Law of Property Bill

Paul Butt answers the question – How will a new Law of Property Act affect conveyancers and what changes will be made?

Well, you could have knocked me over with a TR1. The Queen’s Speech, setting out the Government’s proposed legislative programme for the 2016 session of parliament included the following: “The Government will bring forward proposals to respond to the recommendations of the Law Commission’s report on Making land work: easements, covenants and profits á prendre (2011) to simplify the law around land ownership”.

So a new Law of Property Act – but the big question is how will this affect conveyancers – and their clients? Will it mean we will have to change long established procedures?

The 2011 Law Commission Report highlighted many practical problems with Easements and covenants and proposed remedying them. Perhaps the most important is the rule in freehold land that although a negative covenant can bind successors to a covenantor, a positive one cannot. The proposal is for a new ‘land obligation’ which will bind successors whether negative or positive.

This proposed change will make it much easier to arrange for the ongoing maintenance of common facilities in housing estates – roads, sewage treatment plants, environmental areas etc. Simple covenants to pay, which will bind future owners, will be possible rather than having to use devices such as estate rentcharges or restrictions on the Register. This will, of course, need developers and their conveyancers to embrace these changes.

Then we have the archaic rules as to the running of the benefit and burden of negative covenants and the problem in particular as to whether anyone, and if so whom, has the benefit of a covenant and so can sue on it. The Report recommends that these rules be simplified for the new land obligations. And most importantly, both the benefit and burden of covenants will be registered against the respective titles affected, as easements already are. So it will be possible to see clearly who has the benefit as well as the burden of a covenant. But these changes will only apply for the new land obligations. So the old problems will still remain for old covenants.

As far as easements are concerned, the Report recommended that 20 years’ non-use of an easement should be sufficient to raise a presumption that the easement has been abandoned. This should result in a lesser need to worry about old or unknown easements affecting land and the expense of a policy to cover the risks involved.

Changes are also proposed with regard to the implication of easements on a sale of part. The existing rules – s 62 LPA, Wheeldon v Burrows etc. are confusing and unclear. The recommendation is that s 62 should no longer lead to the creation of easements. However, implied easements will not be abolished altogether. The proposal is that easements should still be implied on a sale of part, but only in clearer, strictly defined circumstances. However, here conveyancers need not change what is already best practice – grant and reserve those easements agreed between the parties and then expressly exclude all others. If this were always done now, then implied easements would not be an issue even without the changes.

Another proposal is to modify the underlying conditions for a right to amount to an easement so that a right to park in a defined parking space can amount to an easement. At the moment there is Court of Appeal authority that such a right (as opposed to a right to park somewhere in a car park) cannot amount to an easement. At the moment many conveyancers seem to ignore this rule; at least with the change, they will be safe in continuing to do so.

A change that will be welcomed by conveyancers is the rule that an easement attached to a leasehold estate does not survive the termination of that lease. This prevents the merger of many freehold and leasehold titles when the owner of the lease buys the freehold. If the lease were terminated, the property would lose the benefit of the easements that go along with that lease. Conveyancers then have to explain to a client why they are buying both a lease and the freehold rather than just the freehold. This rule is to be abolished.

One final proposed change is to the law on prescription. At the moment there are three different methods of prescribing for an easement; these will be replaced by one single method, but still based on 20 years use.

The Report included a draft Bill for the enactment of its recommendations. However, the Government announcement pointedly does not say that it will enact those recommendations or enact the draft Bill – it says that it will ‘respond’ to the recommendations. What does this mean? It may well be, therefore, that the Government will come up with different proposals, or enact some but not all of the proposed changes. Time alone will tell!

I remember being told that when the 1925 Law of Property Act was introduced, this resulted in the premature retirement of many property lawyers – old dogs who were unable or unwilling to learn new tricks. I doubt that the 2016 Bill will have the same effect, but although it is to be welcomed, it will inevitably mean some changes to practices and prejudices and require training for fee earners – and all at a time when many conveyancing practices are already over-stretched. Happy times ahead!

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