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Estates and interests

Estates and interests. Debbie Rook LL.B open learning . The doctrine of estates. Refers to the PERIOD OF TIME during which the rights of the land will last e.g freehold = forever. 28 Hill Road: I own the freehold estate. You own the leasehold estate.

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Estates and interests

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  1. Estates and interests Debbie Rook LL.B open learning

  2. The doctrine of estates • Refers to the PERIOD OF TIME during which the rights of the land will last • e.g freehold = forever

  3. 28 Hill Road: I own the freehold estate. You own the leasehold estate. More than one estate can exist in one piece of land at a time FEE SIMPLE ABSOLUTE IN POSSESSION 5 yrs

  4. Legal estates - s.1(1) LPA 1925 • FEE SIMPLE ABSOLUTE IN POSSESSION • Perpetual grant • Not conditional • A right to immediate enjoyment

  5. Legal estates - s.1(1) LPA 1925 • TERM OF YEARS ABSOLUTE • A fixed term • Can be less than a year • Can be a future interest

  6. Lace v. Chantler [1944] • A landlord purported to grant a lease “for the duration of the war”. • Held: this was an uncertain period of time and therefore NO leasehold estate was created.

  7. 5 legal interests – s.1(2) LPA • (a) An easementfor an interest equivalent to an estate in fee simple absolute in possession or a term of years absolute • (c) A charge by way of legal mortgage • (b) A rentcharge – subject to certain conditions • (d) “…and other similar charge” • (e) Rights of entry exercisable over a legal term of years absolute

  8. Equitable interests – s.1(3) LPA • A process of elimination – 2 legal estates and 5 legal interests and everything else is equitable (s.1(3) LPA 1925).

  9. Examples of equitable interests Common examples • Interest of a beneficiary under a trust • Restrictive covenants in freehold land • Equitable easements • Estate contracts

  10. A trust of land • A trust is the means by which property may be held by one person (a trustee) for the benefit of another (a beneficiary).

  11. What is an estate contract? • It is a contract to create or transfer a legal estate • It must comply with s.2 Law of Property (Miscellaneous Provisions) Act 1989 • It is always an equitable interest

  12. When do you need a deed? • S.52 LPA 1925 • To CREATE or TRANSFER a LEGAL ESTATE or a LEGAL INTEREST in land

  13. What is a deed? – s.1 LP(MP) Act 1989 • 1. Must be clear on face of document that it is a deed • “This Deed of transfer …” • 2. Must be validly executed: • signed • witnessed • delivered

  14. EXCEPTION • S.54(2) LPA 1925 • A SHORT LEASE (not exceeding 3 years) • in possession • at the best rent • without the payment of a fine (premium) • Applies to creation but not assignment

  15. Summary • s.1(1) LPA – 2 legal estates • s.1(2) LPA – 5 legal interests • s.1(3) LPA – anything else is equitable • s.52 LPA – need a deed for a legal estate/interest • s.54(2) LPA – an exception to the need for a deed (the short lease)

  16. WHEN IS A RIGHT LEGAL? MUST USE THE CORRECT DOCUMENT (A DEED) MUST BE LISTED in s.1(1) or s.1(2) LPA 1925 +

  17. WHAT RIGHTS CAN BE EQUITABLE? THOSE THAT ARE IN s.1 BUT WHICH AREN’T MADE BY DEED THOSE NOT IN S.1 LPA 25

  18. Ali owns the freehold of Greenacre … … over which she gives - Neighbour Caron - a right of way over the garden Neighbour Dillon - a promise that Greenacre will never be used for business purposes North Bank plc which had lent money to Ali – a mortgage Bren a 5 year lease. INTERESTS in land

  19. Estates Ali owns the freehold Bren owns a leasehold Interests Caron has an easement Dillon has a restrictive covenant The Bank has a mortgage Multiple rights in land

  20. What happens if Ali sells Greenacre to Ed? The big question = is Ed bound by the following: • lease • easement • restrictive covenant • mortgage?

  21. The issues this raises • The need to protect estates/interests against new owners of the land • The need to protect new owners against existing estates/interests • The need to establish priority between competing interests e.g. two mortgages

  22. The issue of priority • The way in which the law determines which of several competing proprietary rights in the same land should have priority over the others

  23. SUMMARY • There are 2 main types of rights in land: estates and interests • There can be a number of different rights in the same piece of land – more than one estate and more than one interest • The only rights that concern land lawyers are proprietary ones – ones that are CAPABLE of enforcement against a new owner • The Issue of Priority is of fundamental importance in land law – does a proprietary right bind a new owner of the land?

  24. Two regimes • Unregistered land …. eventually to be replaced by • Registered land • Registered land means that the estate in the land has been registered at HM Land Registry.

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