Freehold (law)

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In common law jurisdictions such as England and Wales, Australia, [1] Canada, and Ireland, a freehold is the common mode of ownership of real property, or land, [lower-alpha 1] and all immovable structures attached to such land. It is in contrast to a leasehold, in which the property reverts to the owner of the land after the lease period expires or otherwise lawfully terminates. [3] For an estate to be a freehold, it must possess two qualities: immobility (property must be land or some interest issuing out of or annexed to land) and ownership of it must be forever ("of an indeterminate duration"). If the time of ownership can be fixed and determined, it cannot be a freehold. It is "An estate in land held in fee simple, fee tail or for term of life." [4]

Contents

The default position subset is the perpetual freehold, which is "an estate given to a grantee for life, and then successively to the grantee's heirs for life." [4]

England and Wales

Diversity of freeholds before 1925

In England and Wales, before the Law of Property Act 1925, the default position was of a freehold transferable to the owner's "heirs and assigns" (successors by inheritance, or purchase/gift, respectively). Those three words were often included in a conveyance to stress fee simple status. A fee simple estate. A fee tail estate describes when transfer (by inheritance or otherwise) was limited to lineal descendants of the first person to whom the estate was given (known as "heirs of the body" or "heirs of the blood"). There were also freehold estates not of inheritance, such as an estate for life and copyhold was promoted into freehold by the Act.

Rentcharges and payments by way of positive covenents

All estates can be subject to payments to an influential prior owner or land management person or body for multi-property (communal) benefit (estate rentcharges). The most viable form is the form for a neutral or pre-agreed source to collect communal benefit payments, the estate rentcharge. Either type is usually protected by registering the deed of rentcharge against the land. They can be extinguished by a compensation-based statutory procedure, which removes the regular administrative burden on both parties.

Estate rentcharges are potentially subject to abuse, known as "fleecehold".

Any existing rentcharges other than estate rentcharges will be extinguished on 22 August 2037. [5]

Should the owner be guaranteed to benefit or wish to benefit from a communal infrastructure that requires maintenance, not funded by taxation, then Halsall v Brizell (regarding an estuary wall) and Re Ellenborough Park (regarding a communal garden) confirm that in those circumstances positive covenants run with freehold land. This means active duties to pay can exist in very closely analagous cases but are otherwise generally void as to freeholds.

Adverse possession

Freeholds (rather leaseholds if subject to a leasehold) could quite easily be acquired by squatting before the Land Registration Act 2002. [6] [7]

Since its passage such rights are dominated by precisely fixing on the line of neighbouring plots in mutual-boundary disputes, after 12 years without formal contest. This is as there is otherwise a requirement to put the previous legal owner on written notice which must have been received, or deemed received such as by recorded delivery, and be given fair opportunity to object. It is also more easily applicable to unregistered land, which is the status of a tiny number of parcels of non-agricultural freehold land in England. [7] [6]

More than one legal owner means the land is deemed to be on trust. This doctrine is designed to bind the parties to act fairly to each other in the eyes of the law of equity. In default of other provision, such as mention of a trust deed, or background facts, the beneficiaries will be deemed to be the trustees (those named on the registered title) themselves. If a trustee dies then the statutory trustees take their place, or those appointed by a probated Will. Similarly if a company is wound up then the right to act as the trustee and be registered as a legal trustee vests in the liquidator.

As regards third parties interesting in lending against or purchasing the land the general doctrine helping them is the bona fide purchaser without actual nor constructive notice doctrine. This is however subject to all of the prudent surveyors, conveyancer's and physical checks having been carried out well which is formulated in the countering doctrine of caveat emptor (buyer beware). A beneficiary in patent actual possession can still enjoy rights as against a purchaser, or more commonly a mortgage or other secured lender, under the Land Registration Act 2002.

Trustees are bound by the terms of the trust, but the strict rules and maxims of equity and by any decision formally made by all of the adult beneficiaries. [8]

Inequities the Trusts of Land and Appointment of Trustees Act 1996 (TLATA) [lower-alpha 2] resolved included the fact that it was hard to establish a trust without it coming under the auspices of the Settled Land Act 1925. That earlier Act brought a range of problems. In particular, the co-owners of property were regarded as having beneficial interests in money and not in the land. Problems arose where partners disagreed over when they wanted to sell a property usually in the case of separation. This led to situations where spouses and children could find themselves removed from their customary home inequitably.

One of the key features of TLATA is its imposition of statutory considerations to be taken into account when dealing with the disposition of trusts and ordering a sale of a family home.

See also

Notes

  1. All land in Great Britain "belongs", i.e. if all other ownership rights are unproven, to "the Crown". In practice there are many statutes which vest certain types of land such as infrastructure and the beds of "main rivers" in other authorities. Likewise bona vacantia (vacant property, deemed to belong to the Crown, in some other countries land called "unowned") is not immediately treated as capital of the Crown (in practice the government, this having by long custom been gifted to the Chancellery). A fair period and notice is given for company rescuers, creditors, missing intestacy or testamentary heirs to come forward before its escheat to the government means it can be sold or leased as a windfall to the government Treasury through the Bona Vacantia Division. Freehold is an ownership of an estate in land rather than the land itself. This distinction dates back to the Middle Ages and makes a relatively little difference nowadays, so legal authorities often do not bother to distinguish between ownership of the land and ownership of an estate. Attainder has also been abolished as to forfeiture of interests in land: mostly by the Forfeiture Act 1870 and residually, as to a narrow crime, by the Criminal Law Act 1967.

    This principle is also cited, with approval, by the Courts of record in upholding the right, if compensation is at the market value, of government to make without impropriety, any non-irrational, procedurally fair, compulsory purchase in England and Wales and Scotland. [2]
  2. Pronounced /təˈlɑːtə/ by lawyers

Related Research Articles

Escheat is a common law doctrine that transfers the real property of a person who has died without heirs to the Crown or state. It serves to ensure that property is not left in "limbo" without recognized ownership. It originally applied to a number of situations where a legal interest in land was destroyed by operation of law, so that the ownership of the land reverted to the immediately superior feudal lord.

Intestacy Condition of the estate of a person who dies without having made a valid will or other binding declaration

Intestacy is the condition of the estate of a person who dies without having in force a valid will or other binding declaration. Alternatively this may also apply where a will or declaration has been made, but only applies to part of the estate; the remaining estate forms the "intestate estate". Intestacy law, also referred to as the law of descent and distribution, refers to the body of law that determines who is entitled to the property from the estate under the rules of inheritance.

In English law, a fee simple or fee simple absolute is an estate in land, a form of freehold ownership. A "fee" is a vested, inheritable, present possessory interest in land. A "fee simple" refers to a sub-category of such interests that features an absence of any temporal condition limiting its durational period under common law, whereas the highest possible form of ownership interest that can be held in real property is a "fee simple absolute," which is a sub-set characterized by an absence of limitations regarding the land's use. Allodial title is reserved to governments under a civil law structure. The rights of the fee-simple owner are limited by government powers of taxation, compulsory purchase, police power, and escheat, and may also be limited further by certain encumbrances or conditions in the deed, such as, for example, a condition that required the land to be used as a public park, with a reversion interest in the grantor if the condition fails; this is a fee simple conditional.

In common law and statutory law, a life estate is the ownership of immovable property for the duration of a person's life. In legal terms, it is an estate in real property that ends at death when ownership of the property may revert to the original owner, or it may pass to another person. The owner of a life estate is called a "life tenant".

This aims to be a complete list of the articles on real estate.

As a legal term, ground rent specifically refers to regular payments made by a holder of a leasehold property to the freeholder or a superior leaseholder, as required under a lease. In this sense, a ground rent is created when a freehold piece of land is sold on a long lease or leases. The ground rent provides an income for the landowner. In economics, ground rent is a form of economic rent meaning all value accruing to titleholders as a result of the exclusive ownership of title privilege to location.

Commonhold is a system of property ownership in England and Wales. It involves the indefinite freehold tenure of part of a multi-occupancy building with shared ownership of and responsibility for common areas and services. It has features of the strata title and the condominium systems, which exist in Australia and the United States respectively. It was introduced by the Commonhold and Leasehold Reform Act 2002 as an alternative to leasehold, and was the first new type of legal estate to be introduced in English law since 1925.

Seisin denotes the legal possession of a feudal fiefdom or fee, that is to say an estate in land. It was used in the form of "the son and heir of X has obtained seisin of his inheritance", and thus is effectively a term concerned with conveyancing in the feudal era. The person holding such estate is said to be "seized of it", a phrase which commonly appears in inquisitions post mortem. The monarch alone "held" all the land of England by his allodial right and all his subjects were merely his tenants under various contracts of feudal tenure.

Feoffee

Under the feudal system in England, a feoffee is a trustee who holds a fief, that is to say an estate in land, for the use of a beneficial owner. The term is more fully stated as a feoffee to uses of the beneficial owner. The use of such trustees developed towards the end of the era of feudalism in the Middle Ages and declined with the formal ending of that social and economic system in 1660. Indeed the development of feoffees to uses may have hastened the end of the feudal system, since their operation circumvented vital feudal fiscal mechanisms.

Unowned property refers to tangible, physical things which are capable of being reduced to being property owned by an individual but are not owned by anyone. Bona vacantia is a legal concept associated with the unowned property, which exists in various jurisdictions, with a consequently varying application, but with origins mostly in English law.

A profit, in the law of real property, is a nonpossessory interest in land similar to the better-known easement, which gives the holder the right to take natural resources such as petroleum, minerals, timber, and wild game from the land of another. Indeed, because of the necessity of allowing access to the land so that resources may be gathered, every profit contains an implied easement for the owner of the profit to enter the other party's land for the purpose of collecting the resources permitted by the profit.

Land Registration Act 2002 United Kingdom legislation

The Land Registration Act 2002 is an Act of the Parliament of the United Kingdom which repealed and replaced previous legislation governing land registration, in particular the Land Registration Act 1925, which governed an earlier, though similar, system. The Act, together with the Land Registration Rules, regulates the role and practice of HM Land Registry.

In the United Kingdom, a rentcharge is an annual sum paid by the owner of freehold land (terre-tenant) to the owner of the rentcharge (rentcharger), a person who need have no other legal interest in the land. They are often known as chief rents in the north west of England but the term ground rent is used in many parts of the country to refer to either a rentcharge or a rent payable on leasehold land. This is confusing because a true ground rent is a sum payable in relation to land held under a lease rather than freehold land. As a result, the first question a conveyancer or other adviser, such as the free Rentcharges Unit, will demand is information from the Land Registry, which the public can also obtain cheaply, as to whether the subjected land is freehold or held on a lease.

The total registered electorate in the United Kingdom grew from 5.7 million in 1885 to over 21 million in 1918. Much of the growth was result of the Representation of the People Act 1918, which expanded franchise by abolishing property qualifications for men and introduced female suffrage for some women over the age of 30.

Law of Property Act 1925 United Kingdom legislation

The Law of Property Act 1925 is a statute of the United Kingdom Parliament. It forms part of an interrelated programme of legislation introduced by Lord Chancellor Lord Birkenhead between 1922 and 1925. The programme was intended to modernise the English law of real property. The Act deals principally with the transfer of freehold or leasehold land by deed.

In law, a moiety title is the ownership of part of a property. The word derives from Old French moitié, "half", from Latin medietas ("middle"), from medius.

English property law refers to the law of acquisition, sharing and protection of valuable assets in England and Wales. While part of the United Kingdom, many elements of Scots property law are different. In England, property law encompasses four main topics:

Inter regalia (Scots law)

The inter regalia are the rights falling to the Crown in Scots Property law. The term derives from Latin inter (among) and regalia.

Rates are a tax on property in the United Kingdom used to fund local government. Business rates are collected throughout the United Kingdom. Domestic rates are collected in Northern Ireland and were collected in England and Wales before 1990 and in Scotland before 1989.

A nominee trust is a legal arrangement whereby a person, termed the settlor, appoint another person, termed the "nominee" or "trustee", to be the owner of the legal title to some property. Although the legal title is transferred to the nominee, the beneficial ownership of the property is transferred to a third person, termed the beneficiary.

References

  1. "Freehold Land". Australian Trade Commission. Retrieved 30 July 2018.
  2. "FAQs About Escheat". Crown Estate . Retrieved 26 September 2019.
  3. Roberts, Chris (2006). Heavy Words Lightly Thrown: The Reason Behind Rhyme. Waterville, Maine: Thorndike Press. ISBN   978-0-7862-8517-4.
  4. 1 2 Garner, Bryan A., Editor in Chief. Black's Law Dictionary (7th ed.). St. Paul Minnesota: West Group. p. 675. ISBN   0-314-22864-0. -deluxe.
  5. Specific deductions: rent & rates: rentcharges, HMRC. Retrieved 22 December 2011.
  6. 1 2 Department of Constitutional Affairs (June 2001). "Land Registration Bill – Regulatory Impact Assessment" . Retrieved 22 March 2008.
  7. 1 2 Dowden, M. (2005). Practitioner's Guide to the Land Registration Act 2002: The Unfinished Revolution. London: Estates Gazette. ISBN   0-7282-0458-4.
  8. Saunders v Vautier