Definition of Land
Property refers not to resource but to the rights that a person claims in relation to it
- owner - ability to exercise control over who may use it and the manner wwhich it is used.
- third parties may have lesser rights
Law of Property Act 1925 s 205(1)(ix):
Land includes:
- land itself
- all buildings
- mines/minerals
- manor, advowsom, right of way , fishing rights.
Bernstein of Leigh (Baron) v Skyviews & General Ltd [1977] - limited definition of land - held that landowner’s claim to airspace should be restricted to such height as is necessary for him to enjoy in an ordinary way the land he owns and the structures placed on it. No claim to airspace more than any other member of public.
Fixtures vs Chattels
Fixture is a part of the land it is attached to.
Berkely v Poulett [1977] - Two tests to identify a fixture are:
- method and degree of annexation (difficult to remove without causing serious damage to realty)
- object and purpose of annexation. (enhancement of the realty)
Pictures enjoyed as pictures and nothing more (chattels), sundial had been detached (chattel), statue was removable from plinth (chattel), plinth was firmly fixed and architectually important (fixture).
Exceptions:
- person selling land may include a provision for sale to remove fixtures
- person who has affixed object is a tenant, who has the right in some circumstancs to remove tenant fixtures.
Case examples:
- D’Eyncourt v Gregory* [1866] - held freestanding items architectually important. Included tapestries fixed to wall, portrait based on location, marble figures/vases, garden lions, stone seats.
- Leigh v Taylor* [1902] - Held tapestries still chattels even though affixed to wood frames then nailed to the walls and surrounded by moulding.
- Elitestone Ltd v Morris and another* [1997] - tenants claimed bungalow with concrete foundation set into ground was a house. Owner claimed it was a chattel so tenants could not claim protection under Rent Act. Held that if it was constructed so that it was removeable as a unit/in sections it could be a chattel. However, this had a foundation, thus not removable without distruction, thus must have been intended as part of the realty.
- Botham v TSB Bank plc* (1997) - mortgagee claimed a number of items were fixtures and therefore part of the land to be reposessed. CoA held that fitted carpets, curtains, light fittings, gas fires (only connected with gas pipe), standard sized white goods were all chattels. Fitted kitchen units were fixtures.
Ownership
Doctrine of Tenure:
- concerns the way in which land is held (from whom and on what terms)
- originates from only the Crown owns land whilst everyone else is a tenant holding either immeiately or mediately of the Crown.
- Still relevant in the area of leases => rent for the right to occupy.
Concept of Estate:
an estate is a period of time and is capable of division.
Law of Property Act 1925 s1(1), two estates in land are recognised:
a. fee simple absolute in posession (freehold)
* fee indicates it can be inherited and simple for any class of heir; absolute means not conditional and possession is entitlement now
b. a term of years absolute (leasehold)
- limited certain determinable duration right to occupy (exclusive possession - can exclude anyone from property)
- may be sold, given away or inherited
Legal and Equitable Ownership
When there is a conflict between legal and equitable rules, the equitable rules will prevail.
Trust - Trustee holds legal title (recognised by common law) for benefit of beneficiary (recognised in equity)
Capabale of being legal?
Law of Property Act 1925 s1:
s1(1): two estates in land capable of being legal:
- legal freehold
- legal leasehold
s1(2): interests in land capable of being legal (5), 2 are:
- easement
- mortgage
s1(3): all others are equitable
3rd Party Rights/Interests over Land
Legal:
Law of Property Act 1925 s 1(2) (lists 5, 2 are):
a. easement, right or privilege in or over land for an interest equivalent to an estate in fee simple absolute in posession or a term of year absolute
- Easement is a right attached to one piece of land and imposes a corresponding burden on another
b. a charge by way of legal mortgage (interest given as security for a loan)
Equitable:
Law of Property Act 1925 s 1(3):
All other estates, interests and charges in or over land take effect as equitable interests.
Beneficial interest under trust.
If no trust, other interests in land, eg:
restrictive covenants - promises made by one party (covenantor) in favor of the other (covenantee) that the covenantor will not use his land in a particular way.
estate contracts - contract to create or convey a legal estate in the land. The buyer under contract has an equitable interest in the land, and equity sees it as having already been specifically enforced (immediate equitable interest).
- contract to buy a freehold estate in land
- option to purchase property
- contract to grant a lease (incorrect formalities)
- easement capable of being legal created with incorrect formalities
Statute:
Family Law Act 1996 s 30
Right of occupation of non-owning spouse provided that:
a. parties are legally married
b. the home is, has been, or is intended to be the matrimonial home.
Licences:
Licensor gives permission to licensee to do something otherwise not authorised to do.
Thomas v Sorrell (1673) - Licence does not give proprietary interest in land
Can be revoked at any time and is not assignable
Bare licence: specific permission granted for no consideration and can be revoked at any time. (The Calgarth [1927])
Contractual licence: supported by consideration and revocation can lead to a common law case in contract or injunction in equity.
Land Question Structure
Identify estate/interest/3rd party interests:
- Type of interest
- Capable of being legal
- LPA 1925 ss1(1) - estates and (2) - interests
- otherwise LPA 1925 1(3) only equity or
- Family Law Act 1996 s30 - home right - statutory
- formalities required
- legal: deed - LPA 1925 s52; LP(MP)A 1989 s1 - except parol leases (LPA 1925 s54(2))
- equitable contract: signed writing with express terms - LP(MP)A 1989 s2
- other: signed writing - LPA 1925 s53(1)(a) - equitable interests - and (b) - express trusts
- no formal: parol lease, some easements, implied trust (LPA 1925 s53(2)); Statutory right (FLA 1996 s30)
- legal, equitable or statutory
- enforceability in unregistered (land charge, binds world or equity’s darling)
- enforceability in registered system (registrable disposition, IARE, trust, or overriding)
Formalities Legal
Legal:
Creation:
Law of Property Act 1925 s 52:
All conveyances of land or of any interest must be made by deed. This does not apply to leases or tenances or other assurances not required to be made in writing (eg parol lease).
Law of Property Act 1925 s 54:
Parol leases: if not made in writing, leases still legal for possession for a term not exceeding 3 years at the best rent reasonably obtained without taking a fine. it must take effect immediately in possession.
Law of Property (Miscellaneous Provisions) Act 1989 s 1
A deed must:
- make clear on its face that it is a deed and
- is validly executed as a deed by the person or someone authorised
- be signed by the individual with a witness or at his direction with 2 witnesses
- be delivered as a deed.
Disposition:
Law of Property Act 1925 s 52 - A deed is required to transfer a legal estate or interest
Formalities Equitable
Equity:
Creation:
Trusts:
Express - Law of Property Act 1925 53(1)(b)
-> evidenced in writing and signed
Implied - Law of Property Act 1925 53(2)
-> arises automatically as a result of owner’s actions (eg financial contribution to purchase though not legal owner)
No Trust:
- Estate Contracts* - LP(MP)A 1989 s2:
- > Contract for sale or other disposition can only be made in writing and incorporating all terms expressly agreed in one document or if exchanged each.
- > Terms may be set out in document or referred to
- > document must be signed by or on behalf of each party
- > does not apply to a contract to grant short leases (parol) or a contract made in course of a public auction
- > Walsh v Lonsdale - even if deed not used, still lease, just equitable.
Other Equitable Interests - often by deed but not necessary; Law of Property Act 1925, s 53(1)(a) says minimum is signed writing.
Disposition:
Law of Property Act 1925 s 53(1)(c) says any sale gift of other disposition of an equitable interest must be in writing and signed by the parties to the document.
Conveyancing
Describes procedure followed to transfer title to land.
Two stages: up to exchange of contracts; up to completion
Stage one (Exchange of Contracts):
Buyer will investigate property: documentary evidence of title, public local information, inspecting property (find out rights that exist over property).
Until exchange of contracts, either party may withdraw without penalty.
Contract must conform with s2 of LP(MP)A 1989 -> signed writing with all express terms. It becomes fully effective on exchange and parties contractually bound
Seller still has legal title and buyer beneficial interest (estate contract)
Stage two (Completion):
Execute deed (LPA 1925 s52). Legal title to the property is transferred using a conveyance or transfer.
It is completed when the balance of the purchase money is paid and parties actually move.
For registered land, the new owner must be registered at the Land Registry.
Unregistered system
Only system in existence before 1925. Codified in the Law of Property Act 1925 and separate registered system also introduced in this Act.
Conveyancing - Buyer becomes legal owner at date of conveyance
- > new conveyance triggers obligation to register it
- > Deed used to transfer ownership
Sellers prove right to possession through evidence of historical entitlement (usually historical conveyances)
-> Proof of ownership
- Unbroken chain of title - LPA 1925 s 44 provides that seller must produce title deeds proving ownership for last 15 years
- 3rd party rights - conveyances may reveal 3rd party rights
-> disadvantages:
- forged title deeds
- missing documents
- inconsistent documents
- stolen documents
- original documents hard to read
Unregistered System - 3rd party rights
Land Charges Act 1972 (if not stated here, review Land Charges Act 1925 and if outside this Act, pre-1926 rules)
In 1926:
- registration of incumbrances on Land Charges Register (public register kept at Central Land Charges Department in Plymouth)
- registry of 3rd party rights that affect unregistered land - registered against estate owner’s name at the time interest was created (LCA 1972 s3)
- not all rights can be registered on the Land Charges Register (list in 1972 Act)
- registration constitutes actual notice (LPA 1925 s 198)
- future buyers bound
- must be registered by date of completion (conveyance)
- Effect of failure to register - not binding unless purchaser receives as gift (LCA 1972 s4)
Pre-1926 rules:
- legal estates/interests bind the world, even if purchaser has no knowledge
- equitable interests are enforceable against anyone except the bonafide (without fraud) purchaser of the legal estate for value without notice => equity’s darling
- Buyer must be acting in good faith (bona fide)
- Buyer must come within definition of purchaser - including a mortgagee or lessee; not including itestacy inheritance but does include via will; not including application through bankruptcy (instead operation by law)
- Buyer must have bought property for value (some consideration, incl money, money’s worth (eg shares), marriage (or promise to), payment of existing debt)
- Buyer must have taken the legal estate in the property - purchased freehold or leasehold
- Buyer must have bought without notice that the equitable interest exists
=> Actual notice: has or has had actual knowledge (unless vague rumors)
=> Constructive notice: would have come to his knowledge if inquiries/inspections had been reasonably made (LPA 1925 s199(1))
- Kingsnorth Finance Co Ltd v Tizard [1986] - purchaser must make all inquiries/ inspection that ought to be made (Mrs T still had equitable interest)
=> Imputed notice: solicitor (or other agent) had actual or constructive notice.
Unregistered system - unregistrable interests/estates
Not covered by LCA 1972
a. equitable interest arising under a trust
b. most legal interests
c. pre-1926 equitable interests (incl restrictive covenants and equitable easements)
Use Pre-1926 rules:
equitable interests bind everyone except equity’s darling and legal bind the whole world.
Unregistered system - removal of 3rd party interests
- negotiate removal before purchase of property (may involve payment)
- if express/implied trust, may be possible to overreach: (interest of beneficiaries cease to be attached to the land but instead to the sale proceeds)
- Buyer must be acquiring legal estate in the property (leasehold/freehold), and
- Buyer must pay the purchase money to all the trustees, and
- There must be at least 2 trustees (or a trust corporation)
Enforceability - Unregistered system
- Identify 3rd party right claimed
* Correct formalities? - Is interest registrable on Land Charges Register?
- If yes, has it been registered?
- No - Buyer will take free of claim
- Yes - binds buyer
- If no, Legal or Equitable?
- Legal - Binds world
- Equitable - Is it trust?
- No - Buyer bound unless Equity’s Darling
- Yes - Overreached?
=> Yes - Buyer takes free
=> No - Binding unless Equity’s Darling
Land Charge Classifications (unregistered)
Land Charges Act 1972 s2:
s 2(4): Class C charges:
i. a puisne mortgage (legal mortgage not protected by deposit of documents relating to the legal estat affected (title deeds))
ii. limited owner’s charge (equitable charge acquired by tenant for life or statutory owner under Inheritance Tax Act 1984 or any other statutewho paid any tax or other liabilitites to which they can charge repayment of tax against land)
iii. general equitale charge (everything else except those:
- secured by deposit of documents relating to the legal estate affected (eg equitable mortgage)
- interests arising under trusts
- a charge for indemnity against rents equitably apportioned, charged exclusively in exoneration of other land, and against breach/non-observance of covenants/conditions
- any charge falling into another class of land charge
iv. estate contract (ontract by owner to convey or create legal estate, including a contract expressly or via statutory implication, giving option to purchase, a right of preemption or any other like right)
s2(5): Class D land charges
i. Inland Revenue charge (acquired under Ineritance Tax Act 1984)
ii. restrictive covenant (covenant/agreement restricting the use of land and entered into on or after 1 January 1926)
iii. equitable easesment (easement, right, privilege over or affecting land and merely being equitable; arising on/after 1 January 1926)
s2(7): Class F land charge is one affecting any land by virtue of Part IV of the Family Law Act 1996.
Registered System Conveyancing
Conveyance:
Land Registration Act 2002 and Land Reistration Rules 2003 (SI).
- Came into force 13 October 2003
- Repealed Land Registration Act 1925 and Land Registration Rules 1925
- Proof of Ownership:
Official copy of the entries on the Land Registy, which maintains a register of titles to land & open to the public.
- Lists current owner and any interests existing
- Historic ownership irrelevant after registry
Three registers of title:
- Property Register: description of land by reference to title plan & address, including legal estate (leasehold or freeshold) and rights that benefit land
- Proprietorship Register:
- name & address of legal owners (reg. proprietors)
- price paid for land by current owners if sold since 1 April 2000
- limits of ability to deal freely with land (eg restrictions or mortgage)
- Charges Register: rights which burden the land (eg. restrictive covenants, easesments, etc)
_- Transfer: _
Land Registration Act 2002 s 27: on sale of registered title, completion does not transfer legal estate to buyer until buyer’s name is on the register as the new owner.
Registered system - Compulsory Registration
- Compulsory registration as of 1 December 1990 (England/Wales) if sold/leased since this date
- Voluntary first registration (land owners convert themselves but there is a fee)
- Certain ransactions with land triggers obligation to register the title for qualifying estate (s 4(2)(a)):
- any transfer for valuable consideration (LRA 2002 s 4(1)(a))
- mortgage (LRA 2002 s 4(1)(g)
- gift (LRA 2002 s 4(1)(a)
- lease of more than 7 years (affects leasehold estate only, not freehold)
- A gift in a will does not trigger but the transfer from executor to inheritor via assent will trigger compulsory 1st reg. (LRA 2002 s 4(1)(a)(ii).
- application must be made within two months of completion. Transaction void otherwise.
- Updates in LRA 2002 effective 13 October 2003
- Substantive Registration - Freehold estates are capable of registration with separate title
- Leases over 7 years are also capable of registration with separate title but those user 7 years are incapable of registration with own title.
- The title to the estate in land is registered, not the land itself
- there can be more than one register of title existing in relation to one piece of land
Enforceability - Registered System
- Identify type of 3rd party interest.
Three categories of rights exist over registered titles, as well as trust interests:
a. registrable dispositions (s 27 LRA 2002)
- legal easements (created by deed)
- legal charges (mortgages)
- legal lease over 7 years
=> Only legal (binds) if registere at Land Registry by date of registration of buyer (s 29)
b. interests which effect a registered estate (IARE) (s 32 LRA 2002)
- burdens (eg restrictive covenants, estate contract)
- equitable lease
- right under FLA 1996 s30
=> Needs registration as a notice at Land Registry to be binding by date of buyer registration (s29)
c. unregisered interest which overrides
- LRA 2002 Sch 3 Paragraph 1: legal leases 7 years or less (if lease before 13 October 2003, term is 21 years - Schedule 12 paragraph 12)
- Sch 3 Paragraph 2: actual occupation.
- Sch 3 Paragraph 3: legal easements not created expressly by deeds (only implication/prescription) (old easements still protected - sched 12, para 9).
- Binds buyer if existing by date of buyer registration (or completion for paragraph 2)
- Can be overreached if paragraph 2 applies.
d. trust interests
- express or implied trust
- May be recorded as a restriction (Properietorship Register) at Land Registry by date of buyer registration
- Buyer can overreach (s 27 LPA 1925) or he will not be able to register on Land Register otherwise
- Even if not registered, maybe still overriding and requiring overreaching (s 27 LPA 1925).
Land Registration Act 2002 s 29 - purchase for valuable consideration of a registered freehold title takes the legal estate subject to:
a. entries appearing on register (reg. disp and IARE)
b. unregistered interests which override that registered disposition
- > valuable consideration does not include marriage consideration or nominal consideration in money (s 132 LRA 2002)
Registered Disposition
For registered land.
- s27 LRA 2002
- creation of legal mortgage
- express creation of legal easesment
- creation of leasehold estate (over 7 years or disposition with more than 7 years remaining)
- can be registered in own right or as 3rd party interest
- must be noted if freehold or superior leasehold is already registered (dual registration)
IARE
Interest affecting registered estate
- all non-trust interests not in a or c
- will not bind purchaser unless a notice on register (LRA 2002 s 32) by date of transfer (LRA 2002 s 29)
- includes:
- restrictive covenants
- estate contracts
- Family Law Act 1996 s30 rights
- Can be agreed or unilateral (without consent)
- These interests can’t be overreached
Trust enforeability (registered land)
- LRA 2002 s 33 - can’t be protected by notice
- Should be recorded by a restriction in the Proprietorship register (LRA 2002 s40)
- Can be overreached if buyer pays money to all trustees being at least 2 (or trust corp) (LRA 2002 s 27)
- If buyer does not overreach, restriction can prevent registration
- buyer will need to get money back or negotiate with beneficiary
Overriding interests (registered land)
LRA 2002 Schedule 3 lists interests that override
- Sch 3 Paragraph 1: legal leases 7 years or less (if lease before 13 October 2003, term is 21 years - Schedule 12 paragraph 12)
- Sch 3 Paragraph 2: actual occupation at time of completion/transaction.
- Interest must be proprietary (equitable lease or licence would not count (Strand Securities v Caswell [1965]) and they must be in actual occupation at time of sale:
- Occuptation obvious on reasonable/ careful inspection of land at time of sale or buyer had actual knowledge of interest at time of sale
- If inquiry made, person must disclose right unless unreasonable to do so
- Family Law Act 1996 is excludes statutory right from this (s 31(10)(b))
- Williams & Glyn’s Bank v Boland [1981] - wife had right capable of protection (implied trust) and was in actual occupation binding the lender
- City of London Building Society v Flegg [1988] - mortgage loan paid to two trustees to overreach
- Abbey National Building Society v Cann [1991] - sending son to move furiture and put up curtains -> held not actual occupation. This occurred after completion so bank not bound any way.
- Lloyds Bank plc v Rosset [1989] - held actual occupation included visiting regularly during renovation to supervise contractors
- Kling v Keston Properties (1983) - car parked regularly in garage was actual occupation as it was appropriate for nature of property
- Sch 3 Paragraph 3: legal easements not created expressly by deeds (only implication/prescription) (old easements still protected - sched 12, para 9). Only binding if:
- buyer knew of easement before purchase, or
- easement would have been obvious upon reasonably careful inspection or
- easement has been used by entitled person within year proceding disposition of land
Definition of purchaser
LPA 1925 205(1)(xxi) - purchaser in good faith for valuable consideration, including a lessee, mortgagee or other person who acquires interest in property for valuable consideration (does not include a nominal value or a promise but may include marriage).
Purchaser includes gift if only with deed.
