Rights and Interests in Land

Question 1

A right will be legal if it:

Answer 1

(a) appears in ss 1(1) or 1(2) LPA 1925; and
(b) meets the necessary formalities.

Anything that falls outside of the list in ss 1(1) and (2) LPA 1925 can only be equitable – see s 1(3) LPA 1925.

Question 2

Freehold estate definition

Answer 2

• Estate is capable of being inherited.
• Can pass to any class of heir. So is capable of lasting forever/having permanent ownership of the land.
• The estate is not determinable or conditional on any event.
• Immediate right to possession, rather than an entitlement to possession at some time in the future.

If a freehold owner dies with no will or heirs to inherit, the property reverts to the Crown.

Question 3

Leasehold estate definition

Answer 3

Where the tenant is granted exclusive possession of land for a fixed period.

Question 4

Commonhold estate defintion

Answer 4

Gives a buyer a freehold interest in their flat or house with communal areas being managed by a commonhold association run by commonhold owners.

Question 5

Interests in land (capable of being legal)

Answer 5

(a) Easements and profits if they last forever or for a fixed duration.

(b) Rentcharges

(c) Charges by way of legal mortgage

(d) Interests in land which arise by operation of statute

(e) Rights of entry

• a landlord’s right to forfeit the lease (bring the lease to a premature end) if the tenant breaks the terms of the lease; or
• a rentcharge owner’s right to reclaim the land if the money owed is not paid.

Question 6

Equitable interests in land - Express trust

Answer 6

Legal estate owner who creates an express trust is known as a settlor. A settlor may wish to create a trust to benefit their children.

The legal title to the property is separated from the equitable interests. The person holding the legal title (freehold or leasehold) is known as the trustee. The person who is entitled to enjoy the benefits is known as the beneficiary. The trustees and the beneficiaries can be the same or different people.

Can be created by:
(a) self- declaration – here the settlor retains the legal title to their property but declares that they hold the property as trustee for the benefit of another person (the beneficiary); or
(b) declaration plus transfer – the settlor declares a trust and transfers legal title to their property to the trustees who hold the property for the benefit of the beneficiaries.

Question 7

Equitable interests in land - Implied trust

Answer 7

Arise impliedly without any express declaration of trust by the legal owner.

Resulting trust = 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.

Constructive trust = 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.

Interest will not be proportionate to the contribution made, but quantified taking into account the parties’ conduct, the direct and non- direct financial contributions and any non- financial contributions.

Question 8

Equitable interests in land - Interests equitable by nature

Answer 8

Do not appear in s 1(1) or (2) LPA 1925. These include:
(a) A beneficial interest under a trust (whether express, implied, resulting or constructive).
(b) A restrictive covenant
(c) An estate contract. It includes contracts for:
* the sale of a freehold or leasehold estate;
* an option (see glossary);
* a right of pre- emption (this is where a seller is obliged to offer their property to the buyer at the point that the seller decides to sell);
* the grant of a lease; and
* the grant of an easement or profit.

Question 9

s30 Statutory right

Answer 9

This is a statutory right of occupation of the matrimonial home for a non- owning spouse or civil partner.

The right arises provided that:
(a) the parties are legally married or civil partners (and not divorced); and
(b) the home is, has been or is intended to be the matrimonial home.

Home rights do not create an interest in land.
Home rights exist independently of any equitable interest under a trust.

Question 10

Formalities - Creation or transfer of a legal estate or interest

Answer 10

Deed required.

Must be
* in writing;
* clear on its face that it is a deed;
* signed;
* witnessed (by one witness); and
* delivered.

Question 11

Formalities - Creation or transfer of a legal estate or interest exceptions

Answer 11

Parol leases.

(a) The lease must be for 3 years or less.
(b) Tenant must have the immediate right to possess and enjoy the land.
(c) The tenant must pay the best rent which can be reasonably obtained. This means market rent.
(d) The landlord must not charge a fine or premium.

Certain easements (as a consequence of their method of creation) do not require this formality of a deed.

Question 12

Formalities - Creation or transfer of an equitable right in land

Answer 12

Must be created by signed written document:
a) By grant of an estate or interest which can only exist in equity
b) By grant of an estate or interest by a person who owns only an equitable right

Must be created by valid contract with remedy of specific performance available (clean hands/not breached terms):
c) By contract to create or transfer a legal estate or interest
e.g. contract to create a legal lease, a contract to create a legal easement.
d) By trying to grant a legal estate or interest but failing to use a valid deed

By express trust:
e) An express trust must be created by signed written document

Exception to the rule:
Implied trusts do not need to be created in writing or signed. They arise without any formality.