Экзамен зачет учебный год 2023 / Pradi, From Contract to Registration

MATTHEW CONAGLEN

don, 2005); and E. COOKE, The New Law of Land Registration (Oxford, 2003). Also helpful is the Law Commission’s report on land registration, which led to the enactment of the Land Registration Act 2002:

Land Registration for the Twenty-First Century: A Conveyancing Revolution (LC 271, 2001), which is also available online without charge at http://www.law com.gov.uk/lc_reports.htm#2001.

HM Land Register can be accessed online at http://www.landregi steronline.gov.uk/, where searches of the online register can also be conducted (for a modest fee), and further information about the Land Registry can be obtained from http://www.landreg.gov.uk/.

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THE TRANSFER OF IMMOVEABLES IN IRELAND

Una Woods*

1. Introduction

In Ireland the transfer of immoveables or ‘real property’1 is governed by two branches of law known as land law and conveyancing law. Although they are two separate subjects, land law and conveyancing law are closely related and inter-dependent. A knowledge of both is essential for a solicitor acting on behalf of a client who wishes to enter into a transaction in relation to land. Land law is generally understood as defining the types of ownership (known as ‘estates’) or other interests which arise in relation to land2, while conveyancing law is more concerned with the procedures that owners should follow to dispose of their interests and the precautions that purchasers should take in acquiring such interests3. This chapter begins by outlining some basic features of land ownership and the conveyancing system in Ireland. It also highlights recent developments which have taken place in this area of law. Finally, the reader is taken through the basic steps of a residential conveyancing transaction.

* Senior Lecturer at the School of Law of the University of Limerick (Ireland) and former member of the Irish Property Registration Authority.

1In Ireland, following the common law tradition, property is classified as real property (or realty) and personal property (personalty), which corresponds roughly with the distinction made in civil law jurisdictions between immoveables and moveables.

2See J.C.W. WYLIE, Irish Land Law, 5th ed., Dublin, 2013; F. DE LONDRAS, Principles of Irish Property Law, 2nd ed., Dublin, 2011; A. LYALL, Land Law in Ireland, 3rd ed., Dublin, 2010; R. PEARCE, J. MEE, Land Law, 3rd ed., Dublin, 2011.

3See J.C.W. WYLIE, U. WOODS, Irish Conveyancing Law, 3rd ed., Haywards Heath, 2005; LAW SOCIETY OF IRELAND, Conveyancing – Volumes 1 and 2, 5th ed., Dublin, 2010.

UNA WOODS

2. Fundamental Features of Irish Land Ownership

2.1. Feudal Tenure

The Irish system of land ownership is derived from the feudal system which was introduced by the Normans in England following the Battle of Hastings in 1066 and introduced in Ireland following the Norman invasion in the 12th century4. The Norman conquest of Ireland was a more drawn out affair than in England and the feudal system was not imposed over the entire country until the 17th century. The feudal system of landholding or ‘tenure’ was based on the notion that the Crown held the underlying title to all land and so all land was held from the Crown. In Ireland the State has occupied the position of the Crown since 1922. In the aftermath of the Norman conquest, the King made grants of land to his followers, known as tenants in chief, on terms which required the tenant to perform certain services for the King and allowed the King to claim certain rights, known as ‘incidents’, over his tenants. The King’s tenants, in turn made sub-grants of the land on similar terms and this process, known as ‘subinfeudation’, continued until the entire country was subject to a feudal pyramid structure with the King at the top of the pyramid and the tenants in possession of the land at the bottom of the pyramid. Tenure refers to terms under which a person holds land and the most common type of tenure was ‘free and common socage’ which originally required a tenant to perform agricultural services for his immediate lord. This type of tenure later became known as ‘freehold’ and the Tenures Abolition Act (Ireland) 1662 converted all existing tenures into freehold. Freehold tenure is very common today, although all feudal incidents or services have been abolished or are no longer of any practical significance. Feudal tenure, in so far as the concept has survived, was abolished by section 9 of the Land and Conveyancing Law Reform Act 2009. The Law Reform Commission was of the opinion that the notion that all land was held from the State was out of step with the modern relationship between the gov-

4 See A. LYALL, Land Law in Ireland, cit., chapter 3 and J.C.W. WYLIE, Irish Land Law, cit., chapter 2 for a review of the feudal system of ownership.

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ernment and its citizens5. However, feudal tenure has left its imprint on the common law approach to land ownership as it was directly responsible for the introduction of the doctrine of estates.

2.2. The Doctrine of Estates

Absolute (or allodial) ownership of land was not possible under the feudal system as the Crown owned the underlying title to all land. It was necessary to come up with an abstract entity called an ‘estate’ to describe what the tenant in possession of the land owned. There are three different freehold estates: the life estate, the fee tail and the fee simple6. The type of estate determines the duration of time for which the person owns the land. A person who holds a life estate is entitled to enjoy ownership for a lifetime7. Under a fee tail estate, on the death of the current holder of the estate, ownership passes to the direct descendants (as identified by the ancient heirship rules known as ‘primogeniture’)8 of the original grantee and the estate comes to an end when no direct descendants survive. The third estate is the fee simple which is the closest to absolute ownership; if the owner of this estate does not dispose of it during his lifetime, it will pass to his successors as identified by his will or by the modern intestacy rules set out in Part IV of the Succession Act 1965. A long-standing fundamental feature of the fee simple is that it is freely alienable/transferable. Where testamentary restrictions are imposed on the sale of land held subject to a fee simple estate, these conditions are frequently declared invalid by the courts and severed from the testamentary gift so that it becomes unconditional. In making such a ruling, the courts traditionally relied on the doctrine of repugnancy (which declared a restraint on alienation to be repugnant to

5See LAW REFORM COMMISSION, Consultation Paper on Reform and Modernisation of Land Law and Conveyancing Law (LRC CP 34-2004), para 2.01-02.

6See A. LYALL, Land Law in Ireland, cit., chapters 4, 8, 10 and 11 and J.C.W. WYLIE, Irish Land Law, cit., chapter 4.

7Usually the lifetime of the grantee, although it is possible to create a life estate pur autre vie which lasts the lifetime of another named person.

8These rules favoured the eldest son.

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the nature of a fee simple estate)9 or declared the restraint contrary to public policy10. This common law11 approach, sometimes referred to as the ‘rule against inalienability’ is now replicated by a statutory rule set out in section 9(4) of the Land and Conveyancing Law Reform Act 2009 which declares that a fee simple remains freely alienable. The life estate and the fee tail were commonly used in the creation of certain family settlements, known as ‘strict settlements’. Strict settlements were used by landowners to keep land in the family as both estates were not very marketable commodities. Strict settlements led to the deterioration of land and buildings and the impoverishment of the landed classes. As a result, legislation was introduced which would allow the holders of these lesser estates to sell a fee simple estate which brought settled land back onto the market12. Further measures were taken by the Land and Conveyancing Law Reform Act 2009 to simplify the purchase of settled land. It provides that a life estate can only take effect behind a trust of land which confers the trustees with the power to convey a fee simple estate in the land13. A purchaser dealing with two trustees or a trust corporation does not need to be concerned about those holding equitable interests under the trust of land as their interests are ‘overreached’ on the sale (i.e. their interests become detached from the land and attached to the sale proceeds)14. The 2009 Act also prohibits the creation of any new fee tails and converts most existing fee tails into fee simple estates15.

2.3. Leasehold ownership

The leasehold estate developed after feudalism went into decline and it arises where a person (known as the ‘lessor’ or the ‘landlord’)

9Byrne v Byrne (1953) 87 ILTR 183; Re McDonnell [1965] IR 354.

10See Re Dunne’s Estate [1988] IR 155.

11The term ‘common law’ is frequently used to refer to judge-made law.

12The Fines and Recoveries (Ireland) Act 1834 and the Settled Land Acts 1882-

1890.

13S11(6) and s18(1)(a) of the Land and Conveyancing Law Reform Act 2009.

14S21 of the Land and Conveyancing Law Reform Act 2009.

15S13 of the Land and Conveyancing Law Reform Act 2009.

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grants a lease to the lessee (or the tenant) for a fixed term16 in consideration of rent and subject to certain covenants (i.e. promises contained in a deed)17. The lessee is regarded as the leasehold owner and is entitled to exclusive possession of the land during the term. The lessor retains ownership of the superior estate (also known as the ‘reversion’) and is entitled to recover possession on the expiry of the term. Frequently, the lease includes a forfeiture clause, which allows the lessor to terminate the lease before the expiry of the term if the lessee is in breach of certain covenants. A lease is more than a contractual relationship as it can affect persons who were not party to the original agreement18. A person who purchases the lessor’s estate will usually be bound by the lease. Also, the lessee is entitled to sell the remainder of the term of the lease so that the purchaser becomes bound by its terms or, alternatively, the lessee may grant a lease for a shorter term known as a ‘sub lease’ which creates the relationship of landlord and tenant between the lessee and the sub-lessee. Blocks of apartments are frequently subject to leasehold ownership schemes as, up until recently, positive covenants affecting freehold land could not be enforced against future owners of the land19. The grant of a long lease (for example, a lease for 500 years) gave a

16Periodic tenancies may also be created. Such tenancies are frequently created orally and run from week to week or month to month until a notice to quit is served by one party on the other.

17See J.C.W. WYLIE, Landlord and Tenant Law, 3rd ed., Dublin, 2014.

18A lease should be distinguished from a licence agreement which permits the licensee to use or occupy a property. Such an agreement will typically only bind the parties to the agreement and the licensee will not benefit from certain important statutory protections conferred on residential tenants and commercial tenants (see in, particular, the Residential Tenancies Act 2004; the Landlord and Tenant (Amendment) Act 1980, as amended). Occasionally, landlords have attempted to evade these statutory protections by labelling the agreement as a licence and couching it in licence terminology. In determining whether the agreement should be classified as a lease or a licence, the courts will look beyond the label and seek to determine its substantive effect, see Gatien Motor Co. v Continental Oil Co. of Ireland [1979] IR 406; Irish Shell & B.P. Ltd v Costello Ltd [1981] ILRM 66; Govenors of the National Maternity Hospital v McGouran [1994] 1 ILRM 521; Kenny Homes & Co Ltd v Leonard [1997] IEHC 230; Smith v CIE and Irish Rail [2002] IEHC 103.

19New provisions governing the enforceability of freehold covenants are set out in Part 8, chapter 4 of the Land and Conveyancing Law Reform Act 2009.

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purchaser a marketable interest in the apartment but also ensured that a covenant to pay a service charge towards the upkeep of the common areas was enforceable against successive owners of the apartment. Freehold ownership schemes in relation to blocks of apartments may become more widespread in the future.

In a typical conveyancing transaction the title being offered by the vendor is a fee simple estate20, a grant of a lease or an assignment of the residue of the term under a lease.

2.4. The recognition of the trust and the equitable doctrine of notice

Equity as a body of law was developed by the Courts of Chancery due to certain deficiencies in the common law system, in particular the narrow range of actions and remedies available21. The most significant contributions of equity to land law was the recognition of the trust and the development of the equitable doctrine of notice22.

The modern day trust developed from a medieval conveyancing device known as the ‘use’. Under a use, land was conveyed to the feoffee to uses to be held to the use of cestui qui use. Although the feoffee was recognised as the common law or legal owner who could, if required, make a conveyance of the legal title, equity recognised cestui que use as the equitable (or beneficial) owner and would force the legal owner to use the land for his or her benefit. The use became popular as it al-

20A variant of the fee simple estate commonly found in Ireland is the fee farm grant. Although it confers a fee simple estate on the grantee, it creates a leasehold relationship between the grantor and the grantee. Historically, many fee farm grants arose through conversion legislation designed to avoid the expense and inconvenience associated with perpetually renewable leases. In more modern times, fee farm grants were frequently created to avoid the restrictions on enforcing positive covenants affecting freehold land against successors in title to the original transaction. The leasehold relationship created between the fee farm grantor and the fee farm grantee facilitated the enforcement of such covenants against future owners of the land. S12 of the Land and Conveyancing Law Reform Act 2009 prohibits the creation of new fee farm grants, although existing fee farm grants shall remain in force.

21See H. DELANY, Equity and the Law of Trusts in Ireland, 5th ed., Dublin, 2011.

22See A. LYALL, Land Law in Ireland, cit., chapter 6 and J.C.W. WYLIE, Irish Land Law, cit., chapter 3.

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lowed for the avoidance of certain feudal dues, the creation of early family settlements and substantially reproduced the effect of a will before it was possible to leave land by will23. The use was not popular with the feudal lords as it deprived them of their feudal revenue. As a result, the Statute of Uses 1535 was passed in England. In Ireland equivalent legislation, the Statute of Uses (Ireland) Act 1634, was passed by the Irish Parliament. This legislation was designed to ‘execute’ the use or vest the legal ownership in cestui que use. Conveyancers succeeded in circumventing the Statute of Uses by devising a ‘use upon a use’ to exhaust the effects of the statute, thereby facilitating once again the division of ownership into legal ownership and equitable ownership24. The use upon a use, also known as a ‘conveyance to uses’, became the formula of words used to create a modern day trust under which the legal owner is known as the ‘trustee’ and the equitable owner is known as the ‘beneficiary’. The beneficiary can enforce the trust and seek damages from the trustee for any breach of trust. The Land and Conveyancing Law Reform Act 2009 repealed the Statute of Uses25 and eliminated the need to rely on a ‘conveyance to uses’ to vest legal ownership in the trustee26.

Many trusts are expressly created by a deed of trust or in a will. Although, they are often created for the benefit of persons, it is also possible to create a trust for charitable purposes and such trusts are enforceable by the Charities Regulatory Authority27. In addition, the law recognises that certain circumstances may give rise to a resulting trust28 or a constructive trust29. For example, a purchase money resulting trust arises if someone contributes the purchase price of land bought in the name of another30. In such circumstances, the legal owner is required to

23This was not possible in Ireland until the Statute of Wills (Ireland) Act 1634.

24The ‘use upon a use’ was recognised as having this effect in Sambach v Dalston (1634) Tothill 168.

25S8 of the Land and Conveyancing Law Reform Act 2009.

26S62(2) of the Land and Conveyancing Law Reform Act 2009.

27See the Charities Act 2009. See also H. DELANY, Equity and the Law of Trusts in Ireland, cit., chapter 10.

28H. DELANY, Equity and the Law of Trusts in Ireland, cit., chapter 7.

29H. DELANY, Equity and the Law of Trusts in Ireland, cit., chapter 8.

30See C v C [1976] IR 254; W v W [1981] ILRM 202; McC v McC [1986] ILRM 1.

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hold the property on resulting trust for those who contributed to the purchase price. The equitable shares of the beneficiaries reflect their respective contributions. The courts recognise a constructive trust if it is necessary in the interests of justice and good conscience. It is long established, for example, that when a purchaser enters into an enforceable contract to purchase land the vendor is deemed to hold the land on constructive trust for the purchaser31.

The existence of equitable interests in land may complicate dealings with that land and the equitable doctrine of notice was developed by the Courts of Chancery to govern such dealings. Although the trustee has the power to sell or mortgage the legal estate, in certain circumstances the purchaser or the mortgagee will take the interest subject to the trust. The purchaser or the mortgagee will be bound by the trust unless he or she was a purchaser for value without notice of the equitable interest (otherwise known as ‘equity’s darling’). Purchasers will be deemed to have notice of all equitable interests that they would have discovered if they had inspected the land and made enquiries of those in occupation or if their solicitors had adequately investigated the title to the land32. An obvious danger is the possibility that someone in occupation of the property may have contributed to the purchase of property put in the vendor’s sole name giving rise to an equitable interest under a purchase money resulting trust. The doctrine of notice requires a purchaser/ mortgagee or their solicitor to make enquiries to clarify whether any occupiers of the property have such an interest33. Another danger is the possibility that the vendor may have already entered into a contract to sell the land to another purchaser who is therefore deemed to be the equitable owner under a constructive trust. Although such an interest may not be revealed by the enquiries necessitated by the doctrine of notice, it is possible for the first purchaser to ensure that his or her interest binds a subsequent purchaser by registering the contract in the Registry of Deeds, or by registering a caution if the land is registered in the Land Registry. A solicitor acting for the subsequent purchaser is

31See Tempany v Hynes [1976] IR 101 and s52(1) of the Land and Conveyancing Law Reform Act 2009.

32S86 of the Land and Conveyancing Law Reform Act 2009.

33Northern Bank Ltd v Henry [1981] IR 1.

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