#7142 - Fragmentation Of Proprietary Interests - Property A

The bundle of interests/rights in land may be divided in a number of ways, including

• Time

  • Life estate

  • leases

• Space

  • Subdivision

  • Consolidation

  • Strata title (allows division along both horizontal (floors) and vertical (apartment number) partitions, sometimes with areas on common)

    • This is only allowed by legislation: Subdivision Act 1988 (Vic) and Owners Corporation Act 2006 (Vic) [don’t need to know]

• The nature of title

  • Documentary title: deed (GL land) or registration (TS land)

  • Possessory title (by adverse possession: during and after limitation period)

• Sphere of enforceability: whether it is enforceable in law/equity

  • Legal: created/conveyed by deed or registration

    • Enforceable against later purchasers

  • Equitable: no deed/registration

    • Not enforceable against a bona fide purchaser for value without notice (Tulk v Moxhay)

• The nature of the right or interest

  • Possessory rights

  • Non-possessory rights

    • Easement

    • Profit a prendre

    • Restrictive covenant

    • Security interests eg mortgage

• Co-ownership: whether the interest was shared with another/others

  • two or more co-owners

  • Joint tenancy (you hold the land with a partner and if you die the partner ends up with the entire interest – possession of the land goes to the last survivor)

  • Tenancy in common (you hold the land with a partner and if you die your interest in the land goes to your heirs) are the two different ways of holding joint interests in land

• The Crown owns all land absolutely

• Landowners hold an interest as tenants of the Crown (tenant = holder of interest)

• Their interest must derive from a Crown grant

• Freehold interests are freely alienable

History

• William I granted all the lands of England to lords (tenants in chief) in return for tenurial services

• Tenants in chief granted interests to lesser tenants and so on (process of subinfeudation)

• 1290 subinfeudation ended by statute: Statute of Quia Emptores

  • Also provided free men could alienate their property without their lord’s consent

• Gradual elimination of tenurial services

• Tenures Abolition Act 1660

Relevance of The Doctrine of Tenure in Australia

1. Formally no one ‘owns’ land other than the Crown

2. Following Mabo, the doctrine of tenure is not inconsistent with recognising indigenous right to land – existence of native title does not depend on a Crown grant

3. The modern landlord and tenant relationship: (associated with leases):leases arose during feudal times when there were lords and tenants and we have continued this terminology, but we did not have to pay dues to the lord above us!

• Subjects of the Crown don’t own lands in an absolute sense (cf civil law), but hold ‘of the Crown’ (doctrine of tenure)

• An estate in land is ‘a time in the land or the land for a time’

• An estate is an object separate from the land itself. The owner of an estate is not entitled to ownership of the land but to seisin (right to possession at some time)

• The nature of the estate determines the extent and duration of the right to seisin, eg in the case of a life estate, the seisin is for the life of that person

• Thus successive estates can be created in the same land, either in the present or in the future (seisin exists at different times)

‘Estate’ for present purposes means the fullest set of rights of enjoyment of land, namely the right of possession. People can own an estate (a right to possession for a certain time) since they can’t own the land itself. The person is not necessarily entitled to immediate possession. The greatest estate was the fee simple estate which could theoretically last forever. The life estate lasted for the lifetime of a particular person.

Example: if A conveys a life interest to B for B’s life, followed by a fee simple estate to C, both B and C immediately have interests in the land. C immediately has an estate in fee simple – however C is not entitled to possession until B dies. C cannot take possession or sell a right to immediate possession until B dies.

• Present and future interests can be separately alienated

Freehold estates

• Uncertain duration (not limited as to time)

• Exclusive possession

• Includes

  • Fee simple

  • Fee tail

  • Life estate

Leasehold estates

• Certain duration or duration is capable of being made certain

• Exclusive possession

Fee Simple Estate-the largest estate in duration possible.

• “Fee”- estate passes to the owner’s heirs

• “Simple”- not limited to a particular class of heirs

• Because it is conveyed “to X and his heirs” it is of indefinite duration

The word ‘fee’ indicates that the estate is one of inheritance. ‘Simple’ means it can pass to heirs generally and is not limited to a particular class of heirs.

Modes of alienation

• Inter vivos disposition is a grant during the life of the grantor - ‘to A and his heirs’

• Testamentary disposition is a grant by will, takes effect on the death of the grantor.

Akin to full ownership with no conditions.

Grantor may impose limits on the duration of the estate by reference to a contingent event. The event MUST be contingent (may or may not occur: eg death is not a contingent event).

Determinable fee simple

• Duration defined by reference to a contingent event

  • The contingent even is a ‘limitation’

• The only way to determine if it is a determinable fee simple is through indication by the words used.

  • Wording that indicates DFS: “while”, “as long as”, “until” and “during”

• Eg “To Alan in fee simple until Carlton wins the AFL premiership”

• Eg “To A in fee simple until Blackacre ceases to be used for residential premises”

• The interest continues until the occurrence (or non-occurrence) of the specified event which may or may not occur

• If the event occurs, the fee simple automatically terminates and reverts to grantor

The event cannot be one that is BOUND to occur (such as the death of a particular person) because the nature of a fee simple estate is that it potentially may last forever. If the event never occurs the estate just continues. Perpetuities legislation states that eventually if the event doesn’t occur it becomes fee simple absolute.

If the event does occur, the fee simple automatically terminates and reverts to grantor absolutely.

• The grantor still has an interest in a determinable fee simple (the interest is known as a ‘possibility of reverter’) since there is a possibility the estate in fee simple will be regained at a future date.

Conditional fee simple

• A grant subject to a condition subsequent

  • A conditional fee simple (or a fee simple estate subject to a condition subsequent) is created where the grantor attaches a condition to conveyance of a fee simple that will cause the estate to be cut short.

• Wording that indicates CFS: “on condition that”, ‘but if”, or “if it happens that”

• Eg “To Alan in Fee Simple, but if Carlton win the AFL premiership, his estate shall thereupon cease.”

• A gets a fee simple subject to a condition subsequent. If the condition is met, the grantor may “re-enter” the land. If the right of re-entry is exercised, Alan’s fee simple estate will end.

  • You just go onto the property and retake it but would probably seek a court order to get them out.

Another way to limit an estate subject to a subsequent event.

• Difference between conditional and determinable is recognisable by looking at the different words used.

Note the difference between the two forms of estate lies more in form than substance.

• Form of words used

  • “The determinable limitation marks the bounds or compass of the estate, and the time of its continuance.

  • The condition has its operation in defeating the estate before it attains the boundary or has completed the space of time described by the limitation” Zapletal v Wright (quoting Preston on Estates).

• What occurs if the contingent later event happens

  • with determinable, the land automatically reverts back to the grantor.

  • With conditional, the grantor can decide whether or not to exercise the right of re-entry (may choose to let the other keep the estate).

• If the condition is void:

  • a person with a conditional fee simple gets to keep the estate, since the condition can be severed from the grant (Zapletal v Wright)

  • while a person with a determinable fee simple’s estate will be cancelled (Zapletal v Wright)

These estates are measured by the life of a particular person.

2 types

1. A life estate for the life of the grantee, eg, “to Samantha for life”.

2. A life estate for the life of a person other than the grantee (life estate pur autre vie) eg, “to Samantha for the life of Robert”

alienation by life tenant

• Inter vivos –

1. Can assign, thereby creating an estate pur autre vie, eg if A has a life estate and sells it to B, B’s interest lasts only so long as A lives.

2. An estate pur autre vie can also be assigned, eg A has a life estate for the life of B and assigns to C. C’s estate lasts as long as B lives

• A life estate pur autre vie can be devised (given in a will) or pass on an intestacy

• Eg A grants an estate ‘to B for life’

• B has a present interest (vested in possession)

• A (the reversioner) has a future interest, called a reversion

• A is not entitled to possession until B’s life estate ends. But A’s fee simple reversion is an estate ‘vested in interest’, so she can alienate it before it falls into possession. This...