UCL FACULTY OF LAWS

PROPERTY LAW I 2017-8

LECTURE 3

LEGAL ESTATES AND LEGAL INTERESTS IN LAND

1. A Reminder

Cohen, DPP, 374: we may find it useful to distinguish those rights that apply
only against the contracting party and those rights that apply against the world
at large and call rights of the latter kind property rights. I dont say that this strict
definition of property is universally followed, but I think generally we will find it more
useful than any broader definition of property.

2. An Example

Example 1: Hill v Tupper (1863) 2 H & C 122

A X: also puts boats on canal

As promise to give
B an exclusive right
to put boats on canal
Can B assert a right against X?

Does the contract between A and B give B a property right in As land?

No: Pollock CB at 127-8: it is not competent to create rights unconnected with the
use and enjoyment of land, and annex them to it so as to constitute a property in the
grantee [B]. This grant merely operates as a licence or covenant on the part of the
grantors [A], and is binding on them as between themselves and [B], but gives [B] no
right of action in his own name for any infringement of the supposed exclusive right.

A new species of incorporeal heridatement [ie a legal property right] cannot be

created at the will and pleasure of the owner of property, but he must be content to
accept the estate and the right to dispose of it subject to the law as settled by decisions
or controlled by acts of parliament.

See too Keppell v Bailey (1834) 2 My & K 517: Lord Brougham LC at 535: There
are certain known incidents to property and its enjoyment; among others, certain

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burdens wherewith it may be affected, or rights which may be created and may be
enjoyed over it by parties other than the owner; all which incidents are recognised by
the lawAll these kinds of property, however, all these holdings, are well known to
the law and familiarly dealt with by its principles. But it must not therefore be
supposed that incidents of a novel kind can be devised and attached to property
at the fancy and 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 givengreat
detriment would arise and much confusion of rights if parties were allowed to
invent new modes of holding and enjoying real property, and to impress upon
their lands and tenements a peculiar character, which should follow them into all
hands, however remote.

Nicholas, An Introduction to Roman Law (1962): This difference between owning

and being owed is expressed by the Roman lawyer in the distinction between actions in
rem and actions in personam...in substance one action asserts a right over a thing, the
other a right against a person, and hence comes the modern dichotomy between rights
in rem and rights in personam.

Birks, Five Keys to Land Law (1998): What is the difference [between rights in rem
and rights in personam]. The practical difference bears on this question. Against whom
can the right be demanded?...A right in rem is a right the exigibility of which is defined
by the location of a thing. The exigibility of a right in personam is defined by the
location of the person.

3. Limits on the Content of Legal Property Rights

Law of Property Act 1925, s 1:

(1) The only estates in land which are capable of subsisting or being conveyed or
created at law are
(a) An estate in fee simple absolute in possession;
(b) A term of years absolute.

Legal estates in land

Name Content
Freehold* Ownership without limit of time
Lease Ownership for a limited period

NB We will use the term freehold as a shorthand version of fee simple absolute in
possession even though, strictly speaking, there are other forms of freehold estate
(2) The only interests or charges in or over land which are capable of subsisting or of
being conveyed or created at law are
(a) An easement, right or privilege in or over land for an interest equivalent to
an estate in fee simple absolute in possession or a term of years absolute;

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 (b) A rentcharge in possession issuing out of or charged on land being either
perpetual or for a term of years absolute;
(c) A charge by way of legal mortgage;
(d) Any other similar charge on land which is not created by an instrument;
(e) Rights of entry exercisable over or in respect of a legal term of years
absolute, or annexed, for any purpose, to a legal rentcharge.

(3) All other estates, interests, and charges in or over land take effect as equitable
interests.

Legal interests in land

Name Content
Easement Right, benefitting Bs land, to make a
particular, limited use of As land
Charge Security right over As land

4. Legal Estates

4.1 Estates and ownership

- Harriss argument (Property and Justice, 1996): (i) the concept of ownership is
crucial to defining the content of a freehold and of a lease; and (ii) ownership involves
open-ended rights

- The difference between a lease and a licence: Lord Templeman in Street v Mountford
[1985] AC 809 at 816: if B has a lease, then B is able to exercise the rights of an
owner of land which is in the real sense his land, albeit temporarily and subject to
certain restrictions

Note Lord Hoffmann Hunter v Canary Wharf Ltd [1997] AC 655 at 703: even a
possession which is wrongful against the true owner can found an action for trespass
or nuisance against someone else. In each case, however, the plaintiff (or joint
plaintiffs) must be enjoying or asserting exclusive possession of the land. Exclusive
possession distinguishes an occupier who may in due course acquire title under the
Limitation Act 1980 from a mere trespasser. It distinguishes a tenant holding a
leasehold estate from a mere licensee. Exclusive possession de jure or de facto, now
or in the future, is the bedrock of English land law.

4.2 Freeholds and escheat

I Williams, The Certainty of Term Requirement in Leases: Nothing Lasts Forever

[2015] CLJ 592, 599: The fee simple always was, and remains in English law, an
estate which can end. The common law doctrine of estates recognises no perpetual
rights in land. At best the fee simple estate is potentially perpetual, a crucially
important distinction.

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Medieval and early-modern lawyers understood this point very well. An attempt to
grant land forever failed to convey a fee simple. A fee simple was a grant of land to
X and his heirs. If X died without heirs, or his line of heirs ended at any point, the fee
simple estate would end and the land escheat to the feudal lord, now more or less
invariably the Crown...Escheat for want of heirs was abolished by the Administration
of Estates Act 1925, which instead provides that, if a person dies without any heir
entitled to receive their estate, the Crown takes the property as bona vacantia.

4.3 Leases as ownership for a period

LPA s. 1(1)(b): A term of years absolute

See e.g. Prudential Assurance v London Residuary Body [1992] 2 AC 386 (HL): an
agreement that B should have exclusive possession of As land until the land is needed
for road-widening does not, in itself, create a lease: Lord Templeman at 396: A grant
for an uncertain term does not create a lease. A grant for an uncertain term which takes
the form of a yearly tenancy which cannot be determined by the landlord does not
create a lease.

4.4 Other estates?

LPA s. 1(3) All other estates, interests, and charges in or over land take effect as
equitable interests.

So if B has e.g. a life estate/ remainder, then the legal estate (freehold or lease) must be
held on trust for B and others LPA s. 2 then makes clear that a party buying the legal
estate may have a defence to Bs equitable interest: the overreaching defence

5. Legal Interests

- The key point is that the content of Bs right is limited: it does not involve ownership
of any land e.g. an easement cannot give B exclusive possession of As land (as we will
see in Topic 17).