Law of Property Act 1925

Act Summary

Before 1925, the purchase of land was fraught with difficulty for potential purchasers. The process was lengthy and cumbersome, requiring extensive investigation into the seller’s right and title to sell the land, and made more complicated by the fact that several different legal estates existed in land, each of which had to be investigated and proved to the fullest degree. Having embarked on this expensive and time-consuming process, there was also no guarantee that the purchaser would acquire encumbered title to the land. This is because a purchaser would be deemed to be bound by equitable rights of third parties (even if unknown to the purchaser) through the application of the doctrine of constructive notice. All in all, this led to an unsatisfactory state of affairs which was ripe for reform, and prompted the introduction of a raft of legislation in 1925, including the Law of Property Act 1925 (the “LPA 1925”).

The main object of the 1925 legislation was, therefore, to “facilitate and cheapen the transfer of land”^[1]. Of these statutes, the LPA 1925 primarily consolidates and reforms statutory law relating to conveyancing and the law of property, and is regarded as an “essential part of any conveyancer’s bible”^[2]. Whilst some of the 1925 legislation has since been updated and supplemented over time, the framework and principles outlined by the LPA 1925 remain in effect to this day^[3].

Key Parts

The LPA 1925 is divided into several parts, some of the more significant provisions of which are discussed below. Part I of the LPA 1925^[4] sets out certain general principles as to legal estates, equitable interests and powers and it has been said that the “modern law of real property is now understood as the hierarchy of legal estates and interests and the equitable interests established under the LPA 1925”^[5]. https://www.lexisnexis.com/uk/legal/#ref38375F5265616C5F50726F70657274795F303128312D3838295F3637_13One of the key changes made by the LPA 1925 was to streamline interests in land. The number of legal estates in existence was reduced to two – (i) the term of years absolute, and (ii) the fee simple absolute^[6]. In addition, only a limited number of legal interests as outlined in section 1(2) of the LPA 1925 could be created, with all other interests being classed as equitable interests (including the rights of a beneficiary under trusts of land, interests estate contracts and restrictive covenants)^[7].

It should be noted here that the provisions of the LPA 1925 do not operate in a vacuum, but should be viewed in tandem with the overhaul of the land law system implemented at the time, most notably the registration system introduced by the Land Registration Act 1925 and the provisions of the Land Charges Act 1925. Provision was made for the registration of interests, and where registration was necessary, the owner of the equitable interest had to register it and thus, having registered his interest, would be protected because registration is deemed to constitute actual notice of such interests^[8]. In addition, concurrently with these changes, the statutory device of “overreaching” was introduced, which assisted with regulating priority to land^[9]. A conveyance to a purchaser of a legal estate in land (whether registered or unregistered) could ‘overreach’ any equitable interest affecting that estate, whether or not the purchaser had notice thereof, if certain conditions were met^[10]. In such instance, the equitable interests would attach to the proceeds of sale, allowing the purchaser to take the property free of such interests^[11].

Apart from these fundamental changes to the way interests in real property were held and operated, certain other changes to conveyancing and land law practice were introduced by the LPA 1925, in line with the overriding objectives mentioned above. For example, section 36(2) of the LPA 1925 introduced a “new and very useful”^[12] method for severing joint tenancies by way of written notice. Part II of the LPA 1925^[13] included certain provisions dealing with contracts, conveyances and other instruments. In particular, sections 52 and 53 provide that, subject to limited exceptions, all conveyances of land (or interests therein) must be in writing, and where required, by way of deed. Section 62 simplified the conveyancing process by providing that where informal rights exist in relation to two properties in separate ownership, all existing appurtenant benefits (for example, easements) will pass automatically with a conveyance, together with any rights or privileges existing for the benefit of the estate without any express mention of them in the conveyance. As many of the provisions of Part III of the LPA 1925 previously dealing with powers of attorney have since been repealed, the provisions of Part III of the LPA 1925^[14] are now concerned mainly with mortgages and rent charges. Part V of the LPA 1925^[15] is concerned with leases and tenancies, and covers a wide range of issues in relation to the same, although the provisions of the Landlord and Tenant (Covenants) Act 1995 have superceded some of these provisions in relation to leasehold covenants executed after 1996.

Although the LPA 1925 primarily deals with conveyancing and real property matters, it has a wide range of application, and applies to both choses or things in action and choses or things in possession (e.g. chattels and land). One of the more “radical” changes effected by the LPA 1925 was to permit any form of property, whether real or personal, to be limited in tail^[16]. Prior to the enactment of the LPA 1925, under common law, an estate tail could not be carved out of chattels or personal property. This changed with the introduction of section 130(1) LPA 1925, thus allowing for beneficial interests under trusts for sale to be entailed.

Coclusion

Many of the provisions of the LPA 1925 are still in force today, creating, together with the other developments in land law since that time (including the Land Charges Act 1972 and the Land Registration Act 2002), a truly modern law of real property. There is no doubt, however, that the revamp of the UK land law system, which started with the introduction of the 1925 legislation (including the LPA 1925), will continue to progress as the law evolves to meet the social, economic and political needs of today’s society.

REFERENCES CITED:

1. Bray, J., ‘Unlocking Land Law’ (4^th edition, 2014, Routledge)

2. Brilliant, S., Atkin’s Court Forms ‘Land Registration’ (2015 issue, LNUK) vol 25(3)

3. Butterworth’s Property Law Service, ‘Division III: Grant of Leases (General)’ (Issue 86, December 2015)

4. Burn, E.H. and Cartwright, J., ‘Cheshire and Burn’s Modern Law of Property’ (18^th edition, 2011, OUP)

5. Clarke, S., and Greer, S., ‘Land Law Directions’ (3^rd edition, 2012, OUP)

6. Halsbury’s Laws of England, ‘Real Property and Registration’ (5^th edition, 2012) vol 87

LEGISLATION CITED:

1. Land Charges Act 1925

2. Land Charges Act 1972

3. Land Registration Act 1925

4. Land Registration Act 2002

5. Landlord and Tenant (Covenants) Act 1995

6. Law of Property Act 1925

^[1] Halsbury’s Laws of England, ‘Real Property and Registration’ (5^th edition, 2012) vol 87, para 48

^[2] Butterworth’s Property Law Service, ‘Division III: Grant of Leases (General)’ (Issue 86, December 2015), 323

^[3] Judith Bray, ‘Unlocking Land Law’ (4^th edition, 2014, Routledge), 44-45

^[4] Law of Property Act 1925, sections 1-39

^[5] Halsbury’s Laws of England, ‘Real Property and Registration’ (5^th edition, 2012) vol 87, para 48

^[6] Law of Property Act 1925, section 1(1)

^[7] Law of Property Act 1925, section 1(3)

^[8] Sandra Clarke and Sarah Greer, ‘Land Law Directions’ (3^rd edition, 2012, OUP), 48-49

^[9] Simon Brilliant, Atkin’s Court Forms ‘Land Registration’ (2015 issue, LNUK), vol 25(3), para 76

^[10] Law of Property Act 1925, section 2

^[11] Halsbury’s Laws of England, ‘Real Property and Registration’ (5^th edition, 2012) vol 87, para 260 and 710

^[12] E H Burn and J Cartwright, Cheshire and Burn’s Modern Law of Property’ (18^th edition, 2011, OUP), 510

^[13] Law of Property Act 1925, sections 40-84

^[14] Law of Property Act 1925, sections 85-129

^[15] Law of Property Act 1925, sections 139-145

^[16] E H Burn and J Cartwright, Cheshire and Burn’s Modern Law of Property’ (18^th edition, 2011, OUP), 599