#19929 - Introduction - Land Law

Introduction to Land

With a trust, you are providing someone with property on a trust. You get the legal title to the property, BUT you are holding it for someone else who will get it under certain conditions

• Distinction between holding something as a legal right vs beneficiary (equitable right):

  • Legal right to the property as a trustee is different from the rights of the beneficiary under the trust (the person the trustee is holding the property for). The beneficiary does not get the property now, there is a term on the trust and only once that is done, then the property can be passed

  • Separates legal title and beneficial title - when conditions are met, the beneficial title becomes legal title

Features of Land

Land: isn’t moveable, includes what’s above and below and on its surface, and includes whats permanently fixed to it

• In many disputes over land, the dispute is not usually over the land itself. Some Cs say they are entitled to a share of the land when it is sold important to know what land is and is not*

Land is physically and temporally divisible:

• X could own a piece of land and transfer part of it to Y. The piece becomes two pieces.

• Or X could transfer to Y a slice of time in the land. Two sets of rights in the piece of land exist alongside each other.

Land law concerns rights in land:

• Owning land = holding the major stake in a bundle of rights that exists over that land. It doesn’t necessarily mean holding all the rights in the land.

• Land law is about the different rights (and duties) that people can have over land.

What sorts of rights?

1. Ownership: estates

• When you own land, you’re a title holder, and you hold not the land but an estate in land (own a period of time)

• Nemo dat: if you don’t have adequate ownership of a property, you don’t have the ability to transfer ownership (relativity)

Estates are rights in rem (proprietary/property right)

• Right in personam: right against the person who is holding the property, enabling you to occupy the landholder’s land for a certain amount of time without being considered a trespasser (personal or contractual right)

• Right in rem: land-holder has an estate in the land (a right to the property)

  • Not merely personal or contractual. It potentially or actually binds anyone seeking to assert a right over the land.

• Estates are ownership rights (rights in rem), meaning they are rights in the thing itself. They are not governed by contractual privity - if you say you will provide me with land, I still have a right against the person who holds it

Two types of estate

• Freehold estate, which is the largest estate in land (fee simple absolute in possession)

  • Freehold estate is an estate of indefinite duration. No fixed date at which your ownership of the land comes to an end

• Leasehold estate (term of years absolute)

  • You own the freehold to land, you can grant someone else a leasehold estate in that land. There must be an end date. The leasehold will be a slice of time in land you could carve out and sell to someone else a smaller (non-perpetual) slice of time in it (so long as it is not prohibited subletting)

  • For that time, someone else also has an estate in your land: an estate that exists alongside your freehold estate

• So: multiple estates could exist over the same plot of land.

  • There can only be one freehold estate. But there could be numerous leasehold estates.

  • Currently, freehold and leasehold are the only types of estates recognised in land. But it wasn’t always like this

The doctrine of estates

• Before 1925, holders of freehold estates could, and usually did, create various other types of estates in their land. You could create multiple leaseholds with no fixed end date

  • e.g. life estates: P holds the freehold and grants to his son, Q, an estate for the length of Q’s life, and after an estate to R, Q’s son, with the stipulation that once this chain is completed, the land reverts back to P’s estate. Uncertain because we don’t know how long someone will live. However, this was popular as it was a good way to control the future

• Problem: Main point of the doctrine of estates was to keep land within families. But by the early 20th century, there was pressure on parliament to abolish it, as it wasn’t suited to geographical mobility and industrialization. It would be hard to buy property elsewhere as it was tied up in families

• So in 1925, the doctrine of estates was legislated out of existence.

Law of Property Act (LPA) 1925 s1(1)

• From 1st January 1926, there can only exist two types of estate in land – freehold and leasehold.

• You could no longer create successive estates of indeterminate length (e.g. for the length of peoples’ lives)

  • an estate now had to be either perpetual or for a fixed term.

• An illustration of the numerus clausus (closed list) principle: Citizens are not free to devise their own types of property rights. Instead, the range of permissible estates (and interests) are controlled by Parliament and Courts

• LPA s 1(1) made dealing with land simpler: Only two types of estate could now exist over land.

• If you’re someone obtaining a plot of land, you only have to ask two questions as regards estates in that land:

1. Who holds the freehold?

2. Are there any leaseholders? (Are there any tenants?)

• A person who acquires an estate in the land is a disponee or transferee)

LPA 1925, s52

• Another basic rule: if your transfer of a freehold or leasehold estate to someone else is to be legally recognized, you must normally do it by deed.

• A deed = a document titled ‘deed’, signed by both parties and witnessed by one other person: Law of Property (Miscellaneous Provisions) Act 1989, s 1).

Registration of title

• Most legal estates also have to be registered on the Land Register. Transfer of a freehold title, and most leasehold titles, isn’t complete even if you’ve met the deed requirement until the transfer is registered at the Land Registry.

• Once it’s complete, it’s a registered disposition.

• Most, but not all, legal estates have to be registered.

• Short leases are exempt from registration:

  • Any lease not exceeding seven years is a valid legal estate, but it doesn’t have to be registered.

  • Leases for more than three years but no more than seven years can be registered, but it’s optional (still need deed).

  • Leases that are less than three years can’t be registered (and don’t have to be created by deed).

    • But this has to be in writing

    • It would not be practical to register short leases (cost and benefits calculation)

Why is there a deeds and registration requirement?

• Conventional answer: rights over land must be easily provable because land is a very valuable form of property.

• BUT this isn’t convincing. Even in 1925, there were forms of property that could be equally if not more valuable than many plots of land, but didn’t have these deed and registration requirements. Leases for seven years or less can be very valuable yet are exempt from registration.

• A better explanation: land is immoveable and so is vulnerable to all sorts of rights-claims.

  • Lots of people can be on the same land at the same time need to determine everyone’s rights

  • Agreements can be entered into over land which create legal rights and obligations but don’t create legal estates.

  • Law has to establish some means of distinguishing legal ownership rights in land (legal estates) from general interests in land (e.g. rights of occupation and rights of way).

  • Law is a system that determines whether claims are valid and if so, what rights the C has

2. Interests in land

• Land law is as much about interests as it is about ownership of land. People with title to land need to be able to allow us to have interests in it, but also to ensure that their title isn’t vulnerable to those interests.

• Examples of interests:

  • You might not own the land, but have an interest in it because you can use it, or control how it’s used (e.g. you sold some of your land to Y, but on condition that she allows you a right of way over her garden, or doesn’t use it for commercial purposes).

  • You don’t own it, but you’re entitled to some of its value (e.g. because you helped the owner to buy it).

  • The owner made you a promise regarding the land, you relied on that promise, and you’ve suffered a detriment because the owner didn’t keep it.

  • Owner owns a house (freehold), and owner says that when they sell the house, they will give you the option to purchase it (right of pre-emption). This interest is an option to purchase

• Interests over value of the land. Dispute: A owns freehold, B does not but lives with A and contributes to purchase price (mortgage/deposit). On the land registry, freehold belongs to A. But B has an interest so B has an entitlement to the value of the house. A holds the legal title, but B has a share of the beneficial/equitable title to the house

Types of interest in land

• Could be purely in personam/contractual.

• But interests in land are usually interests in rem

  • Rights in rem are proprietary rights – rights to the thing (property) rather than against a person. This is important because if the court says your interest in the land is a proprietary right, then it may mean a 3rd party who thought they would receive the land, may not receive the land

• And so they can be binding on third parties dealing with the land (including people intending to purchase it).

• There are two types of right in rem, the strongest of which is the common law or ‘legal’ right in rem: this right binds everybody.

  • If a 3rd party takes the property, they have to contend with that right until it is...