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Creation & Transfer: Estates & Interests

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Creation & Transfer: Estates & Interests

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  • formalities required: create or transfer / legal estate or interest in land / legal or equitable
  • general rule: legal estates & interests / created & transferred / by deed

Legal estate

  • 2 formalities create or transfer legal estate: 1. contract (involves creation an equitable interest) / & 2. transaction completed when legal estate is created or transferred
  • general rule: deed required (s.52(1) Law of Property Act (LPA) 1925)
  • lease exception: less than 3 yrs / lease immediate in possession / for best rent (s.54(2) LPA 1925)
  • lease not within s.54(2) LPA 1925: 21 day lapse in possession (Long v Tower Hamlets LBC)
  • if lease falls within s.54(2) LPA 1925: assignment of that lease / deed not required (Crago v Julian)
  • valid deed: doc indicates is deed / parties' signatures witnessed & signed by witness / deliver parties deed (s.1 Law of Property (Miscellaneous Provisions) (LPA) Act 1989 )
  • restrictive approach: need to show intent / extra status of deed (HSBC Trust Company v Quinn)
  • delivery: makes clear / intent to be bound / conditional delivery: in escrow / no intent to be bound immediately
  • delivery effective : if maker retains physical possession deed / but makes clear intends bound / difference between deed & escrow time & circumstances when obligation can be enforced (Alan Estates v WG Stores)
  • conveyancing transactions: usually deliver deed transferring ownership as escrow
  • buyer not want to be bound until completion (buyer pays balance, parties move & seller transfers ownership) / seller not want to be bound until buyer has paid purchase price
  • completion: if condition is satisfied / delivery occurs / parties bound by deed
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Creation & Transfer: Estates & Interests

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Interests in land

  • general rule: create or transfer / legal interest in land / deed required
  • equitable interests: created under trust / other (landowner enters restrictive covenant or estate contract) / formalities differ if trust
  • express trusts: must satisfy s.53(1)(b) LPA 1925 / written declaration & signed
  • implied trusts: informally created by landowner / no formalities imposed (s.53(2) LPA 1925)
  • estate contract: create or convey estate or interest in land / formalities under s.2 LPA 1989: written / incorporate all terms / signed
  • s.2(5) LPA 1989 exceptions: short lease under s.54(2) LPA 1925 / auction sale / regulated Financial Services and Markets Act 2000 (regulated mortgage not exempt)

Exchanging contracts

  • seller's solicitor draws up 2 identical contracts / seller & buyer sign copy each / solicitors exchange / binding at exchange (Commission for the New Towns v Cooper)
  • following exchange: seller owns legal estate / buyer acquires equitable interest
  • buyer specific performance remedy compel seller to perform contract for sale / if either party withdraws without good reason breach of contract remedy
  • estate contracts include equitable leases: if no deed & term too long to fall within parol exception (s.54 LPA 1925) / if formalities for estate contract followed equitable exists
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Creation & Transfer: Estates & Interests

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Proof of ownership

  • buyer requires seller prove ownership (title) legal estate
  • unregistered: seller provides deeds & conveyances / show unbroken chain of title / good root of title: documents for 15 yrs / conveyances show third party rights (covenants & easements) / disadvantages: uncertainty of good title & lost or fraudulent conveyances


  • registration of title: Land Registration Act 1925 / replaced by Land Registration Act (LRA) 2002
  • mirror principle: register reflect land ownership & third party rights / curtain principle: register not reflect equitable interests under trusts / matter remains behind curtain / if buyer follows correct procedure (overreaching) can take free / insurance principle: if register not accurate compensated
  • voluntarily register titles or compulsory first registration triggered when unregistered land sold
  • s.4 LRA 2002 triggers: transfer of qualifying estate / valuable or other consideration / creation of a protected first legal mortgage / freehold estate / legal fee simple / s.6(4) LRA 2002: within 2 months
  • landowners apply first registered / district land registry / allocated title number to new register
  • estates capable registered / separate title number: legal fee simple absolute in possession & legal leases (more than seven years)
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Creation & Transfer: Estates & Interests

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Registered titles

  • 1st register property register: description of land & title plan / 2nd register proprietorship register: registered proprietors / limitations on registered proprietors' powers deal freely (warnings: trusts & need to overreach) / 3rd charges register: proprietary rights burden land (restrictive covenants)
  • title absolute: land registry assessed evidence / entirely satisfied as to owner
  • sale of registered title: completion of transfer / not transfer legal estate from sellers to buyers / buyers names must be entered on register
  • dispositions completed by registration: s.27(2) LRA 2002: transfer of registered title / new lease for 7 + yrs / legal easements by deed on property register of land benefitting from easement / mortgages (legal charges) by entry on the charges register of burdened land
  • registered land conveyancing transaction: contract / completion / registration

Electronic conveyancing

  • Electronic Communications Act 2000 / power to allow electronic conveyancing / all stages electronic
  • s.91 LRA 2002: electronic document capable satisfying s.2 LPA 1989 (written contract) & s.52(1) LPA 1925 (deed needed to effect grant or conveyance) / registration of transactions simultaneous with completion
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