Freehold (law)
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In
common law In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omnipresen ...
jurisdictions Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels. Jur ...
such as
England and Wales England and Wales () is one of the three legal jurisdictions of the United Kingdom. It covers the constituent countries England and Wales and was formed by the Laws in Wales Acts 1535 and 1542. The substantive law of the jurisdiction is Eng ...
,
Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
,
Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
, and
Ireland Ireland ( ; ga, Éire ; Ulster Scots dialect, Ulster-Scots: ) is an island in the Atlantic Ocean, North Atlantic Ocean, in Northwestern Europe, north-western Europe. It is separated from Great Britain to its east by the North Channel (Grea ...
, a freehold is the common mode of ownership of
real property In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, is land which is the property of some person and all structures (also called improvements or fixtures) integrated with or affixe ...
, or land, and all immovable structures attached to such land. It is in contrast to a
leasehold A leasehold estate is an ownership of a temporary right to hold land or property in which a lessee or a tenant holds rights of real property by some form of title from a lessor or landlord. Although a tenant does hold rights to real property, a l ...
, in which the property reverts to the owner of the land after the lease period expires or otherwise lawfully terminates. For an estate to be a freehold, it must possess two qualities: immobility (property must be land or some interest issuing out of or annexed to land) and ownership of it must be forever ("of an indeterminate duration"). If the time of ownership can be fixed and determined, it cannot be a freehold. It is "An estate in land held in
fee simple In English law, a fee simple or fee simple absolute is an estate in land, a form of freehold ownership. A "fee" is a vested, inheritable, present possessory interest in land. A "fee simple" is real property held without limit of time (i.e., perm ...
,
fee tail In English common law, fee tail or entail is a form of trust established by deed or settlement which restricts the sale or inheritance of an estate in real property and prevents the property from being sold, devised by will, or otherwise alien ...
or for term of life." The default position subset is the perpetual freehold, which is "an estate given to a grantee for life, and then successively to the grantee's heirs for life."


England and Wales


Diversity of freeholds before 1925

In England and Wales, before the
Law of Property Act 1925 The Law of Property Act 1925c 20 is a statute of the United Kingdom Parliament. It forms part of an interrelated programme of legislation introduced by Lord Chancellor Lord Birkenhead between 1922 and 1925. The programme was intended to moderni ...
, the default position was of a freehold transferable to the owner's " heirs and assigns" (successors by inheritance, or purchase/gift, respectively). Those three words were often included in a conveyance to stress fee simple status. A ''
fee simple In English law, a fee simple or fee simple absolute is an estate in land, a form of freehold ownership. A "fee" is a vested, inheritable, present possessory interest in land. A "fee simple" is real property held without limit of time (i.e., perm ...
'' estate. A ''
fee tail In English common law, fee tail or entail is a form of trust established by deed or settlement which restricts the sale or inheritance of an estate in real property and prevents the property from being sold, devised by will, or otherwise alien ...
'' estate describes when transfer (by inheritance or otherwise) was limited to lineal descendants of the first person to whom the estate was given (known as "
heirs of the body In English law, heirs of the body is the principle that certain types of property pass to a descendant of the original holder, recipient or grantee according to a fixed order of kinship. Upon the death of the grantee, a designated inheritance such ...
" or "heirs of the blood"). There were also freehold estates not of inheritance, such as an
estate for life In common law and statutory law, a life estate (or life tenancy) is the ownership of immovable property for the duration of a person's life. In legal terms, it is an estate in real property that ends at death when ownership of the property may ...
and
copyhold Copyhold was a form of customary land ownership common from the Late Middle Ages into modern times in England. The name for this type of land tenure is derived from the act of giving a copy of the relevant title deed that is recorded in the man ...
was promoted into freehold by the Act.


Rentcharges and payments by way of positive covenants

All estates can be subject to payments to an influential prior owner – or land management person or body for multi-property (communal) benefit (estate rentcharges). The most viable form is the form for a neutral or pre-agreed source to collect communal benefit payments, the estate
rentcharge In English property law, a rentcharge is an annual sum paid by the owner of freehold land (terre-tenant) to the owner of the rentcharge (rentcharger), a person who need have no other legal interest in the land. They are often known as chief rents ...
. Either type is usually protected by registering the deed of rentcharge against the land. They can be extinguished by a compensation-based statutory procedure, which removes the regular administrative burden on both parties. Estate rentcharges are potentially subject to abuse, known as "
fleecehold Fleecehold refers to the inclusion of onerous terms in the deeds of a freehold property or the lease of a leasehold property in the United Kingdom. The practice of fleecehold is known to be increasing in the UK, according to the results of FOI re ...
". Any existing rentcharges ''other than estate rentcharges'' will be extinguished on 22 August 2037. Should the owner be guaranteed to benefit or wish to benefit from a communal infrastructure that requires maintenance, not funded by taxation, then ''
Halsall v Brizell ''Halsall v Brizell'' 957Ch 169 is an English land law case, concerning the enforceability of a positive covenant, that is required positive obligations, in this case the obligation to pay money for upkeep and repair. Facts Homebuyers on a Liver ...
'' (regarding an estuary wall) and ''
Re Ellenborough Park was an English land law case which reformulated the tests for an easement (the scope of the law of easements). It found an easement to use a communal garden to be a valid easement in law. There is no requirement for all of the houses to be imme ...
'' (regarding a communal garden) confirm that in those circumstances
positive covenants A positive covenant is a kind of agreement relating to land, where the covenant requires positive expenditure by the person bound, in order to fulfil its terms. See also *English land law *Equitable servitude *Easement *Restrictive covenant A ...
run with freehold land. This means active duties to pay can exist – in very closely analogous cases – but are otherwise generally void as to freeholds.


Adverse possession

Freeholds (rather leaseholds if subject to a leasehold) could quite easily be acquired by squatting before the
Land Registration Act 2002 The Land Registration Act 2002c 9 is an Act of the Parliament of the United Kingdom which repealed and replaced previous legislation governing land registration, in particular the Land Registration Act 1925, which governed an earlier, though sim ...
. Since its passage such rights are dominated by precisely fixing on the line of neighbouring plots in mutual-boundary disputes, after 12 years without formal contest. This is as there is otherwise a requirement to put the previous legal owner on written notice – which must have been received, or deemed received such as by recorded delivery, and be given fair opportunity to object. It is also more easily applicable to unregistered land, which is the status of a tiny number of parcels of non-agricultural freehold land in England.


Legal owners as trustees for beneficiaries

More than one legal owner means the land is deemed to be on trust. This doctrine is designed to bind the parties to act fairly to each other in the eyes of the
law of equity Equity is a particular body of law that was developed in the English Court of Chancery. Its general purpose is to provide a remedy for situations where the law is not flexible enough for the usual court system to deliver a fair resolution to a cas ...
. In default of other provision, such as mention of a trust deed, or background facts, the beneficiaries will be deemed to be the trustees (those named on the registered title) themselves. If a trustee dies then the statutory trustees take their place, or those appointed by a probated Will. Similarly if a company is wound up then the right to act as the trustee and be registered as a legal trustee vests in the liquidator. As regards third parties interesting in lending against or purchasing the land the general doctrine helping them is the
bona fide purchaser A ''bona fide'' purchaser (BFP)referred to more completely as a ''bona fide'' purchaser for value without notice is a term used predominantly in common law jurisdictions in the law of real property and personal property to refer to an innocent ...
without actual nor constructive notice doctrine. This is however subject to all of the prudent surveyors, conveyancer's and physical checks having been carried out well which is formulated in the countering doctrine of
caveat emptor ''Caveat emptor'' (; from ''caveat'', "may he/she beware", a subjunctive form of ''cavēre'', "to beware" + ''ēmptor'', "buyer") is Latin for "Let the buyer beware". It has become a proverb in English. Generally, ''caveat emptor'' is the contrac ...
(buyer beware). A beneficiary in patent actual possession can still enjoy rights as against a purchaser, or more commonly a mortgage or other secured lender, under the
Land Registration Act 2002 The Land Registration Act 2002c 9 is an Act of the Parliament of the United Kingdom which repealed and replaced previous legislation governing land registration, in particular the Land Registration Act 1925, which governed an earlier, though sim ...
. Trustees are bound by the terms of the trust, but the strict rules and
maxims of equity Maxims of equity are legal maxims that serve as a set of general principles or rules which are said to govern the way in which equity operates. They tend to illustrate the qualities of equity, in contrast to the common law, as a more flexible, ...
and by any decision formally made by all of the adult beneficiaries.''
Saunders v Vautier Saunders is a surname of English and Scottish patronymic origin derived from Sander, a mediaeval form of Alexander.See also: Sander (name) People * Ab Saunders (1851–1883), American cowboy and gunman * Al Saunders (born 1947), American foot ...
''
Inequities the Trusts of Land and Appointment of Trustees Act 1996 (TLATA) resolved included the fact that it was hard to establish a trust without it coming under the auspices of the
Settled Land Act 1925 A settler is a person who has migrated to an area and established a permanent residence there, often to colonize the area. A settler who migrates to an area previously uninhabited or sparsely inhabited may be described as a pioneer. Settle ...
. That earlier Act brought a range of problems. In particular, the co-owners of property were regarded as having beneficial interests in money and not in the land. Problems arose where partners disagreed over when they wanted to sell a property – usually in the case of separation. This led to situations where spouses and children could find themselves removed from their customary home inequitably. One of the key features of TLATA is its imposition of statutory considerations to be taken into account when dealing with the disposition of trusts and ordering a sale of a family home.


See also

*
Allodial title Allodial title constitutes ownership of real property (land, buildings, and fixtures) that is independent of any superior landlord. Allodial title is related to the concept of land held "in allodium", or land ownership by occupancy and defens ...
*
Copyhold Copyhold was a form of customary land ownership common from the Late Middle Ages into modern times in England. The name for this type of land tenure is derived from the act of giving a copy of the relevant title deed that is recorded in the man ...
*
Fee simple In English law, a fee simple or fee simple absolute is an estate in land, a form of freehold ownership. A "fee" is a vested, inheritable, present possessory interest in land. A "fee simple" is real property held without limit of time (i.e., perm ...


Notes


References

{{Use dmy dates, date=July 2018 English legal terminology Legal terminology Real property law Landlord–tenant law