Ten-minute topic: making informal rights permanent

Peta Dollar explores the implications of implied easements for buyers. An easement is a particular kind of right enjoyed by one property (normally referred to as “the dominant land” or “the benefitted land”) over another property (normally called “the servient land” or “the burdened land”). Not every right that benefits a property will be an easement; in order to be an easement, a right must satisfy the requirements laid down by the Court of Appeal in Re Ellenborough Park [1956] Ch 131, namely: It must benefit one property and be exercised over another property; It must serve the benefitted land, and be “reasonably necessary for the better enjoyment of that land”; The owner of the benefitted land and the owner of the burdened land must be different people; It must be capable of being an easement: recent cases have held that a right to use a golf course, swimming pool or tennis court (Regency Villas Title Ltd v Diamond Resorts (Europe) Ltd [2018] UKSC 57; [2018] PLSCS 198) and a right for a fence to be maintained forever (Churston Golf Club v Haddock [2018] EWHC 347 (Ch); [2018] PLSCS 39) can both be an easement. They may be acquired: by statute; expressly; impliedly (this includes easements of necessity or of common intention (very rare), and easements following the rule in Wheeldon v Burrows and under section 62 of the Law of Property Act 1925); or by prescription The latter two methods of acquisition can be problematic for purchasers as these easements are binding without the need for noting at the Land Registry. Accordingly, a purchaser may acquire land that is subject to permanent legal easements without being aware of the fact. Once an easement has been acquired, it is virtually impossible to bring it to an end, unless all those entitled to the benefit of the easement agree to release it. The rule in Wheeldon v Burrows and section 62 of the 1925 Act Where the seller has been using a right (even an informal right) over the part of the land that they are retaining for the benefit of that part of the land they are selling, that right or “quasi-easement” will, under the rule in Wheeldon v Burrows, become an easement when the sale takes place, provided that the right is continuous and apparent, is necessary for the reasonable enjoyment of the land that is sold, and so long as the transfer does not exclude this. Section 62 of the 1925 Act has considerably modified the rules relating to implied grant, and this modification applies to all conveyances since 1881, in view of previous legislation replaced by the 1925 Act. Now, unless a contrary intention is expressed, every conveyance (which for this purpose includes a lease or other assurance of land) passes with it all “easements, rights and advantages… at the time of conveyance… enjoyed with the land or any part thereof”.  Section 62 applies to all quasi-easements, and therefore goes further than the rule in Wheeldon v Burrows, since this applies only to continuous and apparent quasi-easements. Section 62 will convert a licence, and a right that was accustomed to being exercised but the origin of which was unknown, into full easements, so long as the right was being enjoyed at the time when the conveyance was made and is capable of being an easement. For this reason it is essential to exclude the provisions of section 62 in every transfer and lease. Transfer deed provisions Although many law firms’ standard precedent sale contracts expressly exclude the provisions of section 62 in relation to the form of transfer deed, it should be noted that neither the Standard Conditions of Sale (5th edition) nor the Standard Commercial Property Conditions (3rd edition) exclude the provisions of section 62 in relation to the form of transfer deed. The Land Registry, in section 10 of Practice Guide 62, suggests forms of wording to exclude the operation of section 62 or the rule in Wheeldon v Burrows and to prevent passing the benefit of existing easements. If the suggested wording (or wording of similar effect) is included in a transfer, the Land Registry will make an entry in the property register for the land that has been transferred, either setting out the terms of the clause or stating that the transfer “contains a provision relating to the creation or passing of easements”. The Land Registry will not make this entry in the register where the clause is in a lease. Paragraph 4.72 of the Law Commission’s 2008 consultation paper – Easements, Covenants and Profits à Prendre – contains an interesting example of the effect of section 62: “L allows T, her tenant, to park her car anywhere on the forecourt owned by L in front of the demised property, although there is no express term to this effect in the tenancy agreement. Subsequently, T purchases the freehold of the property she had leased (but not the forecourt) from L. The conveyance of the house is silent on parking rights, but it does not expressly exclude the operation of section 62. T will acquire an easement to park on the forecourt retained by L. That easement will be for the same duration as the freehold estate which T has obtained. It is irrelevant that neither L nor T contemplated that L allowing T to park during the tenancy would result in T obtaining a legal easement to the same effect on purchasing the freehold.” Law of Property Act 1925 Section 62(1) of the 1925 Act reads: “A conveyance of land shall be deemed to include and shall by virtue of this Act operate to convey, with the land, all buildings, erections, fixtures, commons, hedges, ditches, fences, ways, waters, water-courses, liberties, privileges, easements, rights and advantages whatsoever, appertaining or reputed to appertain to the land, or any part thereof or, at the time of conveyance, demised, occupied, or enjoyed with, or reputed or known as part or parcel of or appurtenant to the land or any part thereof.” Section 205(1)(ii) defines “conveyance” to include: “a mortgage, charge, lease, assent, vesting declaration, vesting instrument, disclaimer, release and every other assurance of property or of an interest therein by any instrument, except a will”. Collective enfranchisement – a recent case In 4-6 Trinity Church Square Freehold Ltd v Corporation of Trinity House of Deptford Strond [2018] EWCA Civ 764; [2018] PLSCS 71, the tenants of flats in three converted townhouses made a claim for collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993. The tenants had the right, under revocable licences, to use a communal garden, and the landlord argued that the rights granted on enfranchisement should be revocable, as the licences enjoyed by the tenants were revocable.  The Upper Tribunal disagreed, holding that the language of the 1993 Act required the rights to be “such permanent rights as will ensure that thereafter” the occupier of the flat has “as nearly as may be the same rights as those enjoyed” under their lease. The tribunal gained support for its decision from section 62 of the Law of Property Act 1925 for the conversion of temporary rights into permanent ones, stating at [47]: “There is a third rather technical reason why the conversion of temporary to permanent rights ought not to be regarded as inimical to the statutory scheme. Paragraph 2(1) of Schedule 7 to the Act provides that… the conveyance of the freehold interest to the nominee purchaser shall not exclude or restrict the general words implied into conveyances under section 62 of the Law of Property Act 1925. As is well known… section 62 operates to pass with a conveyance all rights enjoyed with the land and to convert them into full legal rights, even where, as previously enjoyed, they were precarious rights. Thus in International Tea Stores Co v Hobbs [1903] 2 Ch 165, on the conveyance of freehold land without reference to any right of way over an adjoining yard in the ownership of the vendor a revocable permission to cross the yard was converted into a permanent right of way in favour of the purchaser… it should not therefore be thought surprising in principle that… a revocable licence granted to qualifying tenants to use a garden must be replaced by an irrevocable right in order to meet the requirement of permanence.”  The Court of Appeal upheld the tribunal’s decision, seeing no problem with the tribunal’s reliance on section 62 as further support for its decision. Peta Dollar is a freelance lecturer, trainer and writer