Real Property Law

This Real Property Law Blog is the place to review some of the recent cases and statutes from around the world.

Real Property Law: United KingdomReal Property Law

We start our review of some recent issues on real property law in UK with Berrisford v Mexfield Housing Co-operative Ltd [2011] 46 EG 105, [2011] 3 WLR 1091 (SC).

The United Kingdom Supreme Court effectively converted a tenancy granted to an individual for an uncertain term into a lease for 90 years, or until the tenant dies.

  • A lease has to be granted for a certain term; otherwise it is void—“for every such estate must have a certain beginning, and a certain end”, 2 Bl Comm 143. A term of a lease must be expressed “with certainty or specifically or by reference to something which can, at the time when the lease takes effect, be looked to as a certain ascertainment of what the term is meant to be”, Lace v Chandler [1944] KB 368, 370 (CA) (Say v Smith (1530) 1 Plow Rep 269, 75 Eng Rep 410, 417—“every contract sufficient to make a lease for years ought to have certainty in three limitations, viz in the commencement of the term, in the continuance of it, and in the end of it … and words in a lease, which don’t make this appear, are but babble”; Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386, [1992] 3 All ER 504 (HL)).
  • In other words, it must be possible to decide at the outset the time when the lease starts, and in particular when it ends, either by reference to the words of the lease or an event that will occur. A lease until a war ends or a team wins a football championship is not good enough. However, a lease for twenty five  years, terminable if the team wins the title is ‘certain’ as it will end after 25 years (if not before).
  • Nonetheless, if the tenant who has been granted the lease for an ‘uncertain term’ occupies property and pays rent, which is accepted by the landlord, that will create a periodic tenancy. The period will depend on the regularity of the rent payment (i.e. a monthly rent creates a monthly tenancy) (Berrisford v Mexfield Housing Co-operative Ltd, above)—setting out a detail exposition and historical analysis of the requirement for a the certainty of the ‘term’ required to create a valid lease).
  • In English common law, prior to 1925, a tenancy for an uncertain term was considered a tenancy for life: “That is clear from what was said in Littleton on Tenures (1481/2) vol 2, section 382 namely – ‘[I]f an abbot make a lease to a man, to have and to hold to him during the time that he is abbot … the lessee hath an estate for the term of his owne life: but this is on condition … that if the abbot resign, or be deposed, that then it shall be lawful for his successor to enter (see also  1 Co Litt 42a; Shep Touch 275)”.
  • In 1925, any lease that last for a life or lives (or until the lessee marries), at a rent, is automatically converted into a lease for ninety years; although it may be brought to an end on the death or marriage of the tenant (Law of Property Act 1925, s. 149(6)).
  • However, a lease to a corporate entity cannot be granted for life. So a lease for an uncertain term granted  to a company (provided rent is paid and accepted) will only create a periodic tenancy.

Hardly a satisfactory outcome, relying on very ancient rules of real property law as  they relate to landlord and tenant.

As stated by Lord Dyson “This is a just result which plainly accords with the intention of the parties. But it may legitimately be said that it is not satisfactory in the 21st century to have to adopt this chain of reasoning in order to arrive at such a result. It is highly technical. There should be no need to have to resort to such reasoning in order to arrive at the result which the parties intended. That is why the radical solution of doing away with the uncertainty rule altogether is so attractive. There is the further point that the section 149(6) route to the right result can only be followed where the purported tenant is an individual and not a corporate entity. To treat an individual and a corporate entity differently in this respect can only be explained on historical grounds. The explanation may lie in the realms of history, but that hardly provides a compelling justification for maintaining the distinction today.”

(Real Property Law)

Nuisance from landfill site, from this Real Property Law Blog

Nuisance from industrial sites has been a real property law issue for many years and especially since the industrial revolution. Today dust, dirt, smells and toxic material pour into the atmosphere and into the soil. Many countries have strict environmental laws to control pollution, but it is sometimes left to the individual to pursue the matter as a private action for nuisance.

The recent English Court of Appeal decision in Derrick Barr v Biffa Waste Services Limited [2011] EWCA Civ 312 (CA) is of special interest.  A little history on real property law going back from Victorian times sets the background.

In 1879 it was stated that what constituted a nuisance was not an “abstract consideration of the thing itself”, but depended on the circumstances. What was a nuisance in one place may not be in another (Sturges v Bridgman (1879) LR 11 Ch D 852). In that case it was said that a nuisance in Wimpole Street may be a nuisance in Bermondsey; although today residents of Bermondsey may beg to differ).

More recently a real property law case arose in the House of Lords as to whether a new tower block at Canary Wharf (also in East London) was creating a nuisance by interfering with television receptions to the established residents of the area. Lord Lloyd of Berwick  stated that “private nuisances are of three kinds. They are:  (1) nuisance by encroachment on a neighbour’s land; (2) nuisance by direct physical injury to a neighbour’s land; and (3) nuisance by interference with a neighbour’s quiet enjoyment of his land”, Hunter v Canary Wharf Ltd [1997] AC 655, 695B, [1997] 2 All ER 426 (HL).  In that case, it was decided that in English real property law no action could be sustained by the mere presence of a building, so the claim failed (although the problem was later resolved by the BBC repositioning the transmitter).

This reinforces the  principle of real property law that a landowner has no general or natural right to the flow of air to, or from, his land (Bryant v Lefever (1879) 4 CPD 172 (CA)). However, if a landowner enjoys a right to the flow of air over his land, the polluting of that air (except when authorised by statute, by express or implied grant, or by prescription) may create a nuisance (Chastey v Ackland [1897] AC 155 (HL); United Verde Copper Co. v. Jordan, 14 F.2d 299 (9th Cir. Ariz 1926)).

All of this was brought together  in a case that restricted the emission of noxious smells from a landfill site, even though the  owner of the site appeared to have complied with all the applicable environmental laws. There was a change in the nature of the waste that created a a far worse smell and that was never authorised (Derrick Barr v Biffa Waste Services Limited [2011] EWCA Civ 312 (CA)).

Although principles of Common law, the same rules emanate from German law which restricts  the emission of “gases, steam, smells, smoke, soot, warmth, noise, vibrations and similar influences”, if that significantly interferes with an owner’s use of his land (Bürgerliches Gesetzbuch (BGB), § 906). Also, If the ownership is interfered with by means other than removal or retention of possession, the owner may require the disturber to remove the interference (BGB § 1006). However, if a building is erected that interferes with television reception, that may not be a breach the Civil Code  (BGH 21.10.1983, BGHZ 88 p. 344 = NJW 1984 S. 729). “Negative Immissionen” (negative effects) are not prohibited.

“Within the boundaries of his land the owner may in principle deal with his property as he wishes”, Hunter v Canary Wharf Ltd.

Real Property Law: United States

Misrepresentation/Caveat Emptor/Fraud

A vendor of real property is expected to disclose, in writing,  any material information that affects the condition of the property, especially information that might not be readily available to the purchaser.

Not providing the correct information may amount to misrepresentation or even fraud. Caveat emptor is an essential element for a purchaser of personal property, but is generally not applicable to land or buildings.

What about information that does not directly relate to the physical or legal aspects of the property?  What about “psychological defects”, such as personal issues (divorce, reason for moving, seller’s credit issues)?

Many of these issues are “none of the buyer’s business”.  But what about death, murder and suicide?

In Pennsylvania, the Superior Court decided that  a murder and suicide at the property was not a “material defect” that the seller was required to disclose.

The Seller Property Disclosure Statement used was as promulgated by the Pennsylvania Real Estate Commission and this covered specified defects to the property, but based on advice from the Commission was not considered to cover such matters as a death at the property.

“Psychological damage is so different from the physical and legal defects listed that it is plain that the legislature intended not to include it … The fact that a murder once occurred in a house falls into that category of homebuyer concerns best left to caveat emptor“, Milliken v Jacono, 2012 Pa Super 284 (2012).

However, the California Civil Code, Section 1102 (‘Residential Disclosure Law’) provides that any death at the property within the previous three years should be disclosed and an owner or broker is not excused from misrepresentation if asked about deaths occurring on the property (Reed v. King, 145 Cal App.3d 261, 193 Cal Rptr 130 (1983)—murder 10 years before a material fact known to seller and “concealment” with intent to induce a sale amounted to an element of fraud.

Ohio takes a similar view on the need for disclosure of “psychological factors” – Van Camp v. Bradford, 63 Ohio Misc.2d 245, 623 NE.2d 731 (1993)—rape at knife point on the property and other rapes in neighborhood should have been disclosed by seller).

Note on this Real Property Law blog:
Terms in bold, including term (as in a lease) and nuisance are defined and explained in detail in the Encyclopedia of Real Estate Terms, Third Edition, or in Real Estate Defined.com.

Issues from this Real Property Law Blog are also covered in Real Estate Defined under each term or phrase.

Also find more real property law with a list of recent property law cases and the applicable Real Estate Term.

Also go to our Bookstore for a list of titles on Real Property Law.
(Real Property Law)