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Property Law Notes

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Property Law Notes MEANING, PURPOSE AND THE CONCEPT OF PROPERTY • Sometimes property can change from being real property to being personal property and vice versa. For example - trees growing on land are real property but once cut down become personal property; an - bricks, mortar and timber are personal property but once affixed to land as a house become real property. The concept of property and its classification: Thing v interest in a thing • Property has 2 meanings: - A object, item or thing which is capable of being owned by a person eg: land and a car are each examples of property in this sense. - The proprietary rights (rights of ownership) to an object or a thing. In other words, the interest that a person has in a thing. We can therefore speak of the ‘property’ (meaning rights of ownership) in the land and the car being vested in a person X. • Sir William Blackstone defines property law as; ‘the sole and despotic dominion which one man claims and exercises ever the external things of the world, in total exclusion of the right of any other indicia in the universe.’ • Property can be divided into two categories: 1. Real property (Realty) 2. Personal Property (Chattels) Common Terms: • Interest: The conventional term for the bundle of rights which a person has in an object. • Ownership: - "The general right of ownership embraces subsidiary rights such as exclusive enjoyment, to destroy, to alienate or to alter, and, of course, the right to maintain, and to resume and recover possession from other persons” - Knapp v Knapp 1944. - Ownership indicates the relationship between a person and a corporeal or incorporeal legal object. - It confers a bundle of rights to enjoy, use possess, dispose of and alienate a "thing" as well as the capacity to ward of any encroachment on the thing. - Ownership can be limited by other rights but is not dependent on other rights. - Ownership is therefore the subsidiary right that is left when all other interests in the property have been taken away. • Title: Title is the measure of the strength of an interest. It provides a yardstick to measure the strength of competing claims of interests in property. • Possession: - "Possession connotes a relationship between a person and some material object. It is a relation subsisting in fact. The ‘right’ of the possessor to the chattel arises out of the factual situation" – Button v Cooper [1947]. - There are two necessary elements: Control and intention. Types of interests in real property - Doctrine of tenure and estate: • 2 fundamental doctrines: - The doctrines of tenure - which indicate the terms and conditions (known as services and incidents) upon which land is held. - The doctrines estates -which indicates the duration of a persons interest in the land. • The doctrine of tenure (or tenures) is a system of land holding. • We now hold land directly of the Crown. Technically, we don’t own land but rather own an interest (i.e. estate) in the land. • The tenure (i.e. terms and conditions on which we hold the land) is ‘freehold’ (called socage tenure in feudal times), which means free of services. • The doctrine of estates flows from the doctrine of tenure. • The word ‘estate’ comes from the Latin word ‘stare’, which means ‘to hold’. • There are now two types of estates: - a freehold estate – which is of indefinite duration; and - a leasehold estate – which is of a certain duration. • Freehold: - There are now 2 types of freehold estate: 1. the fee simple (also called estate in fee simple); and a) The fee simple is the most absolute form of ownership. The fee simple can be freely disposed of by sale, gift or will. ‘Fee’ indicates that it is an inheritable interest while ‘simple’ indicates that it descends without qualification. 2. the life estate. a) The life estate is granted to a person for the duration of their life or the life of another person. It can be created by sale, gift or will. The holder of this estate (called the life tenant) is entitled to occupy the land and receive rents and profits. Ownership and possession of land: • A person can acquire an interest in land through ownership or possession. • Ownership is the stronger interest. • However, a person in possession of the land can defeat the interests of the owner through adverse possession. This involves maintaining possession and an intention to possess (i.e. excluding all others including the true owner) for a continuous period of 12 years. • The law governing acquiring title through adverse possession is a mixture of common law and statute. • Common law determines the required nature of possession. • Statute determines the required duration of possession. Statute prescribes that, at the end of the required duration, the documentary owner’s title is extinguished (s 65 Limitation Act 1969 (NSW)). Co-Ownership: • Two or more persons can hold concurrent interests in land. The two types of co-ownership are: - joint tenancy; and - tenancy in common. • This is a horizontal division because they own the same interest in the land. • Each joint tenant owns an equal undivided interest in the whole property. • The four unities must exist to create a joint venture. These are unity of possession, unity of interest, unity of title and unity of time. • A feature of a joint venture is the right of survivorship – that is, on the death of one joint tenant their interest automatically passes to the survivors. • Tenants in common do not need to own the property in equal shares. There is no right of survivorship. Systems of title: • There are 3 main title systems to land in NSW: • ‘Old system’ title (also called ‘common law’ title) - Applies to all land in NSW granted before 1/1/1863, unless later converted to Torrens title - Some land is held under old system title. Ownership is traced back to the original grant or a ‘good root of title’. Land is transferred by deeds which are registered. • ‘Torrens’ title - Commenced on 1 January 1863 - Most land in NSW is Torrens title - This includes: • qualified title • limited title • strata title - This is title by registration – i.e. registration cures most defects in title. • ‘Crown land’ title - Mainly applies to rural land - Rights in the above land are also recognised under native title. This involves looking at the laws and customs of the people who have a connection with the land. Native title can be extinguished. • There are different ways of dividing interests in unit blocks and other subdivisions: • Some are held under company title – which means the company owns the land and each ‘unit owner’ owns shares in the company. • Most are held under strata title. This involves dividing the land and airspace into separate strata units (each owned by the relevant unit owner) and common property (owned by the body corporate). As stated above, strata title is registered under Torrens title. Legal and equitable interests: • You can have various legal and equitable interests in land which exist at the same time. • Legal interests are those recognised by the principles of common law and equitable interests are those recognised by the principles of equity. • There are various rules which determine the priority between competing legal and equitable interests in land. • However, it is also necessary to be able to identify when a legal or equitable interest arises. Present and future interests, reversions and remainders: • Fee simples, life estates and leasehold estates are all present interests because the holder has a right to immediate possession. • There are also future interests - which arise when a person is granted an estate which does not allow immediate possession but allows possession in the future - a future interest is still a presently existing interest, it is just a possession that occurs in the future. • A future interest can be a remainder (when granted by someone else) or a revision (when granted by themselves). • If A holds a fee simple in land and grants B a life estate thens A’s interest is called a reversion. • A reversion is also called a reversionary interest, estate in raven or estate in dee simple in reversion. • A reversion is the interest remaining in a person who has granted away less than the whole of his to he interest in the land. • It is not an estate in possession because A does not have possession. • But it is presently existing estate, carrying with it the right to seisin (possession) at some fire time (when the interest granted away comes to an end). • A reversion can be disposed of by sale, gift or will. • If A holds a fee simple in land and in the one instrument grant a life estate to B and the remainder of A’s interest to C then A cease to hold an interest, B holds a life estate and C’s interest is called a remainder. • REMAINDER: For example, a person, D, gives ("conveys") a piece of real property called Blackacre "to A for life, and then to B and her heirs". A receives a life estate in Blackacre and B holds a remainder, which can become possessory when the prior estate naturally terminates (A's death). However, B cannot claim the property until A's death. • If A holds a fee simple in land and grants a life estate to B via one instrument and what is left of A’s interest to C via a later instrument then A has transferred it reversion to C. • For example: A grants an interest to B for lift, with remainder to C for life - this results in B holding a present right to possession once B and C have died.
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