Freehold Estates
The Fee Simple
The fee simple estate in possession, sometimes described as a fee simple absolute or a freehold estate, is the most extensive ownership known to the law. It is, by definition, free of incidents (condition and limitations) of the type that apply to other estates. In modern times, it is the most common and most desired ownership interest.
A fee simple estate is subject only to the restrictions that apply under the general law. Historically very few statutory restrictions existed. In modern times a significant body of regulatory legislation, including in particular planning permission, building regulations and environmental legislation, regulate what can be done on private land in the public interest.
The 2009 land law reforms provided that the only legal estates which may be created or disposed of are a fee simple in possession and a leasehold estate. A fee simple may be created, which is subject to conditions or be determinable in accordance with certain criteria. They are set out in the next chapter. However, in the vast majority of cases, what will be encountered is a fee simple interest in possession, free of any such conditions.
Freehold Estates
A fee simple estate is a type of freehold estate, but formerly, it was not the only type of freehold estate that existed. “Fee simple” and “freehold estate” were nonetheless used interchangeably. The 2009 land law reforms converted the other types of freehold estate into interests under a deemed trust and defined a freehold estate to mean a fee simple interest in possession.
The freehold estate has a long pedigree dating back almost 1,000 years. Formerly the concept of tenure defined the terms on which estates were granted. Tenure was rooted in feudal times and defined the relationship between a lord and his subjects / “tenants”. It predated modern landlord and tenant legislation.
Freehold tenure contrasted with unfree tenure and usually coincided with the personal free or unfree status of the holder in society. There could be layers of freehold ownership at the upper levels of society, with the King at the top and feudal Lord and sub-lords/tenants in a pyramid of several steps below.
Several different types of freehold estate existed with incidents that involved obligations to a superior Lord, sometimes, but later and predominantly in money or in kind. For historical political reasons in England, a statute of 1290 Quia Emptores restricted the creation of most new types of freehold tenure, prohibited the creation of further layers of estates and provided free tenants with the right to transfer their estates without the consent of their Lord.
Over time, other types of freehold interest died out, leaving the fee simple interest as the dominant and largest form of ownership and land. The former layers in the feudal pyramid fell away so that most lands came to be held directly from the King/ the Crown. The financial and other obligations disappeared over time.
Ultimately, the fee simple interest was held directly from the Crown and, after Irish independence, was held directly from the State. The notion of holding from or tenure has been abolished by the 2009 land law reforms.
The role of the State as the residual owner was preserved in part by the provisions of the State Property Act and Succession Act, which provide that land reverts to the State where there is no owner or where a person dies without any known successors. This is not based on a theory of tenure but on pragmatic statutory provisions.
Freehold Estates in Ireland
The common law was introduced into Ireland in the 12th Century. It eclipsed and pushed out traditional Irish forms of landholding in all parts of the country, and by the 17th Century, it was the only land law on the Island of Ireland.
For reasons linked to the history of Ireland, certain types of other freehold estates continued to exist in Ireland on terms that were no longer possible in England. Some of these are described in the chapter on redundant legal interests.
Deeds executed after the 2009 Act commenced purporting to create fee farm grants, or renewable leases for lives are deemed to create a fee simple interest in the grantee freedom discharged from covenants or provisions relating to rent. Instruments purporting to create a fee tail interest vest the fee simple interest. The freehold lease for lives perpetually renewable or measured with reference to the life of a person is deemed void.
2009 Reforms
Ultimately the 2009 land law reforms restated the basis of land law. It declared that feudal tenure was abolished completely in so far as any vestiges of it continued to exist. It confirmed that a fee simple interest is freely saleable.
The 2009 land law reforms preserved the concept of an estate but declared that the only types of estates are those mentioned above. The estate retains its pre-existing characteristics but without any previous incidents referable to the ancient concept of tenure. In practice, most of these incidents had died out hundreds of years ago, although the theoretical possibility of their continuance remained.
A fee simple interest is transferable and saleable. It may be left by will pass on an intestacy where a person has not made a will. Terms and conditions inconsistent with the nature of the estate are generally rendered void. The possibility still exists of a conditional fee simple or a determinable fee. These are very rare in practice. They are dealt with in a certain separate chapter.
Pervasive
In theory, there exists a fee simple interest in all land in the country. In most cases, this will be a fee simple interest in possession and there will be no other estate or interest in the land. In some cases, the fee simple may be subject to a long lease, perhaps at a low rent with non-burdensome covenants. In this case, the long leasehold interest will be the predominant and main ownership interest in the land.
The fee simple interest will continue to exist, but the identity of the owner may become lost because the interest is of minimal value, being merely the right to receive a nominal ground rent or enforce covenants which may be nominal or trivial. Modern legislation enfranchises long leaseholders so as to allow them to purchase out the freehold estate. Mechanisms exist for the purchase of the freehold, even though the freehold owners cannot be traced.
The State may hold land for a freehold interest. The position of State land is governed by legislation, the State Property Act 1954. There are circumstances whereby land can vest in the State directly where all the owners no longer exist or can no longer be traced.
Legal and Beneficial Freeholds
There may be a legal or beneficial freehold/ fee simple estate. Usually, the fee simple interest at law (a legal fee simple interest) and the fee simple interest in equity (beneficial fee simple interest) are vested in one person. It is possible for somebody to be a legal fee simple interest holder and to hold it on a trust for another who is the equitable fee simple interest holder. This may arise in the case of a resulting trust where a person takes property in his name, and the purchase money is provided by another.
More commonly, trustees hold the legal freehold interest while there are a variety of interests under a trust in favour of one or more other persons. The land law reforms transform the redundant legal interests which could theoretically exist and cause complications in land ownership and conveyancing and deem them to be interests under a trust.
Sale Free from Encumbrances
By being an interest under a trust, the legal freehold owner can deal with the property. If it is sold, the trust applies to the proceeds of sale instead of the property itself. Of course, there may be restrictions on the trust, the legal freehold owner in dealing with property. The key point is that as regards third parties, the legal owner may deal with them and t such parties do not have to concern themselves with the details of the interest under the trust.
A basic principle of property law is that a bone fide purchaser for value i.e. pays a substantial /full price, takes the property free from beneficial interests of which he does not have notice. Notice in this context means actual or constructive knowledge. Constructive knowledge is the knowledge that would come to a person’s attention if he made the proper conveyancing investigations which he ought reasonably to have made in the circumstances.
The 2009 legislation allows for the possibility that where there are two trustees, they may sell the interest they hold to another, free from trust interest, under certain conditions regardless of whether that other person ought to have known about those interests. The rights of such persons become personal rights against the legal freehold owners/trustees. The trustees have significant personal obligations.
A similar concept has existed with registered title for many years generally. Generally, the legal registered titleholder may sell in the absence of actual knowledge on the part of a purchaser of a contrary interest, free from unregistered interests under the trust.
Land Registration
Registration involves a State guaranteed title entered on a central register. Land registration and registration of title was introduced in England and Ireland at the end of the 19th Century.
In Ireland, the Land Registry became important in property law as the Land Commission purchased out the freehold interest of almost all agricultural land and vested it in the tenant farmers for freehold registered estates. This was financed by long-dated mortgages (land annuities) from the State.
Eventually, land registration came to predominate title in Ireland. Since 2011 registration of title is mandatory on the sale of land in all counties. Over time most unregistered (Registry of Deeds) title based on deeds is likely to disappear.
The Land Registry preserves the concept of estates and interests at common law, which have been modified and rationalised under the 2009 legislation. There is a register of freehold titles, a registry of leasehold titles and a register of intangible rights in land not attaching to any particular land.
Interests affecting land are registered as burdens on part three of the title or folio. They would include in particular, as covenants leases mortgages and easements.
Words of Limitation
Historically the fee simple interest could be created and transferred only by the use of special words of limitation or formulate. Before the 2009 Act, the failure to use these words led to the grant of a life interest only to the named person, even a purchaser. The 2009 Act now provides that the greatest estate or ownership which the seller or transferor has, is to transfer. Words of limitation are no longer required.
Where in relation to unregistered title, the word “heirs” is used as a word of limitation (i.e. to define the estate passing) it takes effect in the same way as a common law deed (gives a freehold deed to the person named, and nothing to his heirs). Where the word “heirs” is used as a word of purchase, it may give a future interest to the heirs concerned.
Where the word “heirs” are used in a deed as word of purchase, then unless a contrary intention appears, they are interpreted to mean the persons who would be entitled on intestacy, if the prior ancestor had died without a will.
Formerly, special words were required to create and transfer a freehold estate. If the correct words were not used, a life estate only would pass. This was irrespective of the intention of the parties to the deed. The requisite wording required that the deed be transferred to the “purchaser and his heirs”. The Conveyancing Act, 1881 allowed the substituted words, “in fee simple”. The wording applied to transfers to individuals, but not corporations.
Statute of Uses Wording
Another relatively arbitrary aspect of freehold deeds, arose from the so-called Statute of Uses. Where land was conveyed without payment of the full money, the Statute of Uses presumed there to be a use (a predecessor to the modern trust) in favour of the transferor, so that the deed could be ineffective.
In this case, special wording was required to make it express that the conveyance was to be absolute. This additional wording, to satisfy the Statute of Uses, came to be inserted in most freehold deeds, even for purchased properties, in order to remove any doubt as to the issue.
Exceptions
A conveyance of (even) the equitable interest in property required strict wordings. This was modified slightly so that strict wording would only be required if technical language was used. Strict wording is not required in wills. Wills have always operated with reference to the intention of the deceased maker.
Wills are only title documents in relation to the conveyance of freehold unregistered title, prior to 1959. In other cases, and in all cases since 1959, the title passes to the party to whom a grant of representation issues.
Registered title land passes by completion of an instrument of transfer in the prescribed format. Strict words of limitation were never required and the transferor transfer the entire registered estate unless a contrary intention is clearly expressed.
Reforms to Words of Limitation
The 2009 Act provides that in a conveyance of an unregistered estate without words of limitation, the fee-simple or other interest of the grantors is presumed to pass unless a contrary intention appears. This provision also applies to conveyances made before the 2009 Act. This is without prejudice to anything done or interest disposed of, or acquired in consequence of the failure to use the required words.
Where an interest is acquired prior to the commencement of the 2009 Act, due to the failure to use the correct words of “limitation”, that interest is extinguished unless the person concerned applies to the court, obtains an order and registers that order within 12 years.
The court may make an order declaring that the applicant is entitled to or has acquired the interest. It may refuse to make the order if it is satisfied, that no substantial injustice would be done to any party. In lieu of declaring entitlement, it may order that the person entitled to the interest, be paid compensation as the court thinks appropriate.
Anomalous Deeds Rules Abolished
The 2009 Act abolished the so-called “rule in Shelley’s case”. This was an ancient rule which deemed there to be a grant of a freehold estate in a case, where it might not appear at first sight to have been intended.
If for example a life interest is given to A with remainder (i.e., the future interest) thereafter to his “heirs” it was presumed that A was to obtain a freehold estate (instead of a life interest together with a freehold interest for his heirs). This could even occur where there was another interest between the apparent life estate and the later estate to that person’s heirs.
The 2009 Act abolishes the rule and provides that when an interest in land is given to the heirs of a particular heir or class of heirs or issue of a person, those latter persons are to take their inter under the deed separately. Therefore, in the above circumstance, the first person will obtain a life interest and his heirs will take an immediate future interest.
The interest will of course be held under a trust of land. The above mentioned provisions which apply to the failure to use the correct words of limitation, also apply in this case. There is a similar provision for application to the court within 12 years by persons thereby prejudiced.
References and Sources
Primary Texts
Wylie on Irish Land Law Wylie 6th Edition 2020
Land Law In Ireland -Lyall 4th Edition 2018
Principles Of Irish Property Law de Londras 2nd Edition 2011
Equity and the Law of Trusts in Ireland- Keane 3rd Edition
Land Law Kenna & Murphy 2019
Land Law Pearce & Mee 3rd Edition 2011
Other Irish Sources
The Land and Conveyancing Law Reform Act 2009: Annotations and Commentary -Wylie 2nd Edition 2017
Property Legislation 2009 2011 Cannon, Clancy, Kenna 2012
Irish Land Law – A Casebook: Adanan Maddox 2020
A Casebook on Equity and Trusts in Ireland – Wylie
Shorter Guides
Land Law Nutshell Cannon 2020
UK Textbooks
Land law C. Bevan 2nd ed.2020
Land Law: Text, Cases and Materials B McFarlane, N Hopkins and S Nield, (4th ed. OUP 2018)
Property Law R Smith(10th ed., Pearson, 2020)
Cheshire and Burn’s Modern Law of Real Property by Burn, E. H. 2011
Modern Land Law Dixon 2018
Elements of Land Law Gray, 2009
Property law: cases and materials Smith 2015
Land law Cooke 2015