Law of Property - Case Study Example

LAW OF PROPERTY (UK) The Law of Property Act 1925 in the United Kingdom makes people aware of their rights and helps them understand what they are entitled to, while making a purchasing decision of a property. Introduction The Law of Property Act 1925 was imposed on 9th April 1925. The Act was imposed in order to consolidate the enactments that are related to the conveyance and the property laws in the United Kingdom. The Law of Property Act 1925 refers to the law of protection, sharing and acquisition of valuable assets in the UK and Wales. There are basically four components of the English property law. Those are: English Land Law for Real Property, English Trust Law, English Personal Property Law and the United Kingdom Intellectual Property Law. Real Property: Fixtures & Chattels A chattel is frequently referred to as the fittings; however, the term fitting does not go at pa with the legal terminology. Whereas a fixture has a legal concept, which is permanently fixed or attached to the real property, usually land and the removal of this can cause permanent damage to the property. The property that is not affixed to the real property is considered to be a chattel property. The meaning of real property is generally explained way beyond just a land. This property also includes certain physical objects that are part of the real property itself. As per the general rule of the Law of Property Act 1925, anything that is attached to the soil is considered to be the part of it. For example, when a building is constructed on a real property and there are certain objects attached to the building permanently, as per law, both the building and the fixtures of the building are the legal property of the freeholder of the land. The traditional approach here is to refer the objects as “fixtures” that are directly connected to the real property. These objects are different than that of the “chattels”, which are, according to the court of law, assets other than the real property. A fixture, by law, is the part of the building or the real property and cannot be removed. However, a chattel is independent and can be removed from the real property. It is not mandatory that chattels can be passed on to the purchaser while selling the real property. There are basically two tests that distinguish a fixture from a chattel. The first one is the degree of annexation and second one is the removability. The degree of annexation is determined by firmness of the attachment of the object to the real property. The more is the degree of annexation or physical connection of the object to the real property, the more is the chance of it being a fixture. The court of law also refers the higher degree of annexation while judging whether it is a fixture or a chattel. The second test, that is removability, is just the opposite of degree of annexation. It refers to how easily an object can be removed from the real property. The easier it is to remove the object from the real property, the more is the chance of the object to receive the status of chattel. The court of law refers to one of these tests in order to solve the dispute of the real property between the parties. It is advised to seek independent legal advice by both the parties involved in land sale transaction as it is very difficult to differentiate between the fixture and chattel. The independent legal advice would help in simplifying the sale transaction and also help in avoiding problems and misunderstandings regarding Corporation Tax and Capital Allowance payments, Land Tax and Stamp Duty. While in dispute, the court of law generally asks for clarification on determining what is a fixture and chattel. There are many cases that are still pending on this context as the court of law has not got a clear determination from any of the parties what to be considered as fixture and which one to be considered as chattel. In most cases, the court of law generally gives importance to the test of degree of annexation for the determination1. However, in recent times, this test also loses its importance and the court of law gives importance to the need of the fixture to the real property. One of the prominent case studies pertaining to the purpose of annexation is Palumberi v Palumberi case wherein greater emphasis was given to the purpose of annexation. Every case depends on the own facts2, however, a guiding test3 is essential in order to determine the purpose of the annexation of the fixture and depending upon that fact the court of law provides the judgment. Case Study The following case study involves Jack and Val. Jack has purchased a house from Val in which a lawyer is helping Jack in the entire deal. However, sensing a foul play, Jack decided to take care of the entire deal. After the deal is complete and Jack moved in, he discovered that several bronze statues in the garden and large Victorian wardrobe had been removed from the real property. Seeing this, Jack confronted Val and he was informed that none of these were mentioned in the contract. Since these are part of the real property, it is advised to Jack to knock the door of court of law in order to receive the justice for the same. Now when Jack is thinking to file suit against Val in the court of law, it is necessary for Jack to seek legal advice with reputed law firms in order to make sure whether he is entitled to receive the afore-mentioned articles while purchasing the real property from Val. According to the Law of Property Act 1925, Jack is entitled to receive these items if it is fixture. As mentioned earlier in the beginning of the article, fixtures are the property of the freeholder of the real property. In this case, if Jack can prove that the mentioned articles are the fixtures to the sold property, Jack is surely entitled to receive them along with the property. Jack is advised to file a case in the court of law against Val stating that the articles are removed from the property while selling the same. As per the Law of Property Act 1925 fixtures are the attachment to the real property that are permanently fixed to the real property. The removal of the fixtures may cause permanent damage to the real property. Hence it cannot be removed from the real property even in case of selling the property to someone else. In this case, the Victorian wardrobes are the fixtures that were fixed to the real property in order to stabilize the same. Hence as the removal of these wardrobes may cause permanent damage to the real property, Jack is entitled for these structures4. Here Jack is advised to file a case against Val for the returning of the big Victorian wardrobes. The court will surely order for the testing of the annexation especially the degree of annexation. However, Jack must make sure that he has the solid proof pertaining to the purpose of the annexation of the Victorian wardrobes in order to receive judgment in his favor. The reason is that in the recent times, court mostly orders for testing the purpose of annexation rather than that of the degree of annexation. Now the question is with the bronze statues on plinths in the garden. Since these statues do not play any role in stabilizing the construction of the property, it is referred to as the chattel property by the court of law. As these statues are chattel property, Jack will not be entitled to receive those as a part of the contract. The court of law would surely order for testing the purpose of these statues as well. However, a chattel property can be converted to a fixture by the process of attachment. But as in this, case there is no provision of converting the chattel property into a fixture, it is advised to Jack not to file case for the bronze statues because the court may not deliver the judgment in his favor. Conclusion As per the court of law and Law of Property Act 1925 in the United Kingdom, every individual is allowed to file suit if they feel cheated while purchasing a real property. In that case, it is always advised to seek proper legal advice to make sure they do not get into legal trouble. References Holland v Hodgson (1872) LR 7 CP 328, available at < http://e-lawresources.co.uk/Land/Holland-v-Hodgson.php> [Accessed 18 Jan 2014] MP Thompson, Modern Land Law, Wiltshear v Cottrell (1853) 1 E & B 674, (OUP, Oxford 2010) Page 16. R Sexton & B Bogusz, Complete Land Law: Text, Cases, and Materials, Reid v Smith (1905) 3 CLR 656, (OUP, Oxford 2013) Page 6. SA Christensen & ‎WD Duncan (2009). Sale of Business in Australia, Australian Joint Stock Bank v Colonial Finance Mortgage, 15 LR (NSW) 464, Investment & Guarantee Corporation (1894) (Federation Press, NSW Page 88. Monti v Barnes [1901] 1 QB 205 available at < http://indiankanoon.org/doc/808481/> [Accessed 19 Jan 2014] Jiwira v Primary Industry of Bank Authority [2000] NSWSC 1094, available at < http://www.thefullwiki.org/Fixture_%28property_law%29> [Accessed 20 Jan 2014] N H Dunn Pty Ltd v. LM Ericsson Pty Ltd (1980) ANZ Conv R 300 available at < http://www.mondaq.com/australia/x/160040/Securities/Fixtures+and+the+Personal+Property+Securities+Act+maintaining+the+status+quo> [Accessed 18 Jan 2014] Re Starline Furniture Pty Ltd (In Liq) [1982] 6 ACLR 312 available at < http://law.ato.gov.au/atolaw/view.htm?docid=DTR/TR94D26/NAT/ATO/00001> [Accessed 20 Jan 2014] E Huang, ‘Journal of Law and Financial Management’ (2009) Metal Manufacturers Ltd v FCT (2001) 46 ATR 497. National Dairies WA Ltd v Commissioner of State Revenue (2001) 24 WAR 70 Read More