Freehold (real Property)
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A freehold, in
common law Common law (also known as judicial precedent, judge-made law, or case law) is the body of law primarily developed through judicial decisions rather than statutes. Although common law may incorporate certain statutes, it is largely based on prece ...
jurisdictions Jurisdiction (from Latin 'law' and 'speech' or 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, the concept of jurisdiction applies at multiple levels ...
or
Commonwealth A commonwealth is a traditional English term for a political community founded for the common good. The noun "commonwealth", meaning "public welfare, general good or advantage", dates from the 15th century. Originally a phrase (the common-wealth ...
countries such as
England and Wales England and Wales () is one of the Law of the United Kingdom#Legal jurisdictions, three legal jurisdictions of the United Kingdom. It covers the constituent countries England and Wales and was formed by the Laws in Wales Acts 1535 and 1542. Th ...
,
Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...
,
Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...
,
Ireland Ireland (, ; ; Ulster Scots dialect, Ulster-Scots: ) is an island in the North Atlantic Ocean, in Northwestern Europe. Geopolitically, the island is divided between the Republic of Ireland (officially Names of the Irish state, named Irelan ...
,
India India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...
and the
United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
, is the common mode of ownership of
real property In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, refers to parcels of land and any associated structures which are the property of a person. For a structure (also called an Land i ...
, or land, and all immovable structures attached to such land. It is in contrast to a
leasehold A leasehold estate is an ownership of a temporary right to hold land or property in which a Lease, lessee or a tenant has rights of real property by some form of title (property), title from a lessor or landlord. Although a tenant does hold right ...
, in which the property reverts to the owner of the land after the lease period expires or otherwise lawfully terminates. For an estate to be a freehold, it must possess two qualities: immobility (property must be land or some interest issuing out of or annexed to land) and ownership of it must be forever ("of an indeterminate duration"). If the time of ownership can be fixed and determined, it cannot be a freehold. It is "An estate in land held in
fee simple In English law, a fee simple or fee simple absolute is an estate in land, a form of freehold ownership. A "fee" is a vested, inheritable, present possessory interest in land. A "fee simple" is real property held without limit of time (i.e., pe ...
,
fee tail In English common law, fee tail or entail is a form of trust, established by deed or settlement, that restricts the sale or inheritance of an estate in real property and prevents that property from being sold, devised by will, or otherwise ali ...
or for term of life." The default position subset is the perpetual freehold, which is "an estate given to a grantee for life, and then successively to the grantee's heirs for life."


England and Wales


Diversity of freeholds before 1925

In England and Wales, before the
Law of Property Act 1925 The Law of Property Act 1925 ( 15 & 16 Geo. 5. c. 20) is an act of the Parliament of the United Kingdom. It forms part of an interrelated programme of legislation introduced by Lord Chancellor Lord Birkenhead between 1922 and 1925. The progr ...
, the default position was the ''
fee simple In English law, a fee simple or fee simple absolute is an estate in land, a form of freehold ownership. A "fee" is a vested, inheritable, present possessory interest in land. A "fee simple" is real property held without limit of time (i.e., pe ...
'' estate , a freehold transferable to the owner's " heirs and assigns" (successors by inheritance, or purchase/gift, respectively). Those three words were often included in a conveyance to stress fee simple status. A ''
fee tail In English common law, fee tail or entail is a form of trust, established by deed or settlement, that restricts the sale or inheritance of an estate in real property and prevents that property from being sold, devised by will, or otherwise ali ...
'' estate describes when transfer (by inheritance or otherwise) was limited to lineal descendants of the first person to whom the estate was given (known as " heirs of the body" or "heirs of the blood"). There were also freehold estates not of inheritance, such as an estate for life and
copyhold Copyhold was a form of customary land ownership common from the Late Middle Ages into modern times in England. The name for this type of land tenure is derived from the act of giving a copy of the relevant title deed that is recorded in the ...
was promoted into freehold by the Act.


Rentcharges and payments by way of positive covenants

All estates can be subject to payments to an influential prior owner – or land management person or body for multi-property (communal) benefit (estate rentcharges). The most viable form is the form for a neutral or pre-agreed source to collect communal benefit payments, the estate rentcharge. Either type is usually protected by registering the deed of rentcharge against the land. They can be extinguished by a compensation-based statutory procedure, which removes the regular administrative burden on both parties. Estate rentcharges are potentially subject to abuse, known as " fleecehold". Any existing rentcharges ''other than estate rentcharges'' will be extinguished on 22 August 2037. Should the owner be guaranteed to benefit or wish to benefit from a communal infrastructure that requires maintenance, not funded by taxation, then '' Halsall v Brizell'' (regarding an estuary wall) and ''
Re Ellenborough Park was an English land law case which reformulated the tests for an easement (the scope of the law of easements). It found an easement to use a communal garden to be a valid easement in law. There is no requirement for all of the houses to be imm ...
'' (regarding a communal garden) confirm that in those circumstances positive covenants run with freehold land. This means active duties to pay can exist – in very closely analogous cases – but are otherwise generally void as to freeholds.


Adverse possession

Freeholds (rather leaseholds if subject to a leasehold) could quite easily be acquired by squatting before the
Land Registration Act 2002 The Land Registration Act 2002 (c. 9) is an act of the Parliament of the United Kingdom which repealed and replaced previous legislation governing land registration, in particular the Land Registration Act 1925, which governed an earlier, though ...
. Since its passage such rights are dominated by precisely fixing on the line of neighbouring plots in mutual-boundary disputes, after 12 years without formal contest. This is as there is otherwise a requirement to put the previous legal owner on written notice – which must have been received, or deemed received such as by recorded delivery, and be given fair opportunity to object. It is also more easily applicable to unregistered land, which is the status of a tiny number of parcels of non-agricultural freehold land in England.


Legal owners as trustees for beneficiaries

More than one legal owner means the land is deemed to be on trust. This doctrine is designed to bind the parties to act fairly to each other in the eyes of the law of equity. In default of other provision, such as mention of a trust deed, or background facts, the beneficiaries will be deemed to be the trustees (those named on the registered title) themselves. If a trustee dies then the statutory trustees take their place, or those appointed by a probated Will. Similarly if a company is wound up then the right to act as the trustee and be registered as a legal trustee vests in the liquidator. As regards third parties interested in lending against or purchasing the land the general doctrine helping them is the
bona fide purchaser A ''bona fide'' purchaser (BFP)referred to more completely as a ''bona fide'' purchaser for value without notice is a term used predominantly in common law jurisdictions in the law of real property and personal property to refer to an innocent ...
without actual nor constructive notice doctrine. This is however subject to all of the prudent surveyors, conveyancer's and physical checks having been carried out well which is formulated in the countering doctrine of
caveat emptor ''Caveat emptor'' (; from ''caveat'', "may he/she beware", a subjunctive form of ''cavēre'', "to beware" + ''ēmptor'', "buyer") is Latin for "Let the buyer beware". It has become a proverb in English. Generally, ''caveat emptor'' is the contra ...
(buyer beware). A beneficiary in patent actual possession can still enjoy rights as against a purchaser, or more commonly a mortgage or other secured lender, under the
Land Registration Act 2002 The Land Registration Act 2002 (c. 9) is an act of the Parliament of the United Kingdom which repealed and replaced previous legislation governing land registration, in particular the Land Registration Act 1925, which governed an earlier, though ...
. Trustees are bound by the terms of the trust, but the strict rules and
maxims of equity Maxims of equity are legal maxims that serve as a set of general principles or rules which are said to govern the way in which equity operates. They tend to illustrate the qualities of equity, in contrast to the common law, as a more flexible, ...
and by any decision formally made by all of the adult beneficiaries. Inequities the Trusts of Land and Appointment of Trustees Act 1996 (TLATA) resolved included the fact that it was hard to establish a trust without it coming under the auspices of the Settled Land Act 1925. That earlier Act brought a range of problems. In particular, the co-owners of property were regarded as having beneficial interests in money and not in the land. Problems arose where partners disagreed over when they wanted to sell a property – usually in the case of separation. This led to situations where spouses and children could find themselves removed from their customary home inequitably. One of the key features of TLATA is its imposition of statutory considerations to be taken into account when dealing with the disposition of trusts and ordering a sale of a family home.


Hong Kong

St John's Cathedral is the only freehold land in Hong Kong, with a statutory requirement that the land must be used for religious purposes of the Church of England. All other lands are granted in leasehold.


See also

*
Allodial title Allodial title constitutes ownership of real property (land, buildings, and fixtures) that is independent of any superior landlord. Allodial title is related to the concept of land held "in allodium", or land ownership by occupancy and defense ...


Notes


References

{{Use dmy dates, date=July 2018 English legal terminology Legal terminology Real property law Landlord–tenant law