Legal Interests Notes

Legal Interests

1. Legal Easements and profits

• Right to do something on the land of another e.g. right of way

• Profits a prendre: ability to take something from the land of another

2. Rentcharges (not on syllabus)

3. Charge by way of legal mortgage

4. Rights of entry

Formalities

1. Creation of legal interests:

Since the LPA 1925 for any interest in land to be a legal interest it must:

1. Be an interest capable of existing as a legal interest, ie within s1(2) LPA 1925

   • Note all the specific requirements under s1(2) must be satisfied e.g. legal easement must be created for a duration equal to a legal estate

2. It must have been created in the recognised manner to be legal ie by deed (s52(1) LPA 1925)

   • Requirements for a valid deed set out in s1 LP(MP)A 1989: signed, attested, delivered and headed deed

3. In addition, in registered land there are registration requirements before it becomes a legal interest: governed by s27(2) LRA 2002

   • Further: if a charge by way of legal mortgage is created over unregistered land, then that gives rise to compulsory registration of the title: s4(1)(g) LRA 2002

2. Transfer of an existing legal interest:

• Could be assigned to the successor: valid assignment must comply with s52 LPA 1925

• Should the transfer deed fail due to lack of formalities then equity may assist and recognise it as a contract to transfer the interest:

  • To do so must fulfil the requirements of a valid contract: s2 LP(MP)A which is capable of specific performance

• If the owner of the interest conveys the estate and fails to mention the interest in the transfer deed, s62 LPA 1925 will imply that the transfer of the estate includes all interests appertaining to the land, unless a contrary intention is expressed (s62(4) LPA 1925)

Equitable Interests in Land

• S1(3) LPA 1925: all other estates and charges take effect as equitable interests

• Numerous ways that an interest may be recognised in equity:

1. An interests which is not capable of being legal: not in s1(2) LPA 1925; or

2. If the person creating the interest only holds an equitable interest; or

3. If the interest has not been made in such a way to make it legal ie lack of formalities (under the doctrine of Walsh v Lonsdale: treated as a (fictional) contract: must satisfy s2 LP(MP)A)

Examples:

1. Restrictive covenants

2. Beneficial interest under a trust

3. Estate contracts: contractual right to a legal estate

1. Option to purchase: right to purchase the land within a stated period of time

2. Right of pre-emption: right of first refusal - means that the owner agrees to offer the land to the holder of the right should they decide to sell the land in the future

   • Before LRA 2002: it had been held that until the owner decides to sell, a right of pre-emption does not create an interest in land: Pritchard v Briggs

     • This remains the law for unregistered land

   • S115 LRA 2002: right of pre-emption in registered land is an interest in land from the time the right is created

Formalities:

1. Creation:

• Depends on the type of interest:

1. Interests not listed in s1(2) LPA 1925 must satisfy the minimum requirements for creating an interest in land under s53(1)(a) 1925: in writing signed by the person creating it

2. Separate requirement for the...

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