Interests in Land

Question 1

Interests in Land

Answer 1

Allow a person to do something in or over the land of another or prevent the landowner from doing something with his land.

Do not give any form of ownership.

Create proprietary rights - holder can transfer or sell interest to another or enforce interest v a new owner.

Question 2

Licences

Answer 2

Do not give the licensee an interest in the land over which the licence is exercised.

Create a personal right

Cannot bind 3rd party successors.

Question 3

What are the 3 legal interests in land under LPA 1925 S1(2)?

Answer 3

Legal Easements, e.g. rights of way, drainage

Mortgages

Rights of Entry

Question 4

What formalities under LPA 1925 are required to create a legal interest?

Answer 4

Must be listed in LPA 1925 s1(2) as a legal interest

Must comply with the definition

Must be created by deed - s52 LPA 1925 (except implied easements)

Must be substantively registered (except implied easements)

Question 5

What creates an equitable interest under s1(3) LPA 1925?

Answer 5

If an interest is inherently equitable – not listed as a legal interest in LPA 1925, s1(2)

Person creating the interest only holds an equitable estate in land

Failed legal interest

Must satisfy minimum requirement for creating an interest in land under LPA 1925, s53(1)(a)

Question 6

Restrictive Covenants

Answer 6

An equitable interest which will burden/bind land belonging to the person who made the promise

e.g. A person may own a piece of land and promises with neighbour he will only use for residential purposes

Question 7

Beneficial Interests Under a Trust

Answer 7

Where land is conveyed to a trustee in fee simple upon trust for a beneficiary.

Trustee is the legal owner.

Equitable interest passes to the beneficiary so they have right of enjoyment.

Must meet requirements under LPA 1925, s53(1)(b)

Question 8

Estate Contracts

Answer 8

A contractual right to a legal estate.

Equity will order specific performance of a contract to create or transfer a legal estate.

• Contract to grant a lease
• Contract to sell freehold land
• Option to purchase
• Right of pre-emption
• Failed legal estates

Must comply with S2(LP(MP)A 1989

Question 9

Option to purchase

Answer 9

Right given by the owner of land to another person to purchase land within a stated period of time.

Question 10

Right of pre-emption

Answer 10

Right of first refusal. Owner of the land agrees to offer the land to the holder of the right, should the owner decide to sell the land in the future.

Question 11

What are the formalities to transfer an equitable interest under LPA 1925, s53(1)(c)?

Answer 11

Valid contract - must comply with LP(MP)A 1989, s2

Specific performance must be available

Question 12

What remedies are available under a legal interest?

Answer 12

Can seek damages as a right

Equitable remedies are also available

Question 13

What remedies are available under an equitable interest?

Answer 13

Specific Performance

Injunction

Rescission of a contract

Rectification

*These remedies are discretionary, subject to equitable principles.

Question 14

Injunction

Answer 14

Order for someone either to put right a defect or refrain from committing a particular act

Question 15

Rescission of Contract

Answer 15

Order restoring the parties to their pre-contractual or former position.

Question 16

Rectification

Answer 16

Right to correct a written instrument which mistakenly fails to record the true agreement made

Question 17

Mercer v Liverpool, St Helen’s and South Lancs Railway Company [1903]

Answer 17

Legal rights bind the whole world, including successors in title

Question 18

Re Nisbet and Potts’ Contract [1906]

Answer 18

Pre-1926, equitable interests were not automatically binding on a successor in title to the land affected

Where the successor was a bona fide purchaser for value of a legal estate without notice of the prior interest, he would take the land free from the interest.

Equity’s Darling