Property Law
Contents
Introduction. 1Property Law.. 1
Personal Property Law.. 2
Real Property Law.. 2
The 1925 property legislation. 3
Land Registration Act 2002. 3
Limitation of the Law.. 6
Conclusion. 6
Reference(s) 7
Introduction
Property is the item or thing owned with the rights of possession, use, and enjoyment, and which the owner can bestow, collateralize, encumber, mortgage, sell, or transfer, and can exclude everyone else from it. There are two basic kinds of property. Those are (1) Real Property means land and (2) Personal Property means anything other than real property which does not involve geographical fixity. Law is the system of rules which a particular country or community recognizes as regulating the actions of its members and which it may enforce by the imposition of penalties. Property law is such type of law which regulates various forms of ownership and tenure in real property and personal property.
Property law deals with both Real Property and Personal Property. In England, property law contains four main topics. Those are Real property law, Trusts law, personal law and intellectual property law. In this assessment, I try to find out the law of property in England and Wales, and understand the concepts of ownership and proprietary rights in land covered.
Property Law
Property law is the principles, policies, and rules by which arguments over property are to be resolved and by which property transactions may be structured. What distinguishes property law from other kinds of law is that property law deals with the relationships between and among members of a society with respect to “things.” The things may be tangible, such as land or a factory or a diamond ring, or they may be intangible, such as stocks and bonds or a bank account. Property law, then, deals with the allocation, use, and transfer of wealth and the objects of wealth (Britannica, 2014). The English legal system has never been codified, although there are a number of very large statutes consolidating aspects of property law, such as the Law of Property Act 1925 and the Trustee Act 1925. The subject continues to have an important basis in case law so that these statutes so not themselves essentially define property. The Law of Property Act 1925 s1(1) classifies types of property in a way that departs from the Roman Law distinctions between real and personal property (Law of Property Act, 1925).
Personal Property Law
Personal property represents goods, money, and all other movables which may attend the owner's person wherever he thinks proper to go. A tangible item is an item that can be felt or touched such as furniture, equipment, vehicles and goods. An intangible item is simply an item that can't be felt or touched such as Stocks, Bonds, Intellectual property and Money. In England real property is supposed to be superior in dignity to personal property, which was originally of little importance from a legal point of view. As a preliminary point, successive government reports have endorsed the idea of reforming the English law of personal property security along the lines of Article 9 of the United States Uniform Commercial Code (UCC) which was first introduced in 1952 and whose influence has since spread to the common law jurisdictions of Canada, Australia, Singapore and New Zealand (McCormack, 2004).
Real Property Law
Real property has a technical meaning derived from the old law of succession, which became obsolete in England (as opposed to Ireland) in 1925. Real property included freehold land but excluded leasehold land so that the two forms of ownership were formerly treated differently on death but, since 1925, all property (moveable and immoveable) has been subject to a single assimilated law of succession (Law of Property Act, 1925).
Identification of real property is Such a description usually makes use of natural or manmade boundaries such as seacoasts, rivers, streams, the crests of ridges, lakeshores, highways, roads, and railroad tracks, and/or purpose-built markers such as cairns, surveyor's posts, fences, official government surveying marks, and so forth.
Comparison between real and personal property in England: Personal property is not matter to various incidents of real property, such as rent, dower or escheat. On the death of the owner intestate real property descends to the heir; personal property is divided according to the Statute of Distributions. Real property as a general rule must be transferred by deed; personal property does not need so solemn a mode of transfer. Contracts relating to real property must be in writing by the Statute of Frauds and contracts relating to personal property need only be in writing when it is expressly so provided by statute, as, for instance, in the cases falling under section 17 of the Statute (Education Portal, 2014).
The 1925 property legislation
The Law of Property Act 1925 is the most enduring element of the Birkenhead legislation of 1925. It deals with estates, trusts, co-ownership of land, contracts and conveyances, formalities, leases and tenancies in outline, and burdens such as mortgages, easements and covenants, and also important definitions. The Trustee Act 1925 (heavily amended in 2000) regulates the powers and duties of trustees, though really a thin layer of statute on a large encrustation of cases. The Settled Land Act 1925 which dealt with landed estates is largely obsolete. Registration was placed on a firmer footing in 1925 with the Land Charges Act 1925 (now as re-enacted in 1972) regulating the registration of burdens against titles which are unregistered and the Land Registration Act 1925 providing for registration of titles to land itself; this last has recently been comprehensively restated in the Land Registration Act 2002 (Leasehold reform act, 1967). There has been much piecemeal amendment of the statute book –the book we use with students lists 61 Acts in pure land law, ignoring that is the numerous statutes on landlord and tenant, and these are supplemented by innumerable statutory instruments. The two key texts are the Law of Property Act 1925 and the Land Registration Act 2002.
Legal and equitable principles: A legal interest must (a) comply with the rules for legal interests and (b) be created using the correct formalities. I will take the example of an easement. Legal easements must exist in perpetuity or for a term of years (say 10 or 999 years). An easement for A’s life must be equitable. If it is for a permissible duration e.g. for 99 years it will be legal if created by the correct formality that is by deed, though prescriptive easements are also legal.
Land Registration Act 2002
Registered Land Principles: The Land Registration Act 2002 contains provisions that render the mirror principle, as applied to land registration, wanting. These provisions refer to proprietary rights that the law allows to exist unrecorded and which can only be known through actual ocular inspection of the land. These provisions are contained in ss. 11(4) (b), 12(4) (c), Schedule 1, s 29(1)-(2(a) (i-ii), and Schedule 3. In addition, there are other interests that are not required to be registered outside of the law that can override registration, and all these can be lumped together as minor interests (Law teacher, 2014). Short leases, under Schedule 1 of the Land Registration Act 2002, is granted an overriding interest over first registration if the term granted is not more than seven years subject to certain exceptions under ss. 4(d), (e) and (f). This is nevertheless, an improvement over the previous Land Registration Act 1925, which granted overriding interest for 21 year leases (Law teacher, 2014).
Registration of unregistered land process discusses in Land Registration Act 2002 section 3 and 4. Effect of non-compliance cited in section 6-8. Classes of title listed Absolute, Qualified, Possessory and Leasehold in section 9-10.
Dealing in Registered Land: For the purposes of section 105 of the Law of Property Act 1925 (c. 20) (mortgagee's duties in relation to application of proceeds of sale), in its application to the proceeds of sale of registered land, a person shall be taken to have notice of anything in the register immediately before the disposition on sale (Land Registration Act, 2002). Dispositions must be registered in order to take effect at law s.27 (2). It includes Transfers, freeholds and leaseholds, Grants of leases, reservations of easements and legal charges.
Check the register interests protected by notices in ss.33-39. Excluded interests: trust interests and non-registered short leases (three years or less); s.33 and the Effect of notices; s.32 (3), Restrictions and their effect; ss.40-47(Land Registration Act, 2002).
Leasehold Estates and Licences: An owner of land will hold the land freehold or leasehold. These are the only two legal estates permitted in modern land law. According to Law of Property Act 1925 Section 1(1): The only estates in land which are capable of subsisting or of being conveyed or created at law are – (a) An estate in fee simple absolute in possession; (b) A term of years absolute. A leasehold estate in land granted for a term not exceeding seven years from the date of the grant, except for— (a) A lease the grant of which falls within section 4(1)(d), (e) or (f);
(b) A lease the grant of which constitutes a registered disposition (Land Registration Act, 1925).
According to Law of Property Act 1925, section 205(1) (xxvii). There is a feudal relationship between landlord and tenant which says the freeholder and the leaseholder. The tenant usually renders a service to the landlord for the giving of possession of the land to the tenant – feudally this was called rent service, but commonly called rent (Faculty of Law, 2014).
Landlord and Tenant (Covenants) Act 1995 (c. 30) is amended as follows. In sections 3(6) and 15(5) (b), for “Land Registration Act 1925”there is substituted “Land Registration Act 2002”. In section 20, in subsection (2), for the words from “rules” to the end there is substituted “land registration rules under the Land Registration Act 2002”. In that section, in subsection (6)- (a) There is substituted “capable of falling within paragraph 2 of Schedule 1 or 3 to the Land Registration Act 2002” (b) Caution under the Land Registration Act 1925 (Land Registration Act, 2002).
Enforcement against a dwelling is likely to take at least six months and could become impossible if the court suspends possession. The onset of insolvency will make no difference to a fixed charge, since the land is excluded from the insolvent’s estate to the extent to the loan and the lender can sell without involving the trustee in bankruptcy or liquidator. Some corporate regimes may involve a moratorium on enforcement procedures, but this will not prevent enforcement of a fixed charge (Sparkes, 2014).
Trusts of land: The Trusts of Land and Appointment of Trustees Act 1996 created a single simple vehicle for holding land in trust. It replaces the system of trusts for sale used between 1925 and 1996. In essence trusts are now simple trusts, that is without any special convincing device other than a power of sale. These are a bare trust, a former strict settlement and a trust for sale. All three now operate in the same way, the bare trust being usual. This vehicle is used in three main ways: a settlement on successive generations, co-ownership and management trusts e.g. trusts following death, minority, or for managing charitable land (TLATA, 1996). The form of the questionnaire does not make adequate provision for a discussion of co-ownership. No doubt this is not a great issue in civilian systems, but it is central to English land law since the 1925 legislation imposes a statutory trust in all cases of co-ownership, formerly a trust for sale and now a trust of land.
Transfer of the mortgage: The debtor has set up a mortgage/land charge to the benefit of bank 1 to secure a loan granted to him. An entire portfolio of mortgages to be transferred is all bank 1’s business transferred to bank 2, it is relatively rare for individual mortgages to be transferred and it is extremely unusual for property to be sold subject to an existing mortgage.
Limitation of the Law
It appears that English law does not sever a mortgage into the real security and the personal obligation. Dicey & Morris state that “In the conflict of law the distinction between the interest in the land and the personal obligation is not normally made for the purposes of sit us, and the asset is regarded (Dicey & Morris, 2000).” Thus the interest of the lender is seen as realty for conflicts purpose even though English law sees it as personal property. There are conflicting cases in many common law jurisdictions but it seems that this law is settled in England.
There are not believed to be any restrictions. It is not usual to have loan agreement, but rather a non-binding offer of a loan followed by a formal mortgage document and if there is a contract in the strict sense the effect is to create an equitable mortgage.
Conclusion
The complexity of the law pertaining to personal property security law in England and Wales has over the years occasioned a pressing need for reform, and the enactment of the Article 9 model embodied in the PPS legislation is timely. If Article 9-type reforms were enacted in England and Wales, it would bring greater organization and consistency to the law of personal property security interests. Against that is the practical concern that a transaction carried out outside the UK may involve the creation of security over UK assets but, because lawyers in the UK are not involved in the transaction, it may not be apparent to the parties that registration is required. And there is also a great deal of uncertainty about where assets (particularly intangible assets) are situated. It is also the case that a person dealing with a company knows where it is incorporated and can conduct such searches as it requires in the place of incorporation. If its place of incorporation does not have a system for registration of charges, it will need to conduct searches in a different way, but it is difficult to justify the UK legislating for perceived imperfections in the registration requirements of other jurisdictions.
Reference(s)
Britannica Property Law, 2014. Property Law [Online]. (Updated August 2014) Available at: http://www.britannica.com/EBchecked/topic/479032/property-law/[Accessed 30 Dec 2014]
Blackstone, W., 1975. Commentaries on the Laws of England II. Oxford: Clarendon Press. P.16.
McCormack, G., 2004. Secured Credit under English & American Law. Cambridge: Cambridge University Press, P. 71.
Legislation, 2014. Law of Property Act 1925 Part I Section 1 (c.20) [Online]. (Updated 2014) Available at: http://www.legislation.gov.uk/ukpga/Geo5/15-16/20/section/1 [Accessed 30 Dec 2014]
Education Portal, 2014. Comparison between Real & Personal Property [Online]. (Updated 2014) Available at: http://education-portal.com/academy/lesson/real-property-and-personal-property-definition-and-differences.html[Accessed 30 Dec 2014]
Legislation, 2014. Leasehold Reform Act 1967 [Online]. (Updated 2014) Available at: www.legislation.gov.uk/ukpga/1967/88/contents[Accessed 29 Dec 2014]
Law Teacher, 2014. The law essay professional [Online]. (Updated 2014) Available at: http://www.lawteacher.net/land-law/essays/mirror-principle-and-the-land-act.php [Accessed 31 Dec 2014]
Land Registry, 2014. Land Registry Practice Guide 15[pdf]. Available at: <http://www1.landregistry.gov.uk/assets/library/documents/lrpg015.pdf>[Accessed 31 Dec 2014]
Land Registry, 2014. Land Registry Practice Guide 25[pdf]. Available at <http://www1.landregistry.gov.uk/assets/library/documents/lrpg025.pdf>[Accessed 30 Dec 2014]
Legislation, 2002. Land Registration Act [Online]. (Updated 2014) Available at: www.legislation.gov.uk/ukpga/2002/9/contents/[Accessed 30 Dec 2014]
Faculty of Law, 2014. Land Economy Tripos Paper 8[doc]. Available through: University of Cambridge website <www.law.cam.ac.uk/faculty-resources/10013811.docx>[Accessed 30 Dec 2014]
Legislation, 2014. Land Registration Act 2002 c. 9 [Online]. (Updated 2014) Available at: www.legislation.gov.uk/ukpga/2002/9/contents/[Accessed 30 Dec 2014]
Sparkes, P., 2014. Property Law. Subject Sections Secretary of the Society of Legal Scholars, University of Southampton.
Legislation, 2014. Trusts of Land and Appointment of Trustees Act (TLATA) 1996 [Online]. (Updated 2014) Available at: www.legislation.gov.uk/ukpga/1996/47/contents [Accessed 29 Dec 2014]
Dicey & Morris, 2000. The Conflict of Laws. 13th edition by Collins, L. J., Sweet & Maxwell, para [22-35].