17.1 The Nature of Land, Estates and Interests

The SRA SQE1 Assessment Specification for FLK2 Land Law (from September 2026) requires candidates to apply the distinction between real and personal property, the two remaining legal estates, the methods of acquiring and transferring those estates, and the formalities for creating, disposing of, and protecting legal and equitable interests. Independent OpenExamPrep materials in this chapter are written for that FLK2 topic. A newly qualified solicitor who treats an oral house bargain as a conveyance, or who assumes a signed contract has already moved the legal estate, will misadvise on purchase, gift, mortgage, and occupation disputes.

Real property and personal property

English law still divides assets into real property (realty) and personal property (personalty). Land is the core of real property. Section 205(1)(ix) of the Law of Property Act 1925 (LPA 1925) defines land widely: it includes land of any tenure, mines and minerals, buildings or parts of buildings and other corporeal hereditaments, and incorporeal hereditaments such as easements, rights, privileges, and rents issuing from land. The soil, the buildings, fixtures, and a reasonable column of airspace needed for ordinary use of the surface all travel with the realty. Bernstein v Skyviews & General Ltd limits aerial claims to the height needed for ordinary use. Subsoil can be separately owned: Bocardo SA v Star Energy UK Onshore Ltd treated a well path through strata beneath a surface title as a trespass.

Chattels remain personal property. They do not automatically pass on a conveyance of the land. The practical dispute is fixtures versus chattels. The tests, classically from Holland v Hodgson and applied in Botham v TSB Bank plc and Elitestone Ltd v Morris, are the degree of annexation and the purpose of annexation. An object resting by its own weight can still be a fixture if it was placed to benefit the land permanently. A house that cannot be removed without destruction is land (Elitestone). Fitted kitchen units, boilers, and central-heating radiators are typically fixtures. Carpets on gripper rods, curtains, freestanding white goods, and most pictures are typically chattels. On an FLK2 problem, read the contract for included items first, then apply the annexation tests to anything left silent.

A licence to occupy is a personal permission. It is not an estate in land. A lease is an estate. Mixing those two is a later landlord-and-tenant trap; at this stage, remember that only estates and identified interests are proprietary and capable of binding successors.

The two legal estates

Since 1 January 1926, LPA 1925 section 1(1) allows only two estates to exist at law:

1. A fee simple absolute in possession (the freehold).
2. A term of years absolute (the leasehold).

Fee simple is the largest slice of ownership the law recognises: it lasts potentially forever and is inheritable. Absolute means it is not cut down into a merely determinable or conditional legal estate. In possession means a present right to enjoy the land or its rents and profits, not necessarily physical occupation. A landlord who has granted a lease still has a freehold in possession because the right to the rent and the reversion is present. A remainder or reversion that is only future is not "in possession" for section 1(1)(a).

A term of years absolute is a leasehold estate. There is no minimum term: a weekly tenancy can be legal. What matters is a term with exclusive possession, plus the formalities treated below. A lease for 99 years determinable on death can still be a term of years absolute.

Life estates, fees tail, and most future interests cannot exist as legal estates. If a will or deed tries to give "to A for life, remainder to B in fee simple," the legal fee simple is held on a trust of land. A and B have equitable interests. The Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996) governs that trust. Do not advise a client that they own a legal life estate after 1925.

Legal interests distinguished from equitable interests

LPA 1925 section 1(2) lists the interests capable of being legal:

Everything else is equitable only: beneficial interests under trusts, restrictive covenants, estate contracts (including options and rights of pre-emption once they take effect as such), equitable easements, equities arising from proprietary estoppel, and mere equities. Section 1(3) confirms that residual interests take effect in equity.

A legal interest is capable of binding the world in unregistered land and, in registered land, of being a registrable disposition or an overriding interest. An equitable interest is more fragile: it may need a notice, a land charge, or the doctrine of notice, and it may be overreached.

How land can be held

Land may be held by a sole legal owner beneficially; by a sole legal owner as trustee for others (a nominee, or a partner holding a home on implied trust); by co-owners as legal joint tenants, always behind a trust of land; as freehold or leasehold, including a freehold subject to a long lease; and subject to third-party rights such as easements, covenants, mortgages, and occupation rights. Companies, charities, and the Crown can hold legal estates. A minor cannot hold a legal estate; the land is held on trust.