Nature of Land Flashcards
SUMMARY OF EVERYTHING
Difference between real and personal property?
- Real property = land
- Personal property = other types of property e.g. cars, TVs, shares
Different rules apply to both
Why is it technically incorrect to say we ‘own’ a piece of land?
All land in E+W belongs to the Crown, we own a right in the land
Land law is the study of proprietary/property rights in the land and responsibilities/duties in land related relationships
What is the difference between a proprietary and a personal right in terms of remedies?
- Proprietary - use/possession of the land can be recovered (can be enforced by an action in rem)
- Personal - can only be enforced by a personal action for damages (use/occupation cannot be recovered)
What is the difference between a proprietary and a personal right in terms of enforcement?
Proprietary rights can be enforced against TP, personal rights only bind the original parties to the right
What rights are capable of being proprietary?
I.e. what are the proprietary rights?
- The freehold estate
- The leasehold estate
- An easement
- A mortgage
- A restrictive covenant
- An estate contract
- A beneficial interest in a trust of land
Holder of proprietary right in land has a right to occupy/use/restrict what can be done with the land in some way
If a particular use of the land is recognised as having proprietary status, does this mean that the actual right under consideration will have proprietary status?
No - must look at nature, creation ad protection of rights in land to determine whether they are proprietary or personal
E.g. right to park car in neighbour’s garage may be an easement (proprietary) but the ability to do so will not always be an easement; same use could be either proprietary or personal depending on circumstances
How can the creation of a right tell us whether it is proprietary?
If there are formalities - most proprietary rights subject to strict requirements re formalities for their creation
What is meant by ‘owning’ a piece of land, if not the physical land itself?
Owning a right to possess the land
Powerful proprietary right
What is a proprietary right of possession called?
An estate in the land
Either freehold or leasehold
What is the freehold estate?
AKA the fee simple absolute in possession
A right of possession which lasts until the owner for time being dies without heirs (without blood relatives and without disposing of it by will)
The highest possible estate in land
Holder of frehold in piece of land = owner
What is meant by fee simple absolute in possession?
- Fee = capable of being inherited
- Simple = can be inherited by heir and includes distant relatives
- Absolute = not liable to end prematurely (not determinable or subject to a condition)
- In possession = fee simple owner has current right to use and enjoyment of property (physical possession not necessary; can receive rent if let)
Is the owner of the freehold free to sell it or give it away?
Yes - alternatively may grant away a lesser estate for a shorter period of possesion than their own (lease)
What is the leasehold estate?
Where a freehold owner grants a lesser estate of a certain duration
Estate granted in term of years absolute (leasehold)
Can be weekly, monthly, yearly, or centuries long
How is a sub-lease created?
Leaseholder (tenant) grants a lease of a lesser duration out of their own leasehold while retaining the original lease
What is the difference between the freehold reversion and the leasehold reversion?
- Freehold reversion = residue of the estate after the granting of a lease
- Leasehold reversion = what the residue is known as if grantor holds a leasehold estate (when lease ends the right to physical possession of land automatically reverts back to landlord)
What is meant by a hierarchy of rights of possession?
Same piece of land may simultaneously be subject to a freehold, a lease and a sub-lease - holder of each owning not the land but right to possession of land subject to the lesser rights they have granted for their particular ‘slice of time’
What is a commonhold?
A type of freehold created out of a freehold registered estate
* Designed to meet needs of owners of flats/apartments
* No overall landlord - just a freehold owner; a company called a commonhold association
* The owner of each flat is a member of the association
* The commonhold association is responsible for maintaining the communal areas of the building
Fewer than 50 blocks across E+W are commonhold properties
What is the difference between an estate and interests in land?
Are both proprietary rights
- Estate = right to possess the land (proprietary rights of possession)
- Interest = use or enjoy the land in some way (gives holder the right to do something/restrict what can be done on land)
Interests will be either legal or equitable
What is the difference between an interest and incumbrances on estate?
Nothing they are the same thing!!!
What is the recoverability and enforcability of an interest?
- Can be recovered (as an action ‘in rem’)
- Can be enforced against third parties (new owner of burdened land)
Very powerful proprietary interest
What are the legal interests?
The interests set out in s1 LPA
- Mortgages
- Easements (granted for a term equivalent to a freehold of leasehold estate [forever/certain term])
- Rights of entry
What are the equitable interests?
Referred to in s1(3) of the LPA which only take effect in equity
- Freehold covenants
- Estate contracts
- Interests in a trust of land
- Easements granted for an uncertain term
- Mortgage granted over an equitable interest in land
Why is the distinction between legal and equitable interests important?
- Remedies - legal interest means entitled to automatic damages without considering discretion of the case (+ equitable remedies) - an equitable interest means no automatic damages, is at discretion of court
- Enforcement
What is a mortgage?
Interest in the land granted by the borrower as security for a loan
Rights = to possess and sell the land in event of default
Who grants a mortgage?
The borrower
NOT the lender
What is an easement?
A proprietary right to use land which belongs to someone else (not exclusive right to occupy/use)
E.g. right of way, drainage, storage, parking
What is a right of entry?
A right for landlord to re-enter leasehold premises and end the leashold estate in event of tenant default/specified event (aka forfeiture clause)
What are the formalities for a legal mortgage, an express legal easement or right of entry as an interest in registered land?
Granted by deed + registered at LR against the title of the burdened land
What is a covenant?
A promise
Will usually arise between freehold owners when one person sells part of land and wishes to ensure buyer does nothing which could affect the amenity and value of seller’s retained land
What is a restrictive covenant and its formalities?
- Covenants that prevent a landowner from doing something on their land
- In writing and signed by grantor
E.g. not to sell alcohol, not to build, only to use for residential
What is an estate contract? What are its formalities?
- A contractual right to a legal estate (whether freehold or leasehold); a failed legal lease/easement/mortgage
- In writing, contains all terms and signed by both parties
Doesn’t comply with proper formalities but has these characteristics
Will an estate contract always be created deliberately?
- Deliberately - option agreement, right of pre-emption
- Non-deliberately - try to create a valid deed (legal interest/estate) and fail - equitable lease, equitable mortgage, equitable easement (instead of legal!)
What is an interest in a trust of the land?
Where a piece of land is placed in a trust, the B has an equitable interest in the land
Wj
What is the difference between an express trust and implied trust re interest in a trust of the land? What are the formalities for each?
- Express trust = trust expressly created (i.e. declaration of trust) - evidenced in writing and signed by declarant
- Implied trust = A and B both contribute 50% of purchase price, land only transferred to A, equity recognises B’s contribution and implies a trust (A and B both Bs) - no formalities
What does ‘title’ mean in transfer of title?
Ownership
How can a freehold estate be transferred?
Rarely created - freehold estates are transferred
- Sale
- Will
- Gift
- Operation of law
What do buyers aim to find out through searches in pre-exchange?
- Whether seller actually owns the land
- Any proprietary rights which benefit or burden the land
Does the deal finish when parties exchange contracts?
No - are only legally bound to buy/sell the land. Certain formalities are required for the completion of a sale of land
What are the requirements (formalities) for a valid land contract? What does it give the buyer?
I.e. where the matter of the contract is land
- In writing
- Contains all expressly agreed terms
- Signed by both parties
An equitable interest in the land (estate contract)
LP(MP)A s2
No scope for an oral land contract
What must a legal estate be transferred (or created) by?
A deed
A written legal document
What is a deed known as in registered and unregistered land?
- Registered = transfer
- Unregistered = conveyance
What are the 3 requirements for a valid deed?
- Intended to be a deed
- Validly executed
- Delivered
TR1 is a standard form of transfer deed
How is a deed intended to be a deed?
Where it is labelled as a deed
How is a deed validly executed?
- Deed must be signed by grantor (seller) in presence of a witness
- Witness needs to sign deed to confirm witnessing (attesting the signature)
How will a company validly execute the deed?
- Two directors signing in presence of witness
- One director and company secretary singing in presence of tiwness; or
- Affixing the common seal of company
Any of the three
Is there a legal requirement for the buyer to sign the deed?
No - but will in practice
On what 2 occasions will a buyer sign the deed?
- Buyer entering into covenant in respect of land
- Buyer making declaration of trust
How is a deed delivered and what is it an acknowledgement of?
Requires an acknowledgement that a person entering into a deed intends to be formally bound by its provision
In practice - by dating the document (parties’ solicitors will do)
What happens in registration and how is it effected by the buyer?
The Land Registry is ‘told’ that the buyer is the new owner of the land - buyer does this by sending completed deed to Land Registry
For registered land, when does legal title transfer?
Not until registration has taken place
Buyer not recognised as legal owner until registration happens
For unregistered land, when does the legal title transfer?
Upon completion of the deed - new owner must then register land for the first time within 2 months of completion (but legal title will have already transferred)
What happens if buyer of unregistered land does not register the land within 2 months of completion?
Legal title reverts back to the seller
What is the transfer of a leasehold called? Must a deed be used?
- Assignment
- Deed must be used to transfer
Dont’ get transfer of lease and creation mixed up
Can a contract for land be completed orally?
No - must be in writing
Must all contractual terms be incorporated into the land contract itself?
Terms can be incorporated into contract by being set out in document or by referring to another document (common)
E.g. SCS
Does one single document have to be signed by both parties?
No, can either:
1. Have both parties sign one contract
2. Two idential documents which are signed and exchanged
Can a variation to the contract be agreed orally?
If it is a material term, no - must comply with LPA s2
Material = essential to contract e.g. completion date
E.g
What is a sale contract?
Entered into by buyer and seller to commit themselves legally to purchase/sale
Creates contractual right to legal estate
Estate contract = equitable interest!
What is an agreement for lease/contract for lease?
Landlord and tenant commit themselves to enter into a lease in future (certainty)
Creates contractual right to legal estate
What is an option agreement?
Gives another a party a right, during option period, to serve notice that they wish to buy the land - if they do then seller must sell land to buyer
Creates contractual right to legal estate
What is a right of pre-emption?
Gives another party a right of first refusal in the event landowner decides to sell their land (must offer it to this party first)
Creates contractual right to legal estate
No obligation to sell
What happens if a land contract is created deliberately/parties try to create a valid deed but fail?
AKA what is the proprietary effect of a land contract?
Courts recognise an equitable interest in the land provided that:
1. There is a document complying with LP(MP)A s2
2. The remedy of specific performance is available
E.g.
Contract to transfer legal estate (sale contract/option agreement) = estate contract
Contract to create legal lease = equitable lease
Contract to create legal mortgage = equitable mortgage
Can an estate contract be specifically enforced against third parties?
I.e. subsequent owners of the freehold estate
Yes it is a proprietary right in the land (an equitable interest)
But must be protected against third parties (method depends on whether registered)
Will a third party who is a donee (was gifted/inherits the land) be bound by an estate contract if the interest holder has failed to protect it?
Yes regardless of registration
What are the remedies for breach of a land contract?
- Damages - available as of right (as a common law remedy to breach of contract!)
- Specific performance - defaulting party ordered to carry out positive contractual obligations
- Injunction - court restrains someone from doing something (e.g. selling to someone else)
Is there an automatic right to specific performance and injunctions?
No - they are equitable remedies so not available as a right but at the discretion of the court
Damages are available as a right
What does it mean for equitable principles to apply in terms of remedies?
The court considers the behaviour of both parties in determining whether to make an order/grant injunction
E.g. buyer delays in requesting remedy
If a contract has for lease been entered into, the tenant moved in, but the lease was not completed by deed, and then the tenant breached a term of the contract, why would the court probably not recognise an equitable lease?
The C is not coming with clean hands
What is the difference between registered and unregistered land?
- Registered = land has been registered at Land Registry
- Unregistered = title information (who owns) is contained in various old paper title deeds
What are the disadvantages of the unregistered land system?
- Difficult to discover TP interests (documentaion held by right-holder themselves and not centrally)
- No state guarantee of accuracy or compensation for error (as with registered system)
- Examining deeds is difficult/impossible if missing or damaged
- Hard to know exact plan and so extent of property
- Conveyancing process may be slower and incur more expensive legal fees for purchaser
When do you have to register an unregistered title?
When there is a transaction or event (disposition) triggering compulsory registration
Sale, mortgage, gift, assent
What are the aims of a system of registered land?
- Simplify costs of conveyancing
- Complete record of all matters relating. to a piece of land
What is first registration?
Each time unregistered land sold for first time since 1 Dec 1990 it must be registered
Can land be registered voluntarily?
Yes - reduced registration fees in these circumstances
Does a triggering event apply to unregistered or registered land?
Both!
What is the effect of a triggering event on unregistered and registered land?
- Unregistered = register for the first time
- Registered = update the register
What are the triggering events?
NB more than 7 years?
- Transfer of freehold estate by sale, gift, or court order
- Grant of a lease for a term of more than 7 years (in which case the land must be registered - can end up with good leasehold title where applicant fails to submit evidence of freehold title when registering leasehold)
- A first legal mortgage of the freehold or of a leasehold with more than 7 years to run
- The assignment of a lease of unregistered land with more than 7 years to run
- The grant of a lease to take effect in possession more than 3 months after the date of grant
What are the aims of land registration for the buyer and the interest holder?
- Buyer = knows precisely what it is buying
- Interest holder = interest enforceable against a new owner
What third party interests should a buyer be bound by?
Those already entered on the register at time of sale
Whether legal or equitable, and whether actual knowledge of buyer
What are the 3 principles of land registration?
- Mirror principle
- Curtain principle
- Insurance principle
What is the mirror principle?
Register should reflect all matters property has the benefit of and is subject to (burdened by). Owner should only have to look at register to understand who owns property and what TP interests bind it
What is an overriding interest and how does it affect the mirror principle?
An interest that does not appear on the register but will still be binding on owner of legal estate and buyer of it
Means transparency of mirror principle has never been fully realised
E.g. lease granted for a term for 7 years or less
What is the curtain principle?
Equitable/beneficial ownership of land is kept off the title and does not affect validity of transaction
I.e. if property held on trust
What is the insurance principle?
The accuracy of the register is guaranteed by the state; any error will be corrected and those suffering loss will be compensated
‘State indemnity’
What information is included in registered title?
- Unique title number
- Details of landowner
- Details of rights that benefit/burden land
- Title plan gives accurate plan of property (general position of the legal boundaries of registered title)
What is the Official Copy?
The Land Registry registered title documents
What are the 3 registers of a registered title and what do they contain?
- Property register - description of property by reference to filed plan, nature of estate (freehold or leasehold), details of proprietary rights that benefit the land (e.g. right of way)
- Proprietorship register - details of the owner of the estate, class of title, and restrictions on owner to deal with land
- Charges register - details of any burdens on the land (e.g. restrictive covenant), details of any leases granted out of title
What are the 4 classes of title?
- Absolute
- Qualified
- Good leasehold
- Possessory
What is an absolute class of title?
Best form of ownership - only bound by interests registered on title or overriding interests
Most common
What is a qualified class of title?
Land Registry of the opinion that title has some defect which it will specify on the register
What is good leasehold title?
LR is satisfied as to the title of the leaseholder only and not the freeholder
E.g. freehold title is unregistered and applicant fails to submit evidence of freehold title when applying to register leasehold title
What is a possessory class of title?
- Applicant in possession of property/in receipt of rents and profits and no other class of title can be given (no title deeds to prove ownership/deeds have been destroyed)
- Same effect as absolute title but it is subject to any adverse rights existing at the time
Claim under Adverse Possession or Squatter’s Rights
May mean TP interests created before date of first reg will bind property even though not noted on the title
What is the effect on a transaction if there is a failure to register a transaction involving already registered land?
The transaction is not legally recognised
Why is it important to clarify what land is?
- Degree of formality in its transfer (cf other types of property)
- Buyer of land wants to know what is included (e.g. shed in garden)
- Digging underneath/flying above - is this trespass?
- Mortgagee wanrts to know what they can take possession of
What are corporeal and incorporeal hereditaments?
- Corporeal = physical things attached to the land (fixtures)
- Incorporeal = benefit of any proprietary rights the land has that are without physical substance e.g. easement to park on adjoining neighbour’s land
What does the legal definition of land include?
The surface, buildings or part of buildings on the land, other corporeal hereitaments and other incorporeal hereditaments
What are the owner’s rights as to the airspace above his land?
Restricted to such height as is necessary for ordinary use and enjoyment of the land
What is the difference between the upper airpsace and the lower airpsace?
- Upper - no exact height from which it begins (innocent flight/aircraft above is okay)
- Lower - to such height as is necessary for reasonable enjoyment of particular piece of land (overhanging structure is trespass whether or not it causes damage)
Only owns lower airpsace
What are the exceptions to the principle that a landowner owns everything beneath his land?
- Any coal belongs to the Coal Authority
- Landowner not entitled to all minerals under land (mines of gold, silver, and treasure belong to Crown)
- No trespass at depths below 300m (so no consent to start deep-level drilling required)
If the cellar of a neighbour’s house was below your land, who would own it?
You!
When is it important to determine whether something is a fixture or chattel?
- When land is being sold - seller needs to know what it can take with it
- Lender, when taking possession, will want to know what is a fixture and can be sold with the mortgaged land
What is the 2 stage legal test for determining whether an object is a fixture or chattel? How do the stages work together?
- The degree of annexation test (raises presumption that it is or is not a fixture)
- The purpose of annexation test (can rebut presumption)
What is the degree of annexation test?
The more firmly object is fixed to land/building = more likely it is to be a fixture
* Rests easily by its own weight = generally a chattel
Will an object be a chattel if it is fairly easy to remove?
No - will still be prima facie that of a fixture
What is the purpose of annexation test?
Considers why the object is attached to the land/building i.e. more covenient use/enjoyment of chattel as chattel or to enhance land/building in some way
More convenient use = remains a chattel
Which of the two tests take priority if there is a discrepancy?
The purpose of annexation test
What are some examples of fixtures and chattels?
- Fixtures = bathroom fittings, items installed by builder (more likely), kitchen units
- Chattels = kitchen appliances (if not integrated and can be removed w/o damage), light fittings attached by screws, carpets and curtains
What if the chattels are incorporated into the architectural design of a buidling but are not firmly affixed?
May be classified as fixtures
What if the chattel cannot be removed without destruction/demolition?
Will be deemed a fixture (forms part of land)
What is a Law Society Fixtures and contents form?
Buyer and seller will agree which items pass on in sale and this will form part of contract
When will fixtures not be part of a sale?
If they are specifically excluded from the contract - a fixture is otherwise part of the land
What if the contract is completed and silent on fixtures, but the seller wants to remove a fixture?
They can’t - seller cannot remove fixtures unless they are expressly stipulated in contract as being excluded from sale
