Foundation Law Foundation Law 2013/142013/14

Natasha SharmaNatasha Sharma

In last week’s lecture we looked at what Equity is and the interplay between

equity and the common law

So, what is equity?

Equitable remedies- specific performance and promissory estoppel

What is specific performance?

What is promissory estoppel?

Facts & judgement of Central London Property Trust Ltd v High Trees House Ltd (1947)

The principle that estoppel is “a shield and not a sword”- Combe v Combe (1951)

Recap-Lecture 16

Show knowledge & understanding of some of the main terms

in land law;

Explain what is meant by the term “tenure”;

Be able to define and explain the key features of both a Freehold and Leasehold Tenure;

Explain and compare how property/land can be jointly owned; and

Be able to apply legal principles to a set of given facts and demonstrate criticality & analysis when answering typical law questions.

Land Law (1)-Learning

Outcomes:

Do you think that there is a difference between “land” and “property”?

Distinguishing “land” from “property”

Land: often only refers to the flat surface or ground layer on the surface of the earth. Land does not have any foundations (is not rooted)

Examples of land- fields, “a plot of land” and acres

Property: refers to anything that is built above the land and therefore, the foundations of the building will be rooted in the ground/land itself

Ownership

What does ownership mean?

Ownership refers to the possession of and the exercise of rights over property or land

The possession or right to property and the way in which it is held is known as “tenure”

In the UK property can be owned in a number of ways and today we will be focusing on Freehold and Leasehold Tenures and in the next lecture, we will look at the third type of tenure, which is Commonhold

This type of ownership is also known as “fee simple

absolute in possession” and is the most common (and preferred) type of ownership

Fee simple ownership represents absolute ownership of property

Freehold(F/H) Tenure

“Fee simple”: means that the owner of the property

owns the land and may dispose (sell it or pass it under his will) of it as he wishes, without any restrictions

“Absolute”: means that the property is not subject to any condition of length or period of time

“in possession”: means that the owner has immediate right of possession of the land or has the right to receive any rent from someone who might reside in it

Fee simple absolute in possession

Unlike a F/H tenure, a L/H tenure is not complete

ownership of the property, as under this type of ownership, the holder only has the right to enjoy possession of the property for a specific period of time

This period of time is referred to as the length of the lease or “ the term of years absolute”

Leasehold (L/H) Tenure

The number of years or the length of the lease, can

vary from a period as short as a week to 999 years

However, the greater the number of years, the greater the rights and benefits the holder enjoys

During the life of the lease, the holder of the lease can enjoy possession of the property and the property can still be sold or inherited, as with a F/H tenure. However, unlike a F/H, at the end of the term of the lease, the property reverts back to the freeholder

The term of years absolute

L/H ownerships are commonly found in respect of the sale of apartments/flats (“multi-storey buildings”) and commercial units (warehouses, shops, offices etc.)

In a L/H there will be a freeholder of the property who retains title (“ownership”) of the property/land. The leaseholder (the person who has been assigned the lease) will enjoy possession of the land/property and exercise ownership rights over it, but at the end of the lease, the property/land will go back to its freeholder

Furthermore, during the life of the lease, the current leaseholder can sell the remaining terms of the lease

There are provisions in the land law whereby leaseholders can purchase the freehold, the lease can be extended/terminated but this falls outside the scope of the foundation law syllabus

Examples

Residential Leasehold Tenure

Flat number 5 is being sold as a L/H for £320,000

The duration of the lease is 999 years

The freeholder of this development is Urban Homes Ltd (as the freeholder, the developer has “fee simple absolute in possession”)

If I purchase this flat on 1st March 2014, for 999 years I will….

…… enjoy possession of the apartment ( complete ownership rights over the flat- e.g., change the bathroom suite, decorate the flat according to my taste, call it “my home” etc.)

……in the event of my death, it will pass under my will or in the absence of a will, under the rules of intestacy

……if I want to, I can sell the lease at anytime during the life of the lease. For example, I may decide to sell the lease (which includes the flat off course!) after 10 years (when the lease will have 989 years remaining on it)

However, at the end of the 999 years, unless a leaseholder buys the flat absolutely or the lease is renewed, the flat will revert back to the freeholder

What benefits do you think a freeholder has by selling his property/land as a leasehold?

Examples

Commercial Leasehold Tenure

This corner shop is being sold leasehold for £250,000

It comes with a lease of 25 years

As a leaseholder, what benefits and rights do I enjoy?

What happens to the property at the end of the 25 years

Joint Ownership

Property/land can be owned by more than one party

For example, property can be jointly owned by husband & wife, between siblings and business partners

This is known as joint ownership

Furthermore, it is not important for each owner to have equal shares in the ownership and the share can be disproportionate amongst the owners

There are two main types of joint ownership: Joint Tenancy and Tenancy in Common

Under this agreement, the joint owners together own the whole

property and do not have a particular share in it

If one of the owners dies, the other surviving owner automatically becomes the sole owner

This would be the case even if a will had been made leaving the deceased owner’s “share” to someone other than the co-owner

For example, a husband & wife buy a house together as joint tenants, they both own the property in equal 50/50 shares. If one of them dies, the property will pass to the other automatically

Joint Tenancy

In this type of ownership, each of the parties has a

definite share in the property

For example, A & B could own the property in equal (50/50 ) shares or A could have a share of 60% of the property and B owns 40%

This would be the most appropriate agreement where people want to own property in separate pre-determined shares (for example, business partners, parents & children, unmarried couples etc.)

Tenancy in Common

Under this form of ownership, if one of the owners dies, their share will NOT automatically pass to the surviving owner/s and instead, will pass to whosoever has been specified in the deceased’s will or if a will has not been made, in accordance with the rules of intestacy

For example, A & B own a house under a tenancy in common and each has a 50/50 share. If B dies, A does not automatically get B’s share. B’s share will go to whomever has been specified in B’s will or under the rules of intestacy

The same rules apply when the property is sold. Each owner will get their pre-determined share

The other distinct feature about this type of ownership is that each owner can also sell their share

Terminology

Tenancy Agreement: an agreement between two parties (the landlord and the tenant/s) to rent the property for a specified length of time. Amongst other key terms and conditions, the agreement will set out the duration of the tenancy, the rent payable + payment terms and the “covenants” (restrictions) and obligations on part of the parties

Landlord: usually the person who owns the property – has absolute in possession

Tenant: the person/s to whom the property is being leased/rented

Vendor: the seller

Buyer: the party that intends to buy the land/property or the lease (in the case of a lease, the buyer of the lease will be called the lessee)

Mortgage: a loan that has been taken out to finance the purchase of the land/property

Mortgagee: the lender of the mortgage (usually a bank or building society which will have a legal charge/interest in the property/land, until the mortgage has been fully repaid)

Mortgagor: the party/parties that take out the mortgage

Conveyance: the legal process by which property/land is brought/sold and ownership is transferred

Preps. For Seminar 17

Hand-out:

Reading List:

Jacqueline Martin, “GCSE Law”, 5th edition, chapter 28- Family Law: Inheritance

Preparatory Questions

Released: Wednesday 26th February 2014

Due: BY 3PM THURSDAY 13TH MARCH 2014

Weighs 25% of the final mark on the Foundation Law module

Lets look over the assignment question and the instructions……

SUMMATIVE ASSIGNMENT

I will be going on leave between 3rd- 18th March 2014 (inclusive)

This means that your timetables for the next two weeks will be changed

FHLA/B/C –your law lecture/combined seminar will be on Friday 7th & Friday 14th March 2014 at 4.30-6.30pm in the Ground Floor Lecture Theatre

You will not be having any other law lectures/seminars during these two weeks and should use this time for private study- work on your summative assignment, reading, revision, seminar preparations etc.

FHLC- in order for you to attend the classes, your normal seminars with Simon Niziol on Friday afternoons, will take place on Thursday 6th & Thursday 13th March at 9.30-11.30am in Room 4.02 instead

ATTENDANCE AND PUNCTUALITY WILL CONTINUE TO BE MONITORED AND REGISTERS WILL BE TAKEN AS NORMAL!

Normal classes will resume from Wednesday 19th March 2014

Important Announcement