Determination of opiorphin in human saliva by means of HFBA-based SUPRAS and LC-MS/MS

The two principal rights or interests in land with which the valuer is concerned are known respectively as the freehold and leasehold.

To the valuer the term “freehold” implies a property which the owners hold absolutely (i.e. unconditionally) and in perpetuity, and of which they are either in physical possession or in receipt of rents from leases which have been created out of the freehold interest. The technical legal term for this is the “fee simple absolute in possession”. Section 1 of the Law of Property Act 1925 states that this and the “term of years absolute” are the only forms of ownership capable of being a legal estate in land and thus existing at common law (see below). “Term of years absolute” is the technical term for the leasehold estate. In practice, the words freehold and leasehold are used instead of the somewhat archaic phrases in the Law of Property Act. However, it should be observed that in law the freehold

Property in land 17 also includes lesser estates in land than the fee simple (see “Successive interests”

below).

Other interests are merely “equitable” (see below). A “legal estate” is “good against the whole world”, but an equitable interest is enforceable against some persons and not others. A “fee simple absolute in possession” exists in all land in England and Wales; whereas leaseholds and equitable interests, where they exist, are superimposed on (or “carved out” of) such ownership, and subsequently terminated, depending on circumstances.

In the following sections it will be convenient to consider first the position of freeholders who are in physical possession of their property, and then note the nature and incidence of the various types of leasehold interest which may be created out of the freehold. Then other interests in land will be examined, and finally it will be explained how successive interests in property – such as “entailed interests”, “life interests” and “reversions and remainders”, which are “equitable interests” only – may sometimes arise under wills or settlements.

At common law, physical ownership of “land” extends indefinitely above and below the surface of the land, within reason, and thus in a normal case includes both air space and subsurface strata of minerals, but not chattels belonging to some other identifiable owner. Boundaries should be unambiguously specified.

Ancient hidden gold and silver artefacts belong to the Crown as “treasure trove”;

but the Treasure Act 1996 has modernised the rules and the finder and landowner may be granted a reward. The Mines (Working Facilities and Support) Act 1966 strictly regulates all mining operations (not least under another owner’s land).

Under the Petroleum Act 1998, the Government grants “licences to search and bore for, and get, petroleum”, which in its natural state is vested in the Crown. The landowner is entitled to compensation for the access to his land for the exploita-tion of the petroleum. This is to be assessed “on the basis of what would be fair and reasonable between a willing grantor and a willing grantee”, with an additional 10% for compulsory acquisition. See BP Petroleum Developments v Ryder.¹

3. Freeholds

Under the Crown, legal freeholders are inherently the absolute owners of land, and are sometimes said to be able to do what they like with that land, subject only to the general law (notably planning control) and to the lawful rights of others. Legal freeholders may thus in a normal case develop land, transfer it, or create lesser interests in it, without the consent of any other private person. Their ownership of the property is perpetual, even though they are mortal, and so passes to their heirs on death. (If the deceased made no will and has no dependants or relatives entitled to inherit under the intestacy rules, the property reverts to the Crown.)

1 [1987] 2 EGLR 233.

18 Property in land

Buildings may become worn out, the use and character of the property may change; but the land remains the permanent property of the freeholders and their successors, whether the latter obtain it from them by gift, sale or disposition on death.

Legal freeholders, as absolute owners of their property, usually hold it without payment in the nature of rent, though in strict legal theory they are always nominally the tenants of the Crown. But in some parts of the country freeholds will be found to be subject to annual payments known as “rentcharges”, “fee farm rents” or

“chief rents”. These usually arise through a vendor of freehold property agreeing to accept an annual sum of money in perpetuity, or for a limited term, in lieu of the whole or part of the purchase price. Such a rentcharge must be distinguished from a normal rent (or “rent service”), which is an incident of a lease. The rentcharge owner has the right, in the event of non-payment, to enter and take the rents and profits of land until arrears are satisfied. The RentCharges Act 1977 prohibits the creation of new rentcharges (they are void) and makes provision for the gradual extinguishment of existing ones by 2037.

A rentcharge or fee farm rent will be treated as an outgoing when arriving at the net income of the freehold for valuation purposes. As for the interest of the rentcharge owner (which is technically a form of legal interest in the land), the rentcharge is usually small in amount compared with the net rental of the buildings and land on which it is secured, and it depreciates in real terms as does any fixed income in periods of inflation.

During a state of national emergency, statute may give the Crown drastic rights of user and possession over the property of its subjects. Even in normal times there are numerous Acts whereby owners can be forced to sell their land to government departments, local authorities or other statutory bodies, and even some private companies, for various purposes. Such compulsory purchases are to be paid for at market value, but this is determined statutorily under the Land Compensation Acts 1961 and 1973.

To develop land, owners must obtain planning permission under the Town and Country Planning Act 1990 (as amended). Legislation governing environmen-tal health, housing and other uses of land, including Local Acts and Building Regulations, restricts the erection or reconstruction of buildings or compels the owners to keep them in a state of good repair and sanitation. Environmental pro-tection legislation governs the emission of pollutants and requires the remediation of contaminated land. Other legislation gives various leaseholders of residential property, including public sector tenants, security of tenure unless the landlord can establish certain grounds for possession. The leasehold reform legislation gives the right to tenants of long residential leases to require their landlords to sell them the freehold reversion or to grant lease extensions.

The owners’ freedom to do as they like with their property is also limited by the fact that they must not interfere with the natural rights of others as, for instance, by depriving their neighbours’ land of support or polluting or diminishing the flow of a stream, or causing a nuisance. Often the owner’s enjoyment is lessened

Property in land 19 by the fact that some other owner has acquired an easement over their property or is entitled to the benefit of covenants restricting the use of it; these rights are discussed below.

(a) Registered and unregistered land

The title to unregistered land depends on the title deeds, a chain of transactions embodied in deeds and other documents leading up to the present owner. This necessitates the storing of old deeds and renders conveyancing a laborious and expensive process. By contrast, if land is registered with the Land Registry details are kept on an easy-to-read electronic database which establishes proof of own-ership protected by a state guarantee of the title. Now that the Register is public, anybody can examine the title to a piece of land by searching on the Land Registry website and paying a small fee.

As a “legal estate”, a freehold can normally be transferred (by a living owner) only on the execution of a deed, that is to say a document expressly stating that it is

“a deed” which is signed and witnessed (Law of Property Act 1925, section 52, and Law of Property (Miscellaneous Provisions) Act 1989, section 1). Under the Land Registration Act 2002, legal freeholds and leaseholds for over seven years must, when transferred or created, be entered in the Land Registry within two months.

The register of title consists of a property register, a proprietorship register and a charges register. The property register identifies the property with an Ordnance Survey-based title plan. The proprietorship register identifies the proprietor, the class of title and various other matters including notices and restrictions. The charges register identifies leases, charges (mortgages) and other adverse interests.

Before registration of title came into existence, all equitable interests (see common law equity and Trusts, below) depended for their protection on “notice”

in some form (and some still do). In other words, if a purchaser acquired title in good faith without notice of an equitable interest, his ownership was not subject to that interest and it could safely be ignored. This rendered equitable interests somewhat insecure. Now equitable interests must be registered for protection in the Land Register in the case of registered land or in the Land Charges Department (Land Charges Act 1972) for unregistered land.

In registered land there are some interests which, although not registered, are binding on purchasers. Such interests are known as “overriding interests” and include persons in actual occupation, unregistrable leases and legal easements and profits (see section 9). The buyer’s surveyor will, of course, inspect the property and, in doing so, ascertain whether there are any occupiers and whether there is evidence of easements such as obvious tracks and rights to light. The buyer’s solicitor will make preliminary enquiries about any overriding interests and require any occupiers to sign the contract and agree to give vacant possession. (In the case of unregistered land a buyer is deemed to have constructive notice of all the interests of persons in actual occupation if they could be discovered from reasonable inquiries.)

20 Property in land (b) Adverse possession

The common law remedy for an owner wrongly excluded from possession (tres-pass) is an order of possession obtainable from the court. Damages for financial loss are also obtainable against the trespasser. But if owners are excluded from possession of registered land by trespassers who treat the land as their own (adverse possession), then after not less than 10 years the trespassers may require the Land Registry to grant them a registered title, provided that they have first notified the owners who have then failed to object (Land Registration Act 2002, Schedule 6).

(Where the owner does object, the squatter may only be registered as the proprietor if certain conditions set out in the Schedule are met.) This makes the acquisition of title to registered land by adverse possession unlikely, so long as the rightful owner keeps the Registry aware of any change of his address for notification. In unregistered land, however, no notification is required and 12 years’ adverse pos-session may result in the owner’s interest being extinguished. This is of concern to large landowners, such as local authorities and universities, whose land is not registered, and provides a strong incentive to register title.

4. Leaseholds

It commonly happens that freeholders, instead of occupying the property them-selves, grant or “let” the exclusive possession of the premises to another for a certain period, usually in consideration of the payment of rent, under a lease or tenancy. Grantors of leases are called lessors or landlords and their interest while the lease lasts is the reversion. Grantees are called lessees, leaseholders or tenants.

A lease is normally an estate in land, and a contract.

A leasehold estate is in strict legal parlance a “term of years”. This expression covers leaseholds of all kinds, no matter how long or short the period for which they are “demised” (i.e. granted) and even if they are periodic. A periodic tenancy – e.g.

yearly, quarterly, monthly or weekly – automatically renews itself until terminated by notice to quit from either side, whereas a fixed term tenancy ends on the expiry of the term. In some circumstances, a lease can be cut short by forfeiture (for breach of covenant by the tenant) or by the exercise of a right to break inserted in the lease. Fixed term tenancies may be of any length and a “building lease” of 99 or even 999 years is often met with; occupation leases for terms such as 5, 10, 15, 25 or 50 years are also commonly found in practice.

Like a freehold conveyance, a lease or tenancy taking effect as a legal estate must be granted by deed; but the Law of Property Act 1925, section 54, provides that no formalities whatever are needed for the grant of a tenancy at a full market rent for not more than three years, taking effect immediately. So parties who believe that such an informal lease is unenforceable may be caught out. See, for example, Hutchison v B & DF.²

2 [2008] EWHC 2286 (Ch).

Property in land 21 Grants of tenancies (but not the obligations contained in them) may be back-dated; or they may be made to begin at a future date but not more than 21 years after the date of the grant (these are known as “reversionary leases”). Leases of more than seven years or leases which take effect in possession more than three months in the future must be registered at the Land Registry.

A lease can be transferred – “assigned” – by gift or sale, or on death, just as a freehold can, although this right can be restricted by the lease. If an assignment takes place in breach of the lease, the assignment as between the assignor and assignee is valid, but is subject to the lessor’s right to forfeit the lease for breach of covenant.

A lease can also be granted out of a lease if the lease allows. Such a lease is called a sublease or underlease and must be at least one day shorter than the head lease, otherwise it takes effect as an assignment. The head lessee is the landlord of the sublessee. In theory there can be a multitude of subleases, sub-underleases and sub-sub-underleases carved out of a lease if it is long enough. The term “head rent” is used to distinguish the rent paid by the head tenant to the freeholder from any rent paid in respect of the same property by a subtenant to the head tenant (subrent). Many commercial leases prohibit the head tenant from subletting at less than the head rent.

Freeholders who grant leases or tenancies retain the right at common law to regain physical possession of the property when these leases or tenancies come to an end. For this reason the landlord’s interest in the land is known as his “reversion”.

A leaseholder who has subleased has a leasehold reversion because his right to possession reverts to him at the end of the sublease.

The common law right of the reversioner to regain physical possession of the property at the end of the lease (including, as a normal common law rule, any buildings or other “fixtures” added to the land by the tenant which are not remov-able by the latter as “tenant’s” fixtures) is now much restricted by legislation. The most important statutes are the Housing Act 1988, the Landlord and Tenant Act 1954, the Agricultural Tenancies Act 1995, the Leasehold Reform Act 1967, the Leasehold Reform, Housing and Urban Development Act 1993, and the Housing Act 1996. The provisions contained in these acts are considered in greater detail in Chapters 17 and 18. These statutes usually protect the tenant in actual occupa-tion, so where there is a sublease of the whole of the premises, the subtenant has the protection.

A lease is normally subject to the payment of an annual rent and to the obser-vance of covenants contained in the lease. Commercial leases often include pro-vision for “rent reviews” to take account of general changes (assumed normally to be increases) in property values.

If the rent a lessee has covenanted to pay is less than the true rental value of the premises, the lessee will be in receipt of a net income from the property, a “profit rent”, the capitalised value of which, for the balance of the term, will represent the market value of the leasehold interest. Even if a lessee is paying the market or

“rack” rent of the property and the lease is subject to regular rent reviews, it may

22 Property in land

have some value in that it confers a right to occupy the premises for the unexpired term and may enable the lessee to claim a new lease or to continue in possession at the end of the term under the legislation mentioned above. If a lessee is paying a rent above the full value, the lease will have a negative value owing to the liability that it creates.

Lessees are very much more restricted in their dealings with the property than freeholders. In many cases they will be under express covenants to keep the premises in good repair and redecorate internally and externally at stated inter-vals. Alternatively, they may have to pay the landlord by way of a service charge for repair, maintenance, insurance and the provision of facilities and services.

Usually they cannot carry out alterations or structural improvements to the prop-erty without first consulting their lessors, and possibly covenanting to reinstate the premises in their original condition at the end of the term. Often they may not sublease or assign their interest or part with possession without first obtaining their landlord’s consent, although in most leases that consent cannot be unreasonably withheld. If a tenant wishes to “surrender” his lease to his landlord, this will need the landlord’s consent. Whether it is forthcoming will largely depend on market conditions at the time. Where the lease is valuable, the landlord may be happy to purchase it back from the tenant. Where it is not, the tenant may have to pay for release.

If a tenant sublets, even though the sublease contains precisely the same covenants as the headlease, there is the risk of the tenant incurring liability to his landlord if the subtenant fails to keep his part of the bargain. Similarly, if a ten-ant assigns his lease, he may still be held liable for breaches of the lease coventen-ants by the assignee under the common law or, in leases granted after 1995, under the Landlord and Tenant (Covenants) Act 1995 by virtue of a guarantee given as part of the terms for assignment.

For these and other reasons, leaseholds are less attractive to the investor than freeholds and the income from a leasehold interest in a particular class of property will usually be capitalised at a higher rate per cent than would be used for a freehold interest in the same property.

There follow some types of lease commonly met with in practice.

(a) Building leases

These are leases of land ripe for building, i.e. development, under which the lessee undertakes to pay a yearly ground rent for the land, as such, to erect suitable

These are leases of land ripe for building, i.e. development, under which the lessee undertakes to pay a yearly ground rent for the land, as such, to erect suitable