A guide on the Law and property act 1925

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The law and property act is a significant piece of legislation and you may have heard of it when learning how to buy a property if you’re new to buying or you may need to familiarise yourself with it if you’re comparing leasehold and freehold houses.

In general, for the most up to date information and to be sure that you’re following the law the right way, always look at the government website.

Having said this, this article aims to go over the most important parts of the law and break things down in an easy-to-understand format as there is a lot that happens under the law including evictions from leaseholds and adverse possessions.

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What does the law and property act involve?

The Law and Property Act is important in the UK because it establishes a legal framework for the transfer of property ownership. It mainly relates to commercial property and leasehold, freehold and commonhold units.

This means there are good laws in place for the sale and purchase of land and property, including the transfer of freehold and leasehold property.

In the act, there are requirements for a written contract, the transfer of legal title, and property to be registered with the Land Registry which you can find more about here.

The act also created the Land Registry, which is in charge of keeping a register of all land and property in England and Wales. This makes determining who owns a specific piece of land or property and resolving ownership disputes a lot easier.

The Law and Property Act also made significant changes to conveyancing law, making the process of buying and selling property easier and less likely to result in a legal dispute. 

For instance, there is now the introduction of standard form contracts for the sale of real estate, which are intended to be clear and easy to understand while outlining the terms and conditions of the sale in a transparent manner.

property act

What are the parts of the law and property act?

There are eleven parts of the act that have their own regulations for different areas. Reading below will allow you to stay informed.

Part 1: Covers general principles regarding legal estates, equitable interests, and powers

The first part of the Law of Property Act of 1925 reformed the legal estates in the UK. Section 1 of the act established the two main types of estates – freehold (which is an estate in fee simple absolute in possession) and leasehold (which is a term of years absolute). 

Previously, the old estates in land, such as fee tail and life interests, were converted by Section 1 to take effect as equitable interests but these are no longer acknowledged as recognised terms.

Now, Section 3 of the act is important because it explains how these equitable interests actually work. It sets out the rules for how they have effect, which is really important to understand if you’re dealing with property law in the UK.

Part 2: Addresses contracts, conveyances, and other legal instruments

Section two of the law is slightly more interesting. For example, Section 70 is something you should definitely be aware of if you’re dealing with property law in the UK. 

It’s important to look at schedules 1 and 3 alongside Section 70 because they all deal with interests that override.

One key thing to note is that landlords no longer have the right to be paid rent if they do not agree to their side of the tenancy agreement, which is an important change for tenant rights.

Another interesting section is Section 146, which outlines how a lanldord can get a tenant to repair any breaches in their agreement.

It’s worth noting that this power was transferred to the Lands Tribunal by the Law of Property Act 1969, and then to the Upper Tribunal by the Transfer of Tribunal Functions (Lands Tribunal and Miscellaneous Amendments) Order 2009.

Part 3: Deals with mortgages, rent charges, and powers of attorney

There are some additions to how mortgages are processed. This is good and bad because while there are better regulations to help lenders from going bankrupt, landlords now can’t get away with doing their own conveyancing.

There are times when only a qualified solicitor can process this part of the law and lenders will also not approve a buyer for a home unless they speak to a solicitor too.

Part 4: Covers equitable interests and things in action

Equitable interest relates to interest on buy to let mortgages specifically. There are some changes to the law here and how it is processed and the amount of interest bank or lender can charge

Part 5: Addresses leases and tenancies

This makes sure landlords are able to charge a high enough price to benefit from the right rental income to run their property business without exploiting tenants.

Part 6: Deals with powers

The amount of power a landlord can have over a tenant is discussed in the section on this law.

Part 7: Addresses perpetuities and accumulations

Sometimes, developers and landlords will not want to put money towards the longevity of a household.

There are sections in the law that state there must be building regulations and structural requirements to not only keep tenants safe to have a property standing for a long enough time.

Part 8: Covers the legal rights of married women and lunatics

This part of the law relates to those who are vulnerable in society and may not have the same access to finances that others do.

For instance, married women are protected and so are those in mental health institutions who are renting a property please

Part 9: Deals with voidable dispositions

Section 172 used to govern fraud, but the Insolvency Act 1985 repealed it, with the exception of pending bankruptcies at the time.

Section 173, which deals with voluntary dispositions of land made with the intent to defraud a later buyer, is also worth noting. 

If a gift or other transfer of land is made with this intent, it is voidable at the later buyer’s request. However, if a subsequent conveyance for valuable consideration was made after June 28, 1893, it will not be considered fraudulent.

Part 10: Addresses wills and probate

Those who are on probation due to waiting to face a court date or those who have a will in place have parts of the law here detailed towards them.

Part 11: Covers miscellaneous topics

All of the seemingly untouched parts of property law are listed in this section of the act. For instance, if there is a simultaneous death where two people died at the same time, the law goes over what is done with the property.

the Law and property act 1925

What are the most important parts of the act?

The most important part of the law and property act is that there is it made it clear that if land was bought the owner would be the owner for many years to come.

Law and Property Act of 1925 in the United Kingdom did not occur in isolation. There were many changes to the land law system at the time, including the introduction of the Land Registration Act and the Land Charges Act. 

These changes made it necessary to register equitable interests, and the owner of that interest was required to do so.

Because it provided actual notice of the interests, this registration provided protection. There were also some new rules for regulating land priority. 

Basically, if a legal estate in land was conveyed to someone who bought a house (whether registered or not) and certain conditions were met, then any equitable interest affecting that estate could be “overreached”. 

This meant that the equitable interests would be attached to the sale proceeds, allowing the purchaser to take the property free and clear.

So, while the Law and Property Act was significant, it was only one component of a larger set of changes to the UK’s land law system at the time.

There were also some new rules for “overreaching” that aided in regulating land priority. Basically, if a legal estate in land was conveyed to someone who bought a property (whether registered or not) and certain conditions were met, then any equitable interest would be given.

This meant that the equitable interests would be attached to the sale proceeds, allowing the purchaser to take the property free and clear.

So, while the Law and Property Act was significant, it was only one component of a larger set of changes to the UK’s land law system at the time.

In Conclusion

Wrapping things up, It is clear that the landlord and property act is a very complicated part of the law but necessary at the same time. The changes in this legislation set out a lot clearer boundaries for the transfer of property.

In addition, make things clearer for those who are trying to keep on top of their taxes like stamp duty and land tax and the cost of a property. 

FAQ

What section of the law does the law and property act involve?

The Law of Property Act 1925 is a law in the UK that deals with property rights and ownership.

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donnell-bailey

Donnell Bailey

Property expert

Donnell is a property expert focusing on the property market, he looks at a combination of legislation, information from property managers, letting agents and market trends to produce information to help landlords.

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