Identifying Third Party Rights and Interests
(i) identify the type of third party right being claimed;
(ii) (ii) decide whether the right is capable of being legal;
(iii) decide whether the right has been created by the correct formalities; and
(iv) classify the right as either legal, equitable or statutory.
⇒ In land law you must ask yourself two questions when deciding whether a right is equitable:
Is the right in the list of legal interests under the Law of Property Act 1925, section 1(2)(a)? → if it is
not, the right must be equitable.
If the right is in the list you must ask whether or not the right was created by deed → if it is not, it
must be equitable (which requires the right to be created by signed writing instead except for
implied trusts).
⇒ If created by neither deed or signed writing it is neither legal or equitable.
Summary of Interests and formalities- Structure
1. Identify the Estate or Interest
What type of estate/interest e.g. easement, lease, restrictive covenant
2. Is it capable of being legal?
S1(1) LPA 1925 lists estates capable of being legal- the freehold (fee simple absolue in possession)
and the leasehold (term of years absolute)
S1(2) LPA 1925- lists third party interests capable of being legal (most important = easement and
mortgage).
If the estate or interest does not fall within these lists, it is not capable of being legal, it can only be
equitable (LPA 1925 s1(3).
The only type of statutory third party right you will be concerned with is the ‘home right’ under the
Family Law Act 1996.
3. Formalities
For an estate or interest in land to be valid, the correct formalities must be used to create it.
3.1Creation by deed
Generally, to be valid, all legal estate and interest must be created by deed LPA 1925 s52.
Requirements for a deed in s1 LPMPA 1989. This covers all the estates and interest listed in s1(1) and
(2) of LPA 1925.
There are some exceptions to this rule (e.g. parol leases exception- a valid legal lease can be created
without a deed if it satisfies the conditions in s54(2) of LPA 1925. Valid legal easement may arise also
without the need for a deed/formality.
3.2Creation in a contract
Where there is a contract to create or convey a legal estate in land, equity will recognise that
contract as creating an equitable interest in land, so long as it satisfies the requirements for a
contract under s 2 of the LPMPA 1989.
(i) identify the type of third party right being claimed;
(ii) (ii) decide whether the right is capable of being legal;
(iii) decide whether the right has been created by the correct formalities; and
(iv) classify the right as either legal, equitable or statutory.
⇒ In land law you must ask yourself two questions when deciding whether a right is equitable:
Is the right in the list of legal interests under the Law of Property Act 1925, section 1(2)(a)? → if it is
not, the right must be equitable.
If the right is in the list you must ask whether or not the right was created by deed → if it is not, it
must be equitable (which requires the right to be created by signed writing instead except for
implied trusts).
⇒ If created by neither deed or signed writing it is neither legal or equitable.
Summary of Interests and formalities- Structure
1. Identify the Estate or Interest
What type of estate/interest e.g. easement, lease, restrictive covenant
2. Is it capable of being legal?
S1(1) LPA 1925 lists estates capable of being legal- the freehold (fee simple absolue in possession)
and the leasehold (term of years absolute)
S1(2) LPA 1925- lists third party interests capable of being legal (most important = easement and
mortgage).
If the estate or interest does not fall within these lists, it is not capable of being legal, it can only be
equitable (LPA 1925 s1(3).
The only type of statutory third party right you will be concerned with is the ‘home right’ under the
Family Law Act 1996.
3. Formalities
For an estate or interest in land to be valid, the correct formalities must be used to create it.
3.1Creation by deed
Generally, to be valid, all legal estate and interest must be created by deed LPA 1925 s52.
Requirements for a deed in s1 LPMPA 1989. This covers all the estates and interest listed in s1(1) and
(2) of LPA 1925.
There are some exceptions to this rule (e.g. parol leases exception- a valid legal lease can be created
without a deed if it satisfies the conditions in s54(2) of LPA 1925. Valid legal easement may arise also
without the need for a deed/formality.
3.2Creation in a contract
Where there is a contract to create or convey a legal estate in land, equity will recognise that
contract as creating an equitable interest in land, so long as it satisfies the requirements for a
contract under s 2 of the LPMPA 1989.
