PROPRIETARY RIGHTS AND CONTRACTS Purpose of annexation:
Hamp v Bygrave This is the dominant test of the two.
REAL PROPERTY AND PERSONAL PROPERTY:
Botham v TSB Bank If the object is intended to be permanent and
Personal property = anything owned that is movable. provide lasting improvement to building, it is deemed to be a fixture.
Real property = permanent property that is immovable and anything If temporary and not necessary, it will be a chattel. – eg. bath, sink,
that is attached to the land. lavatory = fixtures; dishwasher, cooker, curtains = chattels.
Personal property (chattels): Leigh v Taylor Only fixed for personal enjoyment. – eg. tapestry or
an artwork is a chattel.
This includes possessions that movable and owned by someone.
Personal property is not affixed to or associated with the land. Holland v Hodgson Dry-stone wall, per Blackburn J, is a fixture
despite no attachment due to purpose.
Personal property includes tangible and intangible items.
D’Eyncourt Tapestries, stone statues, garden seats, vases, integral to
Tangible items = items that can be felt/touched. – eg. furniture, design of land are fixtures.
business equipment, vehicles.
Holland v Hodgson Purpose of annexation is judged objectively.
Intangible items = items that canno be felt.touched. – eg. money,
stocks, bonds, intellectual property, goodwill, reputation.
Other factors:
Real property – What is included in land?
Botham v TSB Bank List of other factors the court will take into
Real property is permanently fixed to one location and it includes the account: *Extra marks*
land, buildings, crops and minerals found on the land. * If the object is part of the overall design of the building
* The moveability of the object – if moved regularly, probably
Rights relation to a land will extend to: a chattel
1. The surface of the land * Damage caused to the land/building when moved – if great
2. The lower airspace above the land damage, likely a fixture
3. The ground below the surface area * Installation of the object – if installed by a builder, likely a
4. Buildings/Parts of buildings found on land fixture, if installed by an independent contractor, likely a
5. Wild plants growing on land (not including commercially grown chattel.
plants which will belong on the person who planted them)
6. Wild animals killed on the land (not including living animals that
don’t belong to anyone) PROPRIETARY RIGHTS:
7. The soil over which water flows (up to the middle of the river if
flowing between two plots) Proprietary rights = rights concerning the ownership of land.
8. Incorporeal hereditaments = intangible rights that benefit the
land Proprietary rights may:
9. Fixtures on the land 1. Vary – they may be extensive or quite narrow. – eg. possession
of the land to the exclusion of others is an extensive rights, while
The lower airspace above the land: the right to fish on property is more narrow.
2. Concern what you can or cannot do over the land that you
Only part of the airspace will be deemed as part of the land which is physically possess. – eg. possession might not mean that ability
necessary for the ordinary enjoyment of land. to carry on a business on the land.
3. Be numerous over one land – so possible to have more than 1.
Anchor Brewhouse Developments v Berkley House (Docklands
Developments) Ltd Invasion of the lower airspace amounts to trespass. Proprietary rights are distinctive:
As land is unique and generally an expensive purchase, so the rights
Civil Aviation Act 1982 Aircraft may pass over land at a reasonable surrounding it are distinctive. Proprietary rights are enforceable against
height without it being deemed as trespass. the person who granted it, and also against those who come over to the
land.
Bernstein of Leigh (Baron) v Skyviews & General Ltd Interference with
the upper airspace will not amount to trespass. There may be lots of proprietary rights over one piece of land. However,
Land law tries to ensure that any given land is not overburdened by a
The ground below the surface area: multitude of rights being exercised over it. There may be rights over a
land that are not given proprietary status, these rights remain personal
This includes mines and minerals only.
Coal Industry Act 1994 Coal is automatically owned by the Coal
Authority.
Proprietary rights Personal rights
Fixtures on the land: • Rights in rem = Enforceable • Rights in personam = Enforceable
against the land itself only against the person who
• If the holder of the right is granted it and not against the land.
Where a chattel has become attached to the land/building on it, it may denied that rights, they will be • The only option for breach of a
become a part of the land by becoming a fixture. able to seek action to recover personal right is sue for breach of
the land. contract
Holland v Hodgson This will depend on: • Enforceable against third • Not enforceable against third
1. Degree of annexation to the land/building – the greater the parties parties
annexation, the more likely it is a fixture. If no annexation, then
it is a chattel only.
AND OWNERSHIP OF LAND:
2. Purpose of annexation
All land in England and Wales is technically owned by the Crown. At
Melluish v BMI The label the parties give to the object is not conclusive most, individuals could have an estate in land.
of its status.
Estate in land = proprietary rights in land to physically possess, use,
Degree of annexation: enjoy and deal with the land to the exclusion of others.
Chelsea Yacht Houseboat can be removed without damage despite s.1 Law of Property Act 1925 All estates and interests in land are
attachments to land so this means it is a chattel. A permanent home capable of being proprietary rights, and you will find the list below. If
is not necessarily a fixture. a right is not on the list, it cannot be proprietary, it can only be personal
– meaning that the right is not attached to the land.
Elitestone Ltd v Morris If it is not possible to move shack without
destroying it, despite no attachment to land, it is a fixture. If a Personal rights to do bind third parties and the only remedy for breach
sculpture can be removed without damage or diminishing its will be damages paid by the grantor, not the subsequent owner.
inherent beauty, it is deemed to be a chattel.
Land law – All chapters – Revision notes | Page 1 of 24
, • will have instructed a surveyor to carry out structural reports,
Estates in land: • see whether the owner actually has the right to sell it,
• burden on the land,
1. Freehold: *Outright ownership* • interests which the land had the benefit of
Freehold = “fee simple absolute in possession” – it will last for When satisfied with the condition of the property and everything else,
an unlimited time. then will go ahead with the contract. Once exchanged, the deal
becomes binding and both parties are legally obliged to go ahead with
All land must have a freehold owner. If the owner cannot be the sale. This is done by dating the contract.
traced, the ownership is held by the Crown.
STAGE 2 – Deed:
s.1(1)(a) Law of Property Act 1925 Freehold is one of the estates The seller transfers the property to the buyer.
in land.
STAGE 3 – Registration of Title:
2. Leasehold: *Renting* The buyer will be registered with the Land Registry as the new owner.
Leasehold = “term of year absolute”, meaning an estate granted Effect of a binding contract:
out of freehold. The owner of a freehold could choose to rent
someone a leasehold estate of all or part of the land. – it will last Seller = has absolute ownership of freehold.
for a fixed period of time – eg. 4 weeks, 4 years, any period.
Seller and buyer enter into a s.2 compliant contract
s.1(1)(b) LPA 1925 Leasehold is one of the estates in land.
Both estates in land sit below the Crown’s ownership.
Seller still has the legal title, but at this point,
Interests in land: Buyer now has an equitable interest, an “estate contract”.
Interest in land = a powerful right which one person has over another’s “Equity regards done which ought to be done.” – The buyer has an
land. These rights do not confer a right to possession. equitable interest in the land which can be enforced.
1. Easements – Such as a right of way This equitable interest is capable of binding third parties.
2. Mortgages – Loans for a house
3. Restrictive covenants – Eg. cannot operate a business Remedies for breach:
4. Estate contracts • Damages for breach of contract – available as a right
5. Beneficial interest behind a trust • But also equitable remedies as the buyer has possibly lost the
house of their dreams:
Legal or equitable interests? • Coatworth v Johnson Specific performance for the sale
to go ahead
There are two types of interests in land, legal or equitable. • Injunction to stop the seller to sell the house to
someone else
s.1(2) LPA 1925 List of legal interests:
• Easements Coatworth v Johnson Equitable remedies are not available as a right,
• Mortgages but these are granted at the court’s discretion. If the buyer has also
breached the contract or is in the wrong for any other reason, the
s.1(3) List of equitable interests: equitable remedy may not be granted. “You must come with clean hand
• Estate contracts for equity to grant relief.”
• Restrictive covenants
• Beneficial interests behind a trust
Acquiring a leasehold:
FORMALITIES FOR LAND CONTRACTS: Process:
Land contracts require additional requirements to normal contracts STAGE 1 – Contract: s.2 LP(MP)A
studied in contract law as property is the highest value asset you can
contract on and therefore, additional safeguards are required. STAGE 2 – Deed:
Exception: no need for a deed if the lease is for 3 years or less
Normal contract rules apply – these will not be assessed;
• Offer STAGE 3 – Registration of Title:
• Acceptance Exception: no need to register title if the lease is for 7 years or less
• Consideration
• Intention to create legal relations Effect of a binding contract:
• Absence of Misrepresentation
The same as above, a contract will create an equitable estate if the
s.2 Law of Property (Miscellaneous Provisions) Act 1989 Formalities formalities have been complied with.
for contracts created by an interest or estate in land (contract on/after
27/09/1989): CONTRACT FORMALITIES:
• Must be in writing
• Must contain all the terms of the agreement Types of estate contracts:
AND ¾ Deliberately created contracts:
• Both parties must sign the contract – but contracts may be • Contract to grant a lease – Walsh v Londsdale
exchanged – here the parties sign their own copies and • Contract to sell freehold land
exchange it with one another. In this case, the contract • Option to purchase
becomes binding when exchanged. • Right of pre-emption (= an exclusive right to buy a land
within a period of time, such as 6 months/a year)
The contract may also refer to another document which will then be
incorporated into the contract by reference. – eg. on sale, repair works ¾ Inadvertently created contracts/Failed legal estates and
may be a required to be carried out by the seller and in this case, the interest:
contract may refer to the seller report. • Equitable easements
• Equitable mortgages
s.2 Formalities are required when acquiring a freehold estate. • Equitable leases
Acquiring a freehold: These contracts (1. and 2.) must all comply with the s.2 LP(MP)A
formalities.
Process:
No need to comply with s.2 LP(MP)A:
STAGE 1 – Contract: 1. Contract to grant a lease with a term not more than 3 years –
The buyer and seller will enter into a contract for sale. This will set out s.54(2) LPA 1925
the contract price, the agreed completion date, and the key term. 2. Auctions
3. The creation of rights in property under resulting, implied or
Prior to entering into the transaction, the buyer will carry out: constructive trusts – s.53(2) LPA 1925
• searches of the land
Land law – All chapters – Revision notes | Page 2 of 24
, Cases on s.2 LP(MP)A 1989: ACQUIRING A FREEHOLD – STAGE 3 (REGISTRATION):
Firstpost Homes v Johnson If only the plan was signed and the contract Today most land is registered at Land Registry which will show proof
was not, then contract does not comply with s.2. of ownership. However, before this system came into existence
CA held: the letter was the actual contract in this case and signature on ownership of land was proved by showing title deeds to the buyer. This
the plan only did not suffice. There was no s.2 compliant contract task has proved to be administratively difficult as the title deeds often
because the lack of signature on the letter. dated back hundreds of years and contained the transfer documents
for each transaction (chain of ownership of land).
Tootal Clothing v Guinea Properties When the formalities are used to
get out of obligations and the contract relating to land also contains You are free to check any address on the system for £6.
another term, the court may uphold that term even if it did not comply
with s.2. This system was introduced in 1925 by the LPA 1925. Although this new
Facts: Tootal Clothing had been granted a lease for 25 years. The tenant system was introduced about 100 years ago still to this day around 20%
was to carry out fitting works to the property. On satisfactory of all land in England and Wales remains unregistered.
completion of these works the owner of the land was to pay the tenant
£30,000. The landlord failed to pay. Land Registration Act 2002 Made registration compulsory on all sales
Held: the court view this as an attempt by the landlord to get out of the of land and other transactions.
contract after the completion has taken place.
What happens after a transaction:
Wright v Robert Leonard Developments The remedy of rectification • If land is sold, the buyer must register themselves as the new
may be available if: owner of the land with Land Registry.
1. A term, previously available to the parties that was intended to • At this stage the seller’s name will be replaced by the buyer’s
be included in the contract is omitted by mistake AND name at the Proprietorship Register.
2. It would be unjust not to amend the contract.
Registration is compulsory for:
Oun v Ahmad The remedy of rectification may be rejected if the • s.4 LRA 2002 First registration of unregistered land on a
omitted term was expressly excluded (not by mistake). triggering event (=eg. sale of land).
• s.27 LRA 2002 On the disposition of land already registered.
North Eastern Properties v Coleman A contract contains all the terms
if it contains all the terms relating to the property. Events which trigger registration under s.4 and 27 LRA 2002:
Facts: a contract for the sale of 11 flats was entered into. In the actual • Sale of land
contract, only 8% of the discount was reflected and it was agreed that • Gifting of land
the buyer would then submit a separate invoice to get the other 2%. • Assent of land on inheritance
CA Held: the buyer argued that because the 2% discount was omitted • Grant of a mortgage
from the contract this meant that the contract was not s.2 compliant as • Grant of a lease for more than 7 years
it did not contain all the terms. Court rejected this argument. The
contract was still compliant with the formalities as they did contain all Effect of non-registration: s.7 LRA 2002
the terms relating to the property as only the 8% discount was relating • If non-registration of registered land – legal title not acquired.
to the property and the other 2% was relating to the wider transaction. Buyer has equitable title which can be enforced
• If non-registration of unregistered land – legal title passes with
McCausland v Duncan Lawrie A variation to the contract must also deed but reverts to the seller after 2 months. Buyer has
comply with s.2 in order for it to be valid. equitable title which can be enforced
Facts: two solicitors agreed on a completion date that fell on a Sunday.
After noticing this they agreed orally that they would make sure to A land may remain unregistered if no triggering events occurred since
complete the transaction the preceding Friday. However this did not the LRA came into force.
happen and one of the solicitors issued a notice to complete. The
question was whether this agreement to change the completion date
was enforceable. CREATION AND TRANSFER OF A LEGAL LEASE:
Creation:
ACQUIRING A FREEHOLD – STAGE 2 (DEED): s.52 LPA 1925 Must be created by a deed, except if the lease is for 3
years or less.
s.52(1) LPA 1925 A legal estate must be transferred or created by a s.1 LP(MP)A 1989 Sets out the requirements of a deed – the deed must
deed. comply with the requirements.
Deed = the document that transfers the legal estate to the buyer. Transfer (assignment):
Must be transferred by a deed, even if it was not created by a deed. –
s.1 LP(MP)A 1989 Deed formalities: eg. maybe because the lease was for 3 years or less.
• Must be clear on the face of the document that it is intended to
be a deed When having a long-term lease but the leaseholder does not need the
• Validly executed by the Seller/transferor: land, they may want to find someone else to take on the lease. In this
¾ signed in the presence of a witness (over 18 and not a case, the lease will be transferred (assigned).
member of the family) and
¾ delivered/dated. Exception to deed requirement:
s.54(2) LPA 1925 Need not register leasehold if:
The back of an envelope could amount to a deed if it complies with 1. It is for a term of 3 years or less AND
these requirements. 2. Fixed term/express periodic/implied periodic
s.2 LP(MP)A 1989 Effects of an invalid deed: s.54(2) LPA 1925 Document need not even be in writing if:
• Treats the failed deed as a contract – a promise to convey the 1. In possession
estate 2. Best rent (= market rent)
• This entitled the buyer to insist on the transfer of the freehold. 3. With no fine or premium paid
• The contract must still comply with s.2 LP(MP)A formalities
s.54(2) LPA 1925 Creation of a short lease can be oral or implied and
Example: the law will recognise it.
The parties have already agreed to sell the house and a date for Crago v Julian (1992) But you cannot assign an existing lease orally. Any
completion is agreed. A deposit will then be paid by the buyer to the assignment must be done by deed.
seller and at this point, the buyer now has an equitable interest in the
house (estate contract).
REGISTRATION OF A LEGAL LEASE:
On the date of completion, the buyer solicitor will send the purchase
money to their client. Once received the seller solicitors will call the Legal lease for more than 7 years:
buyer solicitor and at this moment both parties will date the deed they s.27 LRA 2002 Substantive registration requirement: The lease must
hold that will then be signed by their client in the presence of a witness. be registered and will be entered into the Charges register of the
At this stage, the house will have been transferred to the buyer. freehold title.
Effects of non-registration: it will not be a valid lease, simply an
equitable lease until registered.
Land law – All chapters – Revision notes | Page 3 of 24
