Nature of Land Flashcards
explain an estate in land
A person with an estate in land has the right to enjoy, possess, control and dispose of it and receive any income produced from the land.
There are freeholds and leaseholds.
explain an interest in land
A person with an interest in land has a right against land owned by another person. For example, a right of way.
explain what is meant be freehold
This is the freehold estate which lasts indefinitely. Its full legal name is ‘fee simple absolute in possession’.
explain what is meant by leasehold
This is an estate in land where the tenant is granted exclusive possession of the land for a fixed period. Its full legal name is ‘term of years absolute’. It is also described as a lease or tenancy.
can a freehold owner can grant a lease?
A freehold estate owner can grant a lease for any duration.
can a leasehold owner grant a lease?
A leasehold estate owner can only grant a sub-lease for a shorter duration than their own lease.
give examples of interests in land
- mortgage
- restrictive covenant
- profits
- easement
- resulting trust
- constructive trust
- estate contract
- option
explain a mortgage
An interest over land granted by the borrower to the lender as security for a loan. If the borrower fails to repay the loan, the lender can enforce its security.
explain a restrictive covenant
A promise by one landowner in favour of another landowner that they will not do certain things on the land. For example, not to use the land for any use other than a private home.
explain easements
A right for one landowner to make use of another parcel of land for the benefit of their own land. For example, a right of way.
explain profits
also called profits a prendre – a right to go on to somebody else’s land and remove from the land something which exists naturally. For example, a right to catch and take fish or a right to graze animals.
explain resulting trusts
A person, who is not the legal owner, contributes directly to the purchase price of the property. The person acquires an interest proportionate to their contribution.
explain constructive trusts
An interest in land is created when a person, who is not the legal owner of the property, makes a contribution to the property other than a direct financial contribution at the time of the purchase. This can include contributing to the mortgage payments or making substantial improvements to the property.
The interest will not be proportionate to the contribution made, it will be quantified by taking into account the parties’ conduct, direct and non-direct financial contributions and non-financial contributions
explain estate contracts
an estate contract is the contract to convey an estate i.e. for sale of a freehold estate / grant of a lease / grant of a mortgage
So, when a lease fails to be legal, it is said to be an equitable lease / estate contract.
This contract does not give rise to a legal interest
explain options
An option enables the owner of the option to insist that the land is sold to them at any time during the fixed period of the option (the period must not exceed 21 years). An option fee is usually payable, but the full purchase price only becomes payable if the option is exercised.
what is a home right? Explain it.
This is a statutory right for a non-owning spouse or civil partner to occupy the matrimonial home under the Family Law Act 1996. It does not create an interest in land.
Important - the non-owning spouse does not own the legal title to the property. They could have a beneficial interest (i.e. under resulting trust), but they could not hold legal title.
what is alienation?
The sale or underletting of leasehold land.
what is assignment?
the transfer (or sale) of a lease between the tenant/lessee (an assignor) and a purchaser (an assignee).
what is a beneficial interest?
The interest of a beneficiary under the trust (express, resulting or constructive).
what is a charge?
An alternative word for a mortgage also expressed as a charge by way of legal mortgage.
what is a conveyance?
A document transferring legal ownership in freehold unregistered land.
what is dominant land?
The land that benefits from a restrictive covenant or easement.
what is a fine?
A sum of money paid to the landlord in return for granting a lease. Usually paid in addition to rent.
what is a fixed term lease?
May be for any period of time as long as the maximum period is fixed.
what is a lesse/tenant?
The owner of the leasehold estate.
what is a lessor/landlord?
The person who grants the leasehold estate. The landlord retains the right to receive rent and sell the freehold (subject to the lease). The retained rights are known as the reversion.
what is a reversion?
The landlord retains the right to receive rent and sell the freehold (subject to the lease). The retained rights are known as the reversion.
what is a mortgagee?
This is the lender who owns the mortgage interest in the land.
what is a mortgagor?
This is the borrower, the person who owns the legal estate in land and grants the mortgage to the mortgagee (lender) as security for the loan.
what is a periodic lease?
A lease for one period, which extends automatically until either the landlord or tenant give notice to quit. The period is usually a week, month or year.
what is personal property?
Rights in property except for land (goods and chattels).
what is a positive covenant?
An obligation which requires effort or expenditure in order to perform the obligation.
what is a puisne mortgage?
A legal mortgage over unregistered land which is not protected by the deposit of title deeds. Pronounced ‘puny’.
what is real property?
All property rights relating to land (estates and interests, ie mortgages, easements etc).
what is servant land?
The land which is subject to or burdened by the covenant or easement. The easements are exercised over this land. The servient land is bound by the restrictive covenant.
what is a tenancy?
This is the leasehold estate which lasts for a fixed period of time. Its full legal name is ‘term of years absolute’. It is also described as a lease or leasehold. A freehold estate owner can grant a lease for any duration. A leasehold estate owner can only grant a sub-lease for a shorter duration than their own lease.
what is time immemorial?
the date of legal memory
what is meant by ‘transfer’?
a document transferring legal ownership in registered land
who owns mines and minerals?
all interests in coal are now vested in the Coal Authority under the Coal Industry Act 1994
what is the definition of land?
land includes:
o land of any tenure
o Mines and minerals (inc. coal beneath the property)
o Corporeal hereditaments
o Incorporeal hereditaments
o Manor and advowson (these have limited modern application)
o Buildings and parts of buildings
o fixtures
what are corporeal hereditaments?
these are tangible, physical characteristics of land that can be inherited i.e. trees, rocks, clods of earth
what are incorporeal hereditaments?
these are intangible property rights that that can be inherited i.e. profits and easements
what is meant by flying freehold?
a building can fall within the definition of land even if it doesn’t touch the soil because they can be divided horizontally or vertically. This is called flying freehold.
what is the extent of land?
Land extends upwards and downwards to the centre of the earth.
what rights does a landowner have in relation to airspace?
in relation to airspace, a landowner’s rights only extend to the height needed for ordinary use and enjoyment.
explain fixtures and their effect
Fixtures are included within the definition of land
This means the landowner must give these to the buyer (unless there is provision in the contract to the contrary)
what is a chattel? what is the effect of this?
Chattels are personal property and not included within the definition of land. The landowner does not need to give these to the buyer
what is the difficulty which chattels? Give an example.
chattels can become fixtures. Something may start as a chattel but become a fixture if it becomes difficult to move and is clearly intended to form part of the land
blocks of stone placed one on the top of another without any mortar or cement for the purpose of forming a dry stone wall would become part of the land, though the same stones, if deposited in a builders yard and for convenience sake stacked on the top of each other in the form of a wall, would remain chattels.
what is the test to determine whether something is a fixture or chattel?
There is a two part test to determine whether something is a fixture or a chattel (Bexley v Poulett [1977])
o The degree of annexation; and
o The purpose of annexation
re: fixtures/chattels
explain the degree of annexation limb of the test
If the object can only be remove by causing significant damages to the land, this indicates that it is a fixture (i.e. fireplace, panelling or conservatory)
If it is easy to move, it is likely to be a chattel (i.e. carpets, curtains). Another indicator is if it is resting on its own weight
If satisfied, it creates a rebuttable presumption that the item is a fixture
re: fixtures/chattels
explain the purpose of annexation limb of the test
- If the object was attached to the land to enhance to land or to create a permanent improvement, then it is a fixture.
- If the object was attached to the land for better enjoyment of the object, then it is a chattel.
This is the key test and takes priority over the degree of annexation
re: fixtures/chattels
who has the onus to prove something is a fixture?
the person claiming that the item is a fixture
re: fixtures/chattels
give examples of fixtures
Split-level cooker with a built-in oven and inset hob
Kitchen units
Items installed by a builder i.e. wall tiles
Bathroom fittings i.e. basins, bath
Items that are part of an architectural design (i.e. tapestries fixed into panel walls, pictures, marble vases, ornaments) are likely to be fixtures despite their ease of removal (D’Eyncourt v Gregory [1866])
A greenhouse that is likely to fall to bits if moved
re: fixtures/chattels
give examples of chattels
Ornamental items i.e. pictures
Free-standing cooker connected via a flex
Kitchen appliances that are only attached by their own weight and an electrical flex and can be removed or replaced without damage
Carpets and curtains
Gas fire connected purely to function as a fire
Light fittings attached by screws
A mobile home resting on its own weight if it is easy to remove
who technically owns all land in England and Wales?
the crown
what are the categories of rights in land?
Estates and interests. These rights can compete.
All rights can be equitable, but only some can be legal.
when will a right be legal?
o It appears in ss1(1) or 1(2) LPA 1925; and
o It meets the necessary formalities
If these requirements are not met, it will be an equitable right.
what are the two estates capable of being legal?
S1(1) LPA 1925 sets out that there are two estates capable of being legal:
o Freehold (i.e. the estate in fee simply absolute in possession)
o Leasehold (i.e. the term of absolute years)
what are the types of lease?
fixed-term and periodic
what is ‘estate in fee simple absolute in possession’? Explain each part
The full name is an ‘estate in fee simple absolute in possession’:
o Fee - the estate is capable of being inherited
o Simple - it can pass onto any class of heir, so the estate can last forever. The estate is akin to having permanent ownership of the land.
o Absolute - the estate is not determinable or conditional on any event
o In possession - an immediate right to possession (rather than entitlement to in the future)
what is an estate?
a period of time. Therefore, a person owning an estate can create a lesser estate out of it or shorter period of time (i.e. a freehold owner creating a lease).
what is meant by ‘exclusive possession’?
the ability for the tenant to control the land and exclude everyone from the land, including the landlord
how long can a lease last for?
any duration, but it cannot last forever.
what is a fixed term lease?
a lease for any duration but the maximum duration must be clear (i.e. one day, six months, an academic year or 999 years)
what is a periodic lease?
this is for one period that will automatically extend itself until either the landlord or tenant terminates the lease by notices. The notice to quit would usually be for the period of the tenancy i.e. one month for a monthly tenancy
what is commonhold?
This is a new type of freehold tenure that was introduced in 2002
It gives a buyer a freehold interest in their flat or house with communal areas being managed by a commonhold association run by commonhold owners.
This looks like an attractive alternative to a lease but it is not commonly adopted within only 20 registered at the LR as of 2019
what is meant by tenure?
This refers to how a piece of land is held. All estates in land are held by virtue of either freehold tenure or leasehold tenure.
what interests are capable of being legal under s1(2) LPA 1925?
S1(2) LPA 1925 sets out the interests in land that are capable of being legal (subject to formalities being met):
o Easements and profits
o Rentcharges
o Charges by way of legal mortgage
o Interests in land which arise by operation of statute
o Rights of entry
when can easements and profits be legal?
Easements and profits are only capable of being legal if they are for a duration equivalent to a freehold or leasehold. In other words, easements lasting forever or for a fixed duration are capable of being legal. Easements and profits for an uncertain duration are not capable of being legal.
what is a rentcharge?
This is a right to receive a periodic payment charged on the land
when can a rentcharge be legal?
They are only capable of being legal if they are perpetual (i.e. forever) or for a term of years absolute (i.e. for a fixed duration)
what is a mortgage?
A mortgage is an interest over property granted by the borrower to the lender as security for a debt or the discharge of some other obligation.
what is meant by interests in land which arise by operation of statute?
These are interests which are capable of being legal. The owner of the rights will be some form of government agency
explain rights of entry
This is either:
o A landlord’s right to forfeit the lease (i.e. bring to a premature end) if the tenant breaks the terms of the lease; or
o A rentcharge owner’s right to reclaim the land if the money owed is not paid
how can equitable property rights be created?
o By contract to create or transfer a legal estate or interest
o By trying to grant a legal estate or interest and failing to comply with the relevant formalities
o By grant of an estate or interest by a person who owns only an equitable right
o By grant of an estate or interest which can only exist in equity
o By express trust
o By implied trust
what interests are equitable only? How are these created?
i.e. these can never be legal interests:
o A beneficial interest under trust (express, implied, resulting or constructive)
o Restrictive covenant
o Estate contract
These are created by:
o By contract to create or transfer a legal estate or interest
o By trying to grant a legal estate or interest and failing to comply with the relevant formalities
o By grant of an estate or interest by a person who owns only an equitable right
o By grant of an estate or interest which can only exist in equity
o By express trust
o By implied trust
explain an express trust
- Any type of property (inc. land) can be placed in a trust
- The defining characteristic of a trust is that the legal title to the property is separate from the equitable interests
- The person who holds the legal title (i.e. freehold or leasehold) is the trustee
- The person who is entitled to enjoy the benefits of the land is the beneficiary
The trustees and beneficiaries can be the same or different people
how can an express trust be created?
o Self-declaration - the settlor retains legal title but declares they hold the property as trustee for the beneficiary(i.e. the settlor is the trustee)
o Declaration plus transfer - the settlor declares a trust and transfers legal title to their trustees who hold the property for the benefit of the beneficiaries (i.e. the settlor transfers legal title to a trustee)
what is an implied trust?
This is when a trust arises without any express declaration of trust by the legal owner.
There are two forms of implied trust:
o Resulting
o Constructive
when does a home right arise?
The right arises if:
o The parties are legally married or civil partner (not divorced); and
o The home is, has been or is intended to be the matrimonial home
explain a licence
- A licence is a personal right and does not create an interest in land
- A licence is capable of authorising anything i.e. from a right of access to temporary occupation
- A licence can be revoked at any time
who does a licence bind?
The licence only binds the parties and not the successor to the land
what formalities must be met for an estate/interest to be legal? What are the exception to this?
A deed is required to create or transfer a legal estate or interest in land. In other words, the estates and interests under s1(1) & (2) must be created by deed to be legal
Exceptions:
* Certain easements do not require creation by deed (we will look at this in chapter 3)
* There are no formalities to be met for a parol lease to be legal, but it must meet other requirements.
re: formalities of legal estates/interests
what requirements must the deed meet?
The deed must meet the following requirements (s1 Law of Property Act (Miscellaneous Provisions) 1989):
o In writing
o Clear on its face that it is a deed
o Signed
o Witnessed (by one witness)
o Delivered
what requirements must a parole lease meet to be legal?
a parole lease can be legal without creation by deed if it meets the following requirements:
o The lease must be for three years or less
o The lease must take effect in possession (i.e. the tenant must have an immediate right to possess and enjoy the land)
o The tenant must pay market rent (i.e. the best rent that can be reasonably obtained)
o The landlord must not charge a fine or premium
what formalities must be satisfied when a contract is being used to create/transfer rights in land?
What types of transactions would this be applicable to?
Applicable to:
o Sale of a freehold of lease
o Grant of a lease
o Creation of an option
o Creation of an easement
The contract (and any later variations to a contract) must comply with certain formalities (s2 LPMPA 1989):
o Be in writing
o Incorporate all the expressly agreed terms in one document
o Be signed by or on behalf of all of the parties
re: equitable property rights
when an equitable right has been created/transferred by grant of an estate or interest which can only exist in equity, what formalities must be met? Give an example.
i.e. restrictive covenants
It must be created in a signed written document (s53(1) LPA 1925).
Even if created by deed, this right can only ever be equitable.
re: equitable property rights
when an equitable right has been created/transferred by grant of an estate or interest by a person who owns only an equitable right, what formalities must be met?
It must be created in a signed written document (s53(1) LPA 1925)
What power does the owner of an interest have to grant further interests? Give an example.
a person cannot grant a greater interest than they possess i.e. if someone holds an equitable lease, they could only sell an equitable lease, not a legal lease
re: equitable property rights
when an equitable right has been created/transferred by contract to create or transfer a legal estate or interest, what formalities must be met?
Give examples
A contract to create/transfer a legal property right will create an equivalent property right so long as (called the Walsh v Lonsdale Doctrine):
o there is a contract
o which complies with s2 LPMPA i.e. be in writing, incorporate all the expressly agreed terms in one document and is signed by or on behalf of all of the parties; and
o the remedy of specific performance is available (i.e. the person seeking the remedy has clean hands - they cannot have breached the contract).
Examples:
o contract to create a legal easement > will create an equitable easement
o contract to create a legal lease > will create an equitable lease
o contract to transfer an existing legal estate > will create an estate contract
what happened in Walsh v Lonsdale & Coatsworth v Johnson?
o Walsh v Lonsdale > the parties had a valid contract for a 7 year lease. The parties omitted to create a deed. The court recognised an equitable lease based on the contract
o Coatsworth v Johnson > similar facts to the above but the claimant had breached a term of the contract. He was deemed not to have clean hands so couldn’t access a remedy.
re: equitable property rights
when an equitable right has been created/transferred by trying to grant a legal estate or interest but failing to use a valid deed, what formalities must be met? when would this apply?
i.e. when the parties fail to into a contract and they fail to use a deed, the courts will try to find a contract so that transaction does not fail entirely
For this type of equitable property right to arise there must be:
o A contract
o That complies with s2 LPMPA 1989
o Clean hands
what happened in Parker v Taswell (1858)?
the parties had intended to grant a legal lease but the document had not been executed correctly and was not a deed. It therefore could not create a legal lease. The document satisfied the requirements for a contract and specific performance was available, therefore the document created an equitable lease.
re: equitable property rights
when an equitable right has been created/transferred by express trust, what formalities must be met?
- Must be expressed by signed written document
- It is not a formality for it to be by deed but it often is
re: equitable property rights
when an equitable right has been created/transferred by implied trust, what formalities must be met?
- There are not formalities – they arise out of conduct by parties (s53(2) 1925)
when dealing with interests in land, what is the approach to take?
o Stage 1 – identify the interest
o Stage 2 – is it capable of being legal, or is it equitable by nature?
o Stage 3 – have the correct formalities been used?
o Stage 4 – the interest is capable of being legal, but there is no deed
o Stage 5 – legal, equitable or statutory?
Do not assume that the existence of a deed means a legal interest has been created.
re: stage 1 - identify interest
what are the facts to look for which can help to identify an interest?
o Exclusive use for a fixed period lease
o The right to use another landowner’s land (but not created exclusive possession) an easement
o An obligation not to do something on the land restrictive covenant
re: stage 2 - is it capable of being legal, or is it equitable by nature?
give a summary of this stage
Does it appear in s1(1) or (2) - LEGAL
o Remember, for an easement to be legal it must be created for forever or a fixed duration, if it is for an indefinite amount of time it can only be equitable
Anything else - EQUITABLE BY NATURE
re: stage 3 - have the correct formalities been used?
give a brief overview
- An interest capable of being legal must be created by deed in order to be legal (unless an exception applies i.e. is it a short-term lease?)
- If the interest is equitable by nature, check that the formalities have been met (unless it is an implied trust)
re: stage 4 - the interest is capable of being legal, but there is no deed
give an overview
Equity may intervene if formalities are met Walsh v Lonsdale Doctrine
re: stage 5 - legal, equitable or statutory?
give an overview
- Legal interest if the interest is capable of being legal and the formalities have been met
- Equitable interest if the interest is only capable of being equitable and the formalities have been met
- If the formalities have not been complied with and equity cannot intervene, then there would be no valid interest in the land. The person claiming the right would have a licence only.
- Home rights are a statutory right that do not create an interest in the land
explain estate contracts to convey a freehold estate
The sale and purchase of land normally has two stages.
The first stage is when the seller and buyer enter into a contract in which it is agreed that the estate in land should be sold. Contracts are exchanged and the buyer holds an equitable interest.
The second stage involves the seller transferring the property to the buyer. The sale is completed and the legal estate is transferred to the buyer. There is usually a short interval between the two stages. During that interval the buyer owns an estate contract (which is an equitable interest).
could a parol lease be created orally?
so long as it meets the other requirements, it could possibly be created orally
