Reforming Land Law

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Reforming Land Law - Easements and Covenants

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By David Wheeler REFORMING LAND LAW – EASEMENTS AND COVENANTS

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A right that allows somebody to have access to another persons land, for example access to a path through a persons garden that leads to the street. Examples include; The right to use storage – Wright v Macadam. The right to use of a toilet – Miller v Emcer Products Ltd. A right of way – Borman v Griffith. An easement is a legal interest in land under Section 1 (2) of the Law of Property Act (LPA) 1925. Can be created by means such as an express grant, created through necessity, or by prescription. EASEMENTS -1

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EASMENTS – 2 An easement must adhere to the characteristics set out in Re Ellenborough Park; There must be a dominant and servient tenement. An easement must accommodate the dominant tenement, that is it must be of a benefit to the dominant tenement, not the servient The dominant and servient tenement must not be owned and occupied by the same person – this is called the ‘Seisin’ rule The right claimed must be capable of forming the subject matter of a grant.

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A promise to do or not to do something contained within a deed or a contract. A positive covenant is a promise TO do something, for example ‘to pay a fee for the maintenance of a shared pathway’ A negative or restrictive covenant is a promise to NOT do something, such as to not build an extension on a property. COVENANTS

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REFORMING EASEMENTS - 1 Section 62 LPA 1925 allows for a benefit given through permission to become a binding legal easement. This has the effect of sometimes creating undesirable and unnecessary legally protected rights. The Law Commission recommends that this element be removed, that a legal easement should not be created simply through ‘friendly permission’. However, they also say this section should “continue to upgrade easements…from leasehold to freehold interests”.

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REFORMING EASEMENTS - 2 Easements by prescription; Mummery LJ said in Housdon v Conservators of Wimbledon & Putney Commons said, “the need for a simpler law of prescription has become of more, rather than less, concern”. An easement is created by prescription when, for a continuous period of time, a person makes use of another’s land, with their knowledge and without them attempting to prevent it. No consent is needed, merely a lack of action against it. The Law Commission recommends that the current law on prescription should be replaced with “a new statutory scheme for the acquisition of easements”, based “on the quality of the claimants use of the servient land, restricted to registered land, whereby a legal easement would not be acquired until the claimed easement was registered”

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WALLS V COLLINS The current position of the law is that when a leasehold estate becomes part of a freehold estate, whether through merger or surrender, then when said lease over property is forfeited, any burdens upon that lease are also terminated. However, in Walls v Collins, it was decided that when such a merger occurs, rights that have been acquired under Section 62 of the LPA 1925 will not be extinguished. The Law Commission recommended the following; “1) that the decision in Walls v Collins…be reversed by statute, but 2) That statute should provide a mechanism to enable…to elect to keep the benefit of interests appurtenant to the lease surrendered or merged”.

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REFORMING COVENANTS - 1 The Law Commission in their report on Easements and Covenants identified the following four problems; Difficult identifying who has the benefit of a restrictive covenant Complex and difficult rules regarding the running of a benefit/burden of restrictive covenants The persistence of the original owners liability after sale The burden of a positive covenant does not run at law, whereas the benefit does

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REFORMING COVENANTS - 2 As mentioned in the previous slide, a positive covenant – the obligation to do something in relation to an estate in land – does not ‘run with the land’, whilst a restrictive covenant does. When consulted by the Law Commission, the Chancery Bar had this to say; “…it is a serious practical problem and injustice that positive covenants cannot be enforced directly between successors in title to the original land owning contracting parties…” This refers to the concept of the ‘chain of liability’ – that when a positive covenant is not upheld by a future owner after the original owner, or the third owner after them, there is no legal enforcement of this positive covenant, as a positive covenant does not ‘run with the land’. Contrary to this, a restrictive covenant does run with the land, and as such would be enforceable upon all future owners.

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REFORMING COVENANTS - 3 In response to this, the Law Commission recommended the following changes; “That the owner of an estate in land shall be able to create positive and negative obligations that will be able to take effect (subject to the formal requirements for the creation of legal interests) as legal interests appurtenant to another estate in land, and therefore as registerable interests pursuant to the Land Registration Act 2002 (LRA), provided that; The benefit of the obligation touches and concerns the benefitted land; The obligation is either a) an obligation NOT to do something on the burdened land, b) an obligation to do something on the burdened land or boundary of the burdened or benefited land, or c) an obligation to make a payment in return for the performance of an obligation of the kind mentioned in (b), and finally The obligation is not made between lessor and lessee and relating to the demised premises”

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REFORMING COVENANTS - 4 These recommendations would mean that covenants made by an owner of an estate in land meeting the criteria set out by the Law Commission will take effect as “legal interests in the burdened land, appurtenant to the benefited estate in land” instead of taking effect as a promise or a covenant. Therefore, a covenant meeting those criteria would become a legal interest that runs with the land and not a promise, and as such would be enforceable as a legal interest under Section 1 (2) (a) of the Law of Property Act 1925 (LPA), which states; “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; (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). . . . and 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.”

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THE EFFECT ON TULK V MOXHAY -1 Facts – Tulk sold a plot of land on Leicester Square to a buyer who agreed to a covenant to not build on the square (a restrictive covenant) as part of the purchase of the land. The property was transferred several times, until it came to be owned by Moxhay, who refused to adhere to this restrictive covenant despite the fact that he was aware of its existence when he purchased the property. Tulk attempted to bring an action for an injunction against Moxhay to prevent him building on the land, which was successful. The court gave the reasoning that when a purchaser who has been given notice of a restrictive covenant that runs with the land they are purchasing – meaning that they are fully aware of its existence – they will be bound by this covenant and will have to adhere to it. NOTE – this has been replaced with a requirement for registration of covenants created after 1925; Unregistered Land – recorded as a class D(ii) land charge under the Land Charges Act 1972 Registered Land – recorded as a notice on the charges register of the burdened land. However, Tulk v Moxhay covenants still exist, mostly in covenants created before 1925. So what will the effects of these proposed reforms have on the decision of Tulk v Moxhay?

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THE EFFECT ON TULK V MOXHAY - 2 The reforms suggested by the Law Commission (as stated on slide 11) would mean that it would no longer be desirable for the principles of Tulk v Moxhay to exist, the reasons for this being; It is undesirable to have two methods of creating a covenant/legal interest operating at the same time, as it would force the purchaser to check to see whether or not a Tulk v Moxhay covenant exists on the land, or whether a legal interest as stated in the reforms is attached to the land instead. This adds extra complexity to the process of buying the land. It would leave it to the purchaser to decide which of these two he or she wishes to be part of the terms of buying the land, and it is unlikely that a purchaser would want a Tulk v Moxhay covenant to run with the land they are buying, making the principle obsolete.

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THANK YOU FOR WATCHING

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