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Lecture notes, lectures 1-8

Land Law (University of Leeds)

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Adam Baker Law 2270 and

3270
Land Law 2015-2016

GENERAL PRINCIPLES AND CONCEPTS

Reading

Essential

Dixon, “Modern Land Law” (2014) 1-26

Smith, “Property Law” (2014), chs 1, 2, 4, 5, 6 and 8

Macfarlane, Hopkins and Nield, “Land Law: Text, Cases and Materials” (2015)
chs 1, 2 and 5 and 6

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1. THE CONCEPT OF ‘PROPERTY’

1.1 Meaning of ‘Property’

difference between subject matter of the right, and the right itself
The term ‘property’ can be used in three different senses:

a. to describe physical things. Land could be such a thing (e.g. “that field is
my property”), as could ‘chattels’ (choses in possession), these being any
tangible property which is not land, such as books and chairs.

b. to describe rights in those physical things. This is a more technical sense

of the term ‘property’. To be an ‘owner’ of a land, for example, is to have
certain rights in it. If the owner was to sell the land, what they are strictly
selling is those rights. Likewise if they made a gift of it, what they are passing
is those rights. In this abstract sense, property is theorised as a ‘bundle of
rights’ in the relevant asset.

When the term ‘property’ is used in this sense, the right-holder is said to
have a ‘proprietary right’: see Section 3. ‘Land Law’ is essentially the
study of proprietary rights existing over the physical entity of land.

c. to describe choses in action. These are intangible assets such as

contractual rights, shares in companies, patents, copyrights and debts.

1.2 Real Property and Personal Property

The terms ‘real property’ and ‘realty’ are often used to describe both land (as a
physical entity) and proprietary rights in it. The expressions ‘personal property’ and
‘personalty’, by contrast, describe property that is not real property. It therefore
covers chattels (and proprietary rights over them) and choses in action.

Due to a quirk of history, there is one type of proprietary right over land that is not
classified as ‘real property’: the leasehold estate. These rights rank as personal
property, and are designated as ‘chattels real’. No study of proprietary rights in land,
however, would not include look at leasehold estates. This is an important reason
why this module is called ‘Land Law’ rather than ‘Real Property Law’.

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Property: real and personal.

Real (land + rights in land . except leasehold estates)
Personal: (chattels and the rights in them; choses in action and leasehold estates)
2. THE TANGIBLE SENSE OF ‘LAND’

2.1 Introduction
defining the physical sense in land

could be relevant when buying a house or inheriting land.

In this section we are concerned with ‘land’ in the sense of a physical asset. Broadly
speaking, ‘land’ in this regard extends to the following:

i. the ground below the surface to a reasonable depth (Section 2.2);

ii. the surface, including constructions that are ‘part and parcel of the land’ and
fixtures (Section 2.3); and

iii. a certain portion of the airspace above the surface (Section 2.4).

2.2 The ground below the surface

It is well-established that ‘land’ extends down below the surface, so that an owner
may bring an action in respect of any subterranean trespass.
If it didn’t wouldn’t be able to even plant a flower or dig a hole in own back garden.
The real q: HOW FAR DOWN?

Illustrates that it goes some way down:

Edwards v Lee’s Administrator (1936) 96 S.W. 2d. 1028

Edwards’ land included the entrance to a cave. He allowed guests to visit the cave
for a fee.
A third of the cave lied under the surface of Lee’s land. Lee successfully sued
Edwards in trespass to land.

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In Bocardo SA v Star Energy UK Onshore Ltd [2011] 1 A.C. 380, it was held that an
owner’s entitlement extends down to the point at which physical features (such as
pressure and temperature) render the concept of ownership absurd. In that case the
boring of three pipelines between 800 and 2,800 feet below the ground was held to
be capable of being a trespass to land.
There are nevertheless certain exceptions to the principle of subterranean
ownership. For example, the ownership of all unworked coal is vested by statute in
the Coal Authority (Coal Industry Act 1994, ss 1(1) and 7(3)); and all rights in
petroleum (inclusive of mineral oil and natural gas) existing in its natural condition in
strata are vested in the crown (Petroleum Act 1998, ss 1(a) and 2(1)).

2.3 The surface, including vegetation, constructions and fixtures

Ownership of the surface of ‘land’ extends to things such as trees, hedges, plants
and flowers, whether cultivated or wild. More difficulties are sometimes caused by
the status of constructions and alleged ‘fixtures’.

Constructions include things such as houses, dry stone walls and garages. Very
often these will be deemed to have merged with, and so become ‘part and parcel of’,
the relevant land. In some rare cases, however, a construction may remain a chattel.
Similarly in cases of objects other than constructions that are brought onto land, the
question is whether they are ‘fixtures’ or retain their status as chattels. If the item is a
fixture it is deemed to lose its identity as personal property and instead become part
of the land in question.
Some things brought on to the land become part of the land. i.e. bricks (then used to
make a garage which is part of the land)
Some things remain personal property, i.e. one brick brought on to the land remains
personal property i.e. not part of the land

Can matter if land is being sold – what is included in the purchase price ?

Part of the land – fixture

No? a chattel
HoL intervene. New test: does it rest on its own weight or is it attached in any way.
Not a massive difference:

The burden of proof in both instances turns on whether the item is attached to the
land or merely rests on its own weight. If it is attached the burden of proof is on the
party seeking to show that it is a chattel, and vice versa. What is the objective
purpose: (what does the reasonable person think?) The key issue in either event is
the ‘objective’ purpose for which the item is present; that is, whether it is objectively
there to form a lasting improvement to the land or merely present so that it can be
enjoyed of itself: Holland v Hodgson (1872) L.R. 7 C.P. 328, 335. The test is

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objective because it looks to what a reasonable onlooker would make of matters, as

opposed to what the party who brought the item or sited the construction subjectively
intended.

Botham v TSB Bank Plc (Unreported, 30 July 1996)

Fixtures : bathroom fittings e.g. towel rails, taps) and kitchen units e.g.
fitted sink

Chattels: fitted carpets, curtains and blinds; kitchen white goods; light
fittings.

D’Eyncourt v Gregory (1866-67) L.R. 3 Eq. 382

Statues, figures, vases, though not secured to the land in any way, were
held to be fixtures because they were regarded as part of the architectural
design of the house.

On the application of this test to constructions, Lord Lloyd has explained in

Elitestone Ltd v Morris [1997] 1 W.L.R. 687, 693:

If construction can’t be moved save by destruction, it is part of the land

“A house which is constructed in such a way so as to be removable, whether

as a unit, or in sections, may well remain a chattel, even though it is
connected temporarily to mains services such as water and electricity. But a
house which is constructed in such a way that it cannot be removed at all,
save by destruction, cannot have been intended to remain as a chattel. It
must have been intended to form part of the realty.”

If the construction is built in such a way as to be removable, then the question

becomes more difficult. The relevant factors in this event are very much like those
applied in the cases concerning alleged fixtures.

2.4 A portion of airspace

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‘Land’ extends to such portion of the above airspace as is necessary for the
reasonable enjoyment of it at ground level. Any unauthorised entry into this airspace
is hence actionable as a trespass to land: Bernstein v Skyways & General Ltd [1978]
Q.B 479.

3. PROPRIETARY RIGHTS IN LAND

3.1 Introduction

Thus far we have explored the meaning of land in its tangible sense. It has also been
noted, however, that the term ‘property’ extends to rights in that physical asset. Land
law is centrally concerned with the study of these ‘proprietary rights’. In this section
we will explain the significance, and introduce some types, of them.

3.2 Proprietary (property) rights and personal rights

fundamental to understand that not every right is a proprietary right
explaining why this distinction is important
3.2.1 The distinction

A property right over physical property is often called a ‘proprietary right’. In land law
such rights are also sometimes referred to as ‘interests in land’ or ‘rights in rem’.
Proprietary rights are very significant because they are capable of enforcement
against third parties. In particular:

a. Proprietary rights have the capacity to be enforced against future owners of

the land. See slide 21. When a right is so enforceable, it is often described as
being ‘binding’ on the new owner in question.

B owns field. A has proprietary right to walk across the field. B sells field to C, A
assert right to cross field against C.
- example of third party impact.

D (neighbour) causes an obstruction on the field that substantially interferes with A’s
right to walk across it. A may claim damages (/an injunction) against D

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The idea of capacity in this respect is important. A proprietary right may in

principle be enforceable against a later owner, but whether it actually is
depends on rules to be considered in this module (most notably in topic
7). See also Sections 4.3.2 and 5.3, below.

b. Proprietary rights may be enforced against other third parties who interfere
with their exercise. See slide 22.1

In these respects proprietary rights may be sharply distinguished from ‘personal’

ones. Personal rights are enforceable only against the other party/parties to them. A
contractual right is a good example of this: it is exercisable only against the other
person(s) who have promised performance under the contract. (no comparable 3 rd
party impact) Personal rights do not, therefore, affect future owners of the land
(slides 23–24); and third parties who interfere with them are not generally subject to
any liability (Hill v Tupper (1863) 2 Hurl. & C. 121; slides 25–26).

A company owned a canal. It give Hill the ‘exclusive right’ to put pleasure boats for
hire on the canal. The right was considered to be a contractual one only (this is
significant)
Issue arose when Tupper put rival pleasure boats on canal. Hill tries unsuccessfully
to sue Tupper. The contractual right was held to be good only against the canal
owner.

Personal rights:
Bare License – gratuitous permission (not contractually binding) i.e. inviting
someone to dinner

Contractual license  right to come on to the land (in this example)

Example:
A owns cinema. Z purchases ticket to see film at the cinema  contractual license
If, before Z sees the film, A has sold the cinema to B, Z has no right against B to see
the film. Can only seek damages for breach of contract against previous owner.

With that said, however, there is by statute one type of personal right that may be
potentially enforced against later owners of the land: the so-called ‘matrimonial home
right’. We will consider this entitlement further in topic 7.

3.2.2 Limits on proprietary rights

1
This is clearly so of ‘legal’ property rights. Whether it is also true as regards ‘equitable’ ones is a contentious
point; but is not an issue of importance in our syllabus.

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Given how much importance attaches to a right being proprietary rather than
personal, the law accepts only a limited number of proprietary rights, each with
specific pre-conditions for their existence. If this was not the case, landowners would
be able to stultify the effective use of their land in the hands of its later owners by
subjecting it to frivolous proprietary rights (so-called ‘clogs upon title’). For an
example, see slides 28–29. As Brougham L.C. once remarked in Keppell v Bailey
(1834) 2 My. & K. 517, 535:
So if it meets ANY of the conditions of the proprietary rights, then it is a proprietary
right, if it does not meet any: it is a personal right

Land law recognises no proprietary right of dog exercising, therefore it is only

personal. If matters were otherwise, B could enforce her right against later owners of
the land. This could otherwise impede any productive use of it

“… it must not… be supposed that [proprietary rights] of a novel kind can be

devised… at the fancy or caprice of any owner. It is clearly inconvenient both
to the science of the law and to the public weal that such a latitude should be
given.”

Originally, whether a particular type of right could be proprietary depended upon

whether the courts were prepared to enforce it against third parties (e.g. Tulk v
Moxhay (1848) 2 Ph. 774) – which was essentially a policy choice . Since 1926,
however, statute has curtailed the ability of the courts to create new property rights
(see Sections 5.1.1 and 5.2(2)(c)).

3.3 Types of proprietary right: an overview

At the risk of some over-simplification, it may be useful to start by classifying the

allowable property rights in land as follows:

1) rights of possession of land (‘estates in land’) (Section 3.4); and

2) non-possessory rights over land,2 which break down into:

a. rights to derive a limited advantage from or over another’s land

(Section 3.5.1)

b. rights concerning the sale of estates in land (Section 3.5.2)

2
These rights are occasionally called ‘encumbrances’. Some statutes also sometimes refer to them as ‘estates’,
but such usage is uncommon and is not adopted in this module.

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c. security rights over land (Section 3.5.3).

It will be seen later (Sections 4 and 5) that proprietary rights can be ‘legal’ or
‘equitable’. For now, however, this further refinement need not trouble us.

3.4 Estates in land

3.4.1 Origins of the concept

English land law does not recognise that any person can be the ‘owner’ of land in the
sense that Civil Law systems do. This is because it is underpinned by the theory that
the Crown ‘owns’ all land, which notion has its origins in the Norman invasion of
1066. When the courts had to explain what an individual who ‘owned’ land in fact
held, they found their answer in the idea that they held an ‘estate’ in it.

3.4.2 Types of estate

“The land itself is one thing and the estate in the land is another thing, for an
estate in the land is a time in the land or land for a time.” (Walsingham's
Case (1573) 75 E.R. 805, 815.)

distinction between land as a physical asset and an estate as a right that one can
have over land

the estate in land is a time in the land or land for a time- all estates cannot exist
indefinitely. They must eventually end
numerous types of estate, named according to the slice of time one has in the land
itself
different estates can exist in the same land at the same time
- land law tenant relationship : multiple estates in the same land

An estate in land is a right to possess (i.e. enjoy) that land for a time, whether in the
present or the future. Different types of estate exist for different lengths of time. As
will also be seen, more than one estate can exist in land simultaneously.

a. Freehold estates
either absolute, conditional to determinable (condition attached to the latter two)
and in possession, in reversion or in remainder. Only concerned with absolute and in
possession.

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Eg: imagine that B has a life estate in a beach, and th C gets the land afterwards.
C has a fee simple in remainder/ reversion in the beach
When B’s life estate ends, C’s fee simile becomes one ‘in possession’

Freehold estates are of indeterminate duration. The event that will bring them to an
end is known but not predictable, in the sense that one cannot say with certainty at
the outset of their existence when that event will occur.

Leasehold estate (if taken, it means you are hiring the land) is one of determined
duration. Must be of a length that can be ascertained from the outset (so having a
fixed or calculable end date)

(i). a. Fee simple: this is the amplest estate that one can have in land. A fee
simple estate lasts for so long as the present owner of it has heirs (for
example, through sale or inheritance). This is by a considerable margin the
most common freehold estate; and it is common for its holder (or holders) to
be described as the ‘owner’ (/‘owners’) of the land.
(ii). Can be bought, sold or inherited
(iii). As close as you get to ownership.
Passes from person to person, each person steps into shoes of previus owner
Can only be brought to an end if current owner ends and there is no one to inherit.
Have to die leaving no will and no relatives who would take this land. Intestacy rules
govern land that has not been accounted for under a will in regards to other family
members.
The crown then takes the land and creates a new estate.

(iv). b. Fee tail: a fee tail estate (or ‘entail’, ‘estate tail’ or ‘entailed interest’) is one
that passes down to the lineal descendants of the ‘grantee’ (the person first
granted the right), most usually through succession by eldest male children.
Since 1 January 1997 it has not been possible to create new fee tails.
(v).
(vi).
(vii). c. Life estate: a life estate exists for the lifetime of the original grantee. Its
holder is often (albeit somewhat confusingly) called a ‘life tenant’.

Freehold estates are further classified according to whether they are (i) absolute,
conditional or determinable;
Can have a fee simple that is one of the 3. Conditional and determinable are not
important in this module, there is some condition attached and the estate ends when
this condition occurs.

and

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(ii) in possession, in reversion or in remainder. We are only really interested in

estates that are ‘absolute’ and ‘in possession’. An ‘absolute’ estate is one that cannot
be terminated early (‘determinable’ or ‘conditional’ ones can be). An estate ‘in
possession’ is one that gives a present right to enjoy land, as opposed to one (in
reversion or remainder) that gives a right to enjoy it in the future (see slide 38 for an
example).
Right to enjoy land in future rather then now if in remainder or reversion

c. Leasehold estates
- Hiring the land
- Pay rent and use the land : proprietary right in the land for however long the
leasehold lasts

A leasehold estate (a ‘term of years absolute’) 3 is one of determinate duration. This

means that its length can be ascertained from the outset (i.e. because it has an end
date that is either fixed or calculable). Another way of expressing this idea is that a
leasehold estate is for a ‘term certain’ (see topic 4 handout, pp 10–13). The holder of
a leasehold estate is often called a ‘tenant’, and usually pays a rent in return for the
estate.

When there is a leasehold estate, the holder(s) of it are entitled to possess the land
to the exclusion of the fee simple owners (the ‘landlord(s)’).

Leasehold estates can be assigned, the new tenant in this event stepping into the
shoes of the old one (for the consequences of this, see topic 5, part 2).

Although leasehold estates tend to be conferred for relatively short periods (e.g. six
months, one year or ten years) with regular rent payments to be made by the tenant,
quite a few are granted for very long periods (e.g. 99 years or 125 years), the ‘rent’
for these being paid as one up-front sum. The vast majority of flats and apartments
in England and Wales are occupied under long-term leases of this type (for reasons
which fall outside of our syllabus).

3
The word ‘absolute’ here adds nothing, because there is no such thing as a ‘conditional’ or ‘determinable’ term
of years.

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3.4.3 Creation of new freehold and leasehold estates

A new fee simple absolute in possession can be created only in specific ways. A
‘legal’ fee simple (Section 4.2) may be created by Crown grant (now very rare) or by
‘adverse possession’ (can be obtained by squatting) (considered in topic 8). An
‘equitable’ fee simple, for its part, arises when a ‘trust’ comes into existence (see
Section 4). If no fee simple has been created in a given plot of land, it is called
‘demesne land’, and it belongs to the Crown: s 132(1) of the Land Registration Act
2002.

If no fee simple has been created in a given plot of land- it is called demesne land)
(belongs to the crown)

Other estates could also in theory be created by the Crown. In practice, however,
they are conferred by existing estate holders. For instance, a holder of a fee simple
in possession could grant a leasehold estate to another, retaining their fee simple in
the process.

3.5 Non-possessory rights in land

3.5.1 Rights of limited advantage over another’s land

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There are numerous privileges of this type, many of which are quite rare, and some
of which are very common. Some of these rights will be considered in detail, or at
least touched upon, in this module. Examples of rights in this bracket include:

(viii). Easements: rights held by one landowner to enjoy some limited privilege over
the land of a nearby landowner (e.g. a right of way), not being a profit à
prendre (below).

(ix). Profits à prendre: rights to take something off the land of another (e.g. turf,
soil, timber or wild animals).
(x).
(xi). Restrictive covenants: when a landowner makes a promise, in favour of a
nearby landowner, not to do something on their land (e.g. to build on it), such
a ‘restrictive covenant’ can give the covenantee a proprietary right over the
covenantor’s land.

(xii).
3.5.2 Rights concerning the sale of estates land

A good example of a privilege of this type is an option to purchase. This right allows
its holder to demand a sale of a particular estate to them, at any time during a
specified period, for a pre-agreed price. Another illustration is provided by rights of
pre-emption (Land Registration Act 2002, s 115), which are akin to rights of first
refusal if the landowner in question decides to sell their land.

3.5.3 Security rights over land

Estates in land are often very valuable. If an estate is offered as collateral for the
payment of a loan, the lender takes a proprietary right in the land in question. Such
rights are called ‘mortgages’ or ‘charges’. We consider these in topic 2.

3.5.4 Creation of such non-possessory rights

The ‘non-possessory’ rights just described can only be created by estate holders. A
holder of a fee simple absolute in possession in a field could, for example, enter into
a restrictive covenant with a neighbour (X) that they will not build on their land, give
Y an easement to walk across the field, and confer on Z an option to purchase the
fee simple at any time before 2020 for the sum of £500,000. In this event X, Y and Z
would all have proprietary rights over the land in question.

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4. THE TRUST

4.1 Origins of the concept

The concept of a ‘trust’ has its origins in the 13 th and 14th centuries. For a variety of
reasons there arose a desire by landowners (i.e. those holding some estate in the
land) to leave their estate to another person (say, X), the understanding being that X
would hold the estate ‘to the use of’ some other individual(s) (say, Y). Thus although
X would hold the estate in question, they were intended to exercise their powers as
the holder of it to benefit Y (for instance, by renting out the land and giving the rent to
Y or by letting Y occupy the land).
Give fee simple to manage but someone else enjoy.

The difficulty arose when this confidence was breached. The common law courts
refused to act; for as far as they were concerned X was the owner of the estate, the
understanding on the basis of which they took it creating no more than a moral duty.
In consequence, parties who were intended to have the enjoyment of the land in
question began to petition the King (and from the 1300s the King’s Chancellor, who
came to preside over the ‘Court of Chancery’). A different view of matters was taken
by the Chancellor. Although not denying that X was the owner of the estate in
question, he nevertheless decreed that it would be unconscionable for X to ignore
the claim of Y. The Chancellor would thus order that such estate-holders carried out
the directions imposed on them. The persons in whose favour such performance
was decreed became known as ‘beneficiaries’.

Such intervention by the Chancellor would have been futile had the duty imposed
been one availing against only the current estate holder (i.e. X). In this event such an
obligation would have been easily defeated by the expedient of X passing the estate
onto a third party. Inevitably, therefore, the Court of Chancery came to regard the
right to performance enjoyed by the beneficiaries as capable of being enforced
against some persons to whom the affected estate was transferred (Section 4.3.2,
below). At this crucial stage the rights of the beneficiaries became proprietary.

No equitable estate if there is no legal estate

Only be equitable estate if a common law estate holder has to use the land for a
beneficiaries’ benefit

In any given plot of lland, there must be a legal estate and there may also be an
equitable estate

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4.2 The ‘equitable estate’ and ‘equitable ownership’

With the advent of proprietary status for the rights of beneficiaries came a new
subtlety in judicial language. An estate could be described as ‘legal’ if it was one
recognised and enforced in the common law courts. 4 The rights of beneficiaries as
were enforced in the Court of Chancery, by contrast, came to be treated as
‘equitable’ estates.5 The Court of Chancery modelled these ‘equitable estates’ on the
types of legal estate known to the common law courts. In the simple case in which a
legal fee simple holder became obliged to user their powers for the benefit of
another, that other person would take an equitable fee simple.

When a trust exists, it is very common for those holding the equitable estate(s) to be
called the ‘equitable owner(s)’ or ‘beneficial owner(s)’. 6 The equitable fee simple
absolute is often also called the ‘beneficial interest’ or the ‘equitable interest’. 7 By
contrast, the holder(s) of the legal estate can (at the risk of some inaccuracy) be
called the ‘legal owner(s)’.

So whenever obliged to hold the land for someone, they have the equivalent estate
that is called an equitable estate
So if you have a legal fee simple, they have an equitable fee simple

4.3 Trusts today

The essence of the trust arrangement is that although the holder(s) of the legal
estate enjoy the powers that come with it, they must use them for the benefit of
whichever person(s) hold the equitable estate(s). The trustees must hence manage
the land for the equitable owner(s). The equitable owner(s)’ enjoyment of the land
could, for example, mean their occupying it. They are also the ones who are entitled
to claim any sale monies if the land is sold, and any rent if the land is leased out.

Since the Supreme Court of Judicature Act 1873, there have ceased to be separate
courts of common law and Chancery. There is instead a unified court structure, in
which trusts are recognised and enforced in all courts.

With the coming into force of the Law of Property Act 1925 (on 1 January 1926), the
only estates that can be legal are the fee simple absolute in possession and the
leasehold estate: s 1 LPA 1925. Presuming that the land is not ‘demesne’ land, this
means that in any given plot of land there must be a legal fee simple estate (which

4
But note that, today, statutory reforms mean that only the legal fee simple absolute in possession and the term
of years absolute can be legal estates: see Section 4.3, below.
5
The word ‘equitable’ indicates that they were the creation of the Court of Chancery, which administered the
body of law known as ‘Equity’.
6
Some authors (such as McFarlane, Hopkins and Nield (2015)) would strictly reject the language of ‘equitable
ownership’. The correctness of this view lies outside of our syllabus.
7
The term ‘equitable interest’ is also used to describe other types of proprietary right that are ‘equitable’ (see
Section 5), so it is important to be clear about the sense in which the term is being used.

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cannot be broken up into lesser legal freehold estates). This estate represents the
‘legal ownership’ of the land. It may or may not be held on trust (see Section 4.3.1,
below), in which event there must necessary be an equitable estate – and for our
purposes this is always an equitable fee simple.

It is important to note also that there is no prohibition on a person being both a

trustee (a legal estate holder) and a beneficiary. Such trusts are very common. One
could arise, for instance, if the trustee was directed to hold the land for the benefit of
herself and another (see slide 58–61).
A leasehold estate may also be held on trust; we will explore this further in topic 4.

Equitable ownership could establish in a way which is difficult for the outside world to
figure out

4.3.1 When trusts arise

Today trusts arise in a number of scenarios. Crucially, they go well beyond the
historical situation in which trusts originally arose, as was described above. They are
dealt with more fully in topics 2 and 3. All we need to note for now is that, if a legal
fee simple estate is not held on trust, its holder is called the ‘absolute owner’.

4.3.2 Purchasers and land held on trust

We have already seen that equitable (beneficial) estates, as proprietary rights, can
bind purchasers of land. The precise details of when this occurs are considered in
detail topic 7.

One point is, however, worth stressing even at this stage. Even when land is held on
trust, and so the equitable ownership of land is, in theory, the ‘valuable’ ownership of
it, prospective purchasers of land will virtually always look to buy, not the equitable
fee simple, but the legal one. To a student just starting out with land law this can
seem counter-intuitive, but there are in fact very good reasons for this.

i. Whereas the legal ownership of land is quite easy to establish (see Section 6,
below), the equitable ownership of land may be much harder to work out, so that
a prospective purchaser of the equitable estate may be unsure who to deal with.

ii. It is a fundamental policy of the Law of Property Act 1925 that any prudent buyer
of a legal fee simple can ensure that they take free of any equitable estate
affecting the land. This is done by triggering the doctrine of ‘overreaching’. A
buyer who ‘overreaches’ in effect wipes the slate clean of the former equitable

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ownership of the land at the moment of purchase. Overreaching is looked at in

topic 7.

 doctrine of overreaching.
Buy legal fee simple and ensure overreaching happens, then don’t need to worry
about equitable ownership as it is wiped away when you buy the land

Why worry about equitable owners when you don’t need to

These two points are closely linked. One of the reasons why there is no drive to
ensure that equitable ownership of land is clearly ascertainable by prospective
purchasers is precisely that there is no need for it to be so, because intending buyers
can instead purchase the legal fee simple and rely on overreaching.

5. LEGAL AND EQUITABLE PROPRIETARY RIGHTS

5.1 Introduction
no deed no right

As well as giving rise to the trust, the Court of Chancery also recognised other
proprietary rights, so to alleviate the hardship caused by the courts of the common
law. This ‘hardship’ was caused because the common law courts: (i) adhered to
exacting ‘formality’ requirements (i.e. a deed) for the creation of almost all of the
proprietary rights that they did recognise; and (ii) refused to recognise some rights
(such as restrictive covenants) as capable of being proprietary at all.

Consistently with this perceived hardship, the Court of Chancery was prepared to
recognise and enforce a right in two situations:

i. When the parties had intended to create a legal property right, but did not do
so in a way that met the required ‘formality’ for its creation.

ii. When the common law courts refused to recognise a particular type of
property right at all, but the Court of Chancery felt that such a right was
appropriate.

In light of this development, those proprietary rights recognised in the common law
courts came to be described as ‘legal’ proprietary rights, and those enforced in the
Court of Chancery were called ‘equitable’ proprietary rights.

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5.1.1 The impact of statute

In more recent times these historical underpinnings have been slightly obscured.
One of the reasons for this is that the formerly separate courts of common law and
equity were combined by the Supreme Court of Judicature Act 1873, so that both
legal and equitable rights are enforceable in any court. This change did not,
however, alter the substance of the rules at ‘common law’ or at ‘Equity’. 8 In other
words, legal and equitable proprietary rights continued to be governed by the same
rules as they had been before the 1873 Act, just meant they could be enforced in the
same court.

More recently, the historical background has been further obscured by s 1 of the Law
of Property Act 1925. This provision stipulates for only a limited number of rights that
can be legal (s 1(1)-(2)) and adds that any other proprietary right can only be
equitable (s 1(3)). This means that range of legal proprietary rights today is narrower
than it was historically, and the range of equitable property rights is wider. See slides
67–69.

There are important differences as between legal and equitable property rights. In
particular: (i) legal rights must usually be created with more formality than equitable
rights (see Section 5.2, below)); and (ii) legal rights are more likely to bind
purchasers of land than equitable ones (see Section 5.3, below).

5.2 The creation of legal and equitable proprietary rights

The modern position could be summarised by saying that:

1) If one wishes to create a legal property right, 9 (i) the right must be listed in s
1(1)-(2) LPA:
(ii) one must be a legal estate holder;
(iii) the right must be created in accordance with the required formalities.

As to the final of these conditions, the general rule is that there

must be a deed: s 52 of the Law of Property Act 1925 (the

8
Somewhat confusingly, the term ‘common law’ is often used to describe all judge-made law, including the laws
coming under the heading of ‘Equity’. This is often done when distinguishing such judge-made law from statute
law or that applied in Civil law systems. In other contexts, however, the term ‘common law’ is still used to indicate
all judge-made law excluding Equity, so to contrast the two branches of law. Which sense of the term is being
used should, nevertheless, be clear the context.
9
For this purpose we exclude the legal fee simple absolute in possession. As was seen in Section 3.4.3, a legal
fee simple estate can only be granted by the Crown or else arise by adverse possession.

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requirements for which are to be found in s 1 of the Law of

Property (Miscellaneous Provisions) Act 1989). Often the right
must also be ‘registered’ (see topic 7). There are however
some exceptions to the basic rule, which we will consider as
and when they are relevant in this module.

2) An equitable proprietary right will arise in four situations.

a) Firstly, if the parties meant to create a right that could be legal (i.e. one
listed in s 1(1)-(2) LPA), did not use the required ‘formality’ for its
creation, but Walsh v Lonsdale (1882) 21 Ch. D. 9 applies.

Under Walsh, the attempt to create a legal proprietary right is

treated as merely an agreement to create one. Because Equity
‘treats as done that which ought to be done’, the party in whose
favour the right was intended will get the equivalent equitable
right instead.

In order for the doctrine in Walsh v Lonsdale to apply today, the

parties’ agreement10 must be in writing and signed by both
parties (s 2(1) of the Law of Property (Miscellaneous
Provisions) Act 1989), and it must be specifically performable.
In terms of this latter point, however, land is always treated as
unique.

b) Secondly, if there arises a trust of a legal estate, in which case the

beneficiary/beneficiaries will take an equitable estate in land (Section
4, above)

c) Thirdly, if the parties intended to create some other (i.e. not a

beneficial) right only capable of being equitable (i.e. not one in s 1(1)-
(2) LPA), and they meet the necessary formalities for its creation.

Examples of the rights not listed in s 1(1)–(2) include options to

purchase, restrictive covenants and rights of pre-emption.
Different formality requirements apply to such rights. Those
concerning the sale of estates in land (Section 3.5.2) must be
10
This ‘agreement’, it has been contended, is really just a fiction. The parties did not agree that one would grant
to the other a legal property right; they attempted to actually create one.

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in writing and signed by both parties (s 2(1) LP(MP)A 1989).

Others privileges must be created in accordance with s 53(1)(a)
of the Law of Property Act 1925, 11 which requires that it be in
writing and signed by the person purporting to create the right.

It is unclear whether it is open to the courts to accept entirely

new equitable proprietary rights in this category; some authors
argue that this is prohibited by s 4(1) LPA 1925.

d) Fourthly, under the doctrine of proprietary estoppel (this is considered

in topic 2).

5.3 Impact of legal and equitable proprietary rights on third parties

As between the parties to the creation of a property right (other than an estate) that
can be either legal or equitable (i.e. one listed in s 1(2) LPA 1925), whether it is one
or the other usually makes little difference to their relationship inter se. Legal and
equitable proprietary rights do, however, differ in terms of their capacity to bind third
parties who later take an estate in the relevant land.

Before 1926, legal rights bound the whole world, whereas equitable rights bound
anyone unless they were a good faith purchaser of a legal estate in the land for
valuable consideration without any notice (actual, imputed or constructive) of the
relevant equitable right. Such a purchaser was called ‘Equity’s Darling’. We will
consider the modern rules on this matter in topic 7.

Legal rights more likely to bind purchsser

Some rights are perceived to be more important and so capable of being tird party
rights
Less important rights deemed by parliament have less 3 rd party impact (they ae
equitable rights)

If parties use a high degree of formality: then they deserve to be legal. More visible
to the outside world due to its more obvious creation and so deserves to be legal.
Too far to say that if they fail to use the high degree of formality then they deserve to
create no right at all.
What we say instead is they didn’t use a sufficiently high degree of formality to
create a legal right, still be allowed to create an equitable right, so long as they meet
a lower level of formality.
Created with less formality so has less third party impacts as it is less discoverable.
11
Whether one can use s 53(1)(a) LPA 1925 to create as equitable rights ones that could also be legal (i.e.
because they are listed in s 1 of the LPA 1925), or whether those rights can only be equitable under Walsh, is an
open academic question.

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So if fail to use highest formality, they can instead make the equitable equivalent

5.4 Transferring legal and equitable interests in land

Some proprietary rights (e.g. easements) can only exist if attached to an estate in
land, and so can only be passed on to a third party as part of a transfer of that estate
to them. Other rights can be transferred independently. In either situation, a valid
transfer of a proprietary right (whether an estate or a non-possessory privilege) must
comply with certain formality requirements in order to be valid:

a) In order to transfer a legal proprietary right (e.g. a legal fee simple), one must
use a deed: Law of Property Act 1925, s 52.

b) A valid transfer of an equitable proprietary right must be in writing and be

signed by the person transferring it: Law of Property Act 1925, s 53(1)(b).

Note also that any contract containing an obligation to sell or transfer an interest in
land must be in writing and signed by both parties: s 2(1) of the Law of Property
(Miscellaneous Provisions) Act 1989.

6. REGISTERED AND UNREGISTERED LAND

why is legal ownership easy to prove

6.1 Legal estates are ‘registered’ or ‘unregistered’

Thus far it has been seen that persons do not ‘own’ land but in fact hold estates in it.
It has also been explained that the only estates that can be legal estates are the fee
simple absolute in possession and the term of years absolute.

All legal estates in land are ‘unregistered’ or ‘registered’. An estate is ‘registered’

when the title to it (i.e. ownership of it) is recorded with its own title number at the
Land Registry, and ‘unregistered’ when it is not so recorded. With a registered
estate, therefore, one may prove its ownership by reference to the register kept by
the Land Registry; whereas ownership of unregistered estates is ordinarily shown
through the title deeds. It should be emphasised that, once an estate becomes
registered, it cannot at any point thereafter become unregistered once again.

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In practice, lawyers and writers often talk about ‘registered land’ and ‘unregistered
land’. In strictness this is potentially misleading, as it is very much possible to have a
plot of land, one estate in which (e.g. the legal fee simple) is registered, but another
estate in which (e.g. a legal leasehold estate) is unregistered. Nevertheless, the
common parlance is useful provided that this point is understood.

6.2 The move towards registration of title

Although registration of title goes back to the 1800s, the vast majority of estates
were unregistered when, on 1 January 1926, the Land Registration Act 1925 (now
superseded by the Land Registration Act 2002) came into force. Since then there
has commenced a steady and inexorable movement towards title registration. Today
some 95% of legal fee simple estates are registered.

As we will see in topic 7, any sale or gift of an unregistered legal fee simple must be
registered within three months of the transfer. It is thereafter a registered estate.

A key reason for the shift toward registration of title is that conveyancing involving
registered estates is seen to be less complicated, less time-consuming and therefore
cheaper than conveyancing involving unregistered estates. The rules governing
when proprietary interests (e.g. easements) affecting registered estates bind
purchasers of the estate are also often perceived to be fairer. We will consider the
rules of both ‘unregistered land’ and ‘registered land’ in this regard in topic 7.

7. CONCLUSION

7.1 A bird’s-eye view of topic one

7.1.1. The legal fee simple as ‘ownership’ of a plot

Imagine any plot of land in England and Wales. The ‘plot’, for this purpose, includes
not only its surface, but also constructions that are ‘part and parcel’ of it, fixtures on
it, the ground below the surface to a reasonable depth and a portion of the airspace
above.

Presuming that our plot of land is not ‘demesne land’, there will be a legal fee simple
estate. This legal fee simple will originate either: (i) in a Crown grant; or (ii) from a

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taking of adverse possession. One cannot break this estate up into smaller legal
freehold estates (e.g. a life interest followed by a fee simple in remainder).

The ownership of this legal fee simple can be seen as the ‘legal ownership’ of the
land. The current ownership of this legal fee simple is usually ascertained by the
Land Registry record (for registered estates), but sometimes occasionally by the title
deeds (for unregistered estates). This estate can be bought and sold. A deed is
necessary for its transfer, as is registration if it is registered.

7.1.2 There may or may not be a trust of the legal fee simple

The legal fee simple in our plot of land may or may not be held on trust. If it is not,
the legal fee simple holder is the ‘absolute owner’. If however it is held on trust then,
in all of the cases that concern us, 12 this will mean that there is an equitable fee
simple in the plot of land. The holder(s) of this equitable fee simple are the
‘beneficiaries’ or ‘equitable owners’; those who have the legal fee simple are the
‘trustees’. Not uncommonly, the trustees and beneficiaries are the same persons. In
essence, when there is a trust the holder(s) of the legal estate enjoy the powers that
come with it, but must manage the land for the benefit of the equitable owner(s).

An equitable fee simple is a proprietary right, and so may bind buyers of the legal fee
simple. Nevertheless, prospective purchasers of the land will still virtually always
wish to buy the legal fee simple. If the seller is the ‘absolute owner’ this is readily
comprehensible; but even when the land is held on trust, any prudent buyer can
ensure that, when they buy the land, they will take free of any equitable fee simple
affecting it. This can most obviously be done by the process of ‘overreaching’.

7.1.3 There may or may not be a leasehold estate

Various other rights may exist over our plot of land. One of the most important such
rights is the leasehold estate. Such an estate may be granted by the legal fee simple
owner(s) of the land.13 It can be legal or equitable; this will depend on the formality
with which it was created.

When there is a leasehold estate, the holder(s) of it (‘the tenant(s)’) are entitled to
possess the land to the exclusion of the legal fee simple owners (the ‘landlord(s)’),

12
Other equitable estates can also operate behind a trust (e.g. an equitable life estate followed by an equitable
fee simple in remainder/reversion), but we are not really concerned with this.
13
An equitable fee simple owner could also grant an equitable lease.

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as well any equitable fee simple owners if there is a trust. The lease agreement will
usually provide that an ongoing rent is payable in return for this possession. 14

Leasehold estates can be assigned, the new tenant in this event stepping into the
shoes of the old one. They can also be held on trust in the same way as legal fee
simple estates.

7.1.4 There could be other (non-estate) proprietary rights and personal rights

Finally, the legal owner(s)15 may have conferred other rights over our plot of land.
Some of these rights may be ‘personal’ (e.g. a contractual right to play cricket; an
oral permission to have a picnic); and these privileges will not bind any purchaser of
the land.

The legal owner(s) may also have granted proprietary rights over the land. These
rights can be legal or equitable. Whether a privilege is legal or equitable will depend
on what type of right it is and how it was created. These rights can in principle bind
later purchasers of the legal fee simple, in accordance with the rules to be
considered in topic 7.

7.2 Policy issues in land law

Although it is sometimes a quite technical subject, one should not assume that land
law is not also beset by policy tensions. Some of the more long-standing issues
include:

a. the extent to which new proprietary rights should be recognised, or else the
pre-conditions for existing rights be loosened/tightened up;

b. how far the courts should adapt the law to protect persons who, for whatever
reason, are perceived to be vulnerable;

14
Matters differ if our plot of land has flats or apartments on it. In this event it is standard that the legal fee simple
owner(s) to have granted very long leasehold estates (e.g. 125 years) over each of the flats, paid for upfront by
the original tenant. Due to its length, and the lack of a continuing obligation to pay rent, such an estate is loosely
treated as if it represents the ‘ownership’ of the flat in question.
15
Tenants can also grant property rights over land, but not for a longer duration than their lease. They can also
confer personal rights. Equitable owners can grant equitable rights over the land, but this is uncommon in
practice and not important in our module.

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c. how best to balance the competing – or, at least, the often perceived to be
competing – interests of banks and other financial institutions against ‘family’
interests;

d. how best to resolve the tension between the desire for certainty in dealings
with land with the perceived unfairness that this sometimes causes;

e. how to best regulate (both by statute and common law) the relationship
between parties with a proprietary relationship (most notably, that between
the parties to a mortgage and those who are in a landlord-tenant relationship);
and

f. how much of an effect the Human Rights Act 1998 should have on land law.
As well as its impact on questions of statutory interpretation, it is claimed by
some authors that, eventually, the Act will lead to the recognition of new,
‘human property rights’ in land, which will exceptionally prevail over legal or
equitable rights.

As will be seen during this module, land law can also be looked at through the prism
of jurisprudence. We will often encounter decisions that raise fundamental questions
about why judges decide cases in the way that they do.

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