Land Law: Estates and Interests

• Syllabus Topic 2 pertains to Estates & Interests for Land Law (LAW242), a 15-credit module.
• Dr. John Tribe is the Module Coordinator.
• He can be contacted via [email protected] and holds office hours on Wednesdays, 14.00-16.00 in Room 5.22 of the SLSJ Building.

Estates and Interests

• Recommended Textbook Reading: Dixon, Core Concepts: Dixon 13th edn, Chapters 6 (6.1 – 6.3), 9 (9.1 – 9.3).

Estates

• 1925 legislation relates to estates.
• Simplification of estates occurs under the Law of Property Act 1925, s.1(1) and s.1(3).
• A fee simple absolute in possession is a freehold estate where "in possession" means not in remainder or reversion
• "Absolute" signifies the estate's capability of continuing indefinitely, as defined by the Law of Property Act 1925, s.7.
• A term of years absolute is a leasehold estate.
• ‘Certainty of Leasehold Terms’, P. Sparkes, (1993) 109 L.Q.R. 93.
• Bridge 'Leases – contract, property and status' Chapter 4 in Land Law: Issues, Debates, Policy (2002)
• Harwood 'Leases: are they still real?' (2000) Legal Studies 503.
• A contract usually creates an estate in land under the Law of Property Act 1925; s.205 (1) (xxvii).
• A lease is an Estate vs a Personal Right compared to a Licence.
• *Thomas v. Sorrell (1673) Vaugh 330: ‘[a licence] properly passeth no interest nor alters or transfers property in any thing, but only makes an action lawful, which without it had been unlawful.’
• Errington v Errington & Woods [1952] 1 K.B. 290
• Ashburn Anstalt v. Arnold [1989] Ch 1 (CA)
• Rent is not an essential requirement for a lease.
• Ashburn Anstalt v Arnold [1988] 2 All ER 147
• A lease requires certainty of term, meaning the date of commencement must be fixed or ascertainable, as well as the maximum duration.
• Bright 'The uncertainty of certainty in leases' (2012) L.Q.R. 337
• For Fixed Term: Lace v Chantler [1944] KB 368
• Prudential Assurance Co Ltd v London Residuary Body [1992] 3 All ER 504
• Law of Property Act 1925, s.149(6)
• Skipton Building Society v Clayton (1993) 66 P&CR 223
• *Mexfield Housing Co-op v Berrisford [2011] UKSC 52:
• Secretary of State for Transport v Blake [2012] EWHC 2495 (Ch)
• Southward Housing Co-op Ltd v Walker [2015] EWHC 1615 (Ch)
• For Periodic term: Javad v. Aqil [1991] 1 W.L.R. 1007
• Exclusive possession is also required for leases.
• The right to exclude all others from the land including the lessor (Street v Mountford [1985] AC809).
• Aslan v. Murphy [1990] 1 WLR 766
• AG Securities v. Vaughan [1990] 1 AC 417.
• Westminster City Council v. Clarke [1992] 2 A.C. 288.
• Mexfield Housing Co-op v Berrisford [2011] UKSC 52
• Bruton v London Quadrant Housing Trust [1999] 3 WLR 150: defines "lease" or "tenancy" as a landlord and tenant relationship, not necessarily creating a proprietary interest binding on third parties.
• Bright, 'Leases, Exclusive Possession, And Estates' [2000] 116 LQR 7
• Pawlowski, 'Occupational Rights In Leasehold Law: Time For Rationalisation' [2002] Conv. 550
• Kay v London Borough Lambeth [2006] 2 W.L.R. 570 (HL):
• Formalities: requires a deed unless the lease is for 3 years or less (Law of Property Act 1925; ss. 52 & 54).
• Walsh v Lonsdale (1882) 21 Ch D 9 establishes equitable leases.
• The Law of Property (Miscellaneous Provisions) Act 1989, s.2 governs formalities, as amended by the Regulatory Reform (Deeds and Documents) Order 2005.
• Implied covenants at law exist regarding the relationship between landlord and tenant, including quiet enjoyment.
• Southwark L B C v Mills [1999] 4 All ER 449
• Lee v Leeds City Council [2002] 1 WLR 1488
• Not to derogate from grant
• Statutory interferences with leases examples are: Repair, Housing Tenure, Breach of covenant and Commonhold
• Recent Reforms occurred under the Leasehold and Freehold Reform Act 2024.

Legal and Equitable Interests in Land

• An introduction to legal and equitable interests in land.
• Legal interests are limited in number by the Law of Property Act 1925, s.1(2).
• Examples of Legal Interests: easements or privilege for a period equivalent to a legal estate, rent charges, a charge by way of legal mortgage, a right of entry exercisable over or in respect of a legal term of years absolute
• Equitable interests arise under the Law of Property Act 1925, s.1(3).
• Validly Creating Interests in Land must follow Statutory Formalities.
• Law of Property Act 1925; ss.1; 52; 53 and 54
• Law of Property (Miscellaneous Provisions) Act 1989, ss.1 and 2
• Land Registration Act 2002, s.27 (for registered title only)

Common Interests in Land

• Common interests in land include interests are taught as complete subjects in some Land law modules and the treatment in textbooks is therefore very detailed.
• You need to be able to identify such interests (which requires the basics of how such interests are created (including an outline of formalities for their creation), their nature (what the interests are), and whether they can be granted as legal or equitable interests (or both)) and consider if and how they may be enforced against a purchaser or other interest holder on a sale of registered or unregistered land.

Easements

• Textbook Reading are Dixon, Easements: Dixon 13th edn, Chapter 7 and Law Commission (1971) WP 36.
• Easements are rights possessed by the owner of one piece of land (the 'dominant' land) whereby the owner of other (‘servient') land is obliged either to suffer something to be done on his land, or to refrain from doing something on his own land, for the benefit of the dominant land.'
• An easement is attached to one piece of land and exercisable over an adjacent piece of land.
• Defined and benefits the first piece of land – Re Ellenborough Park [1956] Ch 131.
• A right does not benefit the land if it merely benefits the owner of the land – Hill v Tupper (1863) 2 H &C 121.
• Examples of common easements are rights of way, a right to have a building constructed on land supported by adjacent land and a right to run a drain under neighboring land.
• Harris v Da Pinna (1886) 33 Ch.D.238.
• The law of easements balances the rights of the dominant tenement owner and the servient tenement owner.
• To benefit from an easement, one must be an estate owner.
• A legal easement can be acquired by an actual grant by deed or by presumed grant through prescription (Prescription Act 1832).
• Law of Property Act 1925, s.1(2)(a)
• Law of Property Act 1925, s.1(3)

Easements Distinguished From Other Rights

• Natural rights
• Public rights
• Restrictive covenants
• Licences
• Customary rights
• Profits a prendre

Mortgages

• Textbook reading: Mortgages: Dixon 13th edn, Chapter 11.1
• Samuel v Jarrah Corpn Ltd [1904] AC 323 at 326.
• A mortgage is the interest taken over an estate by a lender as security for his loan.
• The relationship between the borrower and lender is governed by the terms of the mortgage, case law and statute.
• Lenders powers are controlled, originally by equity and now by statute.
• Borrowers remaining proprietary interest is called the equity of redemption.
• s. 87 Law of Property Act 1925 preserves the position although there is now a charge and not a lease.
• s.36 Administration Justice Act 1970 and s. 8 Administration of Justice 1973 gives the courts power to prevent a lender gaining possession
• Before selling, there must be at least 2 months arrears of interest - s.103 Law of Property Act 1925.
• Cuckmere Brick Co Ltd v Mutual Finance Ltd [1971] Ch 949.
• A legal mortgage can only be created by deed per s.1(2)(c) Law of Property Act 1925.
• s.1(3) Law of Property Act 1925

Restrictive Covenants

• Textbook reading: Restrictive Covenants: Dixon 13th edn, Chapter 8 (8.1 – 8.3)
• A restrictive covenant restricts the use of one landowner for the benefit of another.
• A covenant enforced between original parties differs not from any contract.
• Positive covenant can be enforced between the original covenantor (person making the promise) and covenantee (person with the benefit of the promise)
• A covenant will only be an interest in land, however, if is a restrictive covenant meaning the covenantor to spend money to comply with the covenant.
• A restrictive covenant will only be enforceable, other than against the original covenantor, if it relates to the land and not to be person.
• Tulk v Moxhay (1848) 2 Ph. 774 which concerned a promise to keep Leicester Square as an open space.
• A restrictive covenant needs to be protected by registration.
• A restrictive covenant can only be enforced by someone other than the original covenantee if it touches and concerns the land, in other words, it must not be a purely personal covenant.
• Federated Homes v Mill Lodge Properties [1980] 3 All ER 371
• Elliston v Reacher [1908] 2 Ch 374.

Options to Purchase and Rights Of Pre-emption

• An option to purchase is treated as an interest in land.
• An option to purchase gives the purchaser an enforceable right to purchase the property at a specified time in the future (the option period) at which point a binding contract for sale is created when the option is exercised by the purchaser (Tye v. House [1997] 2 EGLR 171).
• Spiro v Glencrown Properties Ltd [1991] Ch 537
• Protection of interests against third parties: Concerns of notice
• Textbook reading: Notice: Dixon 13th edn, Chapters 1 (1.4 only) & 3 (3.8 only)
• Automatically bind third parties is Legal interests
• Bind everyone except a bona fide purchaser for value of the legal estate without notice is Equitable interests
• The Doctrine of Notice
  • Actual notice occurs under the Law of Property Act 1925, s.198(1).
  • Constructive notice means a purchaser is deemed to have notice of all matters he would have discovered if he had made the usual and proper enquiries under. -Law of Property Act 1925, s.199 -Hunt v Luck [1902] 1 Ch 428 -Caunce v Caunce [1969]1 WLR 286. -Williams & Glyn's Bank Ltd v Boland [1980] 2 All ER 408 Kingsnorth Trust Co Ltd v Tizard [1986] 2 All ER 54
• The Statutory Concept of Overreaching Textbook reading: Overreaching: Dixon 13th edn, Chapter 2 (2.9 only)
• Transfer of an equitable interest from the land to the proceeds of sale
• Applies to 'family type' interests and the Three conditions
• Law of Property Act 1925, ss.2(1)(ii), 27(2) City of London Building Society v Flegg [1987] 3 All ER 435
• State Bank of India v Sood [1997] 1 All ER 169
• Scott v Southern Pacific Mortgages Ltd [2014] UKSC 52:

Interests

• Interests are part of the bundle of rights and represent a legally enforceable relationship with the land but is not an estate.
• Legal estates and equitable interests are described in the Law of Property Act 1925 Section 1 Subsections 1-3
• A right that is possessed by the owner of one piece of land or namely the dominant tenanment where by the owner of another piece of land known as the servient tenanment is obligated to suffer something done on their land. Dixon, Chapter 7 (7.1 – 7.5)
• Residents had a right to walk around the park with the benefit of an easement, so it is the owners of the park that suffer the easement concerning the Re Ellenborough Park case
• Qualities named in order for there to be an easement in the Dago case included: There must be a Dominant and Servient tenanment, the easement must benefit the dominant land, Dominant and servient owners are different/Common ownership, Wheeldon and Burrows, Right claim must be capable of forming the subject matter of a grant.
• Case updated a lot of the commentary in Ellenborough park, particularlary in the are of recreation easments which was brought up in the Regency Villas case -Lord Briggs - Majority judgement you can have easments of this type Lord Carnworth - Dissent, the provision of those facilities is going a step to far in terms of recreational easements and their usage.
• ARight does not benefit the DL if it only benefits business interest of individual
• In the case concerning Hill v Tupper:
• Court held that there was no easement for H, the right to put boats out was just a business interest and did not benefit the dominant land and only benefitted H.

Doctrine of Notice and Overreaching.

• Two types of estate are described within, Law of Property Act 1925 s 1(1).
• Who is bound by interests at common law and defined as Legal intersts bind the world and Equitable intersts are subject to the doctrine of notice
• the Law of Property Act 1925, s.199 states: 'within his own knowledge, or would have to his knowledge if such inquiries and inspections had been made as ought reasonably to have been made by him'
• MJ Williams The extent in which a bank ought to have known about an interest when they took possession of the property was discssued in the Hunt v Lucky case.
• Williams & Glyn's Bank Ltd v Boland 1980 Similar facts to Caunce but demosntrates a massive change in judicial opinions in 11 years. Mortgage lenders try to take property free from Mrs B's interest and this is where it differs.
• Wilberforce - "It (Caunce and Caunce) has somewhat faded from the argument in the present case and appears to me to be heavily obsolite from the Williams & Glyn's Bank Ltd v Boland 1980 case.
• the Kingsnorth Trust Co Ltd v Tizard case set a precedent regarding the Law of Property Act 1925, s 199(1)(ii) (b) that states: A purchaser is deemed to have the same actual or constructive as his professional advisors (agents)
• 2(1) Law of Property Act 1925 provides and states the following, "A conveyance to a purchaser of a legal estate in land shall overreach any equitable interest... whether or not he has notice thereof where as.2(3) Law of Property Act 1925 states: Overreaching does not apply to restrictive covenants, easements, contracts (e.g. rights of pre-emption)
• Law of Property Act 1925, s. 27(2) states: the proceeds of sale or other capital money shall not be paid to or applied by the direction of fewer than two persons as except where the trustee is a trust corporation
• in the City of London Building Society v. Flegg [1987] 3 AII ER 435 case it is important to note that If you overreach someone like the Fleggs, you are effectivley booting them out of their own home so they can sell it and realise the value.
• The Scott v Souther Pacific Mortgages case is important to bear in mind that the system of land registration is merely conveyancing machinery. The underlying law relating to the creation of estates and interests in land remains the same. (at [96] per Lady Hale).

Registered Land Cont

• Land Registration Act 2002, s.58 is relevent when discussing the position of the registered proprietor
• Key thing with, mortgages are in modern times – classed as charges
• Schedule Two – registration requirements -Key thing is mortgages are in modern times – classed as charges
• Third category: these are interests that B can protect of by entering them on the register
• Used to be called 'minor interests'
• No definitive list - but includes all interests in land that are not otherwise protected as registrable interests, registered charges or overriding interests
• Methods of protection
  • Entry of a notice on the register which protects the priority of the relevant interest -Entry of a restriction on the register which restricts dealing with the land because of the relevant interest (does not protect priority)
• If they are registered, they will take priority and bind successors in title (usually new owner).
• New statutory language for overriding interests - S.29(2)(a)(ii)
• Short leases (<7 years)
• There are four categories of interests, including interests capable of protection on the register
• There is no place for the doctrine of notice in registered land - interests only bind according to the statutory scheme
• LRA 2002 Provides a replacement for doctrine of notice
• The Parkash v Irani Finance Ltd case and MJ Ploughman’s statement is used to move away from the doctrine to do so with a Concept only in LRA 2002
• Land Registration Act 2002, s.32, Explains the purpose of a notice
• No positive definition of interests that can be created by notice
• Negative definition, s 33 - Excludes interests which cannot be protected by entry of a notice

Registration

• Harpum Act (LPA 2002) with the Birkenhead acts (Group of statues in 1920s)
• 13% of land is not registered in UK and is key fact
• Aim of the register and its Overraching quest is to make land easier to buy and sell - the term for this is free alienation.
• Harpu update the LRA 1925 by having a Reduced number of overriding interests (interests not registerable)

Overreaching

• The law of property act 2025, ss.2(1)(ii) covers Law of Property Act 1925, ss. 27(2) which states that the law covers instances where one trustee is listed and you need to appoint another to have overreaching
• Court held that the mortgage lender had missed out - they had no rights in the property because they should have known about the interests that attach to the property, Court held that the mortgage lender had missed out - they had no rights in the property because they should have known about the interests that attach to the property. -Court held that the mortgage lender had missed out - they had no rights in the property because they should have known about the interests that attract to the property.
• Lord Wilberforce held that they could not take the property and said that caunce had 'faded' and was 'obsolete'