Legal interests in Land

LPA 1925, s.1(2): Legal interests

The two legal estates are the largest and most important of the rights to land which are recognised by law, as opposed to operating in equity. However, there are lesser rights which are accepted in law and which are not regulated to an existence in equity only. These lesser interests are called ‘legal interests or charges’ and they are listed in LPA 1925, s. 1(2) . the following is a brief introduction to each of these rights.

Legal easements, rights or privileges (s. 1(2)(a))

Easements are not easily defined but are easily recognisable once encountered. Essentially, they are rights attached to one piece of land, either entitling its occupants to do something on another’s property, or preventing the owner of that other property from interfering with the passage of some benefit to the first piece of land. Thus one may have the right to walk over one’s neighbour’s land or perhaps the right to prevent the neighbour building so as to block the passage of light to one’s windows. In each case there is a piece of land which is benefited by the easement and a piece of land which is burdened with it. There are many types of easement, such as rights to storage or drainage, the right to water and a great number of others.

Related to easements, are also capable of existing at law under s. 1(2)(a), are profits a prendre. These are rights to take something from land which belongs to another estate owner; for example a right to cut wood on another’s property.

Rentcharges (s. 1(2)(b))

The first thing to note about the term ‘rentcharge’ is that it does not refer to rent which is payable under a lease, but to another arrangement whereby land is charged with the payment to someone of an annual or periodic sum. If money is not paid, the person with the benefit of the rentcharge is entitled to enter upon the land in order to enforce payment.

At one time, and in certain parts of the country, it was rare for an estate in fee simple to be sold for a single payment of money; instead the vendor took a lump sum plus a rentcharge securing an annual payment. However the Rentcharges Act 1977 prevented the creation of any new rentcharges of this type, provided that any existing ones are to end 60 years after the Act came into force, and gave the estate owner of the charged land the right to redeem the rentcharge earlier on the payment of compensation.

The 1977 Act did not, however, abolish rentcharges altogether and they may still be created for certain purposes. Thus it is still possible to leave a property to a person, subject to a rentcharge obliging him to make a periodical payment to your widow or widower, or to some other member of your family, in order to provide for the maintenance of such person.

It is also still possible to create ‘estate rentcharges,’ which are used to ensure that the estate owner of the charged land makes a payment towards the upkeep of facilities on other land. An example of this type is the rentcharge obliging the estate owner to pay an annual sum towards the maintenance of a road on his neighbour’s property. These rentcharges are a means of providing for the enforcement of positive covenants in freehold land.

For a rent charge to be a legal interest in land it must last for the same period as one of the two legal estates; that is, either in perpetuity or for a fixed period.

Charge by way of legal mortgage (s. 1(2)(c))

A mortgage is the means whereby an estate in land is charged with the repayment of a debt or the performance of some other obligation. For example, the borrower provides security for a loan by granting a mortgage to the lender. The mortgagee obtains an estate or interest in the mortgaged property by virtue of this arrangement. If the borrower fails to repay the loan, the mortgagee may take the mortgagor’s property and sell it to satisfy the debt.

The charge by way of legal mortgage is one of the three types of mortgage recognised by LPA 1925, ss. 85-87. The other two are not mentioned in LPA 1925, s. 1(2) because they are created in a manner which gives the mortgagee a legal estate in the mortgaged property (in fact a lease) and are therefore legal by virtue of s. 1(1).

…and any other similar charge on land which is not created by an instrument (s. 1(2)(d))

The rather peculiar wording of this section is due to the repeal of the first four words, which originally referred to ‘land tax’ and ‘tithe rentcharge.’ The charges in this category are all created by statue and are rarely encountered. 

Rights of entry (s. 1(2)(e))

This heading includes rights of entry included in leases or annexed to rentcharges. It is usual to include in a lease a clause which allows the landlord to recover, or ‘re-enter’ the property should the tenant be in breach of any of his obligations under the lease. This right is a legal right in itself under s.1 (2)(e) and is regarded as an interest in land. A similar right is usually included in a rentcharge, so that the owner of the rentcharge may enter and recover the land should the owner of the charged estate fail to pay the sums due.