to exclusive possession.
An easement to park your car will be allowed where there is a choice of parking spaces or where the servient owner is not deprived of possession and control over the spaces.
Case law has determined that the right to store items in a cellar was not an easement. - The grant must not depend on permission by the servient tenement owner.
What are examples of rights capable of lying in grant?
- Rights of way
- Rights of light
- Rights of support
- Rights of storage
- Rights of signage
- Right to water in a defined channel
- Right to air in a defined channel
- Rights to use a range of leisure facilities
The courts will not recognise new negative easements - the list is closed, but they may recognise new positive
What are the three ways in which a right can be acquired by an easement?
- Express acquisition
- Implied acquisition
- By prescription
How can an easement be acquired by express acquisition?
If it was granted or reserved as an express acquisition, assess whether the right is legal or equitable.
How can an easement be acquired by implied acquisition?
Implied acquisition can occur in one of the following ways:
1) Necessity
2) Common intention
3) The rule in Wheeldon v Burrows
How can an easement be acquired by necessity under implied acquisition?
It must be completely impossible to use the land without the easement, not just more challenging, for this reason a right of way could be impliedly acquired by necessity, but a right to sewerage services could not.
How can an easement be acquired by common intention under implied acquisition?
Where both parties intend the property to be used in a specific way. If an easement is to arise by common intention in a reservation situation there must be no other possible interpretation of the facts.
How can an easement be acquired by rule in Wheeldon v Burrows under implied acquisition?
(NOTE: this only applies to grants)
Under the rule in Wheeldon v Burrows, the easement will be impliedly granted if, immediately prior to the sale of one of the tenements, there was a common owner-occupier of both tenements, and if it can be shown that it is:
* Continuous and apparent, i.e. obvious (like a worn pathway);
* Necessary to the reasonable enjoyment of the property - not as strict as necessity as in (1) above, but it must be more than simply beneficial; and
* in use at the date of the transfer.
Quasi-easements (easements where the two tenements are owned by the same person) can be converted on sale of one of the tenements into full easements. An easement will not be implied if, following a sale, land is to be used in a different way which represents a “radical change”. The power to imply an easement can be expressly excluded. It is likely that prior diversity of ownership is not required.
How can an easement be acquired by prescription?
If the easement has been in continuous use for 20 years without interruption or protest, then it will be impliedly acquired (Prescription Act 1832).
The use must be known to the landowner.
After twenty years of continuous use there is a judicial presumption of a lost modern grant - a fictitious common law construct allowing the court to enforce the easement as if it had in fact been granted.
Can an easement length be restricted?
If so, the user can be restricted to the extent that the right was used at the time that the easement was granted. For example, where a neighbour changed their farm into a caravan park; their right of way over neighbouring land was restricted - use by guests to access the caravan park was fundamentally different from use by a sole owner of land.
When will an easement be equitable or legal?
This is determined by the document in which it is included (e.g. a ten-year legal lease).
If it has been expressly acquired, it will be legal only if it was:
- Created for the duration of the freehold or leasehold;
- Acquired by deed; and
- Registered.
If the above formalities are not fulfilled, or if it is a contract for the future grant of an easement, or if the grantor only has an equitable estate, it will instead be equitable.
NOTE: if impliedly acquired formalities are not necessary.
When will an easement be enforceable by or against a successor in title?
Question 1 - Has the ownership of the dominant land changed?
No: The original grantee can still enforce as they retain the benefit.
Yes: The successor-in-title will get the benefit, because the benefit will automatically pass to a successor-in-title of the dominant tenement.
Question 2 - Has the ownership of the servient land changed?
No: The original grantee can still enforce as they retain the benefit.
YES - Registered land - The burden passes if one of the following applies:
* It is a legal and expressly acquired easement.
* It is a legal easement acquired impliedly or by prescription, it is capable of being an overriding interest. It does not need to be registered, and will bind if it is known about, obvious on a reasonable inspection, or exercised within a year.
YES - Unregistered land: The burden passes if it is legal and acquired in any way, as legal rights bind the world.
How should an equitable easement be protected?
If it is an equitable easement, then it should be protected by a notice on the charges register of the servient tenement.
Equitable easements must be registered either as an equitable easement D(iii) Land Charge at the Land Charges Department or as an estate contract C(iv) Land Charge in order to bind purchasers for value. If it was created pre-1926 and is still unregistered (which is unlikely) then consider the Doctrine of Notice.
How can an easement be extinguished?
- Express agreement; or
- Implied release where it has been abandoned (i.e. lack of use coupled with an act demonstrating intention to abandon).
What are freehold covenants?
A covenant is a promise made by one party (the “covenantor’) for the benefit of another party (the “covenantee”) which is (usually) contained in a deed. It can be a promise to do something (positive covenant) or to refrain from doing something (negative covenant).
A freehold covenant is a covenant affecting freehold land.
In terms of a freehold covenant, what is the benefitted land and the burdened land?
The “benefitted” land is the land which benefits from the covenant. It is owned by the covenantee.
The “burdened” land bears the burden of carrying out the covenant. It is owned by the covenantor - the landowner who made the promise of the covenant to the original owner.
How are freehold covenants enforced?
The key issue is with freehold covenants is enforceability.
The original parties to the covenant have privity of contract. This means that for as long as the original parties retain the benefited and burdened land, the covenant can be enforced directly. However, enforcement of freehold covenants by successor covenantees can present problems as the parties no longer enjoy privity of contract.
As long as the benefit of the covenant has passed to the successor covenantee, they will be able to sue the original covenantor for damages at common law. However, as the original covenantor no longer owns the land, only the successor covenantor can be ordered to remedy the breach in equity.
Successor covenantees will only be able to enforce performance of the covenant if the benefit enjoyed by the predecessor covenantee(s) has passed to them, and the burden agreed to by any predecessor covenantors has passed to the successor covenantor. Either both the benefit and burden must pass in equity, or both must pass at common law. You cannot mix and match.
The successor covenantee may be able to choose who to sue: the original covenantor or the successor covenantor.
The original covenantor can be sued for damages at common law, but only the successor covenantor can be ordered to remedy the breach in equity. It is preferable to sue the successor covenantor, and that in order to have this option, both the benefit and burden must pass in equity, or both must pass at common law. You cannot mix and match.
In the above example, a covenant will only be enforceable between persons B and D in the above example if the benefit has passed to person B and if the burden has passed to person D.
It is unlikely that the burden will have passed at common law, so always first consider whether the burden has passed in equity.
NOTE: equitable remedies are preferable as injunctions are available to prevent or remedy a breach, whereas only damages are available at common law.
What is the test for deciding whether the burden of a freehold covenant has passed in equity?
The four requirements are set out in Tulk v Moxhay:
- The covenant is negative in substance
Test: the covenant will be negative if it can be complied with by doing nothing (i.e. by not expending any money, time or effort - the “hand-in-pocket” test).
If the result is unclear, it may be possible to sever it into two or more covenants, allowing just the negative part to pass the test. Alternatively, consider whether, as a whole, the covenant can be seen as mainly positive or negative. It may be negative with a positive condition attached (e.g. a covenant not to build without first informing the dominant owner), or vice-versa. If this is the case the covenant will be viewed as entirely positive or negative, despite the contrary minor condition. Equity will never enforce positive covenants against successors-in-title.
- The covenant must accommodate the benefited tenement
a. The original covenantee had an estate in the benefited tenement at the time the covenant was created, and the successor has an estate in the benefited tenement at the time of enforcement.
b. The covenant touches and concerns the benefited land: “touch and concern” affects “the nature, quality, mode of use, or value of the covenantee’s land”, and is not expressed to be personal - i.e. it must only benefit the landowner for as long as they own the benefited land.
This could include restrictions on business use, e.g. “no ironmongery”. REMEMBER: the test is whether it benefits the land, not just the landowner.
c. The benefited and burdened tenements are sufficiently proximate, i.e. neighbouring or at least closely adjacent.
- The original parties must have intended the burden to pass
This can be shown through the express words of the title deed. If it is not shown in the deed, it will be implied, unless it is expressly excluded.
- Notice provisions
As. 32 notice must have been entered on the charges register of the burdened freehold for registered land (or a class D(ii) Land Charge at the LCR for unregistered land) prior to the sale of the burdened land. If a notice is entered, the covenant will bind a successor purchaser. If not, only a volunteer successor (someone given the land as a gift or inheritance) will be bound.
How can the benefit of a freehold covenant pass to a successor through annexation (equity)?
This means that the benefit of the covenant is tied to the land at the time that the covenant is made.
It becomes an incorporeal hereditament that passes automatically with the land.
This may be achieved expressly, impliedly, or by statute. It does not matter how large the parcel of land is. Annexation means annexation to each and every part of the land.
a. Express: clear language stating that the benefit is annexed to the land, not to persons. e.g.
“to the vendor’s assignees and heirs” is not express language as it refers to persons instead of land. For there to be annexation it is not essential for the Land Registry to have entered the burden on the charges register of the servient land.
b. Implied: this is rare.
c. Statutory: express language is not always necessary, as annexation will be assumed unless it is expressly excluded.
How can the benefit of a freehold covenant pass to a successor through assignment (equity)?
If not annexed on creation, the benefit can be assigned (transferred) to the successor expressly. Any assignment must be in writing and signed. The benefit must be assigned every time the property is transferred.
How can the benefit of a freehold covenant pass to a successor through a scheme of development (equity)?
Only consider this where a property developer subdivides a large plot of land and creates covenants that bind all plots and are enforceable by and against all purchasers. Conditions for the benefit to pass are:
- The benefited and burdened tenements must derive title from one seller.
- The common seller is themselves bound by the scheme from the point it crystallises and cannot sell plots in the defined area other than on terms of the scheme.
- All the plots are mutually burdened for the benefit of all the other plots.
- The effect of the scheme is that it will bind all purchasers - potentially for ever.
- The scheme of development must be clearly defined on a plan.
- The limits of the defined area must be known to each of the purchasers.
How can the burden of a freehold covenant pass at common law?
General rule: The burden does not pass at common law.
The only exception is the mutual benefit and burden rule (e.g. a covenant to maintain half of a shared conservatory in the above example - the benefit is the use of a conservatory, and the burden is the cost of its maintenance).
The benefit and burden must be explicitly interlinked (i.e. it is not possible to take the benefit without also having to take the burden). The principle does not apply in reverse. There is no authority to suggest that “he who bears the burden” is entitled to the benefit. The benefit and burden must pass in the same transaction.
The successor covenantor must also have a genuine choice to take both the benefit and burden, or to take neither - if there is no choice, then the burden will not pass (e.g. a covenant to maintain a road, which is the only means of access to the covenantor’s land, would not pass - the covenantor has no real choice as they would need to maintain the road to get access to their own land).
In the example at the start of this chapter, Person D can choose to: (i) use the conservatory and help maintain it; or (ii) not use it. Depending on the decision the burden could potentially pass.
If the burden of a freehold covenant does not pass through common law or equity, what options does a successor covenantee have?
- Pursue the original covenantor.
The original covenantor remains liable under common law for any breaches of the covenant, even if it is the successor that commits the breaches. However, the original covenantor can only pay damages - they are no longer in occupation so cannot remedy the breaches - so this is of limited use for the successor covenantee.
- Indirectly pursue the successor covenantor by a chain of indemnity covenants.
If the original covenantor ensured on sale of the estate that a successor provided indemnities against any breaches, the successor would have to reimburse the original covenantor for any losses arising from breaches. So, if the original covenantor were pursued successfully (see immediately above point 1), there would be a claim for damages back from the successor. Again, only damages are available, but the threat of damages might deter the successor covenantor from starting or continuing to breach a covenant.
- The covenantee could place a s. 40 LRA 2002 restriction on the register of the servient land so that no transfer of the burdened land can take place without the covenantee’s consent.
What this means in practice is that the covenantee will ask for a new covenant directly from the potential successor covenantor (only allowing the land to be sold if it is given).
This is a new covenant, so all issues of the burden passing are irrelevant - the burden will be taken by the successor covenantor.
How can the benefit of a freehold covenant pass at common law through express assignment?
The benefit may be expressly assigned: the original covenantee must do so in writing and give this to the successor covenantee. Written notice must also be given to the covenantor.
How can the benefit of a freehold covenant pass at common law through implied assignment?
Alternatively, the benefit could be impliedly assigned. This requires that the covenant:
- “Touches and concerns” the benefited tenement (see above).
- Demonstrates the original parties’ intention that the benefit should pass with the land
If it is not expressly stated that the covenant is for the benefit of the land or for successors in title to the land, this intention will be implied, unless it has been expressly excluded. - At the time the convenant was created, the covenantee must have a legal estate in the benefited land.
- At the time of enforcement, the successor-in-title must hold a legal estate in the benefited land, though it need not necessarily be the same estate.
What are the formalities for a freehold covenant?
Freehold covenants cannot be legal interests, only equitable interests, so they must be protected in order to bind a successor owner of the servient land. Otherwise, only volunteer successors (those receiving land as a gift) will be bound.
This is done by notice (see Notice Provisions section above).
Next, consider:
* Have the covenants in the question been protected?
* Is the successor covenantor a purchaser or a volunteer?
REMEMBER: if the successor covenantor is a purchaser and no s. 32 notice (for registered land) or Dii) Land Charge (for unregistered land) has been entered, then the covenants will not bind the successor.
Also consider if the covenants have been extinguished or modified? This is only possible in one of the following ways:
An express agreement - Between the dominant and servient landowners.
An implied agreement - For example, if the dominant landowner acquiesces to longstanding breaches by doing nothing over the years.
A declaration by the court - Under LPA 1925.
A declaration by the Lands
Tribunal - Under LPA 1925 (NOTE: it is very difficult to obtain such release.)
REMEMBER: if one of the parties in the question claims that the covenant is extinguished or modified, it will only be so if one of the above methods is strictly followed.
How are legal leases enforced?
The specific formalities will depend upon the length of the lease:
UP TO BUT NOT EXCEEDING 3 YEARS
Fixed term lease: by deed.
Periodic term lease (a “parol lease”). It can be oral, provided the tenant:
* Is in possession of the property; and
* Pays the best rent (which means market rate), without paying a fine (i.e. without paying an up-front lump sum to the landlord).
3 - 7 YEARS
By deed. Where both parties intend the property to be used in a specific way. If an easement is to arise by common intention in a reservation situation there must be no other possible interpretation of the facts.
MORE THAN 7 YEARS
- By deed and clear on the face of it that it is a deed; and
- Registered as required by LRA 2002.
How are equitable leases created?
There are three key ways that an equitable lease may be created:
- Out of an agreement to create a lease.
- From a failed legal lease.
- A lease granted over an equitable estate.
