Lease and release

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Lease and release is literally the lease (tenancy) of non-tenanted property by its owner followed by a release (relinquishment) of the landlord's interest in the property. This sequence of transactions was commonly used to transfer full title to real estate under real property law. Lease and release was a mode of conveyance of freehold estates formerly common in England and in New York for tax avoidance and speed. Between its parties it achieves the same outcome as a deed of grant/transfer/conveyance.

Contents

History

Lease and release was: "a species of conveyance, invented by Serjeant Moore, soon after the enactment of the statute of uses. It is thus contrived; a lease, in fact being a bargain and sale upon some pecuniary consideration for one year, is made by a tenant of the whole freehold [with no fetter on alienation] to the lessee who is in fact the bargainee (buyer). This, without any enrollment, makes the bargainor stand seised to the use of the bargainee, and vests in the bargainee the use of the term for one year, and then the statute immediately annexes the possession. Being thus in possession, he is capable of receiving a release of the freehold and reversion, made to this tenant (bargainee) in possession; and, accordingly, the next day a release is granted to him." [1] [2] This cites the New York common law treatise that "lease and release was the usual mode of conveyance in England (until) 1841 ... and in New York until 1788...." [3] The original benefactor was Lord Norris, "to avoid the unpleasant notoriety of a livery or attornment." [4]

A "special form of grant called a release [can] used to convey a future interest [reversion] to someone who already has a current interest. (A later alternative name is quitclaim.) This fact resulted in a very popular form of conveyance called a lease and release. Two agreements were required. First, a bargain (sale) contract was executed by the seller to convey a lease on the land...(Unlike an outright sale, short leases did not require enrollment in a public registry.) The seller then separately executed a release to grant to the buyer (who was now his tenant) the seller’s remaining interest. [This transfers] title to the buyer, since he now owned both the current and future interests in the land." [5]

The lease and release was: "developed as another strategy to avoid public transfer of seisin, in response to the limitations imposed by the Statute of Enrolments. Since uses (future leases in land) had been limited by the Statute of Uses (and remain subject to disincentives in many jurisdictions), another instrument had to be found. That instrument was the lease for a year (lease for possession) followed on the following day by a release of the property, thus avoiding livery of seisin. The instrument thus consists of two parts: (i) a lease for one year on one day; (ii) a release on the following day. In the lease for a year, the consideration was nominal (usually 5s.) and the term of the lease one year. The release was executed the day after the lease, releasing the property to the 'lessee' in perpetuity; the full purchase price (consideration) is recited in the release; the release recites [mentions] the lease of the previous day; the release is executed 'according to the statute for converting uses into possession' (the Statute of Uses)." [6]

In shorter form it has been described as: "the most common method of conveying freehold property from the later seventeenth century onwards, before the introduction of the modern conveyance in the late nineteenth century. The lease was granted for a year (sometimes six months), then on the following day the lessor released their right of ownership in return for the consideration." [7]

This was a wordy, sometimes two document, mode of conveyance of freehold estates, formerly common in England and in New York superseded by a simple deed of grant/transfer. [8]

Related Research Articles

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" is real property held without limit of time under common law, whereas the highest possible form of ownership is a "fee simple absolute," which is without limitations on the land's use.

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 the property rights may revert to the original owner or to another person. The owner of a life estate is called a "life tenant". The person who will take over the rights upon death is said to have a "remainder" interest and is known as a "remainderman".

A mortgage is a legal instrument of the common law which is used to create a security interest in real property held by a lender as a security for a debt, usually a mortgage loan. Hypothec is the corresponding term in civil law jurisdictions, albeit with a wider sense, as it also covers non-possessory lien.

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

In common law, a deed is any legal instrument in writing which passes, affirms or confirms an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions, sealed. It is commonly associated with transferring (conveyancing) title to property. The deed has a greater presumption of validity and is less rebuttable than an instrument signed by the party to the deed. A deed can be unilateral or bilateral. Deeds include conveyances, commissions, licenses, patents, diplomas, and conditionally powers of attorney if executed as deeds. The deed is the modern descendant of the medieval charter, and delivery is thought to symbolically replace the ancient ceremony of livery of seisin.

<span class="mw-page-title-main">Lease</span> Contractual agreement in which an assets owner lets someone else use it in exchange for payment

A lease is a contractual arrangement calling for the user to pay the owner for the use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial or business equipment are also leased. Basically a lease agreement is a contract between two parties: the lessor and the lessee. The lessor is the legal owner of the asset, while the lessee obtains the right to use the asset in return for regular rental payments. The lessee also agrees to abide by various conditions regarding their use of the property or equipment. For example, a person leasing a car may agree to the condition that the car will only be used for personal use.

A leasehold estate is an ownership of a temporary right to hold land or property in which a lessee or a tenant has rights of real property by some form of title from a lessor or landlord. Although a tenant does hold rights to real property, a leasehold estate is typically considered personal property.

A real estate contract is a contract between parties for the purchase and sale, exchange, or other conveyance of real estate. The sale of land is governed by the laws and practices of the jurisdiction in which the land is located. Real estate called leasehold estate is actually a rental of real property such as an apartment, and leases cover such rentals since they typically do not result in recordable deeds. Freehold conveyances of real estate are covered by real estate contracts, including conveying fee simple title, life estates, remainder estates, and freehold easements. Real estate contracts are typically bilateral contracts and should have the legal requirements specified by contract law in general and should also be in writing to be enforceable.

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.

<i>Quia Emptores</i> English statute of 1290

Quia Emptores is a statute passed by the Parliament of England in 1290 during the reign of Edward I that prevented tenants from alienating their lands to others by subinfeudation, instead requiring all tenants who wished to alienate their land to do so by substitution. The statute, along with its companion statute Quo Warranto also passed in 1290, was intended to remedy land ownership disputes and consequent financial difficulties that had resulted from the decline of the traditional feudal system in England during the High Middle Ages. The name Quia Emptores derives from the first two words of the statute in its original mediaeval Latin, which can be translated as "because the buyers". Its long title is A Statute of our Lord The King, concerning the Selling and Buying of Land. It is also cited as the Statute of Westminster III, one of many English and British statutes with that title.

Use, as a term in the property law of common law countries, amounts to a recognition of the duty of a person to whom property has been conveyed for certain purposes, to carry out those purposes. In this context "use" is equivalent to "benefit".

<span class="mw-page-title-main">Warranty deed</span> Real estate transfer with title guarantee

A warranty deed is a type of deed where the grantor (seller) guarantees that they hold clear title to a piece of real estate and has a right to sell it to the grantee (buyer), in contrast to a quitclaim deed, where the seller does not guarantee that they hold title to a piece of real estate. A general warranty deed protects the grantee against title defects arising at any point in time, extending back to the property's origins. A special warranty deed protects the grantee only against title defects arising from the actions or omissions of the grantor.

<span title="Anglo-Norman-language text"><i lang="xno">Cestui que</i></span> Concept in English law regarding beneficiaries

Cestui que is a shortened version of "cestui a que use le feoffment fuit fait", literally, "the person for whose use/benefit the feoffment was made"; in modern terms, it corresponds to a beneficiary. It is a Law French phrase of medieval English invention, which appears in the legal phrases cestui que trust, cestui que use, or cestui que vie. In contemporary English the phrase is also commonly pronounced "setty-kay" or "sesty-kay". According to Roebuck, Cestui que use is pronounced. Cestui que use and cestui que trust are often interchangeable. In some medieval documents it is seen as cestui a que. In formal legal discourse it is often used to refer to the relative novelty of a trust itself, before that English term became acceptable.

<span class="mw-page-title-main">Peppercorn (law)</span> Legal term

In legal parlance, a peppercorn is a metaphor for a very small cash payment or other nominal consideration, used to satisfy the requirements for the creation of a legal contract. It is featured in Chappell & Co Ltd v Nestle Co Ltd, which stated that "a peppercorn does not cease to be good consideration if it is established that the promisee does not like pepper and will throw away the corn". However, the cited passage is mere dicta, and not the basis for the decision.

<span class="mw-page-title-main">Law of Property Act 1925</span> 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.

A deed of trust refers to a type of legal instrument which is used to create a security interest in real property and real estate. In a deed of trust, a person who wishes to borrow money conveys legal title in real property to a trustee, who holds the property as security for a loan (debt) from the lender to the borrower. The equitable title remains with the borrower. The borrower is referred to as the trustor, while the lender is referred to as the beneficiary.

A reversion in property law is a future interest that is retained by the grantor after the conveyance of an estate of a lesser quantum that he has. Once the lesser estate comes to an end, the property automatically reverts back to the grantor.

The Home Equity Theft Prevention Act is a New York State law passed on July 26, 2006, to provide homeowners of residential property with information and disclosures in order to make informed decisions when approached by persons seeking a sale or transfer of the homeowner's property, particularly when homeowners are in default on their mortgage payments or the property is in foreclosure.

The vast majority of states in the United States employ a system of recording legal instruments that affect the title of real estate as the exclusive means for publicly documenting land titles and interests. This system differs significantly from land registration systems, such as the Torrens system, that have been adopted in a few states. The principal difference is that the recording system does not determine who owns the title or interest involved, which is ultimately established through litigation in the courts. The system provides a framework for determining who the law will protect in relation to those titles and interests when a dispute arises.

<i>Kent v Kavanagh</i>

Kent v Kavanagh[2006] EWCA Civ 162 is an English land law case, concerning easements. It concerns physically shared amenities with physically divided ownership as to the land or surface on which they rest.

References

  1. ↑ Online dictionary, citing Bouvier's Law Dictionary, Revised 6th Ed (1856), citing in turn 2 Bl. Com. 339 (Black's Law Commentaries); 4 Kent, Com. 482 (4 Kent's Commentaries on N.Y. Law); Co. Litt. 207; Cruise, Dig. tit. 32, c. 11.
  2. ↑ See also which cites the same material.
  3. ↑ 4 Kent, Com. 494. For a Google copy of Kent's Commentaries on NY Law, see and scroll down to p. 580.
  4. ↑ Id.
  5. ↑ A Useful Bit of History, from Some Things Every Genealogist Should Know About Deeds (internal citations not copied).
  6. ↑ "Legal cultures seminar web site". Archived from the original on 2007-06-14. Retrieved 2007-06-25.
  7. ↑ BRA web site, page on How to Interpret Deeds, Glossary (see lower down the page). Archived 2007-06-30 at the Wayback Machine
  8. ↑ Online dictionary, citing Burrill, Warren's Blackstone, and the 1913 Webster's Dictionary.

See also

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