Claire May is the new Head of Property atMS Rubric and has been looking at reforms that may affect the company’s rural clients.
Landowners and developers of rural property may be interested in new proposals by the Law Commission put before Parliament in May 2016. If implemented, they would revolutionise third party rights over land:
- Easements (rights to use someone else’s land, for example, rights of way or rights of drainage)
- Profits (rights to take something from someone else’s land, for example, fishing or grazing rights)
- Covenants (obligations for the use of land, for example, maintaining a fence or shared driveway, or restriction such as not building on land)
Easements (such as a rights of way) can be expressly granted to someone by a landowner but these rights can also arise if someone has used the right (without the owner’s permission) for over 20 years. These rights of long user can sometimes be unknown to landowners or buyers and rights can also be implied into sales of land.
Profits (such as grazing or fishing rights) can also be acquired by long use of over 20 years and can arise without the landowner’s knowledge or permission. These long user rights are known as “prescriptive rights” and are governed by ancient and complex legal principals and statutes. The complexity leads to extra time and costs in selling or dealing with land.
Under the new proposals by the Law Commission, the old complex legal rules for someone acquiring Easements and Profits through long use would be abolished and replaced with a single statutory scheme.
Any rights used for 20 years or more can be registered at the Land Registry. However, the new rules would mean that Profitscould no longer be acquired this way and rights like fishing or grazing could only be granted expressly by landowners, which would protect their commercial rights.
How covenants reform could affect your land purchase
Covenants over freehold land are also under proposed reforms. Currently covenants are divided into negative covenants (such as not to build on land or other restrictions) and positive covenants (such as maintaining a fence or shared driveway).
At present, negative covenants pass on with the land automatically when it’s sold but positive covenants do not. For example, a buyer of a property on a development must enter into a deed of covenant to take on obligations to maintain a shared driveway. This all adds costs and complications to conveyancing transactions.
The new proposals would abolish ‘negative’ and ‘positive’ covenants and replace them with new Land Obligations, which would be registered at the Land Registry. The original landowners would also no longer be liable for covenants after selling.
How covenant reform could help developers save time and money
Developers would benefit from these proposed changes to Covenantsand Easements in two main ways:
- Currently rights of way or drainage and service rights on a new development cannot be created until the plot sales occur, as two different ownerships or plots of land are required to create an easement (like a right of way) and initially the whole development is under one ownership by the developer. However, the new rules would allow a developer to create all the necessary shared rights of way and drainage or service rights before the plot sales and this would simplify the conveyancing process and keep costs down.
- The new land obligations being proposed would allow all types of covenants and obligations between neighbours on a development (such as maintenance of a shared driveway or fence and restrictions like not to build to a certain height) to be created and registered on the property title deeds. The obligations would stay with the property and pass to new owners automatically, so that outgoing owners would not be liable after they sell the property. This would also simplify the conveyancing process and deliver clarity for everyone.
More control over grazing and fishing rights
Landowners and farmerswould benefit from the proposed changes to how Easements (such as rights of way) or Profits (such as fishing or grazing rights) are acquired by other people over their land.
The new proposed statutory scheme would provide for these long user rights to be registered at the Land Registry so that their existence can be clear to owners and prospective buyers. Grazing or fishing rights could no longer be created by long use but would need to be expressly granted in writing by the landowner. This would protect commercial rights and give the landowner control and clarity.
For legal advice about rural property transactions contact MS Rubric on Tel 01454 800008,