Concepts of Land Ownership

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Land law as an element of the law of property

  • Law of property - deals with the legal relationship between a thing and the owner of that thing
  • Land law - deals with the legal relationship between land and the owner of that land
  • Property - the condition of belonging to someone - a relationship
  • Land law = land & owner of that land
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Special features of land

Limited supply

  • There are many land reclamation projects, but it's impossible to make new land
  • Very expensive
  • Intensified need to make land freely marketable
  • Special limits on land owner (planning permission)
  • Compulsory purchase - train lines and motorways

Permanence

Connectivity

  • Impossible to consider just one bit of land, have to consider adjoining land. Concerned with relationship in network

Uniqueness

  • Phyiscal location (can never be shared) - damages may be insufficient

Social Importance

  • Human rights may be relevant - ECHR Article 8 - right to a home

Capacity to sustain simultaneous multiple interests

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Subject matter of land law

Multiplicity of interests

Ownership interests - if 2 family members have paid for the land, it confers ownership interest onto the contributor

  • Freehold ownership - closest to absoloute ownership and potentially goes on forever
  • Lease - limited to a fixed maximum duration

3rd Party Interests - confers rights of land to another person

  • Mortgage - it is the right of the bank, if it is defauled, you have to recover losses
  • Easement - right of way
  • Restrictive covenant - a neighbour can restrain land if used for business
  • Lease - has onwership interest although limited. From a land owner's point of view, it is a 3rd party interest
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Land Law Issues

Nature/content of interests in land

  • Can be enforced against later owners
  • If invited - you have a temporary right to enter the land - if the house is sold before, you couldn't use the invitation for new owners

Creation/acquisition of interests in land

  • Usually a formal process
  • Normally preceeded by a contract in writing
  • Completion may require further documentation - a deed
  • Acquisition may require actual registration
  • Law recognises that some land is acquired with no formality, if it is an operation of law
  • Certain actions in certain circumstances create interest
  • If the contribution is just a gift - there is still an interest

Protection/priority of interests in land

  • When a new owner buys, needs to ensure the previous owner had the right to sell and check 3rd party rights to see if there is any effect on new owner and check for restrictive covenants.

Rights enforceable against new owner?

  • Only enforceable if protected and recorded in register - takes priority over the new owner
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Williams & Glyn's Bank v Boland

  • M was sole owner of a property, he bought with contribution from J. M used the house as security for a loan. M defauleted on repayments and the bank sought possession of the property. J asserted she had an interest in the property which had priority.

J's rights

  • Financial interest in property - so share in proceeds should be proportionate
  • There is no evidence of her lending to her husband law assumes she acquired rights in the house, constituting interest in the land
  • Law has machinery where Julia could have recorded her interest in a register
  • Contribution was made informally - she gets protection by being in property at time of loan
  • Her occupation should have alterted the bank - the bank forgot to investigate - their fault
  • Was Julia in occupation? - YES - won the case
  • 10 years prior to this, the decision would have been different as J was a 'mere wife'
  • Law has 2 innocent parties and has to decide in favour of one of them
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Doctrine of Tenures

Terms on which land was held

  • King created system of lanholding, so land was granted to tenants in return for services
  • Kept giving it out until people who held the land owner it (feudal system)
  • There was no transfer of ownership of land, remained with the King

Incidents of tenure - obligation/benefits for landlord

  • Escheat - right to take back land if died without heir or if convicted of a crime

Demise of the practical significance of the doctrine

  • Subinfeudation - creates new level on a feudal system and gets someone to step into your shoes

Statute Quia Emptores 1290

  • Prohibited more subinfeudation, just substitution
  • Progressive reduction of levels in feudal system
  • Levels cost could not be replaced
  • Accelerated by reluctance to get rid of common socage - money not worth collecting

Tenures Abolition Act 1660

LPA 1925

Continuing theoretical basis of land holding

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Doctrine of Tenures 2

Tenures Abolition Act 1660

  • Converted all tenures into common socage

LPA 1925 - position today

  • All land presumed to be directly held from Crown
  • 2 levels of system - King and everyone else
  • If the owner of land dies without an heir/will - land passes to the Crown

Continuing theoretical basis of land holding

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Doctrine of Estates

Concept of the estate

  • Does the tenant own anything - tenant owns an abstract concept - estate

Duration of the grant of land on terms

  • Has an entitlement to exercise ownership rights for a certain period of time

Freehold estates

  • Characterised by uncertain duration
  • Fee simple - potentially the largest and longest, continues until the owner dies without a will or heirs. No restriction on who can inherit - can be anybody chosen
  • Fee tail - theoretically a shorter duration, only descendants can inherit. Potential of an extension so potentially longer.
  • Life estate/estate pur autre vie - owner has right for as long as they life. As english law separates land from owner, the doctrine provides means where someone can set up a scheme for ownership rights for the future - successive entitlement
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Doctrine of Estates 2

  • Successive freehold estates - heirs can own nothing until death, as there is nothing to own
  • Estates in possession - immediate exercise of ownership rights
  • In remainder - if estate in the future is not the grantor
  • In reversion - if estate in the future is the grantor.

Modern significance of the doctrine of freehold estates

  • Arrangements of successive estates are uncommon
  • Usually transactions from earlier times - when important to keep wealth in the family
  • Impossible to create a new fee tail since 1997
  • Fee simple in possession is the only freehold that constitutes most modern dealings in land

Leasehold estate

  • Characterised by certain duration
  • The absence of seisin - factual possession of land - possession of being conferred freehold
  • Contractual agreement
  • Certainty of duration of estate enjoyment
  • Maximum time could be very short and max duration must be fixed at the outset
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Ownership, possession and title

  • English law is driven by procedures for recovery of land when taken from the owner
  • If there is a dispute - english law focuses on who owns the estate or who has physical possession of land

Relativity of ownership/title - who has the better right to possession?

  • Court only concerned about who had better right out of the parties in dispute
  • Possession principle way of entitlement to land
  • Concerned with relativity of possession

Actions for the recovery of land

Law of adverse possession

  • If you have uninterrupted possession over a long periof of time, you become the owner
  • Every possession will create a title, good against subsequent intruders
  • If one dispossesses another - possession by squatter is commencement of a new title
  • The dispossessed has right to recover land from dispossessor to reclaim rights
  • Unless there is a time limit - title could never be sure - the law imposes limits
  • If house is dispossessed by squatters - you have 12 years to reassert rights - if not you lose them.
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Asher v Whitlock

  • In 1850 - there was adverse possession. Williamson started a new title, against everyone except anyone with better possession
  • In 1860 - wife and daughter continued adverse possession
  • In 1861 - Whitlock moved in - claims his possession was the start of a new title
  • In 1865 - heirs claimed under Williamson possession
  • Best title was Lord of Manor, as it was the earliest, but he wasn't party to the action
  • Williamson title commenced first, so he had better possession than Whitlock

General rule - earlier possession gives you better possession

If heirs had not asserted title 20 years after, the title would have been extinguished

Effect of title registration on adverse possession

  • Most land has registered details
  • Asher v Whitlock applies to unregistered land
  • Difficult to have adverse possession of registered land
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Equity and the institution of the Trust

Origin and nature of equity

  • Devised by the court of chancery
  • Inflexibility of common law - result could be regarded as unjust
  • Set about modifying common law to avoid incidences of injustice
  • Usually a case by case basis - so equitable set of principles

Development of the trust

  • Trust became recognised means of ownership which people could set up. Set up in response to equity for justice. Land would be formally transferred to trustee, benefit to hold land for the beneficiary
  • Common law court concerned only with free simple transferring to trustee ignored beneficiary.

Recognition of legal and equitable ownership

  • Equity said split between common law ownership and equitable ownership.
  • Trustee - fee simple in possession
  • Beneficiary - equitable fee simple in possession
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Equity and the institution of the Trust 2

Enforceability of legal and equitable interests

Legal interests universally enforceable

  • Legal ownership confers no benefits, only powers and duty to use land for benefit of beneficiaries
  • Give life estate to A
  • Transfer land to trustees to hold for A
  • Difference - enforceability against later owner of the land

Equitable interests subject to the doctrine of notice

  • Estate contracts - when X agrees to contract in land, has contractual right against seller. Damages are not sufficient as each land is unique. Equity makes on transfer of the estate
  • Restrictive covenants - agreement between landowners, agreeing not to use land for other purposes. Gives beneficiary an equitable interest in land subject ot the doctrine of restriction
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Doctrine of notice and the 'bona fide purchaser'

  • Prior to 1926, the doctrine of notice determined the enforceability of equitable interests through changes in ownership of the land affected.
  • Since 1926 the significance of the doctrine has diminished significantly, but it continues to operate in certain circumstances.

Must satisfy all elements of the doctrine. If not - its not bona fide and an equitable interest can be enforced against them. (Pilcher v Rawlins)

Good Faith

Absence of good faith is irrelevant if it is not directly connected with the proprietary of the particular transaction. (Pumfrey J, Corbett v Halifax Building Society)

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Purchaser

Purchaser for valuable consideration

  • Includes not only a purchaser in the normal sense, but a person acquiring land by way of gift or under the will
  • Excludes a person acquiring land on death of the former owner under the intestacy rules and a squatter who acquires title to land through adverse possession
  • The purchaser must provide considertaion in the form of money or future marriage
  • Consideration must have been paid in full before the purchaser discovers the equitable interest

Purchaser of a legal estate

  • Not necessary that purchaser acquires fee simple
  • Extends to those acquiring a legal lease
  • Includes someone with a legal mortgage
  • If purchaser acquires equitable interest, cannot exercise doctrine of notice
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Notice

Actual Notice

  • Purchaser must have notice of everything to their knowledge
  • It is not necessary the purhcaser acquire the knowledge directly from the owner of the equitable interest
  • A purchaser will not have knowledge of a fact that he once knew if at the time of the purchase, he has genuinely forgotten about it (Re Montagu's Settlement)

Constructive Notice

  • Purchaser will be held to have constructive notice, which would have come to his interest, if he had made enquiries and inspeactions a reasonable purchaser would have made in their position.
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Investigation of title

  • Vendor is required to provide an 'abstract of title', detailing documentary evidence of his entitlement to the legal fee simple that he is purporting to sell to the purchaser.

Prudent Purchaser Test

  • Distinctin between registered and unregistered land
  • Details of land gleamed from historic documents
  • Seller has to provide an abstract of title - documentary evidence of seller's entitlement to sell - lists as to how the fee simple got to him - like a papertrail
  • Document can outline how far purchaser can insist papertrail can go back for
  • Gradually reduced now to 15 years, a prudent seller would have gone all the way back
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Inspection of the Land

Hunt v Luck

  • The rule that the purchaser must also inspect the land
  • A purchaser was held to have notice of all the rights of a tenant who was in occupation of the land, but not of the rights of the landlord from whom the tenant derived his title.
  • A purchaser runs the risk of having constructive notice of any rights belonging to anyone in occupation, and should ensure that enquiries are made of any such person
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Imputed Notice

  • Where a purchaser employs an agent for the purposes of the transaction, any notice which is received by the agent is imputed to the principal
  • The inclusion of imputed notice in the doctrine of notice is essential since purchasers and mortgages almost invariably act through agents and it would be unacceptable for their principals to be able to claim absence of notice on the basis they did not personally receive notice of equitable intersts
  • It would be no less unfair to impute to a purchaser, notice of a relevant equitable interests which the agent happened to have received in the context of another transaction, and the rule if now restrcited to notice acquired in the same transaction
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Successors of the bona fide purchaser

Wilkes v Spooner

  • The bona fide purchaser for value of the legal estate will take free of any equitable interests of which he does not have notice
  • Anyone who later acquires the legal esate from that purchaser also takes free of the equitable interest, even if he actuall knows about it.
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