Understanding Personal and Property Rights in Law

What are personal rights in the context of contracts?

Personal rights, or rights in personam, are enforceable against the other party to a contract or a defined group of people.

What are property rights and how do they differ from personal rights?

Property rights, or rights in rem, are enforceable against the whole world and can bind third parties, subject to any defenses they may have.

What are the three main reasons people cannot always acquire property rights?

1. Formalities: Requires documentation and registration.

2. Personal choice: To limit transmissibility.

3. Legal restrictions: The numerus clausus principle.

What is the numerus clausus principle?

It states that there is a closed list of recognized property rights, preventing individuals from creating new types of property rights.

how does the NCP restrict contractual freedom

A right can be proprietary and have all the 3rd party effects only if it is in the closed list of property rights that the law recognises

How can new property rights be introduced by the state?

1. Legislation: Parliament can create new property rights.

2. Judicial Recognition: Courts can recognize new property rights.

Moncrieff v Jamieson [2007]

existing property rights (easements) can be expanded by the courts

Keppell v Bailey [1834]

Facts: Before dying, A promises C that future owners of their ironworks would acquire limestone for his quarry only. A dies and D buys their ironworks

Decision: even though D knew of this purchase when buying the land, it was held the covenant would not run with the land and equity would not step in as new rights cannot be imposed on land

Hill v Tupper [1863]

Facts: C was given the 'sole or exclusive liberty' to put boats on the canal for hire by A. D had an inn nearby and let his customers put their boats on the canal. C brought an action against D

Decision: that the right to hire out pleasure boats was not a valid easement only a personal right, property rights must be connected to the use and enjoyment of land.

What limitation does Martin B highlight regarding the creation of new easements?

A new species of easement cannot be created at the will of the owner; it is subject to law.

What is the significance of the term 'covenant' in property law?

A covenant is a promise in a deed or contract that relates to the use of land, but it does not always create a property right.

What does Rudden argue are the 4 justifications of the NCP?

1. lack of notice

2. information costs

3. sterilisation of land

4. controlling the non-consensual imposition of duties

What are Rudden's counterarguments to lack of notice

- law may provide property rights are only binding if a purchase has notice of it and accepts to buy covenanted land at a reduced price

- set up a land registration system

Lack of Notice

it is difficult for purchasers or third parties to discover new kinds of property rights.

information costs

when someone wants to buy or use something they need to know who owns it and what rights already exist over it — like leases, mortgages, or restrictions. The fewer and clearer those rights are, the easier and cheaper it is for people to check what they're dealing with and avoid accidentally breaking the law.

counterargument for information costs

could be significantly reduced by requiring the interests to be registered HOWEVER these costs would not be completely eliminated as purchasers still have to look at the register to find out what property interest burden a piece of land and if it is of a novel kind

sterilisation of land

A multitude of burdens over land may render it valueless and hamper marketability

Controlling the non-consensual imposition of duties

The creation of new property rights has a negative effect on third parties and you cannot impose a duty on a third party without their knowledge

counterargument to controlling non-consensual duties

third parties are not worse off because of the creation of a new property right as they already owed a duty to the owner of land not to interfere with it HOWEVER, IF A NEW PROPERTY RIGHT IS GIVEN TO B, X MAY HAVE TO PAY A AND B IF THEY ARE IN BREACH

s1(1) LPA 1925

'The only estates in land which are capable of subsisting or of being conveyed at law are a leasehold and a freehold or a feesimple.'

s1(2) LPA 1925

The only interests or charges in or over land which are capable of subsisting or of being conveyed or created at law are an easement and a mortgage

what was the purpose of LPA 1925

to reduce the list of property rights which can take effect at law to make conveyancing easier and simpler

s1(3) LPA 1925

'All other estates, interest and charges in or over land take effect as equitable interests.'

s4 LPA

gives force to the NCP - new types of equitable interests cannot be created, already created interests can be expanded

estate

- do not own the physical land but you own an estate on the land

- most extensive right over land, gives exclusive possession and control access to the land

difference between a fee simple and a leasehold

a lease is created by contract and has a time limit

HOWEVER there is no real difference between leasehold and freehold against a third party

Lord Templeman in Street v Mountford

A tenant under a lease is 'able to exercise the rights of an owner of land which is in the real sense his land, albeit temporarily and subject to certain restrictions.

fee simple (freehold)

- potentially perpetual (can go on forever)

- granted to X and his heirs

- if X has no heirs, the fee simple is passed on to someone as unowned property

terms of years estate (leasehold)

- What you receive when you rent a piece of land from a fee simple owner and you end up in a landlord-tenant relationship

- can be for less than a year

- term must be set out at the beginning of the lease

easement

the right to do something on someone else's land; e.g. the right to pass

charge by way of legal mortgage

the right that a bank/lender of money receives when they enter into a mortgage agreement with a borrower. This right gives the bank the power to sell/possess debtors' home

·Bernard Rudden, 'Economic Theory v. Property Law. The Numerus Clausus Principle'

Rudden describes the NC principle as a "restricted list of entitlements which [the law] will permit to count as property interests, or 'real rights'.