#16148 - Ownership Overview - Land Law

Property - Introduction

• Attributes of property

  • Ability to be bought and sold, though contracts can be seen as purchase of something other than property, and silence regarding non-confidential information can be bought

  • Right to exclude others, over third parties without rights or those with inferior rights

• Property extend beyond ownership (eg. leases) but the numerus clausus rule recognizes a finite number of proprietary rights and doesn’t allow parties to create new ones

• Property extends beyond physical objects (shares, rights of action, intellectual property) and conversely not all physical objects can form property (human body/parts/corpses)

• Ownership is the ultimate right to use and abuse, but it is not absolute (eg. nuisance, planning permission). It can be split between different people (eg. lease). English law rarely calls on proof of ownership to assert rights; usually possession/rights to possession are enough because they sufficiently prove a better right than others.

• Distinctions

  • Realty (land) vs personalty (choses in possession, choses in action, intellectual property)

    • The permanence of land allows the creation of a greater variety of rights, including long-term rights and permanent arrangements with adjoining landowners for the efficient use of land.

    • Land is especially valuable and requires formalities

    • English law distinction originates in medieval creation of rights in rem which do not protect leases, so leases count as personalty categorized as “chattels real”

    • 1925 property reforms reduced the distinction, but some remain – eg. realty capable of creating a wide range of interests, and need to be registered

  • Choses in possession (physical objects) vs choses in action (incorporeal things)

  • Intellectual property, usually recognized by statute

  • Legal vs equitable rights

    • Equitable interests are narrower in binding purchasers and approach is more discretionary

Central Concerns of Property Law

• Which interests are proprietary?

  • Proprietary rights bind third parties (eg. purchasers of those who created the right) automatically – thus, the focus is on right and not the third party’s conduct (unlike tortious and contractual remedies against third parties, like the tort of inducing breach)

  • Proprietary rights are assignable (though non-proprietary rights can also be)

  • Proprietary rights are specifically enforceable (property, rather than its value, is recoverable) though other rights, like contracts, may also be

  • Parties cannot create novel proprietary rights (numerus clausus)

    • Avoids imposing unreasonable burdens on property buyers by ensuring certainty of which rights might be at play, though this problem is less severe now that interests must be registered to be binding

    • Wide range of proprietary rights renders ownership less attractive and risks economically inefficient property use

  • Licenses (permission to enter that do not amount to lease or easement) are not proprietary – this is controversial and subject to much litigation

• Methods of creation and transfer

• Rights of parties

• Effect on purchasers

  • Not all proprietary interests automatically bind every purchaser: purchasers for value without notice are not bound by equitable interests

  • Some rights are subject to overreaching, which may affect purchasers in different ways

Property Interests: Interests in land

• Tenures – all land is owned by the Crown of which individuals are tenants

  • Traditionally, control over tenures allowed the Crown to collect payment and hold other rights

  • Today the significance lies in encouraging development of estates in land by rejecting the idea of absolute ownership of land and thus making ownership easier to split

• Freehold estates – define the length of time for which the right to the land will last

  • Can be concurrent (owned by multiple individuals) either as a joint tenancy (land vests automatically in survivors when a joint tenant dies) or tenancy in common (interest passes by will or intestacy)

  • Fee simple – a perpetual right to the land that passes on the death of the holder by will or intestacy

    • Fee simple absolute in possession is most common and akin to ownership

    • Extends to land below the surface and to air above as long as the use of the land is affected (airspace = trespass, but flying over at appropriate height is not because it doesn’t affect use of land)

    • Flying freeholds make it possible to sever land horizontally (eg. apartment flats) but long leases are preferred because of difficulties such as if the flat burns down

    • Grantors can create “absolute fee”, or “qualified fee” (interests that terminate in certain circumstances) usually to place obligations on grantees. Qualified fees are either conditional or determinable.

      • Criticism:

        • Effects of determining and conditional fees are very different (eg. when a terminating event is held to be invalid, the entire determining grant is void whereas a conditional grant becomes a fee simple absolute; public policy’s ability to invalidate determining events) though their categorization depends merely on drafting

        • Inconsistency in case law on the validity of terminating events in relation to alienation, and the unsatisfactory distinction between determinable and conditional fees

        • Usually giving the parties multiple choices to accomplish a single objective is because there are substantial advantages of each option (eg. joint tenancy vs tenancy in common) but there is little advantage in the conditional fee because a much larger variety of terminating events are struck down – there is no need to retain both

    • NB a qualified fee to go to a third party upon termination (to A, but if A remarries then to B) is not a conditional fee because 1) B has a “contingent” or “executory” interest not a right of entry and 2) it applies to a life estate

Conditional vs Determinable Fees

Validity of Determining Events

• Fee Tail (entail) – descends to the lineal descendants (eldest male child) of the grantee to ensure that land remains within the family

  • Trusts of Land and Appointment of Trustees Act 1996 prohibits the creation of new fee tails and any attempts take effect as declaration of trust in favour of purported holder

  • Unstable – holder can ‘disentail’ to create a fee simple absolute and destroy the original fee simple in remainder or reversion (that operates if holder dies)

• Life estates – right to land for life of grantee or other person (“to X as long as Y lives”) and upon expiry goes to the holder of next estate

  • Can be qualified in the same way as fee simple

  • Law needs to balance interests...