LAND TENURE LAND • Land Ownership • Land Tenure • Land Sales Land definition • Mitchell v Mosley 1914 "the grant of land includes the surface and all that is above - houses, trees, and the like - ... and all that is below, i.e. mines, earth, clay, etc.". Land definition • Land and Property Act 1925 “Subject to certain exceptions land includes the sub-soil down to the depths of the earth and the airspace above the land to a reasonable height” Property Classification of property Property Real immovables Personal Freehold land movables Corporeal Hereditaments Incorporeal Hereditaments Chattels Chattels land,buildings easements Real Personal leases Choses in Action Choses in debt, proceeds of cheque Possession patent,copyright cow, horse shares Land Ownership Classification of estates Estates Freehold Leasehold Tenancies Freehold Freehold not of Inheritance of Inheritance Fee Simple Fee Tail Estate for Life Pur Autre Vie Land Ownership • Fructus naturales – growing naturally • Fructus industriales – growing as a result of industry i.e. sown crops Fee simple ownership • The natural right of support for land • The right of alienation • The right of enjoyment Limits of fee simple ownership • Limits of the land – boundary • Rights of others over land – Easements – Mortgages • Statutory restrictions • Treasure – Treasure Act 1996 • Minerals Limits of fee simple ownership • Wild animals • Liability in Tort • Fishing rights • Water rights • River beds • Chattels found on land Treasure Act 1996 • “….An Act to abolish treasure trove and to make fresh provision in relation to treasure….” • The Treasure (Designation) Order 2002 Liability in Tort • Tort is a civil wrong independent of contract • A Tort is not a crime – crimes result in punishment – a tort results in the righting of a wrong • A Tort is not a contract – a contract is an agreement between two individuals – Torts are duties fixed by law Liability in Tort • a wrong against the person e.g. assault • wrongs to reputation e.g. defamation • wrongs to property e.g. trespass • wrongs to persons or property e.g. nuisance • wrongs of interference in contractual relations e.g. inducing a breach of contract • abuse of le.g.al proceedure e.g. malicious prosecutions. Easements • An easement is the right to use, or to restrict the use of, the land of another person in some way • rights of way, rights of light, rights to abstract water and rights to the support of buildings. Easements • dominant and servient tenement • relate to property • If two pieces of land come under the same ownership then the easement ceases to exist Easements right of way HOUSE A B DOMINANT SERVIENT TENEMENT TENEMENT Easement right of support Mortgages • the borrower (morgagor) obtains a loan from another person (a mortgagee) on the security of a property • deeds relating to the land are transferred whilst loan is repaid • mortgagee has the right to reposess on repayment default Land Tenure “Conditions or period of holding land” Land Tenure • Owner-occupation • Landlord- Tenant – Farm Business Tenancy – Agricultural Holdings Act 1986 • Partnerships • Share Farming (Joint Venture) • Short term letting and licences Land Tenure Ownership Occupation Owner - Occupier Tenant Landlord Owner Occupation • owner of the land occupies land • increase in owner occupation – decline in tenanted estates – capital taxation – legislation restricting the rights of the owner over the tenant (various Agricultural Holdings Acts). Owner Occupation • Advantages – Freedom to use land as you please • Disadvantages – Large quantities of capital tied up – Total responsibility for land and buildings Landlord-Tenant • Landlord (owner of land) – land – farmhouse – buildings – roads – all other items of infrastructure – supplied in exchange for an annual cash sum Landlord - Tenant • Tenant – livestock – machinery – working capital. Legislation • Agricultural Holdings Act 1986 – agricultural tenancies had full security of tenure – indefinite period from year to year until terminated by a 12 mths notice to quit or on on the death of the tenant • Agricultural Tenancies Act 1995 – Farm Business Tenancy – less interference by law Farm Business Tenancy • Agricultural Tenancies Act 1995 • Applies to all farm business tenancies, both written and oral, beginning on or after 1 September 1995 • The principle of freedom of contract Farm Business Tenancy • Reasons for legislation • encourage landowners to let land (only 35% of agricultural land is tenanted) • to allow tenants to diversify into other businesses whilst remaining agricultural tenants Farm Business Tenancy • Reasons for legislation • to enable effective enforcement of environmental and conservation covenants • to abolish the recourse to unsatisfactory short term arrangements which were being used to avoid the security provisions of the Agricultural Holdings Act 1986 Farm Business Tenancy exclusion (1) • Existing tenancies protected under the Agricultural Holdings 1986 Act • Succession tenancies where two successions have not taken place Farm Business Tenancy exclusion (2) • Variations in an Agricultural Holdings 1986 Act tenancy between the same landlord and tenant. – Tenancies predating 1 September 1995 cannot be converted to a Farm Business Tenancy. Farm Business Tenancy exclusion (3) • Tenancies agreed in contract before 1 September 1995 but commencing after that date fall under the provisions of the Agricultural Holdings 1986 Act. • Otherwise from 1 September 1995 all new tenancies will be assumed to be under the terms of the 1995 Act. Farm Business Tenancy statutory intervention • 6 areas only – definition of farm business tenancy – notice required to terminate a tenancy – tenant's right to remove fixtures – rent review – compensation – resolution of disputes Farm Business Tenancy • business and agricultural conditions • part of the land must be farmed for the purposes of trade or business • agriculture condition requires that the tenancy must be primarily or wholly agricultural • business conditions allow diversification away from agriculture Farm Business Tenancy • Fixed term tenancies of 2 years or less automatically expire on the term date • Notice of at least 12 months but less than 24 months is required terminate a tenancy of over 2 years Farm Business Tenancy • Tenant can seek compensation for improvements made during the tenancy • Opt out of rent reviews • Rent can be varied in relation to objective criteria Agricultural Holdings Act 1986 • There must be a contract of tenancy to let land for use as agricultural land • The land must be used for trade or business • The letting to the tenant must not be "during his continuance in any office, appointment or employment held under the landlord" Definition of Agriculture "including horticulture, fruit growing, seed growing, dairy farming and livestock breeding and keeping, the use of land as grazing land, meadow land, osier land, market gardens and nursery grounds, and the use of land for woodlands where that use is ancillary to the farming of land for other agricultural purposes" Horses and the Agricultural Holdings Act • Grazing non-agricultural animals e.g.. riding horses, by way of business is using land for agricultural purposes • Grazing only - no shelter - non agricultural business Tenancy agreement • The relationship in terms of rights and obligations between landlord and tenant is governed by the tenancy agreement. • No compulsion for FBT to have a written tenancy agreement. • It is in the best interest of Landlord and Tenant to have a written agreement. Tenancy agreement • Some provisions in the 1995 Act apply automatically unless parties agree in writing to exclude or modify – rent – disputes procedure Tenancy agreement • Names of the parties involved. • Particulars of the holding – map – area • Duration of tenancy • Rent payable including timing. • Rates payable by landlord and tenant including drainage rates. Tenancy agreement • Covenants by the tenant – manurial value – insure all deadstock and harvested crops against damage by fire – not to sub-let without permission – conservation – anything else • Power for the landlord to re-enter onto the holding in the case of a breach by the tenant. Security of tenure • Significant under the 1986 Act • Minimal under the 1995 Act • Security of tenure for 2 successions in tenancies created before July 12, 1984 • Eviction very difficult – General Notice to Quit – Uncontestable Notice to Quit Eligible successors to a tenancy under the 1986 Act • Within qualifying degrees of kindred to deceased tenant i.e. wife, brother, sister, child or treated child. • Deriving a living from the holding. • Occupiers of a commercial unit of agricultural land not eligible. • No succession to more than one commercial unit. Landlord-Tenant • ADVANTAGES – Enables landlords with no farming skills to utilize land for agricultural purposes. – Gives opportunity for persons with limited capital to enter farming without having to purchase land. – Enables landlords with insufficient capital to utilize land for agricultural purposes. Landlord-Tenant • ADVANTAGES – Tenancy agreement can specify a minimum standard of farming. Landlord-Tenant • DISADVANTAGES – Landlord has poor land owning skills. – Landlord wealth may not be sufficient to maintain buildings etc.. – Capital planning is limited. – Tenants have considerable security under 1986 Act conditions but much less under the 1995 Act. Partnerships • Landlord retains vacant possession • The return on capital from owning land is low compared to the return on farming the land. A partnership enables a landlord to feel the benefit of both. • Retains a proportion of control over use of land. Partnership • Applies for a limited period and can therefore be terminated at relatively short notice. • Enables landowner to farm land when capital and/or income may be limiting for landlord-tenant relationship. Partnership benefits to farming partner • Farming partner has opportunity to have a stake in an agricultural business. • Amount of capital required is less than in an owner occupied situation. Partnership agreement • Name, place of business, bankers and cheque signing rights. • Capital provided, shares of partners and provision for ploughing profits back into the business. • Salary levels. • Expenses rights. • Profit sharing. Partnership agreement • Dealing restraints, bounds of purchasing/selling rights. • How to dissolve the partnership; notice and circumstances e.g. bankruptcy or incapacity. • Provision due to death of one or other of the partners. Termination will take place if no provision is made. Partnership agreement • Partners working time to ensure that one is not a sleeping partner. • Partnership property. • Insurance, especially important due to joint liability. • Accounts, where they are to be kept, by whom, and who is responsible for drawing up the accounts. • Arbitrator for disputes. Share Farming or Equine Joint Venture • Joint venture between two separate businesses. • It is deliberately designed to avoid the creation of partnership or tenancy • Short term 1-5 yrs Share Farming or Equine Joint Venture • OCCUPIER supplies – land – buildings – fixed equipment – share of livestock • SHARE FARMER supplies – labour – working machinery – share of livestock Share farming - OCCUPIER • he does not want to participate in the day to day management a business; • he wishes to give someone an opportunity to start a business; • he wants to retain vacant possession of the land and share the risk of farming/equine Share Farming - SHARE FARMER • opportunity to get started in farming/equine • opportunity for an established business to expand and spread the fixed costs of labour and machinery Share farming/equine joint venture • The Share farmer and Occupier derive their respective incomes by sharing farm output • The PROPORTION is determined by the value of each party's contribution of FIXED COSTS. • Detailed budgets can then be drawn up using the proportions Share farming example • Area – 75 ha • Stocking – 90 Dairy cows – 200 Mule ewes – 12 ha barley • Share farmer has £6000 interest to pay Share farming example Value of Fixed Costs Total £ Occupier £ Share £ Labour (including share 27000 27000 farmer) Machinery 25000 25000 Rent @£140/ha 10500 10500 Maintenance 7000 7000 TOTAL 69500 17500 52000 PROPORTION 25% 75% Short term letting and leases • Grazing Licences – A licence is a permission to perform an act which would otherwise be unlawful in regard to the land of another person. • A Grazing Agreement can contain specifications which limit the use of land; – Type of Stock – Stocking rate – Fertiliser use – Mowing dates Buying and selling land • The transfer of land from the possession of one to another is called a CONVEYANCE. • This normally requires the services of a solicitor for both Vendor and Purchaser. Root of title • The disposition of land – dealing with the whole of the legal and equitable estate – adequate description of the property and revealing no defect in title. • A "good root title" must show title for at least 15 years. • The vendor has to provide at his own expense an abstract of his title. Particulars of sale • The particulars describe the property sold. • They must include – (i) the physical extent of the property; – (ii) the estate or interest in the land; – (iii) the benefit of the rights attaching to the land; – (iv) any burdens to which the land is subject. Caveat Emptor • Caveat Emptor "buyer beware" • Applies to all land sales. • Purchaser should make his own searches and inquiries and employ a surveyor to inspect the property. • Vendors must not make misrepresentations on the nature of the property. • Particulars must not mislead and provide a favourable perspective of the property. Conditions of sale • Conditions of sale describe the terms under which the property is sold. • Standard forms are available to cover most transactions. • Conditions may be varied to take into account any special circumstances. Land Registration • Registration of the title and not the land itself • Compulsory on all land sold since 1990 • Inherited, gifted land does not require registration • Land Certificate confirms details held at Land Registry Land Registration • Open register • Searches of land register are possible to determine land ownership • Incomplete register Land Charges • Rights and actions over land are registerable with Land Registry • Land Charges Act 1972 Land Charges • Six classes exist – CLASS A • financial payments due on application and enforced by statute e.g. drainage charges – CLASS B • Charges imposed automatically by statute Land Charges – CLASS C • Puisine mortgages (not protected by security often a second mortgage) • Limited owners charges (discharges of death duties) • Estate contracts (contract, an option to purchase, a right of pre-emption, a right to determine, surrender or renew a lease) • General equitable charges (informal mortgages) Land Charges – CLASS D • Death duties • Capital transfer tax/inheritance tax • Restrictive covenants • Equitable easements – CLASS E • easements created before 1 Jan 1926 – CLASS F • charges arising from marriages Local Land Charges • Obligations ('charges„) enforceable against successive owners by local authorities, or central government • Local Land Charges Act 1975 • Held by District/Unitary Councils – Building Preservation Notice – Light Obstruction Notice – New Road Developments – Sewer Drainage – Slum Clearance – Compulsory Purchase Local Land Charges • General financial charges • New Towns charges • Specific financial charges • Civil aviation charges • Planning charges • Open cast coal charges • Other charges • Listed building charges • Fenland ways • Light obstruction notices maintenance charges • Drainage scheme charges • Land compensation charges Sale by public auction VENDOR AUCTIONEER BUYER The requirement of writing • Law of Property (Miscellaneous Provisions) Act 1989 • Contracts for the sale or disposition of land must be in writing and incorporate all the conditions of sale The requirement of writing • An agreement for sale • A description of the parties • A description of the property • A statement of the price • It must be signed by the person to be charged or his agent The requirement of writing • There are exceptions:- • Contracts made in the course of a public auction • Contracts to grant a lease not exceeding 3 yrs taking effect in possession at the best rent reasonably available • Contracts regulated under the Financial Services Act 1986 Common land • Land owned by one person where others hold rights of common over the land • Halsbury‟s The Laws of England - definition in Cooke‟s Inclosure Acts (4th Edn) “A right, which one or more persons may have, to take or use some portion of that which another man‟s soil naturally produces”. • Commons Bill currently in Parliament Common land • common of pasture – right to graze cattle, sheep, horses or other animals • common of turbary – right to dig turves and peat • common of estovers – right to cut timber for fuel or building repair • common of pannage – right to turn out pigs to eat acorns and beech mast Common land • common of piscary – right to fish • common in the soil – right to take gravel, sand, stone and other minerals.