Ownership Overview Notes

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Property - Introduction--Attributes of property

Ability to be bought and sold, though contracts can be seen as purchase of something other than property, and silence regarding non-confidential information can be bought

Right to exclude others, over third parties without rights or those with inferior rights
Property extend beyond ownership (eg. leases) but the numerus clausus rule recognizes a finite number of proprietary rights and doesn't allow parties to create new ones
Property extends beyond physical objects (shares, rights of action, intellectual property) and conversely not all physical objects can form property (human body/parts/corpses)
Ownership is the ultimate right to use and abuse, but it is not absolute (eg.
nuisance, planning permission). It can be split between different people (eg.
lease). English law rarely calls on proof of ownership to assert rights; usually possession/rights to possession are enough because they sufficiently prove a better right than others.
Distinctions

Realty (land) vs personalty (choses in possession, choses in action,
intellectual property)
-The permanence of land allows the creation of a greater variety of rights, including long-term rights and permanent arrangements with adjoining landowners for the efficient use of land.
-Land is especially valuable and requires formalities
-English law distinction originates in medieval creation of rights in rem which do not protect leases, so leases count as personalty categorized as "chattels real"
-1925 property reforms reduced the distinction, but some remain -
eg. realty capable of creating a wide range of interests, and need to be registered

Choses in possession (physical objects) vs choses in action (incorporeal things)
o Intellectual property, usually recognized by statute

Legal vs equitable rights
-Equitable interests are narrower in binding purchasers and approach is more discretionary

Central Concerns of Property LawWhich interests are proprietary?
o Proprietary rights bind third parties (eg. purchasers of those who created the right) automatically - thus, the focus is on right and not the third

party's conduct (unlike tortious and contractual remedies against third parties, like the tort of inducing breach)
o Proprietary rights are assignable (though non-proprietary rights can also be)
o Proprietary rights are specifically enforceable (property, rather than its value, is recoverable) though other rights, like contracts, may also be

Parties cannot create novel proprietary rights (numerus clausus)
-Avoids imposing unreasonable burdens on property buyers by ensuring certainty of which rights might be at play, though this problem is less severe now that interests must be registered to be binding
-Wide range of proprietary rights renders ownership less attractive and risks economically inefficient property use

Licenses (permission to enter that do not amount to lease or easement)
are not proprietary - this is controversial and subject to much litigation
Methods of creation and transfer
Rights of parties
Effect on purchasers

Not all proprietary interests automatically bind every purchaser:
purchasers for value without notice are not bound by equitable interests

Some rights are subject to overreaching, which may affect purchasers in different ways

Property Interests: Interests in land-

Tenures - all land is owned by the Crown of which individuals are tenants

Traditionally, control over tenures allowed the Crown to collect payment and hold other rights

Today the significance lies in encouraging development of estates in land by rejecting the idea of absolute ownership of land and thus making ownership easier to split
Freehold estates - define the length of time for which the right to the land will last

Can be concurrent (owned by multiple individuals) either as a joint tenancy (land vests automatically in survivors when a joint tenant dies)
or tenancy in common (interest passes by will or intestacy)
o Fee simple - a perpetual right to the land that passes on the death of the holder by will or intestacy
-Fee simple absolute in possession is most common and akin to ownership
-Extends to land below the surface and to air above as long as the use of the land is affected (airspace = trespass, but flying over at appropriate height is not because it doesn't affect use of land)
-Flying freeholds make it possible to sever land horizontally (eg.
apartment flats) but long leases are preferred because of difficulties such as if the flat burns down ?Grantors can create "absolute fee", or "qualified fee" (interests that terminate in certain circumstances) usually to place obligations on grantees. Qualified fees are either conditional or determinable.
-Criticism:
o Effects of determining and conditional fees are very different (eg. when a terminating event is held to be invalid, the entire determining grant is void whereas a conditional grant becomes a fee simple absolute; public policy's ability to invalidate determining events) though their categorization depends merely on drafting

Inconsistency in case law on the validity of terminating events in relation to alienation, and the unsatisfactory distinction between determinable and conditional fees

Usually giving the parties multiple choices to accomplish a single objective is because there are substantial advantages of each option (eg. joint tenancy vs tenancy in common) but there is little advantage in the conditional fee because a much larger variety of terminating events are struck down - there is no need to retain both
NB a qualified fee to go to a third party upon termination (to A, but if A remarries then to B) is not a conditional fee because 1) B has a
"contingent" or "executory" interest not a right of entry and 2) it applies to a life estate

Conditional vs Determinable Fees
Conditional Fee
Determinable Fee
The entire interest vests in grantee
The grantee's interest is qualified from subject to the grantor retaining a right the very beginning of entry - a condition subsequent in breach of which he may recover the interest
Determining event phrased in the
Determining event phrased positively negative ("provided she does not
("until she remarries")
remarry")
Repugnancy rule (a court will not
Repugnancy rule will not strike down a enforce a law contrary to public policy)
determining event, even though the can invalidate a determining event same policy grounds apply
If a determining event is struck down,
If a determining event is struck down,
the fee becomes a fee simple absolute the fee is void
Public policy will often invalidate a
Public policy will rarely invalidate a determining event determining event
Subject to a strict certainty requirement: it must be possible to "see from the beginning, precisely and distinctly, upon the happening of what event it was that the preceding vested estate was to determine" (Lord Cranworth, Clavering v
Ellison). However more recent cases have been less inclined to strike down determining events, as illustrated by the dichotomy between Clayton v Ramsden
(Jewish faith was too uncertain) and Blathwayt v Baron Cawley (Roman Catholic was upheld). There is nevertheless still a huge difference between conditions precedent (no need for certainty as to the ways in which the condition may apply, just that it does in fact apply in a given case) and conditions subsequent, although criticized in Re Tuck
Validity of Determining Events
Determining Event
Void for Alienation
Alienation save to one specified person
Alienation save to a limited class

Void for Repugnancy Rule
Alienation based on mortgage
Alienation based on bankruptcy
Marriage
Re-marriage
Partial restriction on marriage

Void for Contrary to Public
Policy
Encouraging spouses to live apart, inhibiting service in the armed forces, interference with raising children
Void for Distaste
Distasteful provisions

Validity
Conditional Fee
Determinable Fee
Void
Not Void
Valid
Valid
Maybe - Re Macleay:
condition that land should not be sold outside the family was valid (controversial)
Void
Invalid (repugnancy rule) - Ware v Cann
Invalid (repugnancy rule) - Re Machu
Invalid - Harvey v
Aston
Valid
Valid - Perrin v Lyon
(marriage to a
Scotsman); Jenner v
Turner (marriage to a domestic servant)
Void
Invalid

Not Void
Valid - Hodgson v
Halford (restriction on religion that grantee may marry)
An event that is bound to happen Invalid
(eg. death or passage of time)
Void for Certainty
Void
Event relating to residence
Void - Sifton v Sifton but distinguished in Re
Gape
Event relating to Jewish faith
Void - Clayton v and parentage
Ramsden but
Blathwayt v Baron
Cawley upheld condition against marrying a Roman
Catholic

Valid

Not Void
Valid - Brandon v
Robinson
Valid
Valid
Valid
Valid

Void
Invalid

Not Void
Valid

Invalid
Void
Void

Void

Fee Tail (entail) - descends to the lineal descendants (eldest male child)
of the grantee to ensure that land remains within the family
-Trusts of Land and Appointment of Trustees Act 1996 prohibits the creation of new fee tails and any attempts take effect as declaration of trust in favour of purported holder
-Unstable - holder can 'disentail' to create a fee simple absolute and destroy the original fee simple in remainder or reversion (that operates if holder dies)
o Life estates - right to land for life of grantee or other person ("to X as long as Y lives") and upon expiry goes to the holder of next estate
-Can be qualified in the same way as fee simple
-Law needs to balance interests of the life tenant and those of the remainder - rules traditionally expressed in terms of "waste":
Liability for "Waste" (actions or omissions affecting the property)
Waste
Amelioratin g waste
Permissive waste
Voluntary waste

Equitable wasteDefinition
Conduct that improves the property
Allowing the property to deteriorate
Doing an unjustified act that diminishes the value of the property

Examples

Liable?
No because it causes no loss
- Doherty v Allmn)
No unless there is an express obligation to repair

Defective work requiring repair;
taking unreasonable profits from the land

"A particularly flagrant branch of voluntary waste" -
Megarry and
Wade, The Law of
Real Property

Yes unless liability is expressly excluded

Yes - important to prevent unwarranted protection to life tenants where liability for voluntary waste is excluded

o Creating estates: traditionally, essential technical words ("words of limitation") were required to create fees simple and entail, the absence of which gave rise to a life estate. However the Law of Property Act 1925 eliminates the need for words of limitation, as long as intention is made clear
Leases - the right to enjoy land for a certain maximum period

Leases vs Freehold Estates
Differe Similarity
Lease nce
Duration
Certain maximum period
Holder

Tenants can create life

Freehold Estate
Indefinite (fee simple) or uncertain (entail, life estate)
Life estate holders can can create rights

History

Purpose-estates out of leases

create leases subject to risk that life estate might terminate before intended expiry of lease
Estates and leases had different history so were once subject to different rules, but the practical consequences have ceased to be significant
To give land for specified
To give land to members of period in return for settlor's family rather than rent/payment commercial arrangements
To provide holders with
To provide holders with an physical enjoyment of the income from rent from land leases

Freehold estates in commonhold land (commonhold) - an interest created by the Commonhold and Leasehold Reform Act 2002 to deal with interdependent properties (eg. flats). It is not technically a new form of estate but a form of freehold.
Interests falling short of full enjoyment and possession

Easements - rights relating to neighbour's land (right of way, right to storage, right to use car park, right to light, right to advertise business)
o Profits a prendre - right to take objects from neighbour's land personally
(in gross) or for benefit of neighbouring land (appurtenant)
o Mortgage - traditionally fee simple to lender with borrower retaining an equitable right to redeem property on payment of loan; now regulated by
LPA 1925 so that the fee simple and equitable right to redeem remain with borrower while mortgager gets a charge
Equitable interests

Estate contract - contractual right to a legal estate is specifically enforceable, and equity regards as done that which ought to be done, so that an equitable interest arises from the contract (thus contracting party has a personal remedy in contract and equitable remedy in rem)
-Thus failed contracts that do not abide by formalities will take effect as equitable interest (equity will treat as a contract whenever there is consideration)
-Also, option to purchase land (purchaser has a choice whether to go ahead with purchase) becomes a proprietary interest, even though it might be exercisable in the far future with a significant risk of transfer of ownership in the land

Restrictive covenant - an obligation imposed upon a neighbor not to undertake specified activities (like an easement, but negative)
o Attempts to create new equitable interests (mostly in response to licenses):
-Lord Wilberforce in National Provincial Bank Ltd v Ainsworth identified criteria for creating new proprietary interests:
-Definable
-Identifiable by third parties
-Capable in its nature of assumption by third parties ??

-Have some degree of permanence or stability
Gray criticizes the test as circular
Contractual licenses are NOT proprietary - Ashburn Anstalt v
Arnald
Estoppel licenses (arise where licensee relies on a representation)
ARE - s116 Land Registration Act 2002

Rights in Chattels-

Absolute ownership (not tenure/estate) - concurrent ownership possible
Bailment - possession of chattels

Bailor has "general property" and bailee has "special property" rights against third parties

If property is damaged bailee can sue for all loss (with duty to account to bailor) and bailor can only recover damage to reversionary interest
(destruction/damage lasting beyond bailment)
o Purchasers from bailors probably bound by bailment

Bailments readily accepted because most interference with goods actions involve interference with possession so no need to concentrate on property rights

Provides the basis for hire/purchase (buyer is a bailee), security transactions (creditor has possession) and other situations, leading to underdevelopment of proprietary interests in chattels
-This furthers the free-market availability of chattels necessary for commerce
-Land, being less frequently bought and sold, and its effective use necessitating more permanent equitable rights, requires a developed concept of proprietary interest, but these concerns are less strong in chattels
Equitable interests in chattels - trusts or equitable charge (security interest)
o Courts more reluctant to find equitable interest (leading to duty of inquiry) in chattels than land and will not extend equitable doctrines to subvert clear and convenient legal rules because of the needs of commerce

Relative Ownership-

Not necessary for C to establish absolute ownership, just a better right than D
(thus also insufficient for D to show that someone else has better right than C)
o Estates - adverse possession (acquiring ownership by possession for certain period of time) rules allow possessor to claim the land back from a third party

Chattels - finding allows finder of property to claim it from third party and third party cannot raise defense of ius tertii (ownership in third party) unless the owner is known and proves a superior title
Relativist nature may be result of English law's absence of special actions to enforce proprietary rights

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