The law concerning legal estates and beneficial interests in land

What is an estate in land?

An estate in land is essentially the legal and beneficial rights and interests a person has over land and property. The majority of land law is comprised in the Land Registration Act 2002 which simplified and updated the law which had, until then, dated back to 1925.

The Land Registry is a government run register of ownership of all the land and property in England and Wales, except for land and property that remains unregistered because it has not been sold or transferred (or otherwise dealt with) for very many years. The 2002 Act makes this Register a complete picture of title (ownership) to land and property, and shows the rights, obligations and interests attaching to or affecting the land.

What is a legal estate?

Theoretically, all land belongs to the Crown. Strictly speaking therefore, a person cannot own land but, instead, owns a series of rights in relation to that land which is known as an ‘estate’. Under the 2002 Act, a land owner can own either the Freehold estate or the Leasehold estate in land which will then be registered at HM Land Registry.

On a transfer or grant of property, the legal owner/s will be registered by HM Land Registry as the Registered Proprietor/s with the appropriate class of legal title, depending on the nature of the land. It will be up to the land registrar which class of title will be registered based on the legal documentation and evidence provided on the transfer or grant.

Freehold title

  • Absolute title: the best form of legal title to land. The legal estate is vested in the registered proprietor and is subject only to entries on the register and to overriding interests.
  • Possessory freehold title: registered where there is a lack of documentary evidence of title, for instance, if the title deeds have been lost and it means there is no absolute guarantee of title at the time of registration. After 12 years, the registered proprietor can apply to have it upgraded to absolute title.
  • Qualified freehold title: this is rare, and if given where there is a fundamental defect with the legal title (for instance, there has been a breach of trust).

Leasehold title

  • Absolute leasehold title: as above, and the registered proprietor will also be subject to covenants in the lease.
  • Good leasehold title: this is where the right of the landlord to grant the lease is not guaranteed.
  • Possessory leasehold title: same as possessory freehold.
  • Qualified leasehold title: same as qualified freehold.

Joint legal owners

Where there are two or more legal owners, they will all be registered as joint registered proprietors. As legal owners, they jointly own the legal estate and it cannot be ‘divided’ between them, nor can any of them own a divisible ‘share’ of the legal estate. Therefore, on the sale or other transfer or disposition of the land, each registered proprietor must be a party to any mortgage deed, sale contract, lease or transfer.

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  • Legal interests
  • Equitable or beneficial interests
  • Legal interests not created correctly in law