THE 1925 PROPERTY LEGISLATION AND UNREGISTERED TITLE CONVEYANCING
1925 Property Legislation
Law of Property Act 1925 a ‘Constitution’ of land law
Establishes fundamental features about rights and rules about transactions with property
and estates
Land Registration Act 1925 (since been repealed and replaced by the 2002 Land Registration Act)
Designed ‘to advise what action should be taken to facilitate and cheapen the transfer of land’
(conveyancing process- the buying and selling of estates in land)
Had an impact on transactional costs and risks generated for the seller (analyse effect critically)
The two principal concerns of a purchaser of an estate- (1) is it really yours? (does the seller really
own the estate being purchased and what is its quality as a life estate or leasehold estate etc.?), (2)
which third party interests exist in relation to the estate? (are they binding?)
A purchaser would be aiming to buy a fee simple absolute in possession estate that can be
passed through the generations with no restrictions
Investigation of title- process of uncovering who really owns the estate
Issue of potential third-party rights to be resolved prior to purchase so as to enable the
purchaser to either choose to accept the rights, walk away from the purchase or attempt to
negotiate with the third party
1925 Act had to avoid subordinating third party (in rem proprietary) right holders to the purchaser
(needed to ensure that the third-party rights were binding)
The legislation had to be sure that it did not destroy the market of third-party rights (selling
such rights was financially profitable to the seller and current owner of the estate) by failing
to protect their interests in the event of the estate being sold and had to ensure that the
third party in rem proprietary rights were not just capable, but actually did bind the
purchaser
Reclassified lots of estates and interests in land (only leasehold and fee simple absolute in
possession)
Introduced mechanisms for the investigation of title (registered title conveyancing system)
and the protection of estates and interests in land (unregistered title conveyancing system)
20% of land in the UK is still under the unregistered title system, although the ultimate aim
is for all land to eventually move under the registered title system
Reclassification of interests in land (effective from 1926 in an attempt to reallocate the risk around
conveyancing)
(1) Fee simple (2) absolute (3) in possession- the greatest possible estate aimed for by
purchasers being (1) freely inheritable for an indefinite length of time (2) without any question as to
the title and (3) enjoyable today
However, a fee simple absolute in possession estate can be divided amongst different parties so
that A first enjoys the estate and then B (on A’s death) and subsequently C (on B’s death)- this is to
, say that A has a life estate in possession, B has a life estate in remainder and C has a fee simple
absolute in remainder (no reversion estate as already established who would inherit the life estate)
Prior to 1926, this created practical difficulties as a purchaser would have to seek out all
parties in order to purchase a fee simple absolute in possession (which none of A, B or C
have)
Fee simple absolute in possession estates could also be co-owned by multiple people concurrently,
(not split into life estates), such as in the case of spouses, however this became complicated to the
purchaser if the co-owners left their part of the fee simple absolute to different people (which could
continue on)
Created severe practical difficulties
Law of Property Act 1925, s1(1) reduced the number of legal estates to only (1) an estate in fee
simple absolute in possession and (2) leasehold estates legal estates (‘a term of years absolute’)
Similarly, the maximum number of people allowed to hold a legal estate was capped at 4
and that, if a co-owner died, they would not be entitled to pass this estate on in their will
s2 outlines a mechanism of overreaching, dictating the particular steps required for a purchaser to
be able to buy an estate without being bound by the interests of any beneficiaries in Trust
Prior to the Act, wealthy families desiring to keep estates within their own family would often
arrange settlements using a Trust (division of ownership between management and
benefits) and thus if purchased, the purchaser would end up with rights no better than the
trustee had and would not obtain an estate in fee simple absolute in possession, but would
be expected to deflect any benefits derived from the estate down to the beneficiaries
The mechanism of overreaching has simplified conveyancing by enabling the purchase and
sale of property which is the subject of either an implied or express trust
Similarly, the concept ensures that the market value of an estate in Trust does not crash due
to the fact that be either sold or brought easily (allows such estates to respond to market
forces)
Beneficiaries will still receive a monetary benefit (essentially buys out the Trust)
Life estates (to be passed from A to B to C) also could no longer exist in their current form (A,
holding the life interest and estate in possession at the time became the trustee for their beneficial
equitable life estate, as well as for B and C) but became subject to the mechanism of overreaching
s1(2) oversaw a reduction in universally enforceable legal rights (except third-party rights of certain
easements and leases under (a) and mortgages under (c)) to equitable third-party rights)
Prior to 1926, there was a distinction between equitable and legal third-party rights (in rem
proprietary rights), of which the latter benefitted from the principle of universal
enforceability (not only ‘capable’ of binding, but required no action in order to be so)
This principle presented a risk to potential purchasers, but were highly attractive on the
third-party rights market
In the case of equitable in rem third-party rights, these bound everyone in the world apart
from ‘equity’s darling’ (‘the one person whose rights will supersede prior equitable
interests), who in such cases, was anybody who had behaved without any kind of fault
1925 Property Legislation
Law of Property Act 1925 a ‘Constitution’ of land law
Establishes fundamental features about rights and rules about transactions with property
and estates
Land Registration Act 1925 (since been repealed and replaced by the 2002 Land Registration Act)
Designed ‘to advise what action should be taken to facilitate and cheapen the transfer of land’
(conveyancing process- the buying and selling of estates in land)
Had an impact on transactional costs and risks generated for the seller (analyse effect critically)
The two principal concerns of a purchaser of an estate- (1) is it really yours? (does the seller really
own the estate being purchased and what is its quality as a life estate or leasehold estate etc.?), (2)
which third party interests exist in relation to the estate? (are they binding?)
A purchaser would be aiming to buy a fee simple absolute in possession estate that can be
passed through the generations with no restrictions
Investigation of title- process of uncovering who really owns the estate
Issue of potential third-party rights to be resolved prior to purchase so as to enable the
purchaser to either choose to accept the rights, walk away from the purchase or attempt to
negotiate with the third party
1925 Act had to avoid subordinating third party (in rem proprietary) right holders to the purchaser
(needed to ensure that the third-party rights were binding)
The legislation had to be sure that it did not destroy the market of third-party rights (selling
such rights was financially profitable to the seller and current owner of the estate) by failing
to protect their interests in the event of the estate being sold and had to ensure that the
third party in rem proprietary rights were not just capable, but actually did bind the
purchaser
Reclassified lots of estates and interests in land (only leasehold and fee simple absolute in
possession)
Introduced mechanisms for the investigation of title (registered title conveyancing system)
and the protection of estates and interests in land (unregistered title conveyancing system)
20% of land in the UK is still under the unregistered title system, although the ultimate aim
is for all land to eventually move under the registered title system
Reclassification of interests in land (effective from 1926 in an attempt to reallocate the risk around
conveyancing)
(1) Fee simple (2) absolute (3) in possession- the greatest possible estate aimed for by
purchasers being (1) freely inheritable for an indefinite length of time (2) without any question as to
the title and (3) enjoyable today
However, a fee simple absolute in possession estate can be divided amongst different parties so
that A first enjoys the estate and then B (on A’s death) and subsequently C (on B’s death)- this is to
, say that A has a life estate in possession, B has a life estate in remainder and C has a fee simple
absolute in remainder (no reversion estate as already established who would inherit the life estate)
Prior to 1926, this created practical difficulties as a purchaser would have to seek out all
parties in order to purchase a fee simple absolute in possession (which none of A, B or C
have)
Fee simple absolute in possession estates could also be co-owned by multiple people concurrently,
(not split into life estates), such as in the case of spouses, however this became complicated to the
purchaser if the co-owners left their part of the fee simple absolute to different people (which could
continue on)
Created severe practical difficulties
Law of Property Act 1925, s1(1) reduced the number of legal estates to only (1) an estate in fee
simple absolute in possession and (2) leasehold estates legal estates (‘a term of years absolute’)
Similarly, the maximum number of people allowed to hold a legal estate was capped at 4
and that, if a co-owner died, they would not be entitled to pass this estate on in their will
s2 outlines a mechanism of overreaching, dictating the particular steps required for a purchaser to
be able to buy an estate without being bound by the interests of any beneficiaries in Trust
Prior to the Act, wealthy families desiring to keep estates within their own family would often
arrange settlements using a Trust (division of ownership between management and
benefits) and thus if purchased, the purchaser would end up with rights no better than the
trustee had and would not obtain an estate in fee simple absolute in possession, but would
be expected to deflect any benefits derived from the estate down to the beneficiaries
The mechanism of overreaching has simplified conveyancing by enabling the purchase and
sale of property which is the subject of either an implied or express trust
Similarly, the concept ensures that the market value of an estate in Trust does not crash due
to the fact that be either sold or brought easily (allows such estates to respond to market
forces)
Beneficiaries will still receive a monetary benefit (essentially buys out the Trust)
Life estates (to be passed from A to B to C) also could no longer exist in their current form (A,
holding the life interest and estate in possession at the time became the trustee for their beneficial
equitable life estate, as well as for B and C) but became subject to the mechanism of overreaching
s1(2) oversaw a reduction in universally enforceable legal rights (except third-party rights of certain
easements and leases under (a) and mortgages under (c)) to equitable third-party rights)
Prior to 1926, there was a distinction between equitable and legal third-party rights (in rem
proprietary rights), of which the latter benefitted from the principle of universal
enforceability (not only ‘capable’ of binding, but required no action in order to be so)
This principle presented a risk to potential purchasers, but were highly attractive on the
third-party rights market
In the case of equitable in rem third-party rights, these bound everyone in the world apart
from ‘equity’s darling’ (‘the one person whose rights will supersede prior equitable
interests), who in such cases, was anybody who had behaved without any kind of fault
