Land Topic 2

1
Land Topic 2

• Estates, Interests and Co-Ownership

2
Registration

• The registration of land has been taking place
  since 1886, it has been a slow process until the
  Land Registration Act 1997
• The idea is that Title and Encumbrances should be
  set out on a register which will be guaranteed by
  the state

3
Registration

• When land is Registered the system greatly
  facilitates the conveyancing of property, however
  not all land is Registered and so at present
  there are two systems of conveyancing in England
  and Wales
• Unregistered and Registered
• Whichever system applies a purchaser will have to
  investigate both the title and the encumbrances.
  It should be noted that the system of
  registration of land is not another system of law
  but only a method of facilitating conveyancing.

4
Unregistered Land

• Title -
• A 15 year root of title has to be investigated.
• Encumbrances -
• Legal interests in documents of title by deeds
• Equitable interests
• Trusts - Doctrine of Notice
• Commercial Interests - Land Charges Register

5
Registered Land

• Title -
• Guaranteed by the entry on the Register
• Encumbrances -
• Trusts and some Legal Interests are Overriding
  Interests and cannot be or do not have to be
  Registered
• Equitable interests attached to the land appear
  on the Charges Register

6
Registration

• HM Land Register is in three parts
• The Property Register describing the property
• The Proprietorship Register stating the owners
• The Charges Register stating the encumbrances.

7
Estates and Interests

• Estates
• Land can only be held from the Crown for a
  certain period of time. This period of time is
  expressed as an estate.
• Under the Law of Property Act 1925 the Common Law
  only recognises two estates

8
Estates and Interests

• Estates
• 1. Freehold Estates in fee simple
• All land is held by someone as a freehold estate
  of a fee simple absolute in possession where the
  holder has the right to hold the land for an
  indefinite period i.e. uncertain duration and the
  land can be inherited
• 2. Leasehold or Term of Years Absolute
• A freeholder may allow another to hold the land
  for a specific time as a leasehold estate for a
  term of years absolute i.e. a specific number of
  years, certain duration.

9
Estates and Interests

• Interests
• Although one person may own/hold the land another
  person may have an interest in the
• Common Law now only recognises five types of
  interest the most important of which are
• a) Legal Easements, Rights and Privileges
• b) Charge by way of legal mortgage

10
Estates and Interests

• Common Law/Legal estates and interest are
• Easy to prove - created by deed
• Easy to protect - good against the whole world
  (in rem) - no need to give notice
• But
• Rigid Common Law interests only apply when
  created by deed and for a period equivalent to a
  fee simple absolute or term of years absolute

11
Estates and Interests

• Protection of Common Law Estates and Interests
• Must be for an equivalent of a fee simple
  absolute of a term of years absolute
• By deed

12
Estates and Interests

• Equitable interests recognised when it would be
  unjust to only apply rigid Common Law principles
  
• Informal - e.g. no deed
• Inability - e.g. granted for life or not
  recognised by Common Law
• Intention - i.e. parties wanted to create an
  equitable interest e.g. an interest behind a
  trust, which is not recognised at Common Law

13
Estates and Interests

• Equitable Interests under the 1925 Legislation
• Two types of Interest in Land
• Interests under a trust - "attached to people"
  (Family Interests)
• Interests attached to land (Commercial Interests)

14
Estates and Interests

• 1. Interests under a trust - "attached to
  people" (Family Interests) e.g.
• A gift in a will Greengables to X on trust to A
  for life thereafter to B absolutely - A can live
  in the property or receive the rent for life and
  then B receives the property - T makes sure it
  happens
• C and D buy Happydale together - C holds for D, D
  holds for C (Property in both names)
• E buys Home Farm for himself and F, F pays the
  deposit (property in E's name)

15
Estates and Interests

• 2. Interests attached to land (Commercial
  Interests) e.g.
• Equitable Easements
• Equitable Mortgages
• Restrictive Covenants

16
Estates and Interests

• Protection of Equitable Interests Before 1925
• Interests under a trust - "attached to people"
  (Family Interests)
• Overreaching (Paid money to trustees)
• If overreaching did not apply (1 trustee) then
  Doctrine of Notice applied

17
Estates and Interests

• Interests attached to land (Commercial
  Interests)
• Doctrine of Notice applied

18
Estates and Interests

• Doctrine of Notice
• A bona fide purchaser of a legal estate without
  notice took free of any equitable interest i.e.
  the purchaser did not know about the equitable
  interest
• Actually - had real knowledge
• Constructively- could have fond out if made
  reasonable inquiries or inspection
• Imputed - the purchaser's advisors knew

19
Estates and Interests

• The difficulty for the owner of the interest was
  ensuring a purchaser knew about his or her
  interest. A continuing concern is the
  effectiveness of the present system of
  overreaching and registration in replacing the
  doctrine of notice. Does/should the Doctrine
  still have a place in this area of law?
• The 1925 Legislation attempted to abolish the
  Doctrine of Notice

20
Estates and Interests

• Protection of Equitable Interest After 1925
• Interests under a trust - "attached to people"
  (Family Interests)
• Overreaching - enables Purchaser to take free
  and interest owner to receive share of proceeds -
  s 27 Law of Property Act 1925 payment of the
  proceeds of sale to two trustees who will look
  after the proceeds for the beneficiaries under
  the trust

21
Estates and Interests

• Interests attached to land (Commercial Interests)
  
• Registration
• Unregistered Land - the interest must be
  registered under the Land Charges Act 1972
  (replacing 1925 Act) - will become obsolete
• Registered Land - the interest must be registered
  under the Land Registration Act 1925
• unless it is an interest listed under s 70 Land
  Registration Act 1925 known as Overriding
  Interests

22
Land Topic 3

• Co-ownership

23
Co-Ownership

• Sole
• Successive - consecutive - Trusts of Land
• Co-ownership - concurrent - Trusts of Land
• Trusts of Land and Appointment of Trustees Act
  1996 (TLATA 1996)

24
Co-Ownership

• Trusts of Land
• Under trusts of land the legal estate is vested
  in the trustees who administer the property for
  the beneficiaries

25
Co-Ownership

• Position of the Trustees
• The maximum number of trustees in relation to
  trust of land is 4 (first 4 named if more than 4
  listed) s34(3) Trustee Act 1925
• No Minimum but sole trustee cannot give a receipt
  for capital money unless a trust corporation s27
  Law of Property Act 1925

26
Co-ownership

• Position of the Beneficiaries
• Consultation
• The trustees when exercising their powers must
  consult with the beneficiaries of full age and
  beneficially entitled to an interest in
  possession and give effect to their wishes or the
  majority so far as consistent with the general
  interest of the trust the effect of this section
  may be excluded by the trust document, s11 TLATA
  1996

27
Co-ownership

• Position of Beneficiaries
• Consent
• The consent of the beneficiaries may be required
  by the trust document. Where the consent of more
  than two persons is required two will be
  sufficient, s10(1) TLATA 1996
• If consent is refused application may be made to
  the court under s14 TLATA 1996

28
Co-Ownership

• Trustees hold the legal estate as
• Joint Tenants
• Beneficiaries can hold the equitable interest as
  
• Joint Tenants or
• Tenancies in Common

29
Co-Ownership

• Joint Tenancies (Law and Equity)
• Each co owner jointly owns the whole of the
  estate
• Survivorship Principle
• The Four Unities
• Unity of Possession
• Unity of Interest
• Unity of Time
• Unity of Title

30
Co-Ownership

• Tenancies in Common (Equity Only)
• Can only exist in Equity
• Unity of Possession must be present
• Each Beneficiary entitle to a notional share -
  not necessarily equal
• Restriction on Register

31
Co-Ownership

• Joint Tenancies or Tenancies In Common (Equity
  Only)
• Transfer may state whether Joint Tenancy or
  Tenancy in Common in equity
• If silent then Joint Tenancy
• Presumed to be a Tenancy in Common if
• Purchase money in unequal shares
• Partners in business
• Mortgagees
• Business property

32
Co-Ownership

• Joint Tenancies or Tenancies In Common (Equity
  Only)
• Severance
• Joint Tenancies cannot be severed at Law
• Joint Tenancies can be severed in Equity (severed
  shares equal)

33
Co-Ownership

• Severance
• Severance of Joint Tenancies in Equity by
• Notice in writing s 36(2) LPA 1925
• Other methods
• Mutual agreement
• Sale
• Conduct/Course of Dealing
• Partition
• Homicide
• Bankruptcy
• Court Order

34
Co-Ownership

• Dispute Resolution - Application to the Court
• Any person who is a trustee of land or has an
  interest in the land may apply to the court for
  an order of sale or other exercise of the
  trustee's powers, s14 TLATA 1996
• The court is to have regard to
• the intentions of the creator of the trust
• the purpose for which the property is held
• the welfare of any minor in occupation
• the interest of any secured creditor
• the wishes of any beneficiary, s15 TLATA 1996

35
Co-Ownership

• Where the Beneficiaries and the Trustees are the
  Same
• Usually agree but note co-habitees
• Married couples Matrimonial Causes Act 1973

36
Co-Ownership

• Where the Trustees and Beneficiaries are
  Different
• City of London BS v Flegg (1988)
• A Solution S 10 TLATA 1996