In the present context, property refers to real property (i.e., lands and building and rights to lands and building). In the broader sense, property refers to anything capable of being owned. In that sense, it also includes movable (“personal”) property/goods and intangible property, such as intellectual property brands and shares. In this context, land refers to real property including land with buildings.
Rights of ownership of land can be complex. Many persons may have different rights to the land concerned. The main interests encountered in practice, are absolute ownership or the interest of a tenant under a commercial type lease.
A person’s title to land effectively means his ownership rights to it. He may have a freehold or leasehold interest in the land. Each type of estate may be subject to elaborate terms and conditions, which have been applied to that land by their predecessors in title. There is much greater scope with leasehold estates, to apply terms and conditions.
It is possible for several persons to own land in shares. There may be leases and subleases of the land. It may be subject to a mortgage. It may be subject to easements. The net result is that many different people may have property rights for the same piece of land or building. The ownership may be divided between freehold owners, tenants, mortgagees, persons holding easements, in any number of ways. The economic benefit or rights to the land may vary depending on the terms of the lease, easement, mortgage etc.
The question of title arises on the acquisition of property. The investigation of title ascertains the nature of the seller’s economic interest in the land, which may range from the full economic benefits of the land to something considerably less.
It is possible for different persons to have different rights and entitlements to land. Commonly, one person has all available rights entitlement to particular land, so that this person is considered the owner of the land. However, the rights of ownership of particular land may be divided amongst various persons either as co-owners or as the holders of different estates or interests in the same land.
There may be a number of joint or co-owners of the land. Each may be entitled to share the entire benefit of the land. Alternatively, each may be owners of a particular share. In this case, they would be entitled to the rents and benefits of the land, in proportion to their shares.
A number of people may own land successively. A person may own land for his life only so that it passed to another person on his death. It is possible to create all variety of rights of right and interest under so-called settlements of land, that may last several generations. 2009 Land law reform has minimised the types of legal estates and legal interests that be created. Other rights must subsist as right under a trustee.
Limits n Freehold Interests
Apart from landlord and tenant relationships, it is possible for persons to have limited freehold title to land. A person may be an owner of an estate for life. This may be for his own life only of for the life of the third party. In this case, the right to enjoy the land may terminate on the death of the relevant party, so that another person with a remainder interest, which commences after the life estate, may thereupon obtain an immediate right to hold and possess the land. That successor, with the estate and the right to take effect on the death of the life tenant, has a future property right to the land.
A person who is a legal owner may be a nominee holding it on trust for other parties. In this case, the person who appears to be a legal owner is obliged to hold the land (and its rents and benefits) as a trustee under the terms of the trust. Depending on the terms of the trust, the beneficiary of the trust may be the real and substantial owner, so that the trustee is a bare nominee only.
In other cases, the trustee may have wide powers and may decide if and when the beneficiary receives all or any of the trust property or its benefit. There may be categories of persons who may potentially benefit, depending on the decision of the trustees. The rights of the beneficiary are determined by the term of the trust. The economic value and usefulness of the rights may vary considerably.
A variety of third-party rights over land may exist by easement. An easement may impact the land in a minor way or in a very significant way, depending on its terms. Depending on the nature and extent of the right, it may be such as to dilute or totally deprive the owner, the freehold owner of the benefit of the land.
It is possible for somebody to contract to give rights over land which are less than a lease. These are usually termed a licensee. An example would be a right to use part of a shop floor. The licensee does not have exclusive possession. The licensee has no right to go to court to exclude other persons from possession. If he is excluded, his right is generally to compensation for loss only. Under exceptional circumstances, some types of licence may come very close to being a lease.
It is possible to have multi-layers of leases in the one property. A person may hold land under a 99-year lease with 50 years left to run at a nominal rent. He may lease the land by way of a commercial lease for 25 years at a market value rent. That tenant may sub-let all or part of the land for a shorter term, such as 10 years, at a higher rent. That person ma, in turn,n share a possession of the property with a licensee.
Licensees are persons who do not have exclusive possession or rights to exclude others from the land. They do, however, have a contract which gives them some economic use of the land.
It is possible to grant a security interest over land. A mortgage or under the reformed land law, gives the chargee security over land which entitles it to take possession and sell the land in order to repay a financial obligation.
The bank’s interest under its charge as mortgagee or lender may exceed the economic value of the owner’s interest because of the amount of monies owed relative to the market value of the secured property.
Mortgages are property rights which give the mortgagees, typically financial institutions, rights to sell or lease the land in order to repay the secured debts, even if the land owner goes bankrupt or dies. The land is effectively available to the mortgagee for the purpose of repayment of the secured debt.