1. The Law of Property Act 1922 reduced the legal estates to:
a) Estates in fee simple absolute in possession (fee simple; freehold).
b) Terms of years absolute (leasehold).
The same act provided that the only legal interests or charges in or over land at law are easements, rights, or privileges in or over land for an interest equivalent to an estate in fee simple absolute in possession or a term of years absolute.
2. The fee simple
a) Historically, 'simple' served to distinguish the fee simple estate (estate of inheritance) from the fee tail estate (estate of inheritance to a particular class of heirs).
b) The holder of a fee simple is technically a tenant, but practically he is the 'owner' of the land. But ownership is a relative and not an absolute concept, because his rights are restricted by the general law of the time and place.
c) Creation of a fee simple: The LPA provides that the grantee will take the fee simple or otherwise the whole interest which the grantor had power to convey in such land, unless a contrary intention appears in the conveyance. As to wills, the Wills Act 1837 provided a similar rule for interpretation.
d) 'Absolute' signifies that the estate must be unqualified, so that laand is freely alienable. The conveyance must not be subject to conditions ('qualified'). An estate subject to a condition can be equitable only.
e) 'In possession' means that the grantee must be entitled to immediate possession of the estate. Where land is con- veyed to A and after A's death to B in fee simple B can only have an equitable interest for he is not immediately en- titled to enjoyment of the land.
f) Land subject to a lease is in practice freeely bought and sold. Who lets his land may still be in 'possession' of a fee simple estate, for 'possession' is for this purpose defined so as to include, beside actual physical enjoyment, 'the receipt of rents and profits, or the right to receive the same'.
3.Leaseholds
a) The parties to a 'term of years' or 'leasehold interest' are known as 'landlord' and 'tenant', or as 'lessor' and 'lessee'.
b) A leasehold is usually primarily a commercail relationship whereby the tenant occupies the land in return for a money consideration (rent). The essence of it is that it is based upon an agreement whereby it has been intended that the occupier should be granted exclusive possession of them for a fixed or periodic term at a stated rent: STREET v. MOUNTFORD (1985)
If there is such an agreement, the legal presumption arises that there is a landlord-tenant relationship. But this may be rebutted if the parties had no intention to create legal obligations, of if the deal is part of, say, an employment contract. It may often be the case that what has been granted is a mere licence to be in possession of the premises or of the land concerned: BINIONS v. EVANS (1972)
At common law, the licensee is protected by the contract (can't be thrown out without reasonable notice); in equity, there are devices such as the constructive trust.
c) 'A term of years' means that there is a fixed period. But tenancy can be periodic (they are determinable by either party at notice at the end of the respective period). Also, there are tenancies at sufferance where the tenant 'holds over' after the expiry of his lease.
There are also tenancies at will determinable by either party without notice which are really in essence bare licenses, but which have the attribute that if rent is paid periodically they are converted into periodic tenancies. Compare BINIONS v. EVANS (1972) - contract said 'tenancy at will'; cout said 'contractual license'.
d) Leasehold interests may subsist as legal estates even though the tenant is not to take possession at once. A term granted at a rent must, however, be limited to take effect within 21 years; otherwise it is invalid even if it is only so puporting.
e) Creation of leasholds: In order to give rise to a legal estae a lease must either be created by deed or be one which takes effect in possession for a term not exceeding three years at the best rent obtainable. All kinds of informal leases other than the latter give rise to equitable interests only.
f) Landlord-tenant relationship
aa) Landlord's obligations: He impliedly covenants that the tenant shall remain in 'quiet possession'. Besides, he must do everything that a reasonable landlord ought to do, such as keep the premises in an orderly state, keep rubbish disposal equipmant, etc.
bb) Tenant's obligations: He is liable for payment of rates and taxes (except such taxes as the landlord is under a legal obligation to pay. He is under a duty not commit waste. Of course he's got to act reasonably.
cc) Express covenants: The most important ones are:
(1) The one not to assign or underlet (if there is no such term, the tenant may assign his interest to a third party for a term shorter than his own; or he may underlet the premises). The Landlord and Tenant Act 1988 provides that the landlord, having such undertakings prohibited, must not unreasonably withhold his consent if the tenant so wishes.
(2) The one to repair. This may be either a landlord's or a tenant's covenant.
dd) Assigment of the landlord's as well as tenant's interests and obligations: 'Covenants which touch and concern the land demised run with the land'. They will bind the successors in title to either party. But there must be a direct reference to land demised, as opposed to the business conducted thereon: THOMAS v. HAYWARD (1869).
On the other hand, where, upon a lease of a restaurant, the tenant covenanted that the landlord should not be concerned in the business, it was held that this covenant directly concerned the use of the premises. The rule that covenants are effective against third parties applies only where there is privity of estate between the party suing upon the covenant and the party in breach; this means that the successors must have taken the same interest in the land as that originally created - thus covenants may run between landlord and assignee, but not bet- ween landlord and sub-tenant. See below for burden in respect of vendor-purchaser covenants.
g) Statutory provisions: Landlord and Tenant Act 1987; Leashold Reform, Housing and Urban Development Act 1993. Most notable is the tribunal system: rent officers determine a reasonable rent, which gives the tenant to right to claim against his landlord a rent reduction.
h) Determinaion of leases
aa) Leases for a fixed period expire automatically at the end of the agreed term (exceptions for farmers, business pre- mises, certain leases of residential property at low rentals for more than 21 years).
bb) Periodic leases - they expire when one full period's notice is given by either party.
II. Rights over neighboring land (iura in alieno solo)
1. Those are easement, profits à prendre, and restrictiv covenants; they are of a more limited nature than the lessee's rights.
Easements and profits may subsist as legal interests. Restrictive covenants can only be equitable (but they bare close resemblance to easments). The difference between an easement and a profit is that an easement is a bare right over or in respect of the land whereas a profit carries with it the right to remove something from the land.
2. Easements
a) Examples: Rights of way, the right to have one's buildings supported by the land of one's neighbour, the right to discharge water over another's land, the right to 'light'. BAXENDALE v. MCMURRAY (1867) - right of water. CONSENS v. ROSE (1871) - right of way. MOODY v. STEGGLES (1879) - use of a wall of a fixing sign.
b) Requirements:
aa) An easement can only be enjoyed in respect of land ('land - land'). There must be a 'dominant tenement' (a piece of land to which the benefit of the easement attaches) and a 'servient tenement' (a piece of land which bears the burden of the easement). The easement must benefit the dominant tenement.
aa) There must be a dominant and a servient owner - the two must separate.
aa) Easements must be capable of forming the subject-matter of a grant. This is because the normal method - at law - of creating easements was by deed of grant. It has got to be physically possible.
c) Acquisition of easements:
aa) Acquisition by deed of grant:
(1) Express grant: They must be enshrined in a deed.
(2) Implied grant: Where land is conveyed to another, there is an implication that an easement is created in certain circumstances; such as where A owns to pieces of land adjacent to each other and transfers one of them, which he had been using so as to have access to his land (paths etc.), to B. This is also called 'quasi- easement'.
bb) Acquisition by prescription:
(1) At common law, one may acquire an easement if he has been exercising the right which he seeks to establish continuously for a very long period (time immemorial, that is as long as since 1189 ['legal memory'] - there must
not be evidence that it has not been in existence from 1189).
It must have been exercised 'as of right', that means neither 'forcefully' nor 'secretly'.
(2) Statutory prescription under the Prescription Act 1832: There must have been continuous use as of right for 20 years immediately preceding the binging of an action.
Further continuous use for 40 years will ground a claim even though the user has been subject to oral per- mission; but if there was written permission (whenever it was given) there is no claim to an easement.
3. Profits
a) This is the right to take away fruits and other profits from the land.
b) There does not have to be a dominant tenement, profits may be enjoyed 'in gross' by an owner who has no such tenement.
Moreover, profits may be 'several' (enjoyed by one person) or 'common' (enjoyed by a number of people including the owner of the servient tenement).
c) The prescription periods for profits are 30 and 60 years respectively, corresponding with the 20 and 40 years which apply to easements.
d) Examples: fishing rights, grazing rights, the right to enter land to cut turf.
4. Restrictive covenants
a) They are equitable interests.
b) The binding effect of restrictive covenants is limited to persons who have 'privity of estate'. Moreover, the burden, as opposed to the benefit, of vendor and purchaser covenants do not bind the land at common law. A 'burden' in this sense is, for example, the obligation to keep the land purchased 'in the existing condition', as opposed to a leasehold interest of a third party (a 'benefit', for this purpose): TULK v. MOXHAY (1848) - gardens sold with the covenant to keep them in good shape; then resold to a third party who had notice - no remedy at common law. Therefore, a new equitable interest has been created: For the third party's conscience had been affected by his knowledge.
c) But this has been restricted:
aa) The obligation must be restrictive; negative in effect (although it may be expressed in positive terms - 'to main-
tain .. uncovered with .. '; vice versa, a covenant framed negatively may be positive in effect - 'may not allow .. the garden to fall into a state of bad shape' [= keep it tidy]).
bb) The covenant must 'touch and concern' as ascertainable area of land which is subjected to it; the covenant must (in a similar manner as an easement) benefit the land in respect of which it is created.
cc) The land in respect of which the covenant is claimed must belong to the person who seeks to enforce it. But this does not preclude an express assignment of the benefit of the covenant to a purchaser of part of the 'dominant' land.
dd) If the claimant is anyone other than the original convenantee he must either show that the benefit of the cove- nant has been expressly assigned to him, or that it was originally 'annexed' to the land, or that it relates to land the subject of a building scheme or a scheme of development.