Happy birthday to the Law of Property Act 1925

This year, the Law of Property Act 1925 celebrates its 100th birthday, with all its original 209 sections and seven schedules more or less intact. The 1925 Act is not, of course, an only child. On 7 April 1925, parliament passed six Acts to consolidate the English law of real property: its five siblings are the Settled Land Act 1925; the Trustee Act 1925; the Administration of Estates Act 1925; the Land Charges Act 1925 and the Land Registration Act 1925. Together, the 1925 Acts introduced far-reaching reforms to English land law. This article is the first in a series written by members of Falcon Chambers to mark this centenary, each focusing upon different aspects of the Law of Property Act 1925. This first article is not an attempt to give a detailed explanation of the 1925 Acts. This would be of limited appeal, even to property practitioners, and would require a great deal of ink. Instead, it seeks to give an overview of what the 1925 legislation achieved and how it got there. The political backdrop It is difficult for practitioners today to appreciate the magnitude of the changes brought about by the 1925 Acts. Today we take for granted some of the more radical changes made by the legislation, such as the fact that all land in England is held either for a term of years or as freehold land, and we readily accept the ease with which equitable interests under trusts can be overridden. As well as losing sight of just how extensive the 1925 reforms to the law were, most practitioners will be unaware of the political battles which led to the reforms. The reforms finally brought about by the 1925 Acts were built on those proposed before the First World War and they reflect a long struggle between competing political views of what the law of England should be. The law historically protected wealthy landowners. The use of strict settlements was widespread, and ensured land could be passed down from generation to generation, resulting in complicated ownership structures which fragmented both legal and equitable ownership. Property could not be dealt with easily and was not freely alienable. The Settled Land 1882 had made land a more marketable asset by introducing the principle of giving a limited owner in possession most powers of an owner and transferring the interest of beneficiaries and those with future estates to capital money. But something rather more radical was needed. The path to reform We pick up the story in 1896, when two great property lawyers, Edward Wolstenholme (the drafter of the 1882 Act) and Benjamin Cherry prepared a bill whose aim was “to make the title to land approximate as nearly as circumstances permit to the title to stock, and to obtain the same advantages as would be secured under as good a system of registration of title as may be devised without the disadvantages incidental to a register of owners”. The sale of land was intended to be simplified. That aim was ultimately achieved by the 1925 Acts, after a lengthy and convoluted legislative history. The notion of freeing land and making it transferable free from trusts, while safeguarding the rights of all interested in the land, can first be seen in Wolstenholme’s 1896 bill, which contained the workings of the principle underpinning the 1925 reforms, namely the notion of an indivisible legal estate, fee simple or term of years, which was subject to a power of disposition which would overreach all or most subordinate interests. Ultimately, the proposals for reform of the underlying law under the Wolstenholme 1896 bill were not pursued. However, the Royal Commission final report in 1911 recommended reopening the question of improving and facilitating conveyancing more generally “to abolish the feudal principles of Real Property Law and to assimilate it to the law of personal property”. In 1914, a bill was produced which introduced the principle of “the curtain” – ie the notion that there would be only two legal estates and everything else would be under a trust and, in effect, sit behind a curtain, ineffective against a purchaser of the legal estate. Then came the First World War. According to Viscount Haldane, who became Lord Chancellor in Asquith’s Liberal government, “… the peace came four years later, and with it a more progressive attitude towards questions of reform”. In 1919, a committee chaired by Leslie Scott KC produced a report with the aim of assimilating the law of real property to that of personal property. The Scott Report, and subsequent draft Bill, was an amended version of Cherry’s bill. Thus, the work done pre-war was not lost and was the starting point for what was to follow in 1922. The new Lord Chancellor, Lord Birkenhead (who had been Scott’s pupil) was the minister responsible for the bill. It was published in February 1920, but was vast and impenetrable, attempting to cover all which was later the subject of the six property Acts of 1925. The bill was presented to parliament as one simply making improvements to the machinery of the law. Viscount Haldane’s preface to Cherry’s lectures refers to the bill having had a “pretty thorough sifting in the two Houses”. It seems as if this might have been an understatement, given the many legislative vicissitudes and further radical amendments to which the bill was subjected. The bill was, however, passed in June 1922 and became the Law of Property Act 1922. This Act, it seems, was not popular. It was impossible for lawyers and non-lawyers alike to understand, and it quickly became obvious that more was required. The 1922 Act was to come into force on 1 January 1925, but was later the subject of a Bill postponing its enactment. There followed a period of political upheaval, with general elections in 1922, 1923 and 1924. Shortly after the 1922 election, Viscount Haldane once again became Lord Chancellor under the first Labour government. It was on his watch that an amending bill and six consolidating bills were presented to parliament, in a carefully revised form, in July 1924 (together with the bill postponing the coming into force of the 1922 Act). Lord Cave then returned as Lord Chancellor. The bills were eventually passed by Parliament and received Royal Assent on 9 April 1925. They came into force on 1 January 1926. What did the 1925 Acts do? The 1925 Acts were described as Acts to consolidate the English law of real property. They brought together most of the statute law concerned with real property enacted since Edward I was on the throne. Significantly, this included incorporation of Lord Birkenhead’s Act of 1922 and the subsequent Amendment Act which had been passed in 1924. The 1925 Acts reflect the struggle between different factions of the law reformers of the day. But the key principles which are embodied in the 1925 Acts are (i) the idea of a single indivisible legal estate with an estate owner with a power of disposition; (ii) the principle that equitable and subordinate interests can be overreached, while still giving protection to them; and (iii) the notion that the law of real property should be assimilated as much as possible to the law of personalty. The introduction of the indivisible legal estate was the most significant change introduced. Post-1925, the legal estate in land is indivisible, save for the purposes of creating a term of years, and for practical purposes there are now only two legal estates (albeit other interests are treated as legal estates, such as easements held for a similar interest to the fee simple and term of years absolute). Before 1925 there were a huge variety of estates in land which took effect at law. As Cherry explained “[o]ne of the great stumbling blocks to all land law reform has been the multiplicity and complexity of our tenure. Until copyhold and customary tenures were abolished, nothing in the nature of a comprehensive simplification was feasible.” The list of legal estates which were abolished reads like the lyrics to a Gilbert & Sullivan song: life estates, determinable fees, remainders, reversions, possibilities of reverter, tenancies in common, estates of coparceners, to name a few. The abolition of these numerous legal estates vastly simplified the conveyancing process, especially the abolition of legal tenancies in common. Post-1 January 1926, a legal estate is not capable of subsisting or being created in an undivided share in land: there is now always an estate owner with a power of disposition. Under the new law, undivided shares could only be created in the form of equitable interests. The legal estate would be held by trustees on trust for sale, limited to a maximum of four joint tenants. Allowing the abolished legal estates and forms of co-ownership to exist in equity gave trust law a significant role to play in land law. This is unique to English land law and is not found in other common law jurisdictions. The whole purpose of limiting legal estates was to simplify conveyancing. It undoubtedly did this. Previously, legal estates could pass from one owner to another, sometimes automatically, and without being evidenced. Abstracts of title could run to many pages in some cases. The new law removed these obstacles. The general new rule was that a legal estate could only be conveyed by the estate owner, and thus the legal estate became the basis of conveyancing. The new law ensured there would always be an instrument under which the legal estate passes from one owner to another. Section 2 of the Law of Property Act 1925 was one of the more important provisions of the Act. The power to overreach equitable interests was not a new concept, but the 1925 Act’s regime of overreaching went further than the previous law and allowed equitable interests which were not subordinate to any existing settlement or trust for sale to automatically and compulsorily be shifted to the proceeds of sale, with exceptions for some registrable interests. A purchaser could also require a transaction to be through the means of a trust for sale. This change all but abolished the doctrine of notice. This is the “curtain” principle. A purchaser would now discover registered equitable interests by looking on the register. Establishing the title to the legal estate was hugely simplified. The rules on devolution on intestacy were also simplified, with the abolition of the “heir-at-law”, tenancy by curtesy, dower, free bench and escheat. 100 candles on the cake Looking back at the reforms achieved in the 1925 Acts is quite humbling. It is difficult to imagine such far-reaching reforms would be possible today. Many students and lawyers, including property practitioners, consider modern English land law complicated, perhaps unnecessarily so. Our predecessors would tell us that we don’t know we’re born. The law of property can still be complicated, perhaps notably on those rare occasions when we have to consider the law pre-1925, but we are largely free from the complexities of the past. The law has, of course, moved on from the 1925 Acts, most notably in the further advancement of land registration and the replacement of the Land Registration Act 1925 with the Land Registration Act 2002. The modern world, with its technological advances and the current political desire to do away with leasehold tenure, looks likely to give rise to future developments. But whatever lies ahead, we are grateful to be property practitioners in 2025, looking back at what the 1925 Acts did, rather than practitioners in 1925 when, it is said, many solicitors retired rather than having to grapple with the brave new world of property law. Jonathan Gaunt KC and Elizabeth Fitzgerald are barristers at Falcon Chambers