Freehold EstatesIntroduction

Every piece of land in this state has an ownership that is capable of being rationalised and fitted into the ownership model that we have and the basic model is that there is a freehold. All land in the state is effectively capable of being rationalised as freehold land.

I’ve explained to you where the term ‘freehold’ comes from: it was the tenure, the basis of ownership, of a person who was personally free in feudal society and therefore they had rights capable of being enforced in the King’s courts. That’s it in a nutshell. The King’s courts were not available to persons who were unfree. While the term grew out of that, it ceased to be relevant very early on because firstly, there are no longer any unfree people in society – people cannot be chattels – and secondly, ‘freehold’ began to be used as a term to differentiate freehold ownership from leasehold ownership, which was the next development soon after the decline of feudal tenure. So very quickly we became the beneficiaries of a system of land ownership that differentiated between two classes of ownership – freehold and leasehold.

The law of estates measures duration. Because that’s really the issue in relation to how you assess somebody’s rights of ownership in land. We’re not talking about lesser rights such as rights of way and so on. Here, what we’re really concerned with is trying to understand how you have the land for a certain period of time, or an uncertain period of time. So when you’re trying to study this stuff, it’s always best just to have a piece of paper beside you and to just do it in a diagram. Because the only thing you’re really worried about is time. Ownership of land is about dividing up the time. It’s about how long or short your rights will be. So estates is about quantity, not of land itself, but of time in ownership of land.

Fee Simple

The largest freehold estate known to the common law is called a fee simple. Fee means forever. A lease can have a definite finish date, it’s fixed. But a freehold is going on into the future. And the reason why it’s called ‘simple’ is because, when the common law was devising this, it conceptualised the notion of rights continuing into the future by recognising the idea of inheritability. This was something that was big news in the early days. It took until the 12th century until the common law really got to grips with this idea, because in the early days of the common law, when there was feudal tenure, when someone was given land within the feudal system, you were establishing a social, economic, even political relationship with this person. You are king. You regard Sir Cuthbert as perfectly trustworthy and loyal subject – he took an arrow for you in France. So he’s getting this piece of land, Shropshire. And Sir Cuthbert holds Shropshire, he enjoys it, he goes around the place pillaging. Thats how you control Shropshire. You’ve given it to Sir Cuthbert, and what he will do is farm it out to his own subjects. He’s become a lord in his own right and they’d become his tenants. And tenants simply meant holding land. But the only person you as king were

originally giving the land to was Sir Cuthbert, not his wastrel, lazy, cowardly son Egbert. Egbert was a malingerer and you did not want him on the land at all. So it was very clear that when Sir Cuthbert died, the land went back to you. So what Sir Cuthbert had was a life estate. That’s how you rationalise it today. An estate for his life, and when he died the land is back in play. As we’ll see the next day, the big news in the 12th century was when the common law began to recognise the idea that Sir Cuthbert could leave the land, not by will because the common law didn’t allow wills for a long time, but if he died his heir could take the land. And the common law allowed that as long as the heir paid a charge. It was called a relief and if you paid it, you could inherit. Now that was the magic moment when a fee simple was born. It was a fee because the rights could go on forever. The rights could go on because it was possible for Sir Cuthbert and his heir and the heir after that and the heir after and so on to inherit, stretching out into infinity. And it was called simple because there was no restriction on who could be an heir. The class of heirs was unqualified. And so the thing that gave us the fee simple estate is the concept of inheritability. In other words you’re getting more than the ownership of the land for your life, you’re getting a piece of time. And it’s not a finite piece of time, it’s not a lease for 10,000 years. It is something that is capable of going on forever. And that is the largest estate.

The fee simple is the largest freehold estate but wasn’t the first freehold estate. The first was in fact the smallest – the life estate. Now, life estates can still exist, but it has to be said they’re a creature of a bygone era. When we talk about land ownership today people are not interested in small interests that will last only for their life. It’s one thing if you go out to rent a place for a few years, but when you’re talking about freehold ownership, the conception that people in modern times have is that you’re going to own it, you can sell it and you can leave it by will. The problem we have is, the system did not involve a group of lawyers sitting down around a table and saying ‘we have to come up with a rational system of ownership that is going to stand the test of time for 1000 years’. Instead you had the system of doling land out based on feudal considerations. And in the feudal model, the idea was, the person who was getting the land from you and that person alone was to be the landholder. Because, the land they held was part of an arrangement to guarantee their loyalty so that if you needed to run a particular part of the country you could turn to them and they would do what you said because they were your man. It was a means of social and political control.

The feudal system was almost doomed to fail from the beginning in terms of it being a system of land ownership because it wasn’t about land as a commodity, as we saw with the evolution of the lease. The lease was a much more modern idea because it recognised that the key thing here was not the parties – the idea that one person is beholden to another – but the land: ‘you give me the land and I’ll give you rent. And that’s all we have to do, we don’t have to kiss up and like each other’. The feudal system began to break apart because it couldn’t contemplate land as a commodity. But in the early days before there was a full decline of the feudal system, the tension was there already: the idea that people were not happy about somebody dying and their heir being left with nothing. And this was recognised gradually, it was a very slow process of evolution.

Initially, the heir had to buy the land back. They had to pay the lord above them in the feudal pyramid for the land. This price that you had to pay in order to get the land granted to you again was called a relief, and it was the capital price; it was the price that you paid in order to step into the shoes of your ancestors – to do the thing that an heir does. But people began to complain, ‘well look, my father bought the land, and now I have to buy it.’ And already you’ve got the idea of land as a commodity. And in 1176, a major development occurred. In the Assize of Northampton it was decreed by the king that the reliefs no longer had to be the capital values of land. Instead it would be a charge, a lesser sum, like a levy. So the heir would just pay the levy, but didn’t have to buy the land back. That doesn’t seem important today, but it was the moment inheritability was born. That’s the moment you ended up with a right of property belonging to a freeholder that could last longer than the life of the initial holder. That’s the magic moment the fee simple was born – and interest with the potential to go on forever. Now, the system was still flawed in the sense that someone might die without an heir, as often happened. So this interest still had the potential to fail, and the land go back to the lord. But the potential to have it go on forever is enough to call it a fee simple.

1176 was a big date; that was the date inheritability was born. The next big date, really, was 1290. A statute was passed then called Quia Emptores. For modern purposes, the significance of the statute Quia Emptores (which by the way was still law until the 2009 Act) was that it did something that had to be done in order to give us the fee simple that we have today. While the ability to inherit was there, there was still a problem because of feudal considerations. In the feudal system the person who was the feudal tenant could have a desire to sell up in order to move away, and equally you could find a person eager to buy the land, someone who wanted to be the feudal tenant (notice here again how the concept of land as a commodity is pushing through). But a third party had a say over this and that was the feudal lord. He says ‘I don’t like the look of this new guy at all, look at him, he’s a weakling. I don’t believe he’ll be able to pay the service for this land and I don’t want him.’ And the feudal system backed the lord up, because the feudal system was based on a personal relationship between tenant and lord. And so the lord had a veto in relation to whether somebody else could step into the shoes of the tenant. So that was a bar to what we call alienability. Alienation is something that you do while you’re still alive. What you’re trying to do is put someone different on the land and the lords didn’t like that. People found various ways of getting around it and eventually, in 1290, it was decided that the thing would just have to be brought to an end. And what was created was called at the time freedom of substitution, which meant that the lord had no veto. If you wanted to sell the land, somebody else paid you and stepped into your shoes. The land really is a commodity now. So again, it’s chipping away at feudal considerations.

So in 1290, freedom of substitution came about. And Quia Emptores stayed the law until 2009. But since its enactment, it translated into a modern concept. And that modern concept is the principle that a fee simple estate is inherently freely alienable. You can sell it, you can give it away, and there’s nothing that can be done vis-á-vis the creation of that interest that can interfere with this

fundamental aspect of a fee simple estate. Freedom of alienation is at the heart of land as a commodity. Quia Emptores was repealed and replaced in this respect by s 9(4) of the LCLRA 2009, referred to on the handout. But the same point remains, the fee simple estate is inherently alienable. Remember, Quia Emptores was a statute, the 2009 Act was a statute, and so obviously a principle laid down by statute like freedom from alienation can have exceptions. And there are such exceptions. One of the most obvious, and it applies throughout the country to many properties, is the Family Home Protection Act 1976. It was passed at a time when women were in a very unequal position when it came to ownership of the family home, in the sense that you still had quite a wide incidence of women giving up work when they got married in order to have a family. And in fact this was mandated in certain institutions such as certain banks and the civil service where there was a marriage bar. And it didn’t say you can’t get married, rather it said ‘if you get married, you’re out of here’, meaning you a woman. The idea was ‘sure why would you need a job, sure haven’t you got a husband? Go home to your husband; go produce for Erin.’ This is incredibly offensive, but it fed into the way land was owned because, as the wife wasn’t earning, it led financial institutions to have an equally narrow-minded view. They would put the mortgage only in the name of the husband. So you ended up with the only name on the title deeds, or the register, was the name of the husband. The wife didn’t get a look it. And that’s okay so long as everyone gets on well. But when things start to go bad you’d find that the husband might start behaving badly and, possibly, one of the evils that this legislation was directed at was the husband either selling the house out from under his family and disappearing or mortgaging it up to the hilt and disappearing with the money. So in 1976 the legislature looked at this in a relatively modern and revolutionary piece of legislation and said ‘well, that may be the way land ownership is divided up, there’s nothing much we can do about it now, but what we will do is we’ll give the non-disposing spouse a statutory veto’. In other words, her consent to the transaction is still required even though her name wasn’t on the mortgage or title deeds. The courts have the power to dispense with the need for consent if someone is acting unreasonably, but that legislation applies today. If you’re buying a house, one of the things you have to check out with the vendor is whether the property is a family home. If it is then you need the non-disposing spouses consent. If the deed is executed without that consent, the conveyance is void. So what’s the point of that 5 minute excursion back in time? Well, there is a classic example of where the legislature steps in and says ‘yes, we know fee simples are freely alienable, but we can qualify that.’ So the ability to alienate a fee simple can be eroded or compromised; the legislature always has the power to qualify your right to alienate. There are other mechanisms that qualify it as well, for example, there’s provisions in the 2009 Act and in the NAMA legislation for dealing with people who try to dispose of their assets to their wives for the purposes of avoiding their creditors.

The first thing that happened on the road to the fee simple that we have today was inheritability – the land passing to the heir. The next thing was freedom of alienation – the right to sell to another person while you’re alive. The next thing that happened was the ability to leave land by will. And funnily enough, this was the last thing to materialise. When you’re talking about inheritability, which was

effectively recognised in 1176, that was to have land pass on intestacy. But the common law for a long time didn’t respect wills of land. The view was that the person who gets your land when you die is your heir. It didn’t take that view in respect of personal property, but real property had to pass to your heir, and you couldn’t avoid it by making a will to divide it between your children. You would have to explore other ways of getting around the problem by say creating a trust. The last thing to happen was eventually the legislature said, in Statute of Wills 1540 in England and the Statute of Wills (Ireland) 1634 in Ireland, that it was going to be possible to leave land by will. And if you look in some of the older cases you’ll see this referred to as divisibility; a gift of land or real property in a will is called a divide. Now these are old terms, which people don’t really use these days, but which you will see in the older cases.

So it became possible to leave land by will, and it depended on how the land was held. With certain types of freehold tenure you could leave all, with other types you could only leave 2/3 by will and the remaining 1/3 has to pass under the rules of intestacy. But eventually the Statute of Wills 1837 just went whole hog and said ‘land is now devisable by will.’ And that was a freedom that people in this jurisdiction enjoyed up until the Succession Act 1965. So we got to the stage where we had inheritability, alienability, and then devisability. And then in 1965, the law relating to succession was revolutionised by the Succession Act 1965. The Succession Act did a number of things, some of which we’ve already encountered. For example, it did away with different rules as regards whether somebody who died intestate holding real property or personal property. So, prima facie, you could make a will of your land and leave it to whoever you liked, except if you were married or had children. There the law introduced interference with freedom of testation. Freedom of testation means the right to make a testamentary disposition. Remember the old phrase ‘this is my last will and testament’. A testamentary disposition is a disposition made in anticipation of death that will operate on death. There had been this complete freedom of alienation from the 19th century, from the Statute of Wills Act, up until the 1965 Act. But again, just as with the Family Home Protection Act 1976, when they were passing the Succession Act they said ‘there have to be certain controls on freedom of testation’. Why? Well there was evidence that freedom of testation was being abused. It’s hard to believe this, but sometimes people would leave their family nothing. Sometimes it would just be sheer nastiness – somebody would be on their deathbed and they’d just want to get one last spiteful act out of their spleen and so they’d call the solicitor in and say ‘I hate you all; I’m leaving all my property to the golf club’. Even though they might be leaving maybe minor children and a wife who isn’t working with nothing. Sometimes it wasn’t nastiness, sometimes it was fear. You’re on your deathbed and you realise that you haven’t been that good during your life and you start convincing yourself that you can smell the sulfur, because you think there is a big fella with a pointy fork waiting for you. So you say ‘I’m going to have to do something good … I know, I’ll leave all my property to the church.’ And of course the church never had any difficulty accepting, even though there was a dispossessed family there saying ‘well what are we going to do, father?’ ‘Pray!’.

And then sometimes there was this absurd mindset that women couldn’t farm.

And the farmer testator has no male children. And the farmer would take the view that women can’t run farms. ‘Tell me there Bridie, when did you ever pull a cow out of a ditch?’. So he’d leave it to his nearest male relative, Paddy up the road, who’s rubbing his hands together. And the testator would say ‘well you know Bridie, in fairness you’ve been a decent wife, so as a reward for all your years of service, I’m going to give you a right of residence in your own home. You have the use of a bedroom and the use of a drawing room and Paddy there has to give you a bucket of potatoes and a bucket of turf every week.’ That is called a right of residence, and these creatures exist in our law – you’ll find them specifically referred to sections 69 and 81 of the Registration of Title Act 1964. These things were commonplace. And when used in respect of spouses, it could lead to a very difficult situation where you ended up being a stranger in your own home.

So the purpose of that excursion is to lead up to the point where the Succession Act 1965 basically said ‘no, in a situation like that, there can’t be complete freedom of testation.’ There are two core provisions – s 111 and s 117 – which we will be looking at later on. Section 111 deals with the rights of surviving spouses and s 117 deals with the rights of children. The difference is s 111 gives you, as a spouse, a legal right to a specific share, while children don’t have an automatic right to a share, they have to go to court. Again, these provisions represent a compromise in relation to the freedom that underwrites the fee simple.

So these are the milestones on the road that gave us the fee simple, the largest estate in land. It is the closest thing to being absolute owner. You can’t say that you’re absolute owner because our system rationalises land ownership in terms of estates. You don’t own the land, you own an estate in land. Today, that doesn’t have huge practical significance; if you own the largest estate you’re practically the absolute owner. Of course you’re rights are less than absolute because they’re controlled by the Family Home Protection Act 1976, they’re controlled by the Succession Act 1965, they’re controlled by planning legislation, the law of nuisance, etc. You can’t do what you like with your land.

But in the old days there was a further aspect to rationalising your ownership as an estate: your estate could end under the feudal system. If you died without having made a will and without having an heir to succeed you, your estate could end because there’d be nobody to take it after you die. What would would happen there was the peculiar old feudal notion called escheat. This meant that the land would go back up to the feudal lord or his successors. Likewise, your estate could end if you committed treason. If you committed treason, your estate was forfeit all the way up to the crown. So there was a reason for rationalising land ownership as an estate as opposed to absolute ownership.

Feudal tenure is now officially gone. But although it declined as a way of people consciously organising land and land ownership – although it died effectively – it didn’t disappear as a legal construct until the 2009 Act. Theoretically, it was possible that there was people out in Ireland three years ago who were still feudal lords. They probably didn’t know it because their ancestors had long since forgotten it and stopped collecting services. The Succession Act 1965 had to abolish escheat – in the 20th century – because there was all this feudal stuff still

kicking around. In terms of the state, the state no longer takes land by way of forfeiture in the event of treason, but you can still see the evidence of the feudal system working now – a ghost of the feudal system – in the event of a person dying without having made a will and without leaving an heir. In the old days that would have been an escheat of some kind. The way such a scenario is dealt with today is that the state steps in under s 73 of the Succession Act 1965 as ultimate intestate successor. That’s the modern form of escheat operating. Because under the feudal system, all land was notionally held under the crown, and when the crown disappeared when we got independence, the state stepped in.

In a number of old cases people tried to give something – a fee simple estate – or leave a fee simple estate, but control what can happen with the land. A good example of that was a case called Re Brown. In that case land was left to brothers, and it was provided that any brother who wanted to sell could only sell to the other brother. So the land had been left in fee simple, but the ability to alienate, the ability to sell, had effectively been almost entirely compromised, because he could only sell to another brother who’d say ‘yeah, I’ll give ya a fiver for it.’ And he had to take it or leave it because he had no other option. And to make matters worse, the pool of potential purchasers diminishes as brothers sell up. It was held that that restriction was invalid because it was repugnant to the essential nature of a fee simple. It’s inconsistent with what it is. You can’t give somebody a fee simple and then compromise the ability to deal with the land because the ability to deal with the land, the ability to alienate, is part of what a fee simple is.

Re Brown is sometimes contrasted with an earlier case, a decision of Sir George Jessel, called Re Rosher. In that case there was a clause in a will that said you couldn’t sell out of the family. That was held to be permissible because it was held that the family was an expanding class: as generations passed, there would be more and more people to sell to.

In a relatively recent Irish case, Re Dunne, the gift basically said ‘you can sell to anybody, except members of the Merdith family of O’Moore’s Forest Mountmellick.’ The court was asked to give directions in relation to this and O’Hanlon J said that this fetter on alienation, although it was relatively narrow in practice and left the power to alienate substantially intact, was contrary to public policy because it encouraged people in succeeding generations to persist in some nastiness that had fueled and inspired this particular restriction. And the class of potentially purchasers was cast completely open.

Types of Fee SimpleThis is an odd part of this topic because if you approach the 2009 Act with any kind of prior knowledge of what the law was like beforehand, you can certainly see the indications of older forms of landholding. The 2009 Act was revolutionary, the 2009 Act was really needed, because our system of law had become top-heavy with stuff that wasn’t required in the 21st century. You could say, in the 21st century the only type of fee simple that you really need is the

basic bog-standard model: you get the fee simple in the land, it’s your land effectively (subject to the controls that the general law imposes on you), you can sell it to whoever you like (subject to the Family Home Protection Act), you can leave it to whoever you like (subject to the Succession Act). That’s really all you need.

The fee simple absolute satisfies the needs of consumers for the most part, and indeed it’s difficult to conceive of why you’d need anything else. But there are other forms of fee simple – modified fees. When you talk about modified fees, the ‘fee’ there is short for fee simple – it’s a modified fee simple. The fee simple in old conveyancing parlance was sometimes just called the fee for short. So you’d say somebody owned land in fee. But the concept of a modified fee simple was recognised from very early on. The thing that’s odd about a modified fee is, for a start, the sort of thing that it’s trying to achieve is a bit antiquated, but apart from that, the way in which it’s done, the way in which it turns on highly technical language, is also quite outmoded. For the most part, in the 21st century, what you’re really interested in is an efficient, rational way of dealing with the disposition of land, and the idea that you’d have to still use particular, peculiar, rather quaint phrases is completely inconsistent with the spirit of the 2009 Act and indeed, inconsistent with the spirit of legislation going back as far as the Conveyancing Act 1881.

What you’ve got with these modified fees is a way of creating a fee simple that you are programming in a particular way. You’re pre-programming this fee simple that it has the potential to end. Now that’s terribly important because it explains again why we have to keep rationalising ownership in terms of estates – rights being a portion of time. Because if you understand that, you’ll understand what’s going on with these modified fees. Modified fees are ways of setting down certain rules, now, that could lead to the end of the fee simple. What happens there is that the fee simple will stop. Even though it is something that is large, it is something that is valuable, it is something that could potentially continue into the future, what you’re doing is you’re saying ‘aah, but if something happens, I want it to stop.’ And what happens if you make it stop? Well the land has to go somewhere and it goes to the person who created the fee simple, who is in the background. Their rights are still in the background. They have a right that can kick back in. Imagine it as an aircraft. The modified fee simple is flying along, but at a slightly higher altitude on the same flight plan there is another interest. Now that interest isn’t interfering with it in any way, and it was passed through the hands of people over the centuries. And if the modified fee comes to an end, the other interest stops being a hidden dotted line and is restored as a fee simple, taking over.

If you look at the words that are used to create these things, you’ll see almost immediately that you’re dealing with another time, another way of dealing with land. First of all you’ve got a determinable fee. And the thing about a determinable fee is, on the happening of the determinable event, the determinable fee simple, as the name suggests, determines automatically. The right that the person in the background has, the creator, is called a possibility of reverter. And the name says it all – the possibility that the land will revert. And

the trick to creating one of these things is to use standard, pre-determined words like ‘while’, ‘during’, ‘until, ‘as long as’, ‘‘till’, which recognised by the courts in this context. ‘To John Smith in fee simple as long as he remains a solicitor’. If John Smith has turned up and he is paying €500,000 for this property, there is no way he is going to allow anyone to put this nonsense in the deed. Why? Because the bank are going to say ‘if this John Smith defaults, we want to be able to sell the thing. And if we’ve got this title, a perspective purchaser’s solicitor is going to say, ‘you want us to pay big money for this interest, which could drop and disappear at any time when he stops being a solicitor? We pay you and say a few decades of the rosary that he doesn’t get struck off’’. Of course nobody would buy it. So we’ve already seen how antiquated this is. These aren’t things that you do when you’re selling land because nobody would tolerate it. They’ll say ‘no stop messing, I don’t care how interesting you found this when you were doing land law 30 years ago, i’m not having it, I want my fee simple absolute and nothing else.’

So these kinds of grants belong to another time, and that was when people disposed of land to fellow members of the same family, and they put in little things to make sure people behaved themselves or to achieve little things that they liked. For example, you often saw a man who was a solicitor his entire life and he wanted to ensure that his eldest son became a solicitor as well. And so you’d create this absurd incentive.

The next modified fee is a fee simple upon a condition (conditional fee). The first thing to notice is that there are a different set of words required to create this type of fee: ‘provided that’, ‘on condition that, ‘but if’, ‘if it happens that’. The magic here is, with a conditional fee, the estate doesn’t end automatically on the happening of the event. The person in the background has what’s called a right of entry for a condition broken. They have to assert that right and put you out before your estate ends. If they don’t do it, the estate will continue on. ‘To John Smith in fee simple on condition that he remain a solicitor.’ You’re scratching your head saying ‘well what’s the difference?’. The difference stems from the common law obsession with different words. Different words, although they refer to exactly the same contingency, give rise to a different type of interest with a slightly different set of incidents. The difference here is it’s a conditional fee with a right of entry for condition broken, so that the estate doesn’t come to an end automatically.

These modified fees are still possible. The 2009 Act didn’t do away with them even though they seem quite antiquated.

Fee Farm GrantsBan on Creation: LCLRA 2009, s 12(1) (will result in fee simple 12(2))Survival of pre-existing fee farm grants: LCLRA 2009 s 12(5), (6)------------------------------------------------------------------------------------------------------------------------

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You’ll see a brief reference to a fourth class of fee farm grants – rentcharges. A rentcharge is a perpetual rent payable out of land by the fee simple owner. What you have where a rent charge exists is this: somebody owns the fee simple in the land, they have to pay a perpetual rent to a person who’s entitled to receive it. You sometimes see these being called annuities, because annuities means annual payment. The only peculiar thing about rentcharges is that on a conceptual level, it didn’t involve any relationship of tenure. In other words, the person paying the rentcharge is not a tenant of another person. With feudal fee farm grants you had the feudal lord and the tenant, with leasehold fee farm grants you had the landlord and the tenant, each of them with fee simple estates in respect of their respective interests. But rentcharges didn’t involve a relationship of tenure; they didn’t mean that you were holding the land from someone else, it meant simply that you were obliged to pay somebody else. That sounds like a fairly fine distinction and luckily you won’t have to be too troubled by it. This class of rent charge was relatively rare in Ireland. The most common fee farm grant was the leasehold fee farm grant. But in any event, this type of interest is banned from now on by the 2009 Act.

Other Hybrid Interests Apart from Fee Farm GrantsLCLRA 2009, s 12These were interests that were created in Ireland with the specific purpose of combining leasehold and freehold interests. It’s something that they weren’t so caught up with in England. It was done for mainly political interests in Ireland. You wanted somebody to be a tenant, you wanted somebody to be beholden to you, but you wanted to give them a freehold estate of some kind. And so theres the lease for lives renewable forever. There’s also a lease for life or lives without any renewability. So in other words, you lease the land to someone for the lives of A, B and C. Those types of freehold estates are banned now, you can’t lease land for that purpose. There was also what was called a lease for lives combined with a term of years. This was simply designed to give somebody a measure of comfort because the didn’t have a renewable interest. So in other words, with a lease for lives, it would be a lease for the lives of A, B and C. When the last life falls, that’s when your estate ends. And people were concerned about this. They’d say ‘I’m taking this interest so that I can farm the land. I’m paying you rent and I don’t want to be in a situation where if a flu epidemic passes through the county and A, B and C drop dead in quick succession, I’ll have no interest in the land.’ So what people did was they combined with a term of years, 35 years for example. There was an advantage to this because people at least knew that they had a guaranteed outer marker, and if A, B and C live longer than 35 years, great. But if they drop dead tomorrow, I’m at least here for 35 years. While your freehold estate – your lease for lives – was in existence, you are treated as a freeholder and you got to vote. When the last life drops, you are a leaseholder only from that moment on. So this combining of a terms of years with lives is designed to give some certainty. And it could either be concurrent where the leasehold terms was

running at the same time as the freehold estates or, for added security, the interests could run consecutively. Again, a very antiquated way of holding land, and done away with in the 2009 Act, but you do see these sometimes in old cases.

Fee TailLCLRA 2009, section 13Before 2009 you’d have to torture a class for about a single lecture on this damn thing which mercifully has been done away with. But it has to be referred to briefly because, on occasion, you will see these turn up, but they’re nothing like as common as fee farm grants. Here again, the easiest way to conceptualise this is to look at it in terms of time. Remember what the fee simple was about: something that could be inherited over time and keep the interest in existence. At its earliest it was about the land being inherited. It took a little bit of time before it became possible to establish alienability and devisability. But as long as there was an heir there to pick up the baton, the estate continued. It was called a fee simple because fee was forever, simple because was there was no restriction on who could inherit. But they came up with a variant. But again, and this is becoming repetitive, the came up with it because people wanted it – there was a demand. It’s like 5 or 6 years ago when there was a demand for limited recourse mortgages. Somebody said ‘look, I want to be able to grant land to my son, but because I’m obsessed with keeping the land there for posterity, I want to ensure that it only goes to descendants and that it stays within a line.’ A lot of these family homes were entailed, which meant that it was all about the eldest son. He inherited the title lord whatever and at the same time he got the family seat; all the other kids had to clear off. It was about keeping a single stream of succession going so that the land was in the family. Now, as we’ll see later, the land could be used to provide for other members of the family, but the principle objective was that it go to the eldest male. And the fee tail was seen as a way of doing this. It was a fee simple – or rather a fee – that had been cut. That’s where the tail comes from. It comes from law french ‘taille’. It was a cut-down fee simple because you cut down the class of heirs. So in other words, a woman couldn’t be an heir on a fee tail male, because it could only go to male descendants. Collaterals (cousins, brothers, uncles) couldn’t be the heir, even though at common law if there were no children, collaterals could qualify as heirs. So this was a cut down fee. And it meant that it would run as long as there was a descendant available to take the land on the death of the previous owner, and that descendant qualified. So, for example, if it was a fee tail male, the fact that you had a daughter was no good. And even amongst your male descendants, it could only be the eldest male. The rules of prima genitor applied.

That meant that you had something that had a greater risk of failing. Because the classes of people that qualified as heirs is reduced. So the fee tail was more likely to fail than a fee simple. And when it was created it was effectively created under the fee simple. In other words, when the person who originally had the fee simple created the fee tail, the fee simple remained in the background. It’s kind of like having multiple windows open on your computer. This is how it works with these estates. The fee simple is still in the background. It’s still owned; there are

people who own it, but below it is the fee tail estate which has now given the entitlement to possession of the land. And what you have to have as the fee tail runs along is a person, not an heir, but an heir of the body. If the heirs run out, the fee tail is over and the fee simple falls back into possession. Now that might happen in 200 years, but there’s somebody there waiting; the fee simple has been inherited all along the way and somebody can come along and show you on paper how they’re now the owner of this estate.

This led to land being tied up – this is the evil of the fee tail estate. This is probably the most vivid example of a tension operating in the common law. The problem was this: why did these things get created? They got created because people wanted them. Why did people want them? Not to be awkward or difficult, but to keep land within the family. Why did they want to keep the land within the family? Because they believed that land was the principal income-yielding asset. This was long before depositing money in the bank, long before shares in companies or government bonds, long before the mercantile class emerged, long before modern commerce. Land was always going to be the principal income-yielding asset. How did it produce income? You had tenant farmers on the ground paying rents to the person who had the freehold. As time went by, the idea of keeping the land within the family presented a number of problems. One such problem was it was completely inconsistent with the demand for land that was out in the world. Out in the world people were saying ‘well, I’m interested in building something or establishing a better farm by buying up smaller holdings. I’m in the market for land. I want to buy it; I don’t want to rent it from someone and be beholden to them.’ But you couldn’t sell this land, because a fee tail estate had a fundamental problem, which was that, unlike the fee simple, the fee tail wasn’t inherently alienable. The ability to sell that was laid down in Quia Emptores didn’t apply to a fee tail. And if an individual who had inherited the land under a fee tail said ‘right, to hell with this, I want to sell’, and sold the land to P, who paid money for it, all the purchaser got was the right to occupy the land for as long as the selling heir was alive, for the heir’s life. And when the heir died the fee tail says that the next descendent gets it. So the next descendant would come along and say ‘clear off’. And the purchaser would say ‘well I bought it off him, I paid for it, I’m entitled to be here.’ And the problem was this: land law had an old maxim, which is still knocking around I think: nemo dat quod non habet, meaning nobody can give what they do not have. And that’s a fairly sensible and logical principle of land law. You can’t give more than you own, and if you try to do it, it’s ineffective. So under a fee tail, all that you had, effectively, was a right to be there until you dropped dead and then your descendant would step in. You couldn’t prevent your descendant stepping in; he would come in and chase the purchaser away.

Now that was the tension: the law is accommodating landowners creating this right that would keep land in the family at the same time you’ve got all these purchasers banging on the door trying to buy the place. And eventually you’d end up with an absurd situation where the courts began to facilitate legal fictions that would enable you to sell the land outright. The fee tail could effectively be broken, and the term used was ‘barring the entail’. And what barring the entail meant was this: if you effected a sale, you would effectively block off the rights of

everybody who would have been afterwards entitled under the fee tail – barring the entail, blocking them. And eventually a piece of legislation was introduced in the 19th century called the Fines and Recoveries Act 1834, which enabled you to do this on a statutory basis, it ceased to be a legal fiction. The 1834 Act just disapplied the principle to fee tail estates – which you can do. Nemo dat quod non habet is a common law principle; you can just switch it around if you want. And if you see some old land law papers, you’ll often see the question ‘The creation of a fee tail estate is a pointless exercise. Discuss.’ And the reason why it was pointless was, you created this creature with the intention of keeping land within the family. But it could be set at nought by somebody just using the procedures in the 1834 Act. You then ended up with, not only an antiquated concept which is still part of the law, but which the law actually allowed you to circumvent. If you could circumvent it why bother having it? And it wasn’t until the 2009 Act that someone finally threw in the towel. In fact the LRC didn’t even recommend the abolition of the fee tail estate. The said ‘well it’s not really doing any harm’. But the system was complicated enough so why have something that is practically useless. So the 2009 Act banned the future creation of these things.

In the 21st century in Ireland, the idea that you would set about programming an interest so that it would stay within a family for succeeding generations is completely alien to modern thinking. Land ownership is perceived in modern times as being as close to absolute ownership as makes no difference. The fee tail is so pointless that, not only did the 2009 Act ban the future creation of such estates, but any that were still knocking about were automatically converted into fee simple estates. And so the effect of the Act for any remaining fee tails that may have been in existence in 2009 was to put a line through the fee tail and call it a fee simple. And that necessarily dumped the fee simple interest operating in the background of any fee tail estate. It’s interesting the way that happened because in land law that happens from time to time, and you do get the impression that people interested in land law aren’t overly interested in the provisions of the Constitution relating to property rights. Because the way in which you could clear a fee tail off and effectively convey a fee simple in breach of the principle nemo dat quod non habet was probably always constitutionally suspect. Because the person who’s being short-changed, the owner of the fee simple and indeed the future successors, gets no compensation. They’re losing their property.

Life EstateNow exists in equity only: LCLRA 2009, section 11(6)

Landowners regarded themselves as being responsible, as having some sense of heritage and tradition and responsibility for future generations. An older man would look at his young son and say ‘well, during the irresponsibility of youth, if he got his hands on a fee simple, he might sell the land, or he might mortgage it and not pay the debt and lose the land. So I don’t want to give him something that he can sell because when he’s older he’ll realise the importance of having land as this income yielding asset and he’ll regret it.’ Thus, landowners liked the idea of the life estate for future generations. So they came up with the idea that ‘when I die,

I’m not going to give the fee simple that I have to my son because if I do he’ll just sell it.’ Now you’re asking the question, ‘well, why didn’t he just leave a fee tail estate?’ But the problem with a fee tail estate was, very soon, the very purpose that a fee tail was designed to achieve was frustrated because the courts and then later the legislature allowed you to bar the entail. So people opted for the life estate. The initial idea when you’d be making your will would be to create a succession of life estates going out into the future – effectively doing the same thing as a fee tail does, but it couldn’t be barred. You would basically say ‘to my son A for life, and then to his son for life, and then his son’s son for life, and his son’s son’s son for life, and so on.’ And you’d basically need a parchment as long as a roll of wallpaper. And the law then said, ‘no, you can’t do that. That’s fundamentally inconsistent with the law’s purpose in making land alienable. If you did that, you’re locking up the land forever and you can’t do that.’ That was what was called a perpetual freehold and it was banned. All through the development of the common law of property, you’ve got this constant tension between one group of people who try to lock land up, and another group of people who want to buy it, and then the courts in between. And the courts gradually came to accept that you couldn’t have these arrangements that tied land up forever. Another example of this – something that you don’t have to worry about anymore but might see in textbooks – was the rules against remoteness, the so-called rule against perpetuities. Now, if you think that you don’t like this subject, that it’s boring and tedious and complicated, you should have seen it when we had the rules against perpetuities! I was days lecturing on it, and it was just the most impossible stuff to get your head around. But these rules against remoteness were designed to prevent this tying up of land. It is of no modern interest.

So what were owners to do then? What people did then was they went to their friendly conveyancer and said ‘look, I want to tie up the land. I don’t want my descendants to be able to sell the land in case they turn out to be wasters.’ And the conveyancer couldn’t do anything for him with the fee tail because it was inherently barable. And he couldn’t give him a big wallpaper load of life estates into the future because perpetual agreements were banned. What he could do was to come with a hybrid version whereby land would be tied up for life estates for as far as you could use them, and after that, you’d have the fee tail. So what you were doing was you were pushing the fee tail back so that for at least maybe 100 years, the land would be tied up. So somebody eventually got the fee tail, but what was built into the system was a prejudice. Because what you then did was, as the time approached when the fee tail was coming up, the dad would say to his son (who was getting the fee tail on the death of his father and was excited to sell it for the money), ‘I’ve an idea. How would you like some money now?’ Because I could go down to the solicitor and get all this re-jigged so that you get a life interest, but with some money now.’ And this would push the fee tail back another generation. And of course the son, being young and stupid, would be attracted by the money. And so you’d have this rearrangement, called a resettlement. Because these arrangements – and this is what I’m leading on to – are called settlements. A settlement in land law is not 10 houses with thatched roofs in the new world waiting to be attacked by the natives. A settlement was where you settled land, where you put it into a succession of interests, usually with the specific purpose of postponing the ultimate vesting of an absolute interest until some point in the

future that is legally permissible. You couldn’t break the rule against perpetuities or create a perpetual freehold or an unbarable entail, but you could go somewhere. The courts accommodated you to some degree, but not to a remote time in the future.

And so this resettlement would occur. And what the resettlement model involved was giving people who were around now life estates instead of their fee tails, providing for a new fee tail by pushing it back further, and paying this person off. And the problem with this was that, as things went along, these family settlements were used not only to provide for your eldest son, but people began to be concerned for the other members of their family. Remember, there was always this obsession of the landed classes with the idea that the eldest son had to succeed. You couldn’t divide up the land between all the children, but sometimes there was the concern that you needed to do something for your other kids. And so what you’d have would be charges provided for, annuities provided for, out of the land. ‘My daughter charlotte can have £100 per year.’ Or sometimes you’d have a provision whereby a sum of money had to be raised out of the land – a capital sum. So part of the land would be mortgaged to raise a capital sum to do something such as pay a dowry, because in the 19th century women weren’t going to be working so what did you do if you had daughters? You read Jane Austin and worked out that you had to get them married off. And the other sons had to go off and get a living – go into the professions, or the army, where you’d need money to buy your commission. And likewise there was provisions made in some of these settlements for widows. All this involved money coming out of the land: either you mortgaged and got a big capital sum, which was then locked onto the land, or you simply created an annuity that said ‘every year, out of the land, £100 has to go to X.’ Now that sounds fine and everybody’s happy. But the trouble is that when you say the money comes out of the land, it doesn’t sprout off a potato plant. It meant your collector going out and kicking tenant ass. And inevitably, this is where the system broke down. Because the only thing that the tenants were producing was agricultural produce and it didn’t matter how many lazy, useless, bone idle children the lord had who needed to have annuities payed for them, the land could only produce so much value. And so this type of landownership began to implode. The land couldn’t take it. And you ended up with the one thing that 19th century society couldn’t bear and that was a poor aristocracy. Its one thing to be from the lower class and be poor but a poor aristocracy was different. They then start moaning ‘what can be done for us, we can’t work.’ And in the 19th century, the ironic thing was that you had people who wanted to buy the land but after centuries of this resettlement, the land land was overburdened with all of these family arrangement. And even if someone came along and wanted to develop the land, the solicitor couldn’t convey the land because so many parties had rights against the land that he couldn’t make title.

The legislature eventually decided to do something about the problem. And in 19th century Ireland, you had various pieces of legislation – the Encumbered Estates Courts Acts and the Landed Estates Courts Acts – that created a crucial concept called ‘overreaching’, which is now used in the 2009 Act. Overreaching is a fundamental concept in land law now. In the 19th century the idea was that the

land needed to be cleared of all of this messy title. You had people with rights in respect of this land – people entitled to annuities, charges, life estates, fee tail estates and all sorts of other things – and that needed to be cleared away. And if you couldn’t get people to agree – and remember, some of them might be underage, of unsound mind, away in a different country, elderly or just downright difficult – there had to be some other way. And so in Ireland in the middle of the 19th century there was the establishment of the Landed Estates Court, before that known as the Encumbered Estates Court. And the name ‘Encumbered Estates Court’ gives you a hint as to what it was at. All these things were classed as encumbrances – burdens on land that prevented it from being sold. And the Encumbered Estates Court was given the power – and you do still see these conveyances on titles (although with registration of title this stuff will disappear) – to take all the encumbrances off the land. You don’t tear it up, you don’t invalidate it, you don’t ignore it. In a conceptual or metaphysical sense you pick it up and you take it off the land. Because what this exercise is about is selling the land. So overreaching involves basically packing the encumbrances up and letting a sale take place executed by the court (Ross J is commonly the judge involved). With such a conveyance, the purchaser got an immaculate title. A Landed Estates Court conveyance was regarded as one of the best roots of title you could get because every vestige, every scrap of title, every scrap of interest affecting the land, was swept away. In terms of title, the land was pristine because nobody else had an interest. That’s the definition of the best title. And that’s what a conveyance of the Landed Estates court gave you. Because all rights of other people, whether they were before the court or not, were swept away – moved over onto the money. And so all these people with various interests in the land had to sort out their issues between themselves in relation to the money. Now it often wasn’t ideal because of course the money wasn’t doled out, it wasn’t divided up. Because usually you weren’t dealing with people who were say 3 or 4 co-owners, each of them entitled to the fee simple, where the interests could be easily divided up. You couldn’t do that with these kinds of interests because these kinds of interests were messy. These were people with transient interests, limited interests, and so all you could do was say ‘right, this money is being invested in boring, low-yield investments – you’ll see references to what are called consoles – and they were state securities. The money was invested there, it produced an income, and all of our landed class friend would have to turn up and basically have the income divided up amongst them. So the settlement was overreached. It was cleared off.

To come back to what we’re talking about today, the life estate, as we’ve seen, is an integral part of those settlement arrangements. Life estates are usually created in a family context. Now, you do still see them being created, sometimes in a will where somebody might have a relative that they care about, but they’re not willing to give that person the entire property. For example an elderly relative who has no near relations such as a spouse or children. And you’d say ‘look, it’s pointless me giving Auntie Bettie the house because all that’s going to happen is she’ll then own it and then when she dies she’ll leave it to the church or whatever. And that’s crazy when I’ve got other relatives I need to look after for the future, so I’ll give her a life estate instead.’ And even then, creating a life estate was dangerous and silly, because another another piece of 19th century

legislation moved on and used overreaching in a different way. The trouble with the Encumbered Estates Court and Landed Estates Court Act was that you had to go to court. And so the Settled Lands Acts 1882-1890 were passed. And these Acts deployed overreaching, but in a different way. You did not need to go to court; instead it involved giving limited owners such as life estate holders the power to sell the interest in the land over and above their own life estate. They could sell the entire interest in the land that was subject to the settlement. And in so doing, overreached the settlement and caused the settlement to attach to money and the land would pass to the purchaser. The Settled Lands Acts were far more widely used and obviously they were a more progressive piece of legislation because they didn’t involve a court application. But they meant that it was extremely dangerous for you to give anybody a life estate because you were giving that person powers under the Settled Land Acts. If you had intended that the house would be there for other relatives after your aunts death, you could end up completely undermining that by giving her the power to sell the house. The fact that her interest was a limited life estate didn’t make any difference.

So the life estate has really had it’s day; that’s the point I’m leading up to. It’s not consistent with our modern notion of why somebody has a title to land. There are other thing you can do for people: rights of residence, which we’ll be looking at later on, are more in keeping with the idea. You give them a right to live in the house, but they don’t get any freehold estate in the house. And, if fact, in the registration of title system – which of course is basically going to be everything once the registrations work their way through – makes it clear in s 81 that if you give somebody a right of residence in registered land, they don’t have a proprietary right, they don’t have an estate in the land, which would entitle them to offload it. So the life estate is getting to a point where it’s had its day. And the proof of that now is that you can’t even create a legal life estate anymore; life estates are only capable of existing in equity. Now that is something that we will be looking at shortly, but I’ll explain briefly what it means. Our system of property law and land ownership recognises the concept of the trust. Our system of land ownership is hard-wired into the division of legal and equitable ownership. It’s been around virtually as long as we’ve had the common law of land ownership that we are talking about today. It involves a simple enough notion: you have one person that owns the legal title, the legal estate (LE). This person can hold the ownership. They could be, for example, registered in the Property Registration Authority on the folio as the owner. You go look on a folio at the Property Registration Authority for a piece of land, say folio 12345F, and the owner according to the register is Mr B. Section 31 of the Act says that is conclusive. So if somebody trespasses on the land, it is Mr B who sues. If the the land is subject to a CPO to build a road, the roads authority talks to Mr B. But it could be that Mr B hold the land on trust for somebody else. The trust wont show up on the folio because that’s not the way it works; the legal owner gets registered as owner, there’s no trust recorded on the face of the folio. But Mr B is in fact holding his legal ownership on trust for another person. And this person is called the beneficiary. Trusts are a part of the modern world. Trust of land are not something that you encounter every day of the week, particularly in this country, but they are used by people with a lot of money who want to shield it from view or shield the ownership of assets from view or they might have money

that they want invested by professional trustees in a managed fund.

So we’ve got this split in ownership: B is the legal owner, C is the equitable owner – the equitable estate is vested in C. So our system recognises this splitting of ownership in to legal and equitable. And it’s not the same; there are incidents of equitable ownership that are not present with legal ownership and vice versa. We then come to the life estate; how is the life estate dealt with? Under the 2009 Act, the life estate can only exist in equity, which means that you can’t see it in law. There was provision in the past for someone with a life estate to be registered as a limited owner (instead of effectively an absolute owner with the full fee simple). That’s effectively disappearing because a life estate will not give you legal ownership; you are basically dependent on there being somebody else holding the legal title. So C is entitled in equity for life. But that’s it; this is the only place the life interest exists. It can’t exist in respect of the legal estate, and the reason why that is now done is because these things are not to encumber titles. Life estates, while they can exist in equity, are to be overreachable. Section 21 of the 2009 Act is a very important provision and it deals with overreaching.

So the life estate, which started out as the first freehold estate known to the law, is not even allowed exist at law anymore, it can only exist at equity, which makes it overreachable. It can effectively be cleared off the land in appropriate circumstances. So that’s how far we’ve come. The point we’ve reached now – the conclusion in relation to freehold estates – is that there is now only one freehold estate that can exist at law, and that’s the fee simple. Now of course it can exist in a variety of forms – modified fees, surviving fee farm grants but no new fee farm grants – but that’s it. There’s no fee tails and there’s no legal life estates; life estates can only exist in equity, and when they exist in equity, they are vulnerable to overreaching. Why are they vulnerable to overreaching? Because it has been decided that they should not encumber title. That’s what overreaching is about: it’s a policy decision that there are certain rights in land that may be enforceable between the person who created it and the person entitled to it, but which should not hold up a disposal of land.

Leasehold EstatesIt’s really important to distinguish between leasehold and freehold estates. When you see some of the really simple questions on the exam that I set and people can’t even distinguish between freehold and leasehold, you’d understand why I stress this point.

We’ve already touched on leasehold estates and where they came from. The leasehold estate was where the common law basically acknowledged that land was a commodity and should have an ownership mechanism that turned on that alone, as opposed to the feudal arrangement, which was based on organising peoples relationships within society. The leasehold estate was thus born; and it was backed up with the action for ejectment, which the common law eventually recognised. You then saw an evolution where leasehold estates have certain defined characteristics. The 2009 Act has helped us in a number of ways. First of all, you can’t talk about leases for lives, because a life was never a leasehold

estate. So that doesn’t even belong in this area; we’re now talking about leasehold estates.

Leasehold estates can be broken down into two principle types, in practical terms (and I’m using the term practical terms here deliberately). Traditionally, you would be talking about one of two things. One class of leasehold estate was a lease for a term certain. A term certain has two essential characteristics. A lease has to have a definite starting point. Because if it’s for a term, it’s for a period, and you need to know when it’s starting; and you need to know when it starts so you know when it ends. These points in time are important because the sections of time on either side of the period of the lease are points in time when the holder of the lease has no rights.

During that time between the start and the end, it’s still possible for that period to come to an end prematurely, for example, by agreement where the tenant surrender the property back to the landlord. Now, tenants don’t have an automatic right to do that – a lot of people think they do but they don’t; it’s a contractual arrangement. Or it could come to an end by compulsion, because the landlord finds that you’re breaching covenants in the lease, not paying the rent, for example. Or there could be a break clause. Break clauses are where a lease has built into in a term that says ‘at a certain point, I can serve notice on you.’ These are often used in commercial leases where they would have been used to entice somebody to sign. A person with a fledgling business may be reluctant to sign a 25 year lease because the business might fail, so a break clause allowing him to break the lease after say 5 years may be inserted. But all of that is fine because you at least know that there is a definite start and a definite finish.

You contrast a lease for a term certain with whats known as a ‘periodic tenancy’. A periodic tenancy is a tenancy that has a base period that recurs. A periodic tenancy, monthly for example, continues to roll over, and you’re paying rent for each period (each month). The point about a periodic tenancy is that it has an advantage over a fixed term lease because it doesn’t have to continue for a very long period of time. Either party to a periodic tenancy is entitled to bring it to an end by giving notice – called a notice to quit. Superimposed on the law relating to leases is a huge body of statute law, which gives tenants certain rights. And one of the most important rights that they have comes from the Landlord and Tenant Act 1980: if you have been in possession under a business lease for a period of 5 years, you’ve a right to new lease. If the landlord tries to put you out, you can demand a new lease, and the court will fix the rent. There’s also the Residential Tenancies Act 2004, which gives residential tenants considerable rights about the circumstances in which the landlord can bring the tenancy to an end. So in fairness, the system is generally tilted in favour of tenants. Why might this be? Well remember, our country has a tradition of the landlord being the aggressor; it’s natural to find in our law a bias against the landlord. Now things have changed in relatively recent times; for example, for a long time you couldn’t contract out of the right to a new lease, but that became possible in 2008.

So the periodic tenancy can continue on indefinitely, if neither body serves a notice to quit. It was thought – and there is English authority to this effect – that

a lease for a term had to be a certain term. This didn’t cause a problem with periodic tenancies because the base period is certain. So, while the common law allowed periodic tenancies that could continue on indefinitely, it did not like the idea of a term that was uncertain. And the reason it didn’t like that was it said, ‘well that’s not leasehold.’ At the time the law didn’t have a difficulty with leases for lives. ‘Yes, there’s a lease; yes, you’re it’s leasehold tender – you’re paying rent to a landlord, but your estate is freehold.’ There’s nothing wrong with a freehold estate being uncertain – a life estate is necessarily uncertain, for example. But that was freehold. We’ve now crossed the line into leasehold, and with a leasehold the common law said that the term must be certain. It could be very long – 10 million years if you want – but it’s still measurable. Granting somebody a lease saying ‘you can stay there until the land needs to be used for road widening’ may seem more modest than 10 million years, but it doesn’t qualify under the common law approach to a leasehold term because it’s not a definite duration. It’s not certain when that lease will end. People argued that was ridiculous in this day and age, particularly in Ireland where the relationship between landlord and tenant is based on contract. Section 3 of Deasey’s Act, unlike in England, put the relationship on a contractual footing. And so, in the 2009 Act, you’ll see a new definition of what a leasehold estate is. It is possible to have a term that is of indefinite duration, in the sense that it may depend on an uncertain event. So the road widening example is now a valid lease. You do not have to build into it a finite term.

The size of leasehold as a topic is hardly surprising given the significance of leases within the land ownership system. Leases are used every day of the week to create a variety of arrangements whereby land is exploited. From a landlord’s perspective, the lease is a very important way of generating an income stream. That’s what commercial leases are for. These are leases granted in respect of buildings. The owners of those buildings have no interest in using them themselves. You’re not in the business of using an office block, you simply want the income. And therefore, by definition, you will want a legal mechanism whereby you can create a relationship of landlord and tenant between you and the occupant, and that lease will have to be a very extensive document to ensure that your rights are protected. The problem is of course that there is always a tension between landlord and tenant, each trying to get the better deal. The landlord wants to get as high a rent as possible and to impose as many obligations as possible on the tenant, obligations to repair, to insure, to pay service charges, etc. All of that has to factored into the lease. And the tenant likewise will try to get as good a deal as possible against the landlord. In the past it was a seller’s market and the landlord as the owner was in a position of power and was able to command the best terms. The upwards only rent review was the classic example of the result of such a situation, and that is now seen as one of the banes of the commercial property sector because it’s causing businesses to suffer because they can’t get their rent reviewed downwards even though the market has collapsed. While they’ve been banned from coming into existence after the 2009 Act was triggered, those that were entered into before that date still operate. Sometimes in this climate the landlord will yield if a tenant goes to his landlord and shows him the books, but he doesn’t have to; only some landlords have seen the light. It doesn’t make sense to crucify a reasonably solid

and reliable tenant such that he defaults and walks away, meaning you have to find a new tenant who wont pay the higher rent anyway. There you see a change in the dynamic that feeds into how a lease is drafted. And we might end up with a change in leasehold trends. You do see trends in the way leases are entered into, duration, etc. We embrace a trend that they have on the continent but which we have never really bought into because of the idea of land being a guaranteed source of a particular defined income: the idea of a turnover rent. A turnover rent is seen as being a very equitable arrangement because the parties share the profits and the losses. Rent is set at a percentage of turnover. So if the tenant does well, the landlord charges a higher rent, and if business is poor, the rent reflects that also. So that just goes to show that the concept of leasing land is not static, it does change.

The vast, vast majority of apartments were sold using leases. And that’s a peculiarity of the old law relating to covenants. The reason was because, under the old law before the 2009 Act, you couldn’t make positive covenants run so as to bind successors in title. The law recognised that restrictive covenants could move outside the realm of contract. So somebody bought a piece of land and entered into a restrictive covenant not to use the land for business purposes. They sell it on and the restriction continues to bind the land through the hands of third parties who weren’t parties to the original contract of covenant. But the law (and by the law I mean equity) would never allow positive covenants to run. A negative covenant says you can’t do something: you can’t build more than 1 house; you can’t use the land for business purposes. A positive covenant, on the other hand, says you must do something: usually you must repair or you must pay. Positives covenants can’t run with freehold land. But apartments depend on common areas that need to be taken care and positive covenants are necessary. And so people had to use leases to sell apartments. These leases were long leases of 500 or 1000 years, because people weren’t going to pay for an apartment and get a 100 year lease. And the lease was at a nominal rent, €1 for example, because the rent was simply there because it was believed in this jurisdiction that you can’t create a lease without a rent. Section 3 of Deasey’s Act, which is the core provision, which we’ve looked at already in the context of fee farm grants, talks about the relationship of landlord and tenant being founded on contract and existing where one person holds land of another in consideration of a rent. So the belief amongst lawyers for over a century has been that to have the relationship of landlord and tenant, even if you’re creating it as a way of selling a property, you still must have a rent, even if it’s nominal – a peppercorn rent. The usefulness of the landlord/tenant relationship is that you can put positive covenants into the lease, the lease of the apartment. The most important positive covenant is the covenant relating to contribution to service charge. Service charge is a big thing, and it’s something that has given rise to huge problems with apartment buildings because people buy their apartment and then they don’t realise that they’ll have to pay ongoing maintenance. People end up not being able to afford the payment and as a result there is a worrying trend of management companies falling apart. Then something serious goes wrong with the building, such as the basement starts flooding because there’s a crack in the slab due to poor work, and it’s going to cost €1.2m to repair it. 6 years have passed, the Statute of Limitations has run, and so it has to be divided up amongst

the apartment owners. That’s the downside of apartment living – shared facilities have to be payed for, and the way in which you’re supposed to compel the payment is by means of leases.

Following the 2009 Act, the law has changed and positive covenants can run with freehold land. And you may see leases no longer being used in respect of apartments and instead see people just getting the fee simple in the apartment, what’s called a flying freehold. For a long time there was a belief that, while you could have freehold in the land, people didn’t understand the idea that you could have somebody owning a fee simple estate in something on the 5th floor. People would say ‘sure that doesn’t make sense; surely the fee simple is down at ground floor level.’ And the answer in land law was ‘no, you can have slices of fee simple going up or down and such things are recognised.’ So in modern times, from a technical perspective, you could create a flying freehold – you could give somebody a fee simple for an apartment on the 5th floor. But the funny thing about the nature of conveyancing in this country was that if you did, nobody would want it. Most solicitors were incredibly conventional and scared, possible because I thought a lot of them, and they would say ‘wait a minute. Don’t like that. What’s that, a flying freehold? Not going near that. That’s like suggesting I get on a plane that has no wings.’ And on one level they’d be right. There’s nothing wrong with it from technical perspective, it can exist. But from a practical perspective there was the problem that you couldn’t tack any positive covenants onto it so that somebody that bought the apartment after you would be obliged to contribute to the service charge. And so they were right; this was a bit odd and one shouldn’t use it. It’s difficult to say whether there’s going to be a change now because of the 2009 Act, because needless to say, there isn’t a property boom anymore; apartments are a lousy investment. So it’s too early to report whether people are going to be using freeholds to sell apartments within developments.

The last thing I want to talk about is two residual categories. We’ve been talking about leases for a term certain and periodic tenancies. A lease for a term certain is a fixed period of time – 10 years for example – while a periodic tenancy is a recurring period. The law has changed that you can have an indefinite period – that’s allowed under s 11(3) of the 2009 Act.

But there’s two other things that were traditionally referred to when one talked about leaseholds or tenancies and these are ‘tenancies at will’ and ‘tenancies at sufferance’. The simple way of approaching these now is provided for by the Act: section 3 says a ‘tenancy’ means ‘the estate of interest that arises from the relationship of landlord and tenant, however it is created, but does not include a tenancy at will or at sufferance.’ What that’s basically saying is that a tenancy at will or a tenancy at sufferance is not a tenancy in the 2009 sense. Tenancies at will and tenancies at sufferance were really arrangements that were too transitory and indefinite and fragile to merit even being called tenancies; it’s a misnomer. Because a tenancy at will was no more than somebody being on somebody else’s land at the will of the landowner. And what that meant was, you could be ordered off at any time and simply become a trespasser. And in certain cases, it’s been said that a tenancy at will is so precarious, it’s little more than a bare license, if there’s any difference at all. And a tenancy at sufferance was even

worse. Because with a tenancy at will, you were at least there at the will of the landlord, but a tenancy at sufferance was where you occupied the land without the landlord’s assent or decent. It was a no man's land in the sense that, if the landlord assented to you being there, you’d have a tenancy at will and if the landlord dissented, you’d have nothing, you’d be a trespasser. So a tenancy at sufferance was the lowest form of so called tenancy. The 2009 Act sensibly said, ‘look, these are not tenancies.’