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Land Law - Equitable land interests
This specific interest will only have effect in equity if the conditions necessary to establish a legal interest in land are not fully met, such as by not registering it with HM Land Registry.
Restrictive covenants, beneficial interests under trust estate contracts, and estate contracts are the most prevalent of these.
Restrictive Convenants
These are rights that third parties, who do not legally own the land, hold over it. They are commitments made by one landowner to another, outlining specific actions they will not take on the property. Examples include: not using the property for any kind of trade, business, or other profession; not modifying the property's construction without permission; and not storing caravans or boats there. Restrictive covenants can be found in larger, contemporary developments where builders attempt to maintain the aesthetics of a housing estate and, as a result, are part of a building scheme, which is a type of restrictive covenant. Some of these covenants date back to the historical origins of land transfer, when landowners would have tried to prevent certain competition within rural or farming communities.
Key term: building plan
When a restrictive covenant is included in a building plan, it merely indicates that the same restrictions will apply to every property. Every property must be both dominating and servient land for the other properties under a particular enforcement mechanism. This permits the landowners to enforce these restrictive covenants against one another.
Beneficial interest under a trust
Although it is typical for a land trust to be created between the parties directly through a deed, this interest can alternatively emerge as an equitable interest and be enforced in law in three different ways: proprietary estoppel stemming from constructive trusts. All of them are based on the same fundamental idea: they are all attempts to subvert the legal ownership of the property by someone claiming to have a benefit interest in it. However, because of the parties' behavior, the court may infer both a constructive and resultant trust, and proprietary estoppel serves as a defense to prohibit one party from breaking a promise or from taking advantage of another's mistaken impression that they have the legal right to a piece of land. When a non-legal owner of the property makes a sizable contribution toward the mortgage payments or purchases significant renovations for the property, a constructive trust is created.
As an illustration
For £275,000, Alba buys a property in her name alone, becoming the only owner both legally and equitable. Each month, she pays £750 on her mortgage. After two years, Gemma moves in with Alba and begins making 50% of the monthly mortgage payments. Gemma also pays for renovations, including building a large kitchen/diner/family room and extending the house one story to the back. About £50,000 is needed for this work, which Gemma pays for with some inheritance. Gemma has been informed by Alba that everything is shared equally and that the property is also "her house." Is Gemma interested in the property in any way? This is a highly typical situation, and a wealth of case law will address this particular topic. This case is comparable to Stack v. Dowden, one of the most well-known instances. Gemma has the right to demonstrate that Alba and her actions have created a constructive trust. By their words and deeds, it is evident that they both intend to share equitable ownership of the property. As a result, equity will support Gemma in this situation should Alba attempt to claim her legal claim to the property and sell it without giving Gemma anything in return.
Only in cases where one party paid a portion of the purchase price but is not the property's legal owner would resulting trusts emerge.
Proprietary estoppel serves as a safeguard against one party breaking a commitment or profiting from another's ignorance of their own legal claims to a parcel of property. For instance, a landowner might persuade a third party to invest funds or labor on the property by offering guarantees or promises that will eventually provide the individual hope for a benefit or right over the landowner's holdings. Therefore, a claim's fundamental components are that someone behaved against them, a promise was given, and there was reliance on that promise.
Example of a Case
For the most of his life, Simon collaborated with his father, Robin, on the family farm. As an adult, he received pay that roughly matched the drawings that Robin had made at the time. The farm belonged to George, the uncle of Simon and Robin, but Stephen had been assured on several occasions that he would inherit Robin's portion of the property. Following a falling out between Simon and Robin, the partnership was dissolved. Stephen then filed a proprietary estoppel action, claiming he should receive Robin's portion of the land. In this instance, what would the court take into account? The extremely brief facts of Moore v. Moore [2018] are as follows. Based on the assurances given to him throughout the course of his childhood, Simon was successful in his claim, albeit with some very intricate financial agreements for his father's care. Cases involving proprietary estoppel are primarily brought by farmers, and they can be exceedingly challenging for the courts to handle.
Estate Contracts
Although this is outside the purview of this revision guide, it is nonetheless important to be aware of this as a potential equitable interest because it is closely related to conveyancing practice. When the parties exchange contracts, which happens at a very specific time in a conveyancing transaction, an estate contract will come into existence. This is the moment when the parties' agreement on the transaction becomes enforceable. There may occasionally be a lag between this exchange phase and the completion itself. Although the new owner is not the property's legal owner during this time, they are nevertheless required by law to pay for it on the completion date. The new owner may find themselves in a vulnerable situation because, at this point, they may have paid a significant sum of money without having anything material to show for it. The new owner receives an estate contract, which is an interest in the land, as equity strives to attain fairness. It merely grants the right to purchase that plot of property on the date of completion that has been agreed upon.
This specific interest will only have effect in equity if the conditions necessary to establish a legal interest in land are not fully met, such as by not registering it with HM Land Registry.
Restrictive covenants, beneficial interests under trust estate contracts, and estate contracts are the most prevalent of these.
Restrictive Convenants
These are rights that third parties, who do not legally own the land, hold over it. They are commitments made by one landowner to another, outlining specific actions they will not take on the property. Examples include: not using the property for any kind of trade, business, or other profession; not modifying the property's construction without permission; and not storing caravans or boats there. Restrictive covenants can be found in larger, contemporary developments where builders attempt to maintain the aesthetics of a housing estate and, as a result, are part of a building scheme, which is a type of restrictive covenant. Some of these covenants date back to the historical origins of land transfer, when landowners would have tried to prevent certain competition within rural or farming communities.
Key term: building plan
When a restrictive covenant is included in a building plan, it merely indicates that the same restrictions will apply to every property. Every property must be both dominating and servient land for the other properties under a particular enforcement mechanism. This permits the landowners to enforce these restrictive covenants against one another.
Beneficial interest under a trust
Although it is typical for a land trust to be created between the parties directly through a deed, this interest can alternatively emerge as an equitable interest and be enforced in law in three different ways: proprietary estoppel stemming from constructive trusts. All of them are based on the same fundamental idea: they are all attempts to subvert the legal ownership of the property by someone claiming to have a benefit interest in it. However, because of the parties' behavior, the court may infer both a constructive and resultant trust, and proprietary estoppel serves as a defense to prohibit one party from breaking a promise or from taking advantage of another's mistaken impression that they have the legal right to a piece of land. When a non-legal owner of the property makes a sizable contribution toward the mortgage payments or purchases significant renovations for the property, a constructive trust is created.
As an illustration
For £275,000, Alba buys a property in her name alone, becoming the only owner both legally and equitable. Each month, she pays £750 on her mortgage. After two years, Gemma moves in with Alba and begins making 50% of the monthly mortgage payments. Gemma also pays for renovations, including building a large kitchen/diner/family room and extending the house one story to the back. About £50,000 is needed for this work, which Gemma pays for with some inheritance. Gemma has been informed by Alba that everything is shared equally and that the property is also "her house." Is Gemma interested in the property in any way? This is a highly typical situation, and a wealth of case law will address this particular topic. This case is comparable to Stack v. Dowden, one of the most well-known instances. Gemma has the right to demonstrate that Alba and her actions have created a constructive trust. By their words and deeds, it is evident that they both intend to share equitable ownership of the property. As a result, equity will support Gemma in this situation should Alba attempt to claim her legal claim to the property and sell it without giving Gemma anything in return.
Only in cases where one party paid a portion of the purchase price but is not the property's legal owner would resulting trusts emerge.
Proprietary estoppel serves as a safeguard against one party breaking a commitment or profiting from another's ignorance of their own legal claims to a parcel of property. For instance, a landowner might persuade a third party to invest funds or labor on the property by offering guarantees or promises that will eventually provide the individual hope for a benefit or right over the landowner's holdings. Therefore, a claim's fundamental components are that someone behaved against them, a promise was given, and there was reliance on that promise.
Example of a Case
For the most of his life, Simon collaborated with his father, Robin, on the family farm. As an adult, he received pay that roughly matched the drawings that Robin had made at the time. The farm belonged to George, the uncle of Simon and Robin, but Stephen had been assured on several occasions that he would inherit Robin's portion of the property. Following a falling out between Simon and Robin, the partnership was dissolved. Stephen then filed a proprietary estoppel action, claiming he should receive Robin's portion of the land. In this instance, what would the court take into account? The extremely brief facts of Moore v. Moore [2018] are as follows. Based on the assurances given to him throughout the course of his childhood, Simon was successful in his claim, albeit with some very intricate financial agreements for his father's care. Cases involving proprietary estoppel are primarily brought by farmers, and they can be exceedingly challenging for the courts to handle.
Estate Contracts
Although this is outside the purview of this revision guide, it is nonetheless important to be aware of this as a potential equitable interest because it is closely related to conveyancing practice. When the parties exchange contracts, which happens at a very specific time in a conveyancing transaction, an estate contract will come into existence. This is the moment when the parties' agreement on the transaction becomes enforceable. There may occasionally be a lag between this exchange phase and the completion itself. Although the new owner is not the property's legal owner during this time, they are nevertheless required by law to pay for it on the completion date. The new owner may find themselves in a vulnerable situation because, at this point, they may have paid a significant sum of money without having anything material to show for it. The new owner receives an estate contract, which is an interest in the land, as equity strives to attain fairness. It merely grants the right to purchase that plot of property on the date of completion that has been agreed upon.
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