Introduction to land law - Rights in land

Learning Outcomes

This article introduces the core concepts distinguishing real property (land) from personal property (chattels). It outlines the nature of legal estates and the variety of legal and equitable interests that can exist over land in England and Wales. You will learn the basic requirements for creating and transferring these rights. This understanding is fundamental for addressing SQE1 questions involving property rights, their enforceability, and the implications of different forms of land ownership.

SQE1 Syllabus

For SQE1, you need a practical understanding of the basic concepts that define property rights in land. This involves recognising different types of rights and how they are established. As you work through this article, focus on:

• The distinction between real property and personal property.
• The different ways in which land can be held (estates).
• How legal and equitable interests in land are acquired and disposed of.
• The legal formalities required to create and transfer interests and estates in land.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which of the following best describes 'real property'?
   1. Any tangible item owned by an individual.
   2. Land and intangible rights associated with land.
   3. Money held in a bank account.
   4. Moveable items such as furniture.
2. Which of the following is NOT capable of being a legal interest under s.1(2) Law of Property Act 1925?
   1. An easement granted forever.
   2. A charge by way of legal mortgage.
   3. A restrictive covenant.
   4. A right of entry annexed to a legal lease.
3. What is generally required to create or transfer a legal estate in land?
   1. A written contract signed by both parties.
   2. A deed.
   3. An oral agreement.
   4. Registration as a land charge.

Introduction

Land law governs the rights and relationships people have concerning land. For the SQE1 assessment, a clear understanding of the foundational principles is essential. This includes understanding what constitutes ‘land’ in legal terms, the distinction between ownership rights (estates) and lesser rights (interests), and the difference between legal and equitable rights. You must also appreciate the formalities required to create and transfer these rights validly.

REAL PROPERTY AND PERSONAL PROPERTY

Property law distinguishes between two main types of property: real property and personal property. This distinction is fundamental as different rules apply to each.

Key Term: Real Property
Real property refers to land and interests in land. It is generally immovable property.

Key Term: Personal Property
Personal property encompasses all property that is not real property. It includes tangible movable objects (chattels or goods) and intangible rights (like debts or shares).

What is Land?

The legal definition of land is wider than its everyday meaning. Section 205(1)(ix) of the Law of Property Act 1925 (LPA 1925) provides a statutory definition:

• 'Land' includes land of any tenure, mines and minerals (whether held apart from the surface or not), buildings or parts of buildings, and other corporeal hereditaments.
• It also includes incorporeal hereditaments such as easements, rights, privileges, or benefits derived from land.

Corporeal hereditaments are tangible elements of land, like the soil, buildings, trees, and minerals beneath the surface (subject to statutory exceptions like coal, oil, and gas which belong to the Crown or specific bodies). Incorporeal hereditaments are intangible rights over land, such as easements (e.g., a right of way) or profits à prendre (e.g., a right to fish).

Ownership rights extend notionally upwards into the airspace and downwards into the ground, but this is limited. A landowner's rights in airspace only extend to such height as is necessary for the ordinary use and enjoyment of their land (Bernstein v Skyviews). Similarly, rights below ground do not automatically include all minerals.

Fixtures and Chattels

Items brought onto land can either remain personal property (chattels) or become part of the land itself (fixtures). Fixtures pass automatically with the land on sale, whereas chattels do not unless specified in the contract.

Key Term: Fixture
An object which was once a chattel but has become attached to the land in such a way as to be legally considered part of the land.

Key Term: Chattel
A tangible, movable item of personal property that is not considered part of the land.

To determine whether an item is a fixture or a chattel, the courts apply a two-stage test (Holland v Hodgson):

1. The degree of annexation: How firmly is the object attached to the land? Objects merely resting on their own weight are typically chattels, while those fixed securely, whose removal would cause damage, are likely fixtures.
2. The purpose of annexation: Why was the object attached? Was it to make a permanent improvement to the land (fixture) or for the better enjoyment of the object itself (chattel)? This test usually overrides the degree test.

For example, kitchen units are usually fixtures, while a freestanding cooker is typically a chattel. An ornamental statue resting by its own weight might be a chattel, unless it forms part of an overall architectural design, in which case it could be a fixture (D'Eyncourt v Gregory).

Worked Example 1.1

Amina is selling her house. The buyer assumes the large, ornate garden shed, which rests on concrete blocks but is not bolted down, is included in the sale. Amina intends to take it with her. The contract is silent on the shed. Is the shed likely a fixture or a chattel?

Answer: The shed is likely a chattel. Although large, it rests on its own weight (low degree of annexation). The purpose appears to be for the enjoyment of the shed itself rather than a permanent improvement to the land. Unless it was specifically designed as an essential part of the garden's architecture, it remains personal property that Amina can remove.

ESTATES AND INTERESTS IN LAND

In England and Wales, land is ultimately owned by the Crown. Individuals hold ‘estates’ in land, defining the duration of their ownership rights. Separately, individuals can hold ‘interests’ in land owned by others. Both estates and interests can be either legal or equitable.

Estates in Land

The LPA 1925, s.1(1), recognises only two legal estates:

1. Fee simple absolute in possession (Freehold): This is the closest equivalent to absolute ownership. ‘Fee simple’ means it can be inherited by any heir. ‘Absolute’ means ownership is not conditional. ‘In possession’ means the owner has the immediate right to enjoy the land (including receiving rent). It can last indefinitely.
2. Term of years absolute (Leasehold): This grants exclusive possession for a fixed, defined period (e.g., 99 years, 6 months, 1 week). The period must be certain from the outset.

Key Term: Estate
Defines the duration for which rights of ownership over land are held. The two legal estates are freehold and leasehold.

Interests in Land

Interests are lesser rights over someone else's land. Section 1(2) LPA 1925 lists interests capable of being legal:

• Easements: Rights over neighbouring land (e.g., right of way) for a duration equivalent to a freehold or leasehold.
• Mortgages: Rights granted to a lender over land as security for a debt.
• Rentcharges: (Now rare) A right to receive a periodic payment from the landowner.
• Rights of entry: E.g., a landlord's right to forfeit a lease for breach of covenant.
• Profits à prendre: Rights to take something natural from another's land (e.g., fishing rights).

Any other interest (e.g., restrictive covenants, beneficial interests under trusts, estate contracts like options to purchase) can only exist as an equitable interest (s.1(3) LPA 1925).

Key Term: Interest
A right that a person has over land owned by another person. Can be legal or equitable.

Legal versus Equitable Rights

The distinction is critical for enforceability, especially against third parties (purchasers).

• Legal rights: To be legal, a right must be listed in s.1(1) or s.1(2) LPA 1925 AND created using the correct formality, which usually means a deed (s.52 LPA 1925). Legal rights generally bind all subsequent owners of the land (‘bind the world’).
• Equitable rights: These include:
  • Rights not listed in s.1(1) or s.1(2) LPA 1925 (e.g., restrictive covenants, beneficial interests under trusts).
  • Rights listed in s.1(1) or s.1(2) but created without the required formality (e.g., without a deed where one is needed). Creation usually requires signed writing (s.53 LPA 1925 or s.2 LP(MP)A 1989), although implied trusts do not.

Equitable rights are enforceable against subsequent owners but may not bind a ‘bona fide purchaser for value of a legal estate without notice’ (Equity’s Darling), though registration rules now largely govern enforceability.

Key Term: Deed
A formal written document, which must make clear it is intended to be a deed and be validly executed (signed, witnessed, and delivered), generally required to create or transfer legal estates or interests in land (s.1 LP(MP)A 1989).

Key Term: Notice
In the context of equitable rights, 'notice' refers to whether a purchaser knew (actual notice), ought to have known (constructive notice), or their agent knew (imputed notice) about the right. The relevance of notice is much reduced by land registration.

Worked Example 1.2

Ravi agrees in writing, signed by both parties, to grant Sarah a right of way across his garden for the rest of her life. He does not use a deed. Sarah pays Ravi £500. Is Sarah’s right legal or equitable?

Answer: Sarah’s right is equitable. An easement (right of way) must be for a duration equivalent to a freehold (forever) or leasehold (fixed term) to be capable of being legal (s.1(2)(a) LPA 1925). A right ‘for life’ is an uncertain duration, so it cannot be legal (s.1(3) LPA 1925). Even if it were for a capable duration, it was not created by deed, although the written contract may satisfy the requirements for creating an equitable interest.

FORMALITIES

The creation and transfer of estates and interests in land require specific formalities. Failure to comply often results in the right being equitable or, in some cases, not existing at all.

• Legal Estates and Interests: Generally require a deed (s.52 LPA 1925) and, for registered land, registration under LRA 2002. Exceptions include short leases (under 3 years taking effect in possession at best rent – s.54(2) LPA 1925) and prescriptive easements.
• Equitable Interests: Usually require signed writing.
  • Contracts for sale or disposition of land interests (including equitable leases/easements arising from contract) need a document incorporating all terms, signed by both parties (s.2 LP(MP)A 1989).
  • Declarations of trust concerning land must be evidenced by signed writing (s.53(1)(b) LPA 1925).
  • Dispositions of existing equitable interests must be in signed writing (s.53(1)(c) LPA 1925).
  • Implied, resulting, and constructive trusts are exempt from formality requirements (s.53(2) LPA 1925).

Key Point Checklist

This article has covered the following key knowledge points:

• Land law distinguishes between real property (land and rights in it) and personal property (chattels).
• The legal definition of land includes physical elements and intangible rights (corporeal and incorporeal hereditaments).
• Whether an object is a fixture (part of the land) or a chattel (personal property) depends on the degree and purpose of its annexation.
• The two legal estates are freehold (fee simple absolute in possession) and leasehold (term of years absolute).
• Interests in land are lesser rights over another's land; only those listed in s.1(2) LPA 1925 can be legal (e.g., easements, mortgages). Others (e.g., restrictive covenants, trusts) are equitable.
• Creation/transfer of legal estates/interests generally requires a deed (s.52 LPA 1925) and often registration (LRA 2002).
• Creation/transfer of equitable interests generally requires signed writing (s.53 LPA 1925 or s.2 LP(MP)A 1989), except for implied trusts.
• The distinction between legal and equitable rights affects their enforceability against third parties, though registration is now the primary factor.

Key Terms and Concepts

• Real Property
• Personal Property
• Fixture
• Chattel
• Estate
• Interest
• Deed
• Notice