Freehold Estates

Northern Ireland property law has the most in common with the pre-2009 property law of the Republic of Ireland. It appears likely that the Law Reform Commission of Northern Ireland’s proposal for the reform of land law will be implemented in the near future. The legislation is broadly similar to the 2009 legislation in the Republic of Ireland, which itself is broadly similar to the 1925 legislation in England and Wales.

There are many unique features of land law that are and have only been found in Northern Ireland and the Republic of Ireland. Even when all laws for Ireland were made in Westminster (1801 to 1922), distinct land laws were made for Ireland.

The registry of deeds system,  applies to the ownership of interests in land, not yet registered in the land registry. As in the Republic, all counties and areas within Northern Ireland are now subject to compulsory registration (since 2000).

As with the registry of deeds, the Northern Ireland land registry evolved from the split of the all Ireland registry in 1921. The land registry system in Northern Ireland is broadly similar to that in the Republic of Ireland, unless similar to that in England and Wales.

The following describes the existing position in respect of the ownership of land in Northern Ireland. In contrast to the proposals which propose a single legal owner, the present system is based on ownership of estates and interests in land. In the majority of cases, there would be a single estate holder who could be spoken of as the absolute owner. However, it is possible to have many layers and categories of an estate.

The land registry has modified the complexities of the registry of deeds/unregistered ownership of land. The land registry recognizes the registered owner as such and caters for other classes of interest by other means.

Fee simple ownership, freed from subleases and encumbrances, is the fullest form of ownership. It may potentially last forever. Someone will always hold the fee simple interest. In some cases, the fee simple interest may be nominal and have no value because there may exist a long lease or a fee farm grant, which is a freehold lease forever.

With the transfer of a fee simple interest, it is essential that certain words are used in the transfer deed, namely, “to the purchaser and his heirs” or, in modern times, “to the purchaser in fee simple.” In the case of one registered title, failure to use the requisite words may mean that the buyer or transferee obtains a life interest only.

It is possible to impose covenants and conditions on freehold ownership. The law is broadly similar to that in the Republic of Ireland. However, the difficulties that existed in the Republic of Ireland prior to 2009 in enforcing covenants on freehold title against successors of the original owner were eased by legislation in 1997.

A fee simple may be a determinable or conditional fee simple. These are fee simple interests that can revert to the original grantor or his successors if the relevant condition applies.

A determinable fee simple vests automatically, whereas a conditional fee simple terminates only if the original grantor’s successor’s right of entry is exercised. The latter right can be barred after a period. They are preserved under the proposal reform without significant change.

A fee tail interest is an ancient type of interest by which ownership passes to families. Typically, the fee tail would pass from father to son. It was possible to create a variety of types of fee tails. If an owner died without the requisite heir, then the ownership would revert to the heirs and successors of the original grantor.

Fee tails were a hindrance to the marketability of land, and for this reason, a range of devices were created to convert the fee tail into a fee simple, which might fully be sold. This is formalized under legislation, which created an effective means of barring the entail and converting it into a fee simple. In practice, a fee tail is unlikely to be encountered, and if one does exist, it will be converted into a freehold interest if the Law Reform Commission proposals are enacted.

An estate for life is one which lasts only for the life of a person. Generally, the person is the life owner. However, it is possible to have an interest with the life of another, a so-called “pour autre vie.” Such an interest could only be sold by the life tenant, and the owners of the reversion, i.e., the persons with rights to the property on termination of the life.

In order to enhance the salability of property, the Settled Land Acts gave the life tenant power of sale in most circumstances. The Settled Land Acts give the life owner a right of sale with the cooperation of certain other parties labeled the trustees of the settlement, are also required. There are rules for ascertaining who is the trustee of the settlement in the context.

In essence, the life tenant may sell property, but the capital monies must be paid to the trustees of the settlement. The life interest would then be entitled to interest on monies or the life interest in the substituted property.

The concept of the life tenant having power to sell all the entire interest in the land and convert all interest attaching into interest in the proceeds of sale.

Under the existing law, it is possible to create a range of future interest. These are interests that may exist at present but do not become operative until a future date. An example maybe where a land is given for life. Another person maybe entitled to the reversion i.e. the interest in the land after the termination of the life interest. It is possible for multiple layers of future interest to exist.

Future interest may be vested or contingent. Vested means that the extent of the rights or estate concerned and the identity of the owner have been ascertained. A contingent interest is one where conditions are outstanding before the extent of the estate or identity of the beneficiary are ascertained.

Typically, future interests may provide the interest for future unborn descendants of the person creating the right. Special rules developed against vesting of future interests to a remote date in the future. A variety of rule existed in common law which are notoriously complex and frequently arbitrary in effect.

The rule against perpetuities originally required that any estate must vest within the portion being persons named in the document creating it plus 21 years. If an interest was even theoretically capable of vesting outside this period, it was void.

The Perpetuities (NI) Act 1966 modified the perpetuity rules in circumstances where the common law rules would cause the interest to be void. The rule that an interest will be void if it was theoretically capable of falling into existence outside the perpetuity period was modified, and instead, it was permissible to wait until a development contingency had occurred before the rights would be invalidated.

Under the new rules, the Perpetuities Act will only automatically render an interest void if it must, out of necessity, be ascertained outside the perpetuity period.

An alternative perpetuity period of 80 years is permissible, which negates the need to refer to lives and being plus 21 years. If no lives are referred to, then an interest must lapse within 21 years.