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The English system of land law can be traced back to the Norman conquest of 1066, after which William II, in an land-grab of epic proportions, declared himself absolute owner of the entire country. Any existing forms of land ownership were therefore swept away. Whatever the constitutional status of this move, William's army had seen off all the likely challengers for the throne, so no-one was in any position to resist it. The Conquest brought with it a sharp distinction - which still exists, technically - between land and chattels.
Chattels are things that can be owned; land cannot be owned, except by the monarch. If a private citizen cannot 'own' land, what is it that we really do own when we think of ourselves as 'land-owners'? Technically, we own what lawyers call an estate in land. Although 'estate' is a general term with an everyday meaning, in this context it has a specialist interpretation. An estate in land is some package of rights over land, and responsibilities accompanying those rights. These rights, by definition, fall short of absolute ownership, but can be quite extensive. The concept of the estate grew out of the medieval process of subinfeudation, as we shall see.
After the conquest, William - as absolute owner of all land - set about distributing vast swathes of it to his principal supporters. These people were the tenants-in-chief of the king, that is, they held their grants of land directly from the king. The tenurial relationship gave the tenants rights over the land, but not ownership. These rights included the right to enjoy an income from the agricultural production of the land, and were accompanied by certain obligations to the king.
For example, the tenant may have been expected to raise soldiers to support the king's military endeavours (knight service), or accept a general duty to render goods and services to the king (socage). Bear in mind that the word 'tenant', as it is used in this sense, has a different meaning from its modern usage. In everyday speech, we normally use the word tenant to describe a person in rented accommodation; in our historical sense, a tenant is anyone who has been granted the right to enjoy the occupation or income of land.
Being a tenant-in-chief was of no particular benefit in itself, because the beneficiary of the estate could hardly manage a county-sized chunk of land on his own. Consequently, the tenant-in-chief would create lesser tenancies out of his larger estate, and grant them to people who were prepared to accept obligations towards him. These sub-tenants could then create their own sub-sub-tenancies, and so on.
This process of 'subinfeudation' is characteristic of the feudal system of land ownership common at that time; each tenant of land took a proportion of the income of the land from his sub-tenants, and rendered his own proportion to his overlord. Thus any given patch of earth would be subject to a whole chain of nested tenancies, from the king at the top to the horny-handed sons of toil at the bottom. Along with the obligation to provide socage or knight-service, tenancy carried certain 'incidental' obligations. Conventionally, when taking up his tenancy, the tenant made a vow of fealty to his overlord, and promised to honour these incidents. Common incidents included the obligation to raise emergency taxes to ransom the overlord from kidnappers. Of particular importance, as we shall see, was the right of the overlord to exercise 'wardship' over the land if the tenant died with an infant heir.
Subinfeudation was abolished in the 13th century, so that no further tenurial relationships could be created, except by the king. As a result, land-owners issued land rights to their sub-tenants by granting certain estates -- packages of ownership rights -- rather than creating new tenancies with their accompanying feudal obligations. The estate defined the duration of the rights enjoyed by its owner, and the accompanying responsibilities. Each of the tenants and sub-tenants of a particular piece of land might be holding his estate on different terms. For example, person A might grant to person B an 'estate in fee simple' in return for the rendering of certain monies and services. 'Fee simple' meant that the estate owned by B could be inherited by his heirs, according to the standard rules of inheritance. Another mode of ownership was the 'estate for life'. Here the sub-tenant would have the right to enjoy the products of the land for the duration of his life, after which the land would revert to the grantor.
At the bottom of the feudal social pyramind were the peasants who occupied land at the pleasure of the local lord of the manor in return for agricultural services. Over time this form of occupancy became recognized as a right, and its owner was known as a villein. The villein's tenancy was known as copyhold, as the proof of his right was a copy of the records of the manorial court.
A fee simple estate was of considerable value to its owner. Moreover, the owner in fee simple was very close in practice, if not in theory, to being the absolute owner of the land. This meant that he could sell his estate, if he wished, to whomever he chose. So while the income from the fee simple estate could provide for its owners and their descendants in the long term, it could raise a great deal of money for the current owner in the short term.
A young man (it would normally have been a man) who inherited an estate on the death of his father was faced with a choice: sell it, and live richly on the proceeds, or keep it to provide modest support to generations as yet unborn. Needless to say, many inheritors preferred the former option. As a result, more mature owners of large fee simple estates began to look for ways to pass on their estates in ways which prevented them being sold outside the family.
In their wills they would use language like 'I grant to my son and the heirs of his body...' The idea was that only direct lineal descendants ('heirs of the body') would be able to inherit the estate; if could not be passed to a non-descendant by a will, for example. The land-owners could not actually prevent the sale of the estate outside the family by this technique; however, by limiting the class of person who could inherit, it was hoped that the land would be of no value to prospective purchasers. A person who did buy the land would not be buying an estate of indefinite duration, because if the seller died without descendants, the estate would come to an end, and the buyer would be left with nothing. Legal devices such as this were objectionable to the 13th century courts. It was a principle of the common law that estates in land should be 'freely alienable', that is, capable of being bought and sold without restriction.
By placing restrictions on the value of the estate being sold, this principle was subverted. Nevertheless, in 1285 influential landowners persuaded Parliament to enact the statute De Donis Conditionalibus. This enactment forced courts to recognise that expressions like 'to the heirs of the body' in a grant of land limited the inheritance of land to direct lineal descendants. Such an estate became known as a fee tail or entail, from the French tailler, 'to cut'. When an estate was granted in fee tail, the grantor retained a reversion, that is, a right to recover the estate at some (unspecified) future date if the owner died without descendants.
The fee tail was very popular with large landowners, as it allowed land to be kept within the family. However, it was not popular with kings, as it came to be seen as a direct threat to their authority. This is because it nullified one of the main sanctions available to the king against rebellion by wealthy families. It was accepted that if a person was convicted of treason, his estates would be forfeit to the Crown. However, if the estate was in fee tail, nothing of value would be forfeit. If the traitor died without heirs, the land would revert from the Crown to the original grantor of the estate. Subsequent kings sought to restrict the use of the fee tail, but these attempts were blocked by landowners.
The fee tail was also unpopular with land owners of less substantial means, as they could not usefully sell or mortgage part of the estate to finance improvements and repairs to the rest. Of course, it was unpopular with profligate heirs, who were prevented from selling the land to their own benefit. This, of course, was exactly what the fee tail was intended to prevent. There was thus constant tension between the king, major landowners, and the large number of lesser landowners. Finally, to cut a long story short, in 1472 the courts allowed the owner of an entailed estate to take legal action against the grantor to block his reversion. This process, known as 'common recovery', effectively converted the fee tail to a fee simple. For large landowners with sentimental attachments to land that had been in the family for generations, this was disastrous. Any wastrel heir could convert the fee tail into a fee simple, and sell the estate out of the family. The device of the trust was employed to circumvent the problem of common recovery, as it was used to circumvent so many other problems. So, to understand the next chapter in the story, we need a brief digression to explain the origin and purpose of the trust.
In the early medieval period, the English common law accepted that a feudal overlord had a right of wardship over the land of his tenants. A minor (anyone under twenty-one years of age in those days) could not own an estate in land, and could therefore not inherit it on the death of his father. This is still the case, except that the age of majority is now eighteen rather than twenty-one. The land in such circumstances was held in wardship by the overlord.
Wardship was attractive to the overlord, because it gave him the income of that land without increasing his own obligations to the king. In the days of frequent wars and crusades, the likelihood that a landowner would die before he had an heir of full age was quite high. Feudal tenants, therefore, had to find ways to direct the benefit of the land to their families even when their heirs could not legally own land. The way this was achieved was to transfer the estate to someone outside the family, with the obligation that it would be used to the benefit of the family.
This device became known as the 'use', because land was held for the use of someone else. Now, the new legal owner of the estate usually honoured his commitments to the grantor's family. If he did not, however, the beneficiary of the estate could not go to the ordinary common-law courts for redress. As far as the law was concerned, the family had transferred the land to someone else, and no longer had any rights over it. The beneficiary of the estate had no legal rights that the courts could enforce. However, the courts of equity had a greater discretion to act according to 'conscience' than the common-law courts, at least in the medieval period. The beneficiary of a use could therefore go to the Chancery for a discretionary remedy if the legal owner of his estate refused to honour his commitments.
The use became a very popular method for granting interests in land outside the restrictions of the common law. The beneficiary of a use had rights that were effectively rights of ownership, and these rights could be bought and sold like common-law rights. There thus developed two completely separate systems of land ownership -- the legal system, enforced by the ordinary courts, and the 'equitable' system, enforced by the Chancery. Uses were unpopular with kings for the same reason that other methods for avoiding feudal dues were unpopular. King Henry VIII abolished the use, by ruling that all existing uses were to be converted into ordinary legal ownership in the hands of the beneficiaries. However, such a useful device could not be suppressed for long, and the use re-emerged shortly afterwards in the form of the 'trust', which is the term that has persisted to the present day.
So, returning to the problem of the owner of an estate who wished to keep it in the family: the trust provided a useful strategy for doing so. Remember that the estate in fee tail could not be allowed to come into the hands of an adult, because he could then seek common recovery and sell it.
So the owner would declare a trust over the land, placing the legal ownership in the hands of trustees, who would manage the estate for the benefit of his heirs. The problem with this approach was that the courts were sensibly resistant to the notion of allowing a landowner to control his land from beyond the grave.
Consequently there developed a 'rule against perpetuities' -- a trust would not be upheld if it did not result in somebody acquiring absolute ownership, free of the trust, within a certain time. The rules were quite complex, but in effect it was difficult to create a trust that lasted more than about 80 years. So a landowner could not simply request that land be held on trust 'for the heirs of my body, indefinitely' -- this trust would be 'void for perpetuity', and would not be enforceable.
So the solution was the process that became known as 'settlement-resettlement'. The current owner of the land in fee simple would, on reaching the age of majority, put the land on trust for himself for life, then for his heir absolutely (settlement). This trust would not fall foul of the rule against perpetuities, as it resulted in absolute ownership within the prescribed limits. When the owner died, his heir would take the land either in fee simple if the heir were of age, or beneficially under the trust if he were still a minor.
On reaching twenty-one, or sometimes on marriage, the heir would then resettle the land, that is, declare that he held it on trust for himself for life, and then for his heir absolutely. And so the process of settlement and resettlement would continue down the generations. Of course, the whole process hinged on the current owner of the land persuading his heir to take the estate for life, not for ever. The main control mechanisms over the heir appear to have been social, rather than legal.
The grant of the trust to the heir would be made on condition that he would himself resettle the land. Having done so, the heir had no disincentive from imposing the same restriction on his own heir. It would be well-known that a person was expecting to inherit land under a resettlement arrangement, and it would have been socially catastrophic for him not to honour the resettlement when his turn came to do so. After all, the heir was only in line to inherit at all because generations of his predecessors had all honoured their parts of the bargain.
Settlement-resettlement used the trust to create the illusion of the fee tail, while avoiding the problem of common recovery. It was popular with great landed families, with sentimental attachments to their family heritage, because with careful control land could be kept in the family indefinitely. Because of its popularity, a body of legal principles grew up to regulate and control it. It was necessary to decide, for example, what happened if the tenant for life died intestate (without making a will). In general the courts, and later Parliament, decided that the tenant for life wished to resettle according to the usual practice. So the law favoured the view that, where there was doubt, land was to be passed from generation to generation according to the principles of settlement.
As the feudal era came to a decisive end in the industrial revolution, and the capitalist era took hold, the process of settlement-resettlement became less useful. Land began to be seen not so much as a measure of one's feudal status, but as a thing to invest and make money. In effect, land was treated as a commodity like any chattel. The courts' assumption that land was to be passed between generations by a process of strict settlement became less useful, even an irritation.
Suppose, for example, that a person had made a large amount of money, and wished to invest it for the benefit of his descendants. He may wish to create a trust to give the benefit of his good fortune to his descendants. This was all very well unless the investments included land. If they did, then the trust would be assumed to form a strict settlement, and would be governed by the law of settlements. This may not have been the intention of the benefactor at all: he may have wished, for example, for the trustees to create a lease of the land and apply the benefit of the lease -- the rent -- for the beneficiaries. Unfortunately he could not do this, as the law assumed that as land was involved in the trust, the benefactor was creating a strict settlement. Because the default statutory rules governing strict settlements were very restrictive, the trustees often found that they could not sell or invest the property in a way that was helpful to the beneficiaries.
The device used to overcome this problem was the trust for sale. A person who had invested in land and wanted to create a trust of the investment in his will would declare explicitly that the trustees were to hold the land on trust to sell to raise money for the beneficiaries. This declaration was taken by the courts to indicate that the beneficiaries were not to receive an interest in land at all, but an equitable interest in money. Money was not capable of resettlement, so the problems of the strict settlement were avoided.
Typically the trust gave the trustees a power to postpone the sale of the land, perhaps indefinitely. If the trustees never sold, then the trust was essentially a trust of land without being a settlement. The trust for sale was essentially a legal fiction, and recognised as such. It came to exist at all because law could not adapt quickly enough to changing social conditions. Unfortunately, the use of the formula 'on trust to sell' had some odd consequences if the trust property included a dwelling that people lived in. Because there was a duty to sell, but only a power to postpone, then if any person with the power to postpone decided to sell, then the property would have to be sold. The agreement to postpone sale had to be unanimous. This could not easily be avoided by clever wording of the trust, because if the trust did not contain a binding duty to sell, it would not be a trust for sale, but a strict settlement.
In the feudal system of land ownership, most people - or at least most men - had some form of land rights. Even copyholders had a recognized title of sorts. As the feudal era came to a close, and the population became more mobile, temporary rights over land came to be recognized.
In general, temporary land rights can be divided into leases and licences. The difference between a lease and a licence is of great importance in land law, because although the day-to-day rights and obligations of leaseholders and licencees appear very similar, they are treated very differently by the courts. A licence to occupy land is, in general, nothing more than a contractual arrangement. For example, landlord L enters into a contract with tenant T such that T can occupy some part of L's land, in return for payment of rent. A licence has fewer feudal trappings, but the licencee does not hold any interest in the land that he can enforce against the landlord. His rights are (mostly) governed entirely by the contract. A leaseholder, on the other hand, has an estate in land, which is accompanied by certain obligations and privileges; these arise by operation of law even if not contemplated by the parties when they originally entered into the agreement. Moreover, some obligations under a lease 'run with the land', that is, they continue to be binding on the landlord and/or tenant long after either or both have sold their interests to other people.
For the freehold owner, the creation of a lease was an investment. While the leaseholder could exclude the landlord from the land for the duration of the lease, the landlord knew that eventually the land would return to his family. In the meantime, the landlord collected rent from the leaseholder. Large landowners were reluctant to sell their freehold interests, and since the abolition of subinfeudation prevented their creating new feudal obligations for their own tenants, the lease was quite a popular way of getting the benefit of land while keeping ownership of it.
Historically, the rights of landlords and leaseholders have always been biased in favour of the landlord. Because people have to live somewhere, and all the land in the country was owned by somebody, people were forced to accept leasehold obligations that were very unfavourable to them. To an extent this is still true today, although recent legislation has rebalanced the landlord-tenant obligations somewhat. Even where the leaseholder was, to all practical intents and purposes, the owner of the land (very common in long leases), and had paid a substantial sum of money for this privilege, the landlord still retained rights over the property which he could not really justify. Unscrupulous landlords could, and still can, cause a leaseholder to forfeit the lease, at considerable loss, as a result of technical violations of the leasehold agreement. In addition, a person who has purchased a leasehold interest at great expense might hope to have something that he can pass on to his descendants, or sell on in the future, but the value of a lease diminishes over time as its remaining term gets shorter.
The lease is a phenomenon almost unique to English law. While most jurisdictions allow for land and property to be rented, usually the rental agreement is nothing more than a contract; it is what would be called a licence under English law. While the rights of leaseholders may have been unbalanced with respect to their landlords, in English law the position of a licencee is even more precarious. It is clearly in the interest of a landlord to assert that his tenants are mere licencees, not leaseholders; the interest of the tenant is to the contrary. The assertion that a lease was, in fact, merely a licence was resisted by the courts, which were unwilling to let landlords diminish the rights of their tenants this way. Whatever the agreement between landlord and tenant was stated to be, the courts tended to find that if it was for a fixed duration, and gave the tenant the right to exclude the landlord from the property, then it was a lease.
Historically the lease was used to allow the freehold owner to obtain an income from land. However, in the last hundred years or so the lease has also become a technical device for enforcing obligations between occupiers of dwellings. When a builder constructs a block of flats, or converts a larger dwelling into separate flats, there often remain parts of the building that are shared between the occupiers (the roof is an obvious example).
A problem that arises is that of ensuring that somebody takes responsibility for the maintenance of these shared areas. If the builder sells the freeholds of the individual flats, he can insist that the buyers covenant to take on specific maintenance responsibilities. However, although some covenants do 'run with the land', and will bind subsequent buyers, only those flats on the ground floor stand on a specific pieces of land, the others do not. There is thus no specific land for the obligations to 'run with'.
The usual solution to this problem is for the builder to sell long leases rather than freeholds. Individual flat owners therefore have a landlord on whom they can call to enforce the obligations of other flat owners. Of course, for the builder this may be an unwelcome ongoing obligation. Having sold the long leases, the builder has made all the money on the deal that he is likely to make, and may well be happy to shed any remaining liabilities. Worse, there has been a tendency for unscrupulous property management companies to buy up the freeholds of developments of this type, and exploit the leaseholders by imposing swingeing management charges. One of the most recent developments in land law -- the introduction of 'commonhold' interests -- is aimed at preventing this kind of exploitation and making it easier for builders to sell freeholds of their developments.
By the start of the 20th century, English land law had become extremely complex. Many legal land interests were recognised, including certain conditional, determinable, and future interests as well as straightforward freeholds and leaseholds. The use of the trust to accomplish objectives that could not be accomplished by strict legal means made the situation even more complicated, as did the widespread use of legal fictions like the trust for sale. Conveyancing was often problematic for practitioners, as it was difficult to tell exactly who had rights over a particular piece of land.
So, in 1925 there was a major reform of the whole law of land ownership, effected by the enactment of a number of huge, complex statutes. The Law of Property Act (LPA) abolished all forms of estate in land apart from two: the fee simple absolute in possession, and the term of years absolute. Because all other forms of legal ownership have been abolished, we generally just use the term 'freehold' for the fee simple absolute in possession, and 'leasehold' for the term of years absolute. From a historical perspective this is inaccurate; prior to 1925, for example, it was possible to own a freehold 'in remainder' rather that 'in possession'. This meant that one expected to receive to receive the benefit of the estate at some future date, perhaps on the death of the current owner. These days, such devices would have to be accomplished by trusts, as would any other form of ownership other than the fee simple of term of years.
The LPA defines how attempts to create other forms of estate are to be treated. For example, an attempt to create a fee tail results in the creation of a fee simple, while the creation of 'successive interests' (''to my wife for life, then to my children in equal shares'') automatically creates a settlement trust. These statutory rules of interpretation of the wording of dispositions of land commonly cause problems for the beneficiaries of wills, because the testator is unaware of the way his words will be interpreted by the courts. Solicitors who specialise in wills and probate work have an interest in encouraging people to seek professional advice when making a will, but in fact if the will is simple, straightforward language will often bring about the desired disposition. ''Everything to my wife'' is a valid will, if correctly signed and witnessed.
However, the use of quasi-legal language in home-made wills does cause problems that professionals would be able to avoid. For example, if a testator makes a disposition of land ''to my children, until the eldest is 21, then to Battersea Dogs' Home'' this creates a trust of land, whatever the testator's actual intentions. A disposition ''to the heirs of my body, until the eldest is 21, then to Battersea Dogs' Home'' -- because it sounds more 'legal' -- does not create a trust at all, but transfers the legal estate jointly to the testator's children in fee simple. This is because the phrase 'heirs of my body' is formulaic of the creation of a fee tail.
The LPA was not the only major statute of 1925. The Land Registration Act (LRA) introduced a system of compulsory land registration. For the first time, most interests in land would have to be registered to be enforceable. This includes both legal and equitable interests. The LRA introduced by the back door the concept of 'ownership' of land. Although one cannot, in theory, own land outright, one can be registered as having 'absolute freehold title', which is as close to outright ownership as makes no practical difference. Now that all other forms of feudal obligation have been abolished, owners of freehold land now technically 'hold land of the Crown in free and common socage'. The idea that the Queen will demand socage is merely a notional one, of course.
The Trustee Act set out to rationalise the powers and duties of trustees, including trustees of land, while the Settled Land Act controlled the creation and management of strict settlements. The LPA did go some way towards resolving the problems associated with the law's bias towards the strict settlement as a way of holding land on trust. For example, it stipulates that if the trustees use the trust money to purchase land, and it does not contain a dwelling, the land is not to be settled but held on a trust for sale.
Most of the provisions of the 1925 reforms remain in effect today, although there have been many detailed amendments to the statutes. Until quite recently there were few significant reforms of the law of land ownership. However, in 1996 the Trusts of Land and Appointment of Trustees Act radically changed the way in which trusts of land are created and managed. In short, this act prevents the creation of any new strict settlements or trusts for sale, and provides that all trusts that include land are to be regarded as simple, general trusts of land. Unfortunately for lawyers, these reforms are not retrospective, and pre-1997 settlements remain governed by the SLA (but pre-1997 trusts for sale are automatically converted into trusts of land). A trust of land has no obligation to sell, unlike a trust for sale, and therefore avoid some of the anomalies of the earlier trust. In addition, the default powers granted to trustees are much more extensive. While the creator of the trust can always reduce these powers in the trust document, the stronger default powers will be helpful to people who have become beneficiaries of trusts accidentally, through carelessly worded will, for example.
More recently, the Commonhold and Leasehold Reform Act (2002) introduces an entirely new form of land ownership - the unithold. Although commonhold is not a new legal estate -- it is only a variation of the fee simple freehold that currently exists -- commonhold land must be registered specifically as commonhold. Within the commonhold each of the unitholders will be the absolute owner of the unithold. The fee simple will be owned by an association consisting of the unitholders. The Act sets out how duties of one unitholder to another, and to the association, are to be enforced. In a sense, commonhold is only a formalisation of the device that is currently widely used, of allowing the leaseholders of flats to jointly form a limited company to buy the freehold. Commonhold, however, is less technical, and less obviously a fudge. In addition, the unithold is a permanent interest -- it does not diminish in value over time as the lease does. The Government at the time suggested that commonhold should eventually become the standard way in which shared land is owned, although even nearly twenty years later there's not much evidence that it is happening.
[ Last updated Sun 21 Mar 2021 05:46:32 PM GMT ]