Property Law- Research project

Property Law- Research project

Analyze the distinction between real and personal property and demonstrate advanced knowledge of legal and equitable interests in property

Property is anything that is subject to ownership, anything that has exchangeable value or which goes up to make wealth or Estate[1]. Property is, therefore, classified into two: real property and personal property.

Real Property describes land and possessions that are attached to the land permanently, e.g. a house. Real property can turn out to be personal property when it can be moved. For example, if you plant a tree it becomes real property since it is attached to the land, but once the tree is pulled out it becomes personal property since it can now be moved. Real property further includes anything that is above or below the land e.g if you have oil in your land, it is real property

Personal Property is all property that isn’t real property. It includes possession of all kinds as long as they are movable and owned by someone[2]. These movable properties are sometimes known as chattels. Personal property includes both tangible and intangible items, e.g., intellectual property.

The differences between real and personal property are as follows:

  1. Personal Property is movable and thus can be moved and taken while real property is immovable and is permanently attached to the land.
  2. Personal property is both tangible and intangible while real property is tangible
  3. Personal property is not as durable and long-lasting as Real property.
  4. Personal property can be hidden, but real property can’t be hidden.
  5. Legally, real and personal property follow different legal procedures

An equitable interest is a right that can be enforced in a court of equity and is protected by equitable remedies. It arises where there is an interest in the property, but no legal title exists. Equitable interest concept only exists in jurisdictions with common law backgrounds and can only be enforced by the court. This type of interest can, however, be overridden by legal ownership

A legal interest usually defeats an equitable interest because, unlike legal interest, it is not registered or is incapable of being registered, but there are exceptions to this. Legal interest arises when the title is created and transferred in the way prescribed by law. Legal interest applies to the whole world. They bind third parties, irrespective of whether they are aware of it or not.

Equitable interests can be lost or defeated in certain circumstances. For example, if a legal owner sells to a buyer in good faith, the buyer will not be bound by the equitable interest if he did not and could not have discovered it during conveyancing investigations

An equitable interest arises where formal legal requirements have not been complied with and look primarily to the intention and not the form of legal transaction. An equitable interest usually has to be in writing but does not require creation by deed.

An equitable interest attaches to the land and is good against the whole world except a bonafide purchaser for value without notice or an interest that is formally registered in a superior way. An equitable interest may arise where it is expressly created or inferred or imposed by the court. Where valuable consideration has been paid for a property, and even where it hasn’t, but all has been done that is necessary to complete the transfer, an equitable interest may arise to reserve fairness

Appraise the land registration system and methods of creating and protecting interests in land, including leasehold and freehold

The land registration system is defined as any public system of records concerning legal rights to land. The two categories of land registration systems are registration by deed and registration by title.

Registration of deed system entails maintenance of a public register in which documents affecting interest in a particular registered land are documented. The deed itself is a document that describes a particular transaction that is registered. Such a deed is merely evidential of the recorded transaction and is not a proof of title. The recording is only a prima facie proof that the transaction in question occurred, but it cannot prove the validity or legitimacy of such transactions. This registration system is mainly used to prevent double selling of land. Registration of deeds can still be found in Nairobi and Coat registries.

Registration of title, also known as the Torrens system, refers to maintenance by the state of an authoritative record of all rights concerning particular parcels of land. Sir Robert Torrens first introduced registration of title in 1858 in Australia. Torrens believed that a land register should show the actual state of ownership rather than just provide evidence of ownership. Under this system, title to land is guaranteed by the government, and in case of any errors in the register, the owner is compensated.

The process of registration involves applying and obtaining either the Land rent clearance certificate and Rates clearance certificate, applying for a search in title, applying and obtaining the consent of transfer. It is followed by filing the transfer instrument, getting site inspection by government value, and valuation report. Ensure endorsement for stamp duty and its assessment, pay the stamp duty then lodge the documents for registration.

There are various methods by which land can be acquired. These are outlined in the Land Act 2012 as follows[3]:

  1. Allocation- in this method, the government is the one that transfers land to individuals. It is usually for a specified time and specific use, and it contains conditions for use. The allocation can be through a public auction, tender, etc. The land to be allocated must first be planned, surveyed, and serviced.
  2. Land Adjudication- This mostly involves the ascertainment and recording of rights and interests to  community land(formerly known as trust land areas)
  3. Compulsory acquisition-this is where the government acquires private land for a public purpose, and it is subject to fair and prompt compensation. There should first be a publication of intention to acquire via the Kenya Gazette and county gazette.
  4. Adverse Possession-occurs where one has stayed on land for twelve years without opposition. Adverse possessor applies to the court to have ownership of that land and must prove that he occupied the land continuously without interruptions for the above specified time.
  5. Settlement programme-This where the government provides access to squatters, displaced persons by use of the Land Settlement Fund administered by the Land Settlement Fund Board of Trustees.
  6. Transmission-This is where ownership passes by way of death, bankruptcy, or liquidation of a company. In case of death, a personal representative is registered as the proprietor, for a bankruptcy, a trustee, becomes the registered proprietor. In contrast, a liquidator becomes proprietor in case of liquidation of the company. This is all done by the order of a court.
  7. Transfers- this occurs through a sale.

Analyze the principles of trust and co-ownership and understand how more than one person can hold land

Co-proprietorship is whereby at least two people own a given home inland and are in this way qualified under lock and key for an interest(s) in that bequest.

Where more than one individual possesses any place land, ownership must be through a trust of land. A trust of land isolates the lawful title of the land from the impartial ownership rights. The trustees hold a Legitimate title, and these are the named proprietors of the land. The trustees and recipients are frequently similar individuals. There are two types of co-ownership recognized these are joint tenancy and tenancy in common.

  1. Joint tenancy

The co-owners each own the whole of the property collectively/ equally Under a joint tenancy [4].  A joint occupancy can exist as either a legitimate or fair intrigue or both. There are two distinct characteristics of a joint tenancy:

  1. The right of survivorship( jus accrescendi) – Upon the death of any of the joint tenants, the entire co-owned Estate is said to survive to the living joint tenant(s). No co-owner(joint tenant) can dispose of their interest in land under their will when they die since they do not have a dividable share. If a joint tenant passes away, the survivor(s) automatically inherit the whole of the property. Where both tenants die together in circumstances in which it is impossible to determine which one died first, it is presumed the eldest died first. Thus the property will form part of the Estate of the youngest under the Law of Property Act 1925[5]. If the property is sold, the joint tenants are entitled to an equal share of the sale proceeds regardless of the amount of money they have put into the property.
  2. There cannot be a joint tenancy unless the four unities are present:

Unity of possession-there is no physical division of the land separating each joint tenants’ share, to the exclusion of the other joint tenants[6] .

Unity of interest-the interests of co-owners must be identical.

Unity of time-the interest of all the owners should have been created at the same time.

Unity of title-all the co-owners should have acquired the legal and beneficial interest in the land at the same time in the same way.

  1. Tenancy in common

Here each of the tenants in common owns a separately identifiable share in the property. They can sell or transfer their share during their lifetime, and they can leave their share to a third party under the terms of their will. Tenancy in common is preferred where the parties pay different amounts towards the purchase price of a property. Tenancies in common only take effect only in equity.

The only unity which exists in the tenancy is the unity of possession, i.e. right of possession of the land. This means the owners have a legal right of occupation and use of the land, as is the case with a beneficial joint tenancy. They are effectively trustees of the property holding the property in trust for themselves and all other co-owners.

Q 4. Apply the rules and principles that govern the transfer of ownership

  1. Capacity to transfer

A person can transfer property when he is competent to enter into a contract, and he has title to the particular interest in the property, which he proposes to transfer [7]. The general rule is Nemo dat quod non habet (no person can give that which he has not). There are, however, exceptions to this.

  1. The doctrine of Lis Pendens– transfer of immovable property during the pendency of a suit relating to that property without the leave of court is prohibited
  2. The doctrine of part performance- A title to property cannot be acquired without complying with the formalities prescribed in law

Q 5. Evaluate the nature of restrictive covenants, easements and profits a prendre

Easements are created under Section 98 of LRA[8]. An easement is a right amounting to an interest in land, allowing one owner of a given piece of land to use or to restrict the use of another piece of land for use or restrict the use of another piece of land owned by another person in some specific way. This, however, excludes the former owner from taking away the soil or products or any other commodity independently capable of ownership.

An easement can be positive or negative. Positive easements include the right to hang clothes on a line passing over another’s land, a right of water, right of way, right to run telephone line over neighboring land, etc. These are the rights to do something on another’s land. Negative easements include easements of support, light, and air.

For there to be an easement, four things must exist:

  1. There must be two pieces of land(dominant tenement and Servient tenement) and two different owners
  2. The grantor and grantee must have the legal right to create an easement
  3. The right must be specific
  4. The right must be capable of creating a grant

Where two pieces of land are not adjoining, they must not be remotely distant from each other. A man cannot have an easement over his own land, i.e., a man cannot have rights against himself.

An easement can be acquired by statute, deed, or prescription. Since an easement is a right, it can be acquired by agreement of the parties such a grant will need to be registered. There can also be an implied easement.

PROFITS

A profit is a right to enter another’s land and take out something from the land that is capable of ownership. If the substance being taken cannot be owned, then a profit will not arise.

The profit can either be enjoyed alone or can be enjoyed by a person in common with others, including the person in or upon whose land the substance or profit is situated.

Profits include the right to go to another’s land and cut trees for firewood, wood or furniture, fetch clay or shale.

Profits may be created by a legally binding instrument. The instrument must clearly state the nature of the profit, the period for which it is to be enjoyed and whether its to be enjoyed…

The grant of a Profit is completed by it being registered as an encumbrance in the register of the land or lease which it affects. Where it is a per-tenant to another land or lease, it is registered in the property section of the land or lease to which it is appurtenant.

A profit granted by the proprietor of a lease shall only be capable of subsisting only during the subsistence of the lease.

RESTRICTIVE COVENANTS

Restrictive Covenants are binding conditions that are written into a property’s deed by a seller to determine what a homeowner can or cannot do with their House or land under particular circumstances. The cover a wide range of issues, but the most common examples include preventing owners from making alterations to a  property, preventing trade or businesses from operating on the land, etc. Restrictive covenants are designed to uphold a certain standard for all residents. Restrictive covenants usually run with the land and thus apply to all future purchasers of the property and not just the original purchaser.

Q.6 Legally analyze a complex property problem

  1. Whether Paddy legally sold the House to Demelza Kernow

We are told that Paddy had bought the House (Dunroamin) in 1980. This means that Paddy was the legal owner of the House (hereinafter referred to as the “property”). Ownership is described in the Black’s Law Dictionary as the “collection of rights allowing one to use and enjoy the property, including the right to convey it to others” and that “ownership implies the right to possess a thing regardless of any actual or constructive control.” This, therefore, means that Paddy as the owner of that land, had legal rights in that property. These rights include right to Sale, right of possession, right to lease, right to charge, etc.

The Concept of ownership is made up of three elements those are[9]  :

  1. The right to manage things
  2. The right to enjoy or consume them and
  3. The right to dispose during life or upon death.

From the above, I would, therefore, say that as the owner of the property, Paddy rightfully sold the property to Demelza. This is as long as all the legal procedures were followed, and it was not tainted with illegality like fraud.

  1. Whether the Property was legally transferred from Paddy to Demelza.

Property can only be transferred from one individual to another in the legally prescribed manner. Usually, this involves the drafting of a legal document known as a deed. The deed should describe the real property, name the party transferring(grantor), the party receiving the property(grantee), and should be signed by the grantor, which must be verified by a notary public that he or she executed the deed. To complete the transfer, the deed must be recorded in the land registrar’s office. For a deed to be proper, it must be:

  1. Executed- there should be the signature of the grantor in the right place. It is, however, not necessary that the grantee signs the deed for it to take effect as a conveyance. The signatures must be accepted
  2. Delivered-proper delivery of the deed from the grantor to the grantee. The grantor must make a statement or perform some Act that implies his or her intention to transfer title. Just mere intention to transfer is insufficient in the absence of further conduct that consummates the purpose. The deed need not be physically delivered to the grantee. A deed becomes effective upon its delivery date. Mere possession of the deed by the grantee does not constitute delivery unless the grantor intended it.
  3. Accepted- The grantee must accept the deed for proper transfer of title of the land to be accomplished. Acceptance largely depends on the party’s intent. The grantee normally accepts a deed if he or she retains it.
  4. Recorded- After delivery and acceptance, a deed must be properly recorded.
  5. Valid-If a deed is to have any validity; it must be made voluntarily with no undue influence. The people executing the deed should have the capacity to contract, i.e. legal age and sound mental and physical condition. It should not be tainted with fraud, e.g., forgery
  6. Whether Demezda has a right in the Property

We are told that Boris told Demezda that she has no right to be in the property as Paddy had contracted to sell the house to him the other week. I would say that Demezda has the right to the property. She is an innocent purchaser with value. She never knew about the Contract between Paddy and Boris. So long as she is an innocent purchaser and she bought the property for value without notice, then she has the right over that property by virtue of that exception. And as the legal owner, she has the legal right to exclude anyone from the property, including Paddy’s mother and the ten members of the local tasting society.

The only option for the three of them is to seek compensation in court for breach of contract and refund of money paid because the property rights have already passed to Demezda. Boris should have registered a caution at the lands registry

  1. Whether restrictive covenants on the property can be removed or whether they are permanent

Restrictive Covenants are binding conditions that are written into a property’s deed by a seller to determine what a homeowner can or cannot do with their House or land under particular circumstances. The cover a wide range of issues, but the most common examples include preventing owners from making alterations to a  property, preventing trade or businesses from operating on the land, etc. Restrictive covenants are designed to uphold a certain standard for all residents. Restrictive covenants usually run with the land and thus apply to all future purchasers of the property and not just the original purchaser. If the restrictions are made in a deed of transfer, they don’t expire. Unless it’s actively specified in the deed restriction, deed restrictions are permanent, and they pass on to anyone who buys the property, regardless of what they are

If no insurance policy can be obtained, then Emezda can approach the person with the benefit of the covenant to obtain ‘retrospective consent’ for work. If that person cannot be traced or refuses to grant permission, and you feel it is unreasonable, then an owner can apply to the Registrar of Lands to modify or discharge the restrictive covenant.

Whether the title to the property herein is unregistered or registered, it doesn’t affect the rights of Demezda over the property as long as the ownership already passed. However, registered titles have many advantages over the unregistered title.

[1] Black’s Law Dictionary p.1382

[2] Ibid

[3] Section 7 of the Land Act 2012

[4] (Burton v Camden LBC[2002] 2 AC 399, HL per Lord Millet)

[5] Section 18 Law of Property Act 1925

[6] (Meyer v Riddick (1990) 60 P & CR 50, CA) .

[7] (Section 7 Transfer of property Act, 1925)

[8] under Section 98 of LRA

[9] (Murphy W.T., Roberts S. & Flessas T. (2004). Understanding Property Law, 4th Edition. Sweet & Maxwel: London.Pg 52-53)