Equity and Equitable interests in Land Flashcards
What are the 5 types of estates/interests that are capable of being legal interests rather than equitable ones?
A fee simple, lease, easement, rentcharge or mortgage.
What types of interests are equitable?
Other interests such as the restrictive covenant, estoppel equity and beneficial interest under trust.
What is a fee simple?
When the land is completely owned and, therefore is capable of being inherited by the land owner’s heirs. It has no time limits and can last indefinitely.
What is a lease?
A lease is conferred by a landlord onto a tenant and grants to the lessee a right of exclusive possession for a finite period of time. The period of time can be fixed or may be periodically extended.
What is an easement?
Easements are certain rights that a person has over another’s land e.g. a right of way.
What is a rentcharge?
A rentcharge is an annual sum paid by a freehold homeowner to a third party who normally has no other interest in the property.
What is the difference between a leasehold and a freehold?
Freehold – You own the property and the land it’s built on for as long as you want. Leasehold – You own the property for a set period, but not the land it’s built on.
What is a restrictive covenant?
A restrictive covenant is a contract between 2 landowners. One landowner promises the other landowner not to carry out certain acts on their own land. Restrictive covenants usually happen when somebody selling land wishes to restrict what the buyer can do with it.
What is a trust?
A trust arises where A (the trustee) has a right (the trust property) and is under a duty to use that right for the benefit of B (or B and others, known as the ‘beneficiaries’), as well as a duty not to use that right for A’s own benefit. If another party has specifically set up the trust, that party is often referred to as the ‘settlor’.
Imagine a case where A holds a legal estate in land on trust for B. In what way can A, the trustee, be described as the ‘owner’ of the land?
The trustee has a legal title and access to common law courts and remedies, and is therefore ‘owner’ in that sense. However, in any sensible usage of the term, he is not an owner, as he must use his rights for the benefit of B.
Is there such a thing as an equitable estate in land?
No. It is possible for B to have an equitable interest in land that is akin to a legal estate (as will occur, for example, where A holds a legal freehold or lease on trust for B). However, the wording of the Law of Property Act 1925 means that, in such a case, B’s right is defined as an equitable interest, rather than an equitable estate.
What are the facts of Rhone v Stephens [1994]?
G owned a neighbouring house and a cottage initially.
The house and cottage were passed through a series of owners until they were in the hands of B and R respectively.
R claimed that B was under an obligation to repair a roof that covered part of the cottage and was leaking.
R supported its claim with the original conveyance: clause 3 stated that G and his successors in title of the house will maintain the roof to ensure that it is wind and water tight.
R also argued that since G took the benefit of support from his cottage, he should have the burden of the covenant to maintain the roof
Did the House of Lords find in favour of the Rhones? What was the chief reason the House of Lords gave for its decision?
Mr and Mrs Rhone were unsuccessful in their claim. Due to its content, the right that they were claiming was not recognised as a legal or equitable property right in land. It was held that, at common law, an agreement to perform a positive act (such as repairing a roof) could not impose a duty on a third party (such as Ms Stephens) under the burden of covenants. To do so would ‘contradict the common law’ rule that a third party cannot be made liable for a contract they were not party to.
According to Lord Wilberforce’s speech in National Provincial Bank v Ainsworth, what qualities must a right have to be capable of being recognized as an equitable property right?
The right must be definable, identifiable by third parties, capable in its nature of assumption by third parties, permanent, and stable.
What is the importance of formalities in the acquisition of equitable property rights?
Formality rules apply to regulate the acquisition of both legal and equitable property rights in land. Nonetheless, the formality rules applying to equitable property rights are less demanding and, due to their nature, equitable property rights are more likely to arise informally.
