Ownership Of Items On Land Under UK Property Law

‘Whilst landowners’ extent of ownership above and below ground is reasonably clear, the ownership of items found on/in the land remains problematic.’

Critically analyse this statement with reference to relevant statute and case law.

Your work will be marked in accordance with the Kingston Law Department grading criteria. In accordance with module learning outcomes, your CW should demonstrate your ability to:

• locate and use relevant legal resources
• demonstrate a critical understanding of relevant legal developments, doctrines and principles
• apply, in a critical and analytical manner, the law of property in either problem question or essay format

Remember, the three key components to any CW are content, structure and presentation.

The Law of Property Act (LPA) and Land Ownership

Land law is a legal concept through which a person can attain rights in claiming his/her personal belongings or his/her property. The Law of Property Act (LPA) is a regulation that must be followed by a person in order to claim legal rights on his/her land. This act is applicable mostly in cases where two parties try to claim land ownership. According to section 205(1)(ix) of LPA, it is understood that “Land includes land of any tenure, and mines and minerals… buildings or parts of buildings and other corporeal hereditaments; also a manor, an advowson, and a rent and other incorporeal hereditaments, and an easement, right, privilege, or benefit in, over, or derived from land”. These are the benefits of a person who is legally eligible under the considerations of LPA. Based on this legislation, this paper aims to highlight a critical analysis of the statement “Whilst landowners’ extent of ownership above and below ground is reasonably clear, the ownership of items found on/in the land remains problematic”. This work is expected to be carried out through the application of appropriate legal principles, relevant legal cases, and certain doctrines in order to justify the overall findings.

Sole Legal Ownership

According to Section 24 of the Land Registration Act (LRA) 2002, the owners of land can be of two major types and they are depicted as sole legal or sole equitable owners and joint owners. LRA 2002 entails a regulation where a person having a registered land must be recorded in the proprietorship register in order to attain legal rights in making claim on his/her ownership. This register confirms that a person is legally entitled to own his/her registered land. However, analytical findings portray that legal rights enjoyed by a registered legal owner can be cited as the power to dispose of anything or take actions when viewing from the perspective of general law. In terms of cases such as mortgage and sub-demise, this power may not be enjoyed by the registered owner of the land. Besides, the general law states that a registered landowner can enjoy the right to make certain claims from the estates if they engage in any activity within the boundary of the owned land. Owners hold a power of making any form of decision-based on his/her own will. An example can be cited wherein the owner has to decide whether to lease the land or dispose of it. In this case, registered owners are not legally eligible to decide on providing a mortgage on land by sub-demise or demise. Hence, mortgages in these types of cases are neither applicable nor allowed in any registered land. According to section 23(1)(b) of the LRA 2002, registered owners can mortgage their land on any basis as most of the houses are built through grants.    

Types of Land Ownership

Besides, the sole owners of a registered land do not trust any other parties since every decision they make is based on their will. At the same time, sole legal owners come into agreement with the purchaser of the land after building trust with him/her. In some cases, purchasers tend to attain assurance from the owners even though there is no trust build-up between them. This type of situation is problematic for the owners especially to form an agreement on selling land at a fair price due to a lack of trust. Building trust at the time is easy but when associating with external parties, it becomes difficult for the sole owner.

An example can be cited regarding the subject matter, i.e. Stack v Dowden [2007] UKHL 17, where both the parties were unmarried couples but lived together for many years. The two parties were legally referred to as the co-owners of the purchased property on the basis of s 2(1), Trusts of Land and Appointment of Trustees Act 1996 (TLATA 1996). In addition, beneficial interests were unidentified since the trust between the co-owners (Stack and Dowden) and the legal estate were never established. This is because agreeing with each other they financially invested to buy a property. However, a major problem arose and thus, the property transfer did not take place as no declaration regarding beneficiary party were made between them.

Furthermore, the court took a decision on making the two parties entitled to receiving shares on a joint ownership basis under the consideration of the Law of Property Act 1925, s 34. This decision made by the court comprised of co-ownership and in a form of joint tenancy between the two parties i.e., Stack and Dowden. In the end, the decision was made by the court on the basis of expressing a declaration of trust, which aroused between Stack and Dowden thereby making them entitled towards receiving property shares on an equal basis. Trust developed between the two parties in this legal case was ‘express trust’ and this was considered under the consent of both parties. Thus, a problem was evident in this case where both the parties who had purchased the property were not entitled to attain transfer of ownership even after paying some amount of compensation. However, it must be noted that equity is controlled by the law but this was not observed in the judgment by the court in this case.

Joint Ownership and Proprietary Rights

In most cases, a particular registered land is owned by more than one person wherein every owner holds a right towards taking actions on an equal basis. This type of ownership is usually formed through a financial agreement between themselves before purchasing the registered land. The legal implication in terms of this type of ownership is unique and different. Thus, these landowners are legally referred to as the ‘co-owners’ and they are well aware of different rights and responsibilities of co-ownership. One of the rules is that the decision cannot be made by a single owner because the consent of every member is a major legal requirement. Joint owners are further eligible to hold rights when consent and agreement between every member are fulfilled. A difficulty in this type of ownership takes place when any of the landowning members transfers his/her legal title to other people. As per the regulation under the Law of Property Act 1925, s 1(6), joint owners cannot make any claim shares from the legal estates even if it remains undivided amongst its joint owners. Moreover, as per the Law of Property Act 1925, s 34(2), claims an undivided share among the owner members can be possible. Besides, legal cases with joint owners of the registered or a purchased land are ruled on the basis of two different conditions. The first condition is termed as ‘joint tenancy’ where there is only one legal owner with equitable rights, and the second condition referred to as ‘tenancy in common’ where the co-owners hold equitable shares. These types of legal terms and conditions make it problematic for the court to provide an appropriate judgment. These can also affect one of the parties to claim proprietary rights over their owned land or property even if they are registered.

In terms of LPA 1925, s1(6), Joint tenancy can be considered when the method of severance becomes applicable at the same time, whereas it is not possible for the joint owners under the legal law of LPA 1925, s36(2). It must be noted in this case that, neither severance method is applicable nor is joint tenancy considerable when ruling out cases, which involve joint co-owners. In terms of joint tenancy, legal owners can only be up to 4 members. Except for 4 legal joint owner members, the rest of the owners are further referred to as beneficial owners. Furthermore, ruling out the cases in order to transfer ownership among the joint members becomes difficult. One of the crucial requirements is depicted as unity among the four legal members. If unity between four members is not displayed then it becomes difficult for them to gain possession on their property or land. Unity of interest, unity of time, unity of title, and unity of possession is recognized as the four major unities to be established between 4 legal joint owners. An example can be cited as a legal case of AG Securities v Vaughan [1988] 3 WLR 1025. In this case, AG securities were an unlimited company that owned overall 25 Linden Mansions and Nigel Vaughan had rented communal areas and bedrooms existing in London during the year 1982. Along with Vaughan, there were other three members who had also rented other communal areas and bedrooms. Forming this rent agreement in the same year, AG Securities further terminated agreements with Vaughan after three years i.e., in 1985. 

Joint Tenancy Cases and Severance

AG Securities further claimed that a joint tenancy (lease) was held under the agreements made between them and Vaughan and due to it, the unlimited company (former party) possessed statutory protection to disclose the agreement with the latter. Thus, the judgment made in court portrayed that no joint tenancy existed in the agreement. Instead, the court stated that a license existed under the agreements formed between the two above parties. Thus, it was proved that the co-tenants of Mr. Vaughan and himself were just licensees but were not tenants. It was, later on, found that the AG Securities legally possessed statutory protection but it was not under the legislation of land and tenant. This is why the case was ruled out by the court with respect to the Rent Act 1977. In this case, even though an agreement between the two parties was established, one of the parties failed in dismissing the agreement with the other by assuming that they held a joint tenancy under the established agreement. Hence, the proprietary rights of AG Securities were further dismissed.

Focusing on the proprietary rights in joint tenancy cases involving legal estates or private estates, claiming proprietary ownership is declared on the basis of severance. Claiming land or property ownership is directly judged out by the court based on severance. As per LPA 1925, cases involving joint tenancy under the agreements made between the two parties can be ruled out through consideration of severance. As per LPA 1925 s36 (2), 7-094, severance does not deliver any impact or influence any statutory rights of the co-owners of the land or property. Thus, this enables the legal estates to directly attain statutory rights to transform a joint tenancy into equitable tenancy as per their will. This type of rulings affects the legal owners of the property as the judgement on proprietary ownership is driven on a severance basis. Goodman v Gallant [1986] Fam 106 is another case highlighted under this context. In this case, Mrs Goodman was entitled to hold 50% of the ownership on the shares after 5 consecutive years. Within these 5 years, Mrs. Goodman took care of Mr. Gallant. Based on the ruling of this problematic case, Mrs. Goodman failed in claiming 75% of the overall shares through severance of the joint tenancy under the agreements between her and Mr. Gallant. The court’s judgement in this particular case indicated equal distribution in terms of overall shares ownership. Since in these types of cases providing a proper judgement was problematic for the courts, a decision on ruling out this case was made on the basis of trust developed between the two parties.

Conclusion

It can be understood from the discussions made in the above sections that the ownership of land or any property can be transferred to the other party due to a lack of substantial legal terms and conditions in the agreement formed between him/her and the other selling party. Proprietary ownership can be difficult for the registered landowners even though they are legally proven. Legal terms and conditions are the crucial aspects of an agreement and the parties forming it must determine whether the ownership defined in the agreement was based on joint tenancy or severance. Besides, it was also found that owning legal rights over the purchased land is often problematic not only for the legal owners but also for the courts as they are the ones to judge cases involving the transfer or claiming of proprietary ownership. From the analytical findings and the above similar cases, the considered statement has been proven i.e. “Whilst landowners’ extent of ownership above and below ground is reasonably clear, the ownership of items found on/in the land remains problematic”.

AG Securities v Vaughan [1988] 3 WLR 1025

Goodman v Gallant [1986] Fam 106

Stack v Dowden [2007] UKHL 17

Graham Battersby, ‘Case Commentary, “Ownership of the Family Home” Stack v Dowden in the House of Lords’ [2011] 20 CFLQ 2, 255

Peter Sparkes, ‘Non-Declarations of Beneficial Co-Ownership, “The Conveyancer & Property Lawyer” [2013] TR 3, 213

Kevin Gray and Susan Francis Gray, Elements of Land Law (7th Edition, OUP Oxford 2011)

Mark P. Thompson, Modern Land Law (Fifth Edition, OUP Oxford 2012)

Martin Dixon, Modern Land Law (Sixth Edition, Routledge-Cavendish 2009)

Sandra Clarke and Sarah Greer, Land Law Directions (OUP Oxford 2012)

Casemine, ‘AG Securities v Vaughan’ (United Kingdom House of Lords, 2017) <https://www.casemine.com/judgement/uk/5a8ff8c960d03e7f57ecd6fe#> accessed 16 October 2019