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2023 > Land Law - Fundamentals > Flashcards

Land Law - Fundamentals Flashcards

1
Q

Introduction

Other than the physical surface area of the land itself, what does ownership of land includes?

A
  • The airspace above, “to such height as is necessary for the ordinary enjoyment of the land”.
  • The ground below, including mines, minerals and substances.
  • Buildings or part of building
  • Fixtures and improvements
  • Incorporeal Hereditaments such as easements, rents, rights and benefits.

Items found on the land. These belong to the landowner, unless he has no knowledge of the item, in which case it belongs to the finder.

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2
Q

Introduction: Fixtures vs Fittings

What is the difference between a fixture and a fitting?

A

Fixtures are part of the land (“affixed”), whereas fittings (also known as chattels) are not.

Another category is “improvements”. Like fixtures, these are permanent additions, and therefore form part of the land.

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3
Q

Introduction: Fixtures vs Fittings

To determine whether an object is a fixture or a mere fitting, two tests are used:

A

(1) The degree of annexation

  • An item attached to the land is likely to be considered a fixture.
  • A free-standing item is likely to be considered a fitting.

(2) The purpose of annexation

If an item is strongly attached, it is clearly a fixture. If not, there is a presumption that it is a fitting, but can be rebutted by considering the purpose of annexation.

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4
Q

Introduction: Legal Rights

What are legal rights in land divided into?

A

a) Estates
b) Interests

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5
Q

Introduction: Legal Rights

A right is legal if it:

A

a) appears in s.1(1) or s.1(2) Law of Property Act 1925.
b) meets the necessary formalities

If a right falls outside of s.1(1) and s.2 LPA 1925 but meets the necessary formalities, it can only be an equitable interest.

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6
Q

Inroduction: Legal Rights - Estates

Section 1(1) LPA sets out the two legal estates:

A

a) Freehold estate
b) Leasehold estate

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7
Q

Introduction: Legal Rights - Interests

Section 1(2) LPA sets out the five legal interests:

Note: the only legal interest not covered by this list is parol leases which do not require the same formalities.

A

a) An easement or profit
b) A rentcharge
c) A legal mortgage
d) Any other charge not created by instrument.
e) Rights of entry.

A rent charge is a right to receive periodic payment charged on the land. To be legal, must last forever or be for a certain period.

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8
Q

Introduction: Legal Rights

What is needed to create or transfer a legal estate or interest in land?

Provide the formalities required of this.

A

A deed
- in writing
- clear on its face that it is a deed
- signed
- witnessed (by one witness)
- delivered.

s.1 Law of Property (Miscellaneous Provisions) Act 1989.

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9
Q

Introduction: Legal Rights - Freehold estate

What are the characteristics of a freehold estate?

A
  • Capable of lasting forever.
  • Not determinable or conditional on any event.
  • Immediate right to possession (not a future entitlement)

Re. possession vs future entitlement: “A for life and then to B.” A will have the freehold. B’s interest at the time exists only in equity.

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10
Q

Legal Rights: Leasehold Estate

What is a lease?

What are the two types of leases?

A

An estate in which the tenant is granted exclusive possession of land for a certain period.

Types of leases
- Fixed term
- Periodic.

Unlike the freehold reversion, a lease cannot last forever.

Periodic: lasts for a fixed period, but after that period, the lease extends itself automatically until either the landlord or tenant terminates the lease by notice.

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11
Q

Legal Rights: Interests

For the purpose of a mortgage, who is the mortgagor and who is the mortgagee?

A

Mortgagor = borrower
Lender = mortgagee.

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12
Q

Legal Rights: Interests

A right of entry is the right for the landlord to…. or for the rentcharge owner to….

A

Landlord to forfeit the lease if the tenant breaks the terms of the lease; or the rentcharge owner to reclaim the land if the money owed is not paid.

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13
Q

Legal Rights: Interests

What legal interests requires no formalities?

A
  • Parol leases (three years or less).
  • Implied easements

See Easements, Covenants, Mortgages and Leases for more details.

  • Can be created orally.
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14
Q

Equitable Rights

All property rights are capable of being equitable. What are the most significant ways in which equitable rights in property are established?

A
  • By contract to create or transfer a right in land.
  • Failing to comply with formalities when creating or transfering a right in land.
  • By grant of a right in land by a person holding an equitable right.
  • By grant of an interest that only exists in equity (i.e. it is outside of ss.1(1) and (2) of LPA 1925).
  • By trust (express or implied)
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15
Q

Equitable Interests: Contract

A contract creating or transferring a legal right will provide an equitable right if two conditions are met:

In what situation is a contract inferred?

A
  1. There is a valid contract.
  2. Clean hands (Walsh vs Lonsdale)

Where the parties failed to use a valid deed but complied with the conditions above.

Clean hands: if the person seeking equity has e.g. breached a term of the contract, the right would not be recognised.

Terminology: a contract creating a legal estate is known as “an estate contract”.

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16
Q

Equitable Interests: Contract

What is a valid contract under s.2 of the Law of Property (Miscellaneous Provisions) Act 1989?

A

A contract that:
- is in writing.
- incorporates all expressly agreed terms in one document (or in each document where contracts are exchanged)
- is signed by/on behalf of all parties.

Any variation to a contract must also comply with the above requirements.

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17
Q

Equitable interests: Signed Written Document

Which three equitable interests are created by signed written document alone (s.53(1) LPA 1925)?

A
  1. Grant of a right that only exists in equity
  2. Grant of a right by a person who only owns an equitable right.
  3. Express trusts

  • These interests must be by signed written document. C.f. some interests that require a contract under s.2 LMPA (sale of freehold/leasehold; grant of lease; creation of easement; creation of option).
  • Express trusts need to be manifested and proved by some writing signed by some person who is able to declare such trust or by his will.
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18
Q

Equitable interests: Equitable by nature

Name 3 interests that are equitable by nature (i.e. they do not appear in ss.1(1) and (2) of LPA 1925).

A
  1. A beneficial interest under a trust.
  2. A restrictive covenant.
  3. An estate contract.

Between exchange of contracts and completion, an estate contract arises in equity for the buyer. It includes contracts for: the sale of a legal estate; an option; a right of pre-emption; the grant of a lease; the grant of an easement/profit.

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19
Q

Equitable interests: Trusts

An express trust can be created in two ways:

What formalities are required for implied trusts?

A

(a) self-declaration
(b) declaration + transfer.

None. They arise as a result of the conduct of parties.

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20
Q

Equitable interests: Trusts

There are two forms of implied trusts:

A
  • Resulting
  • Constructive
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21
Q

Equitable interests: Resulting Trusts

(Legal owner + Non-Legal Owner)

When does a resulting trust arise in land?

A
  • A person who is not the legal owner contributes directly to the purchase price of the property.
  • No evidence that the contribution was intended as a gift or loan.

Further conditions:
- No evidence that the contribution was intended as a gift or loan.
- The contribution is of all or part of the purchase price at the date of acquisition.

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22
Q

Equitable interests: Resulting Trusts

(Legal owner + Non-Legal Owner)

When a person who is not the legal owner contributes directly to the purchase price of the property, how is that person’s interest quantified?

A

In proportion to their contribution.

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23
Q

Equitable interests: Constructive Trust of the Home

(Legal owner + Non-Legal Owner)

When does a constructive trust arise?

A

When there is an common intention that a beneficial interest exists + detrimental reliance.

Often seen in trusts of the home

The detriment must be linked to the agreement.
Agreement can be at the time of purchase or subsequent to it.

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24
Q

Equitable interests: Constructive Trust of the Home

(Legal owner + Non-Legal Owner)

If there is no express intention, how can intention be inferred?

A

By the non-legal owner contributing to:
- the purchase price; or
- significantly contribution to mortgage payments

Note: on top of showing ‘intention’, direct financial contributions automatically prove ‘detrimental reliance’ as well.

You will also notice that technically a resulting trust could be used for the direct contribution to the purchase price, but in relation to the family home, the constructive trust is more suitable, as the court takes into account more factors when quantifying the beneficial interests.

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25
Q

Equitable interests: Constructive Trust of the Home

(Legal owner + Non-Legal Owner)

Apart from mortgage payments, what does detrimental reliance include?

A
  • Substantial improvements to the property.
  • Household bills so that the legal owner can pay the mortgage.
  • Unpaid work in legal owner’s business.

Non-monetary, ‘domestic’ contributions are unlikely to suffice to show ‘detrimental reliance’ but will be relevant in quantifying the interests, if a constructive trust is indeed established.

26
Q

Equitable interests: Constructive Trust of the Home

(Legal owner + Non-Legal Owner)

How is an interest arising out of a constructive trust quantified?

A

By taking into account the parties’ conduct, any financial contributions, and non-financial contributions.

27
Q

Home Rights

What are “home rights”? What two conditions are required for the right to arise?

A

Statutory right of occupation of the matrimonial home for a non-owning spouse.

Two conditions

(a) The parties are legally married and not divorced.
(b) the home is, has been or is intended to be the matrimonial home.

Includes civil partners.

Home rights do not create an interest in land. They also exist independently of any beneficial interest under trust.

28
Q

Harriet is the freehold owner of a property. Her wife Nicole made significant contributions to the purchase price. What are Nicole’s interests?

A
  1. Beneficial interest under resulting trust.
  2. Home right of occupation.
29
Q

Trusts

A trust of land will arise in the following three situations:

A

i. Express trust
ii. Implied trust.
iii. Co-ownership.

30
Q

Trustees

Who can be a trustee of land?

What are the maximum and minimum number of trustees permitted?

A

A person over the age of 18.

Maximum of four. No minimum but it is best to have two trustees, to ensure overreaching works.

If land is conveyed to more than four people, the first four will be the trustees.

31
Q

Trustees

If land is conveyed to a minor and an adult, the land is…

A

…vested in the adult in trust for the minor.

TOLATA 1996, Sch.1, para 1(2)

32
Q

Trustees

Trustees have all the powers of… including

A

…an absolute owner, including powers to:
- sell the land
- mortgage the land
- purchase land for the occupation of a beneficiary.

33
Q

Trustees

Section 11 TOLATA: What duty are the trustees’ powers are limited by?

To that end, what must the trustees comply with?

A

The duty to consult the beneficiaries of full age who have an interest in possession.

The wishes of the beneficiaries, or in the case of a dispute, the majority of them.

An interest in possession = entitled to immediate interest in the land.

This duty is only in so far as it is practicable.

34
Q

Co-ownership

The legal estate must be held as a… and cannot be.

A

…joint tenancy.
…severed

The legal estate cannot exist as undivided shares.

35
Q

Two forms of co-ownership

While the legal estate is always held as a joint tenancy, how can the beneficiaries hold their equitable interests?

What is the key difference between these?

A

As joint tenants or tenants in common.

On the death of a joint tenant, their interest passes to the surviving tenant(s) by virtue of survivorship.

On the death of a tenant in common, their interest passes to their estate.

36
Q

Co-ownership (Legal owner + Legal owner)

What term is never used in the context of a joint tenancy in equity and why?

A

The term ‘shares’ as the tenants are jointly entitled to the whole of the property.

37
Q

Co-ownership (Legal owner + Legal owner)

It is possible for joint tenants to ____ a joint tenancy in equity. What is the effect of this?

A

…sever.
Effect: convert the beneficial interests into a tenancy in common.

38
Q

Co-ownership (Legal owner + Legal owner)

What provides conclusive evidence of the way in which the property is to be held?

A

Express declaration of trust.

E.g. “Conveyed to them as express beneficial joint tenants”

39
Q

Co-ownership (Legal owner + Legal owner)

If there is no declaration of trust, what test is used to determine whether the co-owned property is held in equity as joint tenancy or tenancy in common?

What does it consist of? (explain each briefly)

Note: absent a declaration, it is presumed that the equitable interests are held as joint tenants. Therefore, this is only relevant where a person wants to prove there is a tenancy in common.

A

The four unities test
(1) Unity of possession - each entitled to possess whole property
(2) Unity of interest - identical interests
(3) Unity of title - identical title
(4) Unity of time - acquired rights at same time

40
Q

Co-ownership (Legal owner + Legal owner)

Which of the four unities are present in both joint tenancy and tenancy in common?

A

Unity of possession.

All four unities are required for a joint tenancy, whereas only unity of possession is required for a tenancy in common.

41
Q

Co-ownership (Legal owner + Legal owner)

Where there is no declaration of trust and all four unities are present, how else can a person prove there is a tenancy in common?

Joint tenancy or tenancy in common: third test

A
  • There are words of severance; or
  • Equity presumes a tenancy in common.

Words of severance:
“To A and B in equal shares”
“To be divided equally”
“Between A and B”
Half to A and Half to B.

42
Q

Co-ownership (Legal owner + Legal owner)

In what situations does equity presume a tenancy in common, even where there are two legal owners?

These presumptions are a last resort, and would seem to be rare. In practice, it is already unlikely to prove a tenancy in common where there are two legal owners and no express declaration of trust.

A
  1. Property acquired for business use.
  2. Unequal contributions to purchase price (but not in the case of a trust of the home)
  3. Common intention constructive trust (Stack v Dowden)
43
Q

Co-ownership (Legal owner + Legal owner)

Common intention constructive trust

When will a common intention constructive trust be presumed in relation to the family home being owned by joint tenants in law?

A

The party proves:
- a different common intention at the time of acquisition or their common intention later changed, and
- detrimental reliance

In Stack v Dowden there were significantly unequal contributions to financing other than purchase price, such as mortgage payments. On the facts of the case, their intentions changed over time through their conduct.

The idea that the intention could change over time was established in that case and is known as ‘ambulatory constructive trust’

44
Q

Severing a joint tenancy

Does severance apply to joint tenancy in law, equity or both?

Severance of a joint tenancy in equity

A

In equity only.

45
Q

Severing a joint tenancy

Severance can be effected in two ways:

A
  1. Formal severance by unilateral written notice.
  2. Informal severance.

Note: severance must be inter vivos. Cannot be by will.

46
Q

Severing a joint tenancy

For formal severance to be effective, the notice must:

Formal severance

A

(a) Express a desire to end the joint tenancy immediately
(b) Be received, or deemed to be received, by all joint tenants.

Notice can be handed or posted to the intended recipient

47
Q

Severance of joint tenancy: postal rules

If the notice is delivered by ordinary post, when is it deemed to be served?

If the notice is delivered by first class post, when is it deemed to be served?

A
  • When left at the last known place of abode or business in the UK of the person served.
  • If it is not returned undelivered.
48
Q

What are the three main methods of informal severance?

A
  1. Acts operating on the joint tenant’s share.
  2. Mutual agreement
  3. Course of dealing
49
Q

Joint tenancy: informal severance

What is an act operating on joint tenant’s share?

A

A disposal of the equitable interest by sale, gift, lease or mortgage; or

A valid contract for disposal.

The disposition relates to an equitable interest, therefore must be in writing and signed (s.53 LPA requirements).

50
Q

Joint tenancy: informal severance

What is required for severance by mutual agreement to be valid?

A

An intention to give valuable consideration.

Oral agreement suffices; agreement doesn’t need to be carried through to performance.

51
Q

Joint tenancy: informal severance

Joint tenants in equity agree that tenant 1 would purchase tenant 2’s interest for $750. Tenant 2 later changed her mind, requesting a payment of $1000 instead. No further action was taken, and Tenant 1 died a year later. Was there severance?

A

Yes. There was an agreement supported by an intention to give valuable consideration, which provided an indication of a common intention to sever.

52
Q

Joint tenancy: informal severance

What does severance by mutual conduct (course of dealing) requires to be valid?

A

That the joint tenants assume they are tenants in common over a significant period of time, through their conduct.

53
Q

Joint tenancy: informal severance

In what two cases is severance involuntarily effected?

A
  1. Severance by bankruptcy.
  2. Unlawful killing of joint tenant.

Bankruptcy causes an assignment to the trustee in bankruptcy.

54
Q

Severance: consequences

Where there are two tenants, they both become tenants in equal shares. What if there are three or more tenants?

A

Only the severing co-owner becomes a tenant in common. The others continue to hold a joint tenancy for the remaining interest.

55
Q

Severance: consequences

Harry and Seema purchase a property. Seema contributed 70% of the purchase price, and Harry the remaining 30%. Harry sells his interest to his brother Joseph. Seema subsequently dies, leaving all her interest to her cousin Amber. How is the property held?

A

Legal estate - joint tenancy. On Seema’s death, Harry became the sole trustee of the legal estate.

Equitable interests - Joseph and Amber therefore hold 50% interest each. Initial contributions are irrelevant when severance occurs to create a tenancy in common.

When severance occurs, the individual co-owners’ contributions to the purchase price is irrelevant.

56
Q

Co-ownership: Settling Disputes

Applications under s.14 TOLATA are likely to fall under the following 4 categories:

A
  • Disputes about size of co-ownership interests;
  • Disputes regarding occupation of trust land;
  • Authorisation of transactions without the consent of all trustees;
  • Disputes about whether co-owned land should be sold.
57
Q

Co-ownership: Settling Disputes

Under s.14 TOLATA, the court has the discretion to make an order about:

Two bullets

A

(a) Exercise of trustees’ functions
(b) Nature or extent of a person’s interest in property.

58
Q

Co-ownership: Settling Disputes

Under s.15, the court must take into account the following five factors in exercising its s.14 powers:

A

Section 15 factors

  • Intentions of settlor
  • Purposes of trust.
  • Welfare of minors who might reasonably be expected to occupy any land;
  • Interests of secured creditors of any beneficiaries.
  • Circumstances and wishes of beneficiaries of full age and entitled to an interest in possession.
59
Q

Co-ownership: Settling Disputes

Where the interests of a child are weighed against the interests of a secured creditor, whose interest takes precedence in relation to trust property disputes?

A

The secured creditor.

60
Q

Co-ownership: Settling Disputes

A, B, C and D purchase a property while studying, expressly declared as tenancy in common in equal shares.

B sells her property to A. D completed his studies and wants to sell the property. A and C want to remain in the property.

(1) How is the property held?
(2) On an application from Duncan, what factors will be taken into account, and would his application succeed?

A
  1. Legal estate always held as joint tenants. Equitable interests: 1/2 Archie, 1/4 Cherry, 1/4 Duncan, tenancy in common.
  2. Factors taken into account: Purposes for which property is held; the majority of beneficiaries’ interests/wishes = Cherry and Blake want to continue on.

Court will likely refuse the sale.

2023 (26 decks)

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