Estates and Interests in Land

Legal estates

PROPRIETARY rights

EQUITABLE interests

Protection in REGISTERED land

Protection in UNREGISTERED land

Freehold

Leasehold

FEE: capable of being inherited

LRA 2002 3 categories of interest

Overriding interests (Schedule 3 LRA 2002)

Equitable interests protected by entry

Registrable dispositions (s. 27(2) LRA 2002)

All other interests are equitable, including:

Restrictive covenants

Estate contracts

Equitable easements and mortgages

Beneficial interests under a trust

MUST be registered in order to take effect

Grant of legal charge

Transfer of registered freehold or leasehold

Express grant or reservation of an easement

Rights of entry (forfeiture)

Leases of over 7 years

NOTICE in CHARGES register of BURDENED land (s. 32 LRA 2002)

Restrictive covenants affecting freehold land

Equitable easements

Estate contracts

Do NOT need to be registered to be protected

Paragraph 3: Implied legal easements and profits a prendre

Paragraph 2: Equitable interests in actual occupation

Paragraph 1: Leases for 7 years or LESS

EQUITABLE rights

LEGAL rights

"Bind the whole world"- Mercer v Liverpool

Rights arising under estoppel claims

Occupation rights under Family Law Act 1996

Legal leases more than 3, up to 7 years (optional)

Protected by RESTRICTION (s.33 LRA 2002)

Beneficial interest under a trust

But can be OVERREACHED

Leasehold estate

Freehold estate

PERSONAL rights

Determining the status of a right in land

  1. NATURE OF RIGHT: does it satisfy any substantive characteristics
  1. CREATION: created/ acquired in accordance with the formalities for paticular right
  1. FIXED LIST: is it on the list of recognised proprietary rights
  1. PROTECTION OF RIGHT: if proprietary, is it enforceable against third party

Enforced against a third party

Enforced by an action in rem

Bind only the original parties

Enforced by a personal action for damages

SIMPLE: inheritsed by any heir and includes distant relatives

Right of possession which lasts until the owner for the time being dies without heirs, meaning without blood relatives and not disposed by will

ABSOLUTE: estate is not liable to end prematurely, not determinable or subject to a condition

Fee simple absolute in possession (LPA 11925, s. 1(1)(a)

IN POSSESSION: current right to use and enjoyment of the property- physical possession not necessary

FREEHOLD REVERSION: residue of estate after granting lease

LEASEHOLD REVERSION: residue of the leasehold estate after granting sub-lease

Lesser estate of certain duration

Term of years absolute (LPA 1925, s. 1(1)(b))

Commonhold

Created out of a freehold registered estate

NO OVERALL LANDLORD

Designed to meet the needs of owners of flats or apartments where the owners are interdependent on each other e.g. retirement home

Owner of each flat is a member of the association

COMMONHOLD ASSOCIATION: freehold owner of property in the form of a company

Commonhold association responsible for maintaining the communal areas

Listed in s. 1 LPA 1925

Licence

LEGAL interests

EQUITABLE interests

Easements granted for a term equivalent to a freehold or leasehold estate

Mortgages

Rights of entry

Estate contracts

Beneficial interests in a trust of land

Freehold covenants

Easements granted for an uncertain term

Transfer

Will

Gift

Sale

Operation of law (automatic transfer in certain situations e.g., bankruptcy)

  1. COMPLETION OF THE DEED (s.52(1) LPA 1925)
  1. REGISTRATION
  1. EXCHANGE OF CONTRACTS

Parties become legally committed to buy/ sell the land

Voluntary and NOT legally necessary

Buyer pays a deposit to the seller

Occurs by way of DEED (written legal document)

CONVEYANCE in UNREGISTERED land TRANSFER in REGISTERED land

Requirements of valid deed s. 1 LP(MP)A 1989

REGISTERED land: legal title does NOT transfer until registration s. 27(1) LRA 2002

UNREGISTERED land: first registration within 2 months of completion, OR legal title revert back to seller (ss. 4 and 6 LRA 2002)

Register deed at Land Registry

Comply with LP(MP)A 1989, s. 2

Include all expressly agreed terms

Signed by BOTH parties

Writing

Validly executed

Deliverered

Clear intended to be a deed

TR1 prescribed by Land Registry

LABEL it a deed

Signed by SELLER in presence of witness

Witness sign deed confirm attested the deed

DATING the documents

Pay purchase money and hand keys over to buyer

UNREGISTERED land: LEGAL TITLE PASSES (trigger requirement to register- ss. 4 and 6 LRA 2002)

Whenever a material term is varied variation comply with s. 2 LP(MP)A 1989

Binding law contract passes EQUITABLE interest

Application

Option Agreement

Right of pre-emption

An "agreement for lease" OR "contract for lease"

Sale contract

Courts recognise EQUITABLE interest in land if:

Document complies with s. 2 LP(MP)A 1989

Remedy of SPECIFIC PERFORMANCE available

Remedies for BREACH of land contract

Specific performance

Injunction

Damages

Principles of registration

  1. The CURTAIN Principle
  1. The INSURANCE Principle
  1. The MIRROR Principle

Buyer should be bound only by third party interests already entered on the register at the time of sale

Simplify and cut down the costs of conveyancing

Register should be a CLEAR and COMPREHENSIVE account of the ownership and rights that benefit and burden land

Never fully realised due to OVERRIDING INTERESTS

Register should REFLECT all maters

Need not be concerned of beneficial or equitable ownership of land under trust

Register records ownership of legal estate in the property- LEGAL title

Error will be corrected and COMPENSATED (s. 23 LRA 2002)

"State indemnity"

Accuracy is guaranteed by state

Classes of title

QUALIFIED

GOOD LEASEHOLD

ABSOLUTE

Best form of ownership

Title has some defect

Satisfied as to the title of the leaseholder only

POSSESSORY

May be given to those with a claim under "Adverse Possession" or "Squatters Rights"

Land

LOWER airspace: that portion of airspace which is necessary for the ordinary use and enjoyment of the land (INJUNCTION if breached)

UPPER airspace: does NOT constitute trespass (s. 76(1) Civil Aviation Act 1982 grants immunity from trespass/ nuisance for innocent flight/ aircraft)

Statutory definition s. 205(1)(ix) LPA 1925

Landowner owns EVERYTHING beneath the surface of land

NOT entitled to minerals under land- belongs to Crown (Treasure Act 1996)

NO trespass at depths below 300 metres (s. 43 Infastructure Act 2015)

Any COAL belongs to Coal Authority (Coal Act 1938))

FIXTURES

PURPOSE annexation is BETTER ENJOYMENT of chattel, remain a CHATTEL

Chattel incorporated into ARCHITECTURAL DESIGN classified as FIXTURE even though NOT firmly affixed

Chattel cannot be removed without DESTRUCTION/ DEMOLITION will be FIXTURE

s. 62 LPA 1925 conveyance includes ALL FIXTURES unless excluded from sale in contract (s. 62(4) LPA 1925)

Legal test

  1. Degree of annexation test
  1. Purpose of annexation test

Rests on land by its own weight, CHATTEL

More firmly object fixed to land/ building more likely a FIXTURE

WHY object attached to land/ building

Annexation more convenient use or enjoyment of chattel as chattel, or enhance land/ building

TAKES PRIORITY over other test

Complete a Law Society Fixtures and Contents Form (Form TA10)

s. 28 LRA 2002: an interest whatever kind will take priority over later dispositions

s. 29 LRA 2002: a registrable disposition of a registered estate, made for valuable consideration, will take priority over any pre-existing rights in the land except those which protected by notice or overriding interests

Donees take land subject to ALL pre-existing interests, irrespective of whether they have been protected by registration (s. 28 LRA 2002)

Equitable leases

Options to purchase

Equitable interests under trusts of land

Interests arising by way of estoppel

Actual occupation:

Actual occupation at the TIME of TRANSFER DEED and possibly also TIME of REGISTRATION

NOT defeated by temporary absences e.g. hospital stays, holidays, business trips (prolonged absence might defer)

Must be "permanence and continuity" not simply a "mere fleeing presence"

EXCEPTIONS

Schedule 3 paragraph 2(b)

Schedule 3, paragraph 2(c)

Inquiry made BEFORE disposition and HOLDER of interest FAILED TO DISCLOSE when REASONABLY expected to

OCCUPATION was not obvious with reasonably careful inspection, and the person whom disposition made does NOT have ACTUAL KNOWLEDGE

New owner KNEW about it

New owner did NOT know but OBVIOUS on reasonable inspection of land

Exercised within 12 months immediately BEFORE disposition

EPITOME OF TITLE: bundle of relevant copy documents

DEDUCING TITLE: on a sale, seller required to show epitome of title to buyer

PRE-1926

POST-1926

DOCTRINE OF NOTICE

Equity's Darling: bona fide (good faith) purchaser for value of a legal estate in the land without notice of the prior interest TAKE LAND FREE

Doctrine of Notice

REGISTRATION AS LAND CHARGE under Land Charges Act (LCA) 1972

Exception: "PUISNE" MORTGAGE (second legal mortgage)

Must be registered as a Land Charge

Equitable easements and restrictive covenants BEFORE 1926

Equitable interests under a trust NOT overreached

Entered against the NAME IN THE TITLE DEEDS (rather than name as appears in other contexts)

Failure correct name UNENFORCEABLE and NOT BIND new owner of BURDENED land

Class C(IV): Estate contract

Class C(I): Puisne mortgage

Class D(II): Restrictive covenants AFTER 1926

Class F: Spouse's Matrimonial Right of Occupation

Class D(III): Equitable easement AFTER 1926

Contract to buy land

Option to purchase

Contract to have a lease

Non-protection of an interest make it VOID AGAINST A PURCHASER of land, but NOT AGAINST SOMEONE GIFTED/ INHERIT land

PURCHASER: acquires an interest in land otherwise than by operation of law

VALUE: money or money's worth or future marriage

LEGAL ESTATE: freehold or leasehold estate (or charge by way legal mortgage)

WITHOUT NOTICE: actual, constructive or imputed notice

BONA FIDE: buyer must act in good faith

IMPUTED notice: s. 199(1)(ii)(b) notice received by buyer's agent

CONSTRUCTIVE notice: s. 199(1)(ii)(a) purchaser act as prudent person

ACTUAL notice: purchaser actually knows