The Nature of Land

Introduction to Land Law

What is a freehold estate?

This is the freehold estate which lasts indefinitely - full legal name is ‘fee simple absolute in possession’.

What is a leasehold estate?

Lasts for a fixed period - can be granted by a freehold estate owner for any duration - leasehold estate owner can only grant a sub-leases for a shorter duration than their own lease.

What is a mortgage?

An interest over land granted by the borrower to the lender as security for a loan - if borrower fails to repay the loan, the lender can enforce its security.

What is an easement?

A right for one landowner to make use of another parcel of land for the benefit of their own land. For example, a right of way.

What is a profit?

Right to go onto someone else’s land and remove from the land something which exists naturally - e.g. right to catch and take fish or graze animals

What is a resulting trust in land?

A person, who is not the legal owner, contributes directly to the purchase price of property - person acquires an interest proportionate to their contribution.

What is a constructive trust?

Person (who is not the owner) makes a contribution to a property other than purchase price - e.g. mortgage payments or substantial improvements.

What are the two stages of a transaction in land?

1. Exchange of contracts - buyer holds an equitable interest

2. Completion - legal estate is transferred - during the interval the buyer owns an estate contract (which is an equitable interest) 

What is an option?

An option enables the owner of the option to insist that the land is sold to them at any time during the fixed period of the option (the period must not exceed 21 years) - full purchase price payable when option is exercised

What is a home right?

This is a statutory right for a non-owning spouse or civil partner to occupy the matrimonial home under the Family Law Act 1996 - does not create an interest in land.

What is alienation?

The sale or underletting of leasehold land.

What is assignment?

The transfer (or sale) of a lease between the tenant/lessee (an assignor) and a purchaser (an assignee)

What is dominant and servient land?

1. D = land which benefits from a restrictive covenant or easement 

2. S = land which is subject/ burdened bu the covenant or easement - easements are exercised over this land - SL is bound by the restrictive covenant

What is the difference between a fixed term lease and a periodic lease?

1. FTL = for any period of time as long as the maximum period is fixed.

2. PL = lease for one period, which extends automatically until either the landlord or tenant give notice to quit - period is usually a week, month or year - notice to quit would usually be for the period of the tenancy.

What is the two-stage test for fixtures and chattels?

1. Degree of annexation - how firmly is it attached? - raises presumption that can be rebutted.

2. Purpose of annexation - if an object was attached to the land to enhance the land or to create a permanent improvement then it is a fixture

• If If the object was attached to the land for the better enjoyment of the object then it retains its characteristic as a chattel (

What did D’Eyncourt v Gregory decide regarding fixtures and chattels?

When an item is part of the architectural design - tapestries, statutes etc. held to be fixtures despite their ease of removal, due to the fact the items are part of an overall architectural design. 

When is a right in land capable of being legal?

a) appears in s.1(1) or s.1(2) of LPA 1925

b) meets the necessary formalities

What are the two estates capable of being legal under s.1(1) LPA 1925?

a) The estate in fee (can be inherited) simple absolute (not conditional on anything) in possession (freehold)

b) The term of years absolute (leasehold) - cannot last forever - carved out of a superior interest like a freehold or longer lease (possible to have more than one estate in relation to same piece of land)

How is an equitable interest in land created? (all interests are capable of being equitable) 

• by contract to create or transfer a legal estate or interest

• by trying to grant a legal estate or interest but failing to comply with the relevant formalities

• by grant of an estate or interest by a person who owns only an equitable right

• by grant of an estate or interest which can only exist in equity

• by express trust

• by implied trust.

How can an express trust in land be created?

a) self-declaration - the settlor retains the legal title to their property but declares that they hold the property as trustee for the benefit of another person (the beneficiary)

b) declaration plus transfer – the settlor declares a trust and transfers legal title to their property to the trustees who hold the property for the benefit of the beneficiaries.

What is the difference between a constructive and resulting trust?

1. CT - a contribution to the property other than a direct financial contribution at the time of the purchase - interest will not be proportionate to the contribution made, but quantified taking into account the parties’ contributions

• Legal estate held by owner of land

• Equitable interest shared with contributor

• Dual role as both a a trustee and beneficiary

2. RT - A person who is not the legal owner contributes directly to the purchase price of the property - acquire an interest proportionate to their contribution.

• Contributor has holds legal estate as trustee and a beneficial interest equal to % of contribution

• Dual role as both a trustee and beneficiary.

Can a restrictive covenant be a legal interest?

No - as does not appear in s.1(1) LPA 1925. 

What is a ‘home right’ under s.30 FLA 1996?

A statutory right of occupation of the matrimonial home for a non-owning spouse or civil partner.

• the parties are legally married or civil partners (and not divorced)

• the home is, has been or is intended to be the matrimonial home.

Do NOT create an interest in the land and exist independently of any equitable interest arising under a trust (whether express or implied)

What is a license?

Personal right that does not create an interest in land - therefore do not bind successors - can be revoked at any time.

What are the formalities to create a legal interest in land>

A DEED (s.52(1) LPA 1925) 

Requirements for a deed:

i) in writing 

ii) clear it is a deed (not another doc) 

iii) signed 

iv) witnessed (by one person) 

v) delivered 

What are the exceptions to the formalities for a legal interest?

PAROLE LEASE EXCEPTION:

a) three years or less (PD where period is for three years or less)

b) tenant must have immediate right to possession

c) market rent

d) no charge or premium - can be paid instead of rent, but not in addition to it.

What are the formalities for a contract in land? (s.2 LPMPA 1989)

a) be in writing

b) incorporate all the expressly agreed terms in one document

c) be signed by or on behalf of all parties

If fail to comply/ use deed - court may intervene - if there is a: i) contract ii) complies with s.2 LPMPA iii) clean hands.

Is the doctrine of specific performance an equitable remedy?

YES - the courts will only grant it if the person seeking it has behaved justly and fairly - based on the equitable maxim: ‘he who seeks equity must do so with clean hands.’

If you breach the terms of a contract you will not have clean hands and equity will not intervene.

Does an implied trust need to be in writing?

NO - can arise without any formality - simply as a result of the conduct of the parties (s.53(2) LPA 1925)

For what duration must an interest in land be in order to be legal?

a) forever

b) a fixed time period

(if for the duration of someone’s life - would not comply with these requirements and therefore would be equitable)