14. Mortgages

This chapter discusses mortgages, specifically mortgage creation, legal mortgages, equitable mortgages, and priority of mortgages. A mortgage is a debt secured on land. A legal mortgage in registered land can now be created only by means of a legal charge under the Land Registration Act 2002, s. 23(1)(a). The mortgagor has a bundle of rights known as the ‘equity of redemption’. If the mortgagee attempts to gain any unconscionable advantage by means of the mortgage, the courts will strike it down. The mortgagee has five potential remedies to recover the debt: an action on the mortgagor’s personal covenant; repossession; sale; appointment of a receiver; and foreclosure. The doctrine of undue influence is important in the law of mortgages. Provided the mortgagee bank follows the steps outlined by the House of Lords in Royal Bank of Scotland v. Etridge (No. 2), it will be protected against a claim for undue influence.

11. Trusts of land

This chapter focuses on what the law requires of trustees of land and how it protects the beneficiaries of those trusts. All trusts of land are now governed by the statutory framework set out in the Trusts of Land and Appointment of Trustees Act 1996. The Act sets out the rights and responsibilities of trustees, and the rights of beneficiaries, under a trust of land. Trustees have extensive powers over the land, but have a duty to act in the interests of the beneficiaries, to consult them, and to give effect to their wishes where possible. The beneficiaries (with an interest in possession) have a right to occupy the land, although the trustees have the power, under certain circumstances, to restrict or exclude them from occupation. The chapter also discusses the powers of the court under TOLATA 1996; cases of bankruptcy; and the Settled Land Act 1925.

5. Leases

This chapter discusses the leasehold estate, or ‘term of years absolute’—more commonly referred to as simply a ‘lease’. It begins by defining the most frequently used terms in this area of law, followed by some examples of leases in practice. It discusses the creation of a lease and explains the essential characteristics of a lease, including whether or not the payment of rent is necessary. It looks at how leases may be ended. It then considers the statutory protection provided by the law for the tenant and discusses tenancy agreements. Next, the chapter discusses some typical leasehold covenants, and considers the assignment and running of leasehold covenants. Finally, it looks at a relatively new development in land law called the commonhold.

2. The structure of land law

This chapter discusses the origins and structure of modern land law, tracing the development of two kinds of estates and interests: at common law and in equity. It discusses the meaning of estates in land, and legal and equitable rights; examines the differences between the two; and explains why it matters whether a right in land is legal or equitable. The different effects of legal and equitable interests on purchasers of land are noted, because common law acts in rem and equity in personam. This gave rise to the doctrine of notice. The reforms introduced by the 1925 Property Acts are explained, including reduction of legal estates in land to two: the fee simple absolute in possession (freehold) and term of years absolute (leasehold)—Law of Property act 1925 s. 1(1). Registration of land charges partially reformed the doctrine of notice, and overreaching was introduced. The Land Registration Act 1925 introduced compulsory registration of title; there are now two systems: registered and unregistered land.

6. Adverse possession

This chapter discusses the law on adverse possession. It first considers arguments for and against allowing adverse possession. It then describes changes in the law of adverse possession and outlines the main statutory provisions, namely the Limitation Act 1980, the Land Registration Act 1925, and the Land Registration Act 2002. Next, the chapter discusses what a squatter needs to show to make a claim to the land; the influence of human rights law on adverse possession; and the effects of adverse possession. The old scheme under the Limitation Act 1980 and the new scheme under the Land Registration Act 2002 are compared.

13. Covenants in freehold land

This chapter focuses on covenants in freehold land. A covenant is a promise made by one landowner to another regarding the use of freehold land. Enforceability is not a problem when considering the original parties to a covenant. The parties have simply entered into a contract with each other. Complications are caused, however, by Law Property Act 1925, s. 56(1), which extends the scope of persons who may be counted as original covenantees, and the Contracts (Rights of Third Parties) Act 1999 (C(RTP)A 1999), which enables the benefit of a contract to be given to those who are not parties to it. The common law and equitable rules for passing of the benefit and burden of a covenant, positive covenants, breach of covenants, modification and discharge of covenants, and proposals for reform are discussed.

9. Trusts and the family home

This chapter discusses a form of ‘implied’ co-ownership—the situation in which the law recognizes that co-ownership in a property has arisen, even though this is sometimes far from the intention of the parties. It looks at how implied co-ownership arises, either through a resulting or constructive trust. It discusses in detail the two-stage process that gives rise to the court identifying that the existence of a common intention constructive trust has been established, and looks at how the courts have considered this process over many years. It then considers how the court approaches quantification of shares in the property. Finally it looks at the many proposals for reform in this area of law.

8. Joint owners of land (co-ownership)

This chapter discusses ‘express’ co-ownership of land—the situation in which owners make a conscious decision to own land together. It first briefly defines the two types of co-ownership—joint tenancy and tenancy in common—and distinguishes between legal and equitable ownership. It then discusses legal title and equitable title in relation to joint tenancy and tenancy in common; and how to differentiate between joint tenancy and tenancy in common in practice. The chapter also considers the issue of severance, which converts the status of a co-owner from joint tenant to that of tenant in common, as well as the impact of co-ownership on the land register.

7. The sole owner of land

This chapter discusses what it means to be the ‘owner’ of a property. In registered land, whoever is entered into the proprietorship register as the registered proprietor of the property is deemed to have the authority to deal with the land as an owner. The chapter discusses three alternative scenarios when the land register shows a sole registered proprietor; the first is that the registered proprietor is the sole legal and equitable owner of the land; the second is that the registered proprietor is the sole legal owner, holding the equitable title on trust for someone else; the third is that the registered proprietor is the sole legal owner, holding the equitable title on trust for him- or herself and (an)other equitable owner(s). The chapter considers the potential dangers for equitable owners and purchasers, and explains the law that has been put in place to protect them.

3. The freehold estate

One of the most fundamental changes to land law made by the 1925 property legislation was the reduction of the number of legal estates in land to just two: the fee simple absolute in possession (freehold estate) and the term of years absolute (leasehold estate). This chapter focuses on the fee simple absolute in possession, which is the technical name for the freehold estate. It begins by considering each of the terms that make up the legal definition of legal freehold: the ‘fee simple absolute in possession’. Unless an estate satisfies each part of it, the estate cannot be a legal freehold, but must instead be an equitable interest in land. The discussions then turn to the creation and transfer of the legal freehold.