Business Law

REAL PROPERTY
LAW

Concepts
and
Types of Ownership
Slides prepared by Ricardo Villegas
Senior Lecturer
 Business Law
INTRODUCTION FORMS OF PROPERTY LAND
Real Property Freehold
PROPERTY CONCEPTS
LAND FIXTURES Fee Simple
Ownership
Personal Property
& Life Estate
Possession TANGIBLE INTANGIBLE
Leasehold
(Chose in (Chose in
Possession) Action)
Real Property
TYPES OF OWNERSHIP
&
Personal Property JOINT TENANCY
TENANCY IN COMMON

Strata Title
Community Title
 Business Law
So, you’re looking to buy
some Real Estate?

Yes, we’d love to buy a

House.

And…you know how the

Torrens Title works…right?

Um….

Ok. Let’s start at the

beginning.
 Business Law
PROPERTY CONCEPTS

Ownership

&

Possession
 Business Law
PROPERTY CONCEPTS Ownership
The Owner of property is said to have ‘TITLE’ to the property.

The Owner has extensive legal rights in relation to the property,

including the Right To Transfer Ownership of the property to
another person.
 Business Law
PROPERTY CONCEPTS

Ownership

&

Possession
 Business Law
PROPERTY CONCEPTS Possession
Someone in Possession of Property has temporary control and
custody of the property.

In most cases, Possession and Ownership of property coincide.

In other words, the Owner of the property has

the property in their Possession.

It is also possible for someone to be in

Possession of property of which they are NOT
the Owner
 Business Law
PROPERTY CONCEPTS

Ownership
& Possession
Can we buy a house
now?

Do you know the

different between Real
and Personal Property?

Um….
Ok. Here we go.
 Business Law
PROPERTY CONCEPTS

Real Property

&
Personal Property
 Business Law
PROPERTY CONCEPTS Real Property
Property is any thing, right or interest that can be owned by a person.

Property generally can be divided into

two legal categories: Real Property and Personal Property.

Real Property is land and

things attached to the
land — that is, FIXTURES
such as buildings and things
attached to buildings.

Real Property is regulated by State and Territory

legislation
 Business Law
PROPERTY CONCEPTS Real Property
Real Property is regulated by State and Territory legislation

Crown Land Management Act 2009 (SA);

Land Acquisition Act 1969 (SA);

Land and Business (Sale and Conveyancing) Act 1994 (SA);

Law of Property Act 1936 (SA);

Real Property (Commonwealth Titles) Act 1924 (SA);

Real Property (Foreign Governments) Act 1950 (SA);

Real Property (Registration of Titles) Act 1945 (SA);

Real Property Act 1886 (SA); Strata Titles Act 1988 (SA);
 Business Law
PROPERTY CONCEPTS

Real Property

&
Personal Property
 Business Law
PROPERTY CONCEPTS Personal Property

Personal Property (sometimes called ‘CHATTELS’) includes

all forms of property other than Real Property

Personal Property Includes tangible forms of property

(Choses in Possession), such as

CARS BOOKS

CLOTHES FOOD
 Business Law
PROPERTY CONCEPTS Personal Property
Personal Property also includes intangible forms of
property (CHOSES IN ACTION), such as:

SHARES INTELLECTUAL
PROPERTY
RIGHTS

CONTRACTUAL
RIGHTS
 Business Law
FORMS
OF
PROPERTY
 Business Law
FORMS OF PROPERTY

Let’s look at Forms

of Property.
 Business Law
FORMS OF PROPERTY

PROPERTY

Real Property Personal Property

LAND FIXTURES TANGIBLE INTANGIBLE

(Chose in (Chose in
Possession) Action)
 Business Law
FORMS OF PROPERTY

PROPERTY Real Property LAND

Land is a defined section of the planet’s surface.

Land includes all of the features and resources

naturally occurring within the boundaries of the land:

the TREES the ROCKS the WATER

 Business Law
FORMS OF PROPERTY

PROPERTY Real Property LAND

If someone is the Owner of LAND, how far beneath the

surface of the land is still their property?

The Classic Legal I’m going to look

View was that they for my keys. I think
Owned the LAND all I dropped them in
of the way to the the Magma, just
centre of the earth. next to the core.

In practice, Ownership of I have them. They

the valuable minerals were in my Lava
bathtub.
beneath the surface of the
LAND is vested by
legislation in the CROWN.
 Business Law
FORMS OF PROPERTY

PROPERTY Real Property LAND

Grigsby v Melville
Common Law [1974] 1 WLR 80
The Owner is entitled to prevent someone from tunnelling under their
property without permission.

Ok, fine. How much

You can’t just
do I have to pay to
tunnel underground
mine for 1 year?
my house without
permission
 Business Law
FORMS OF PROPERTY

PROPERTY Real Property LAND

How high above the LAND

is still the Owner’s land?

According to various case law decisions, there is NO FIXED

HEIGHT to which an Owner owns the airspace above their land.

The Owner owns the airspace above their LAND to the height
reasonably necessary for the ordinary use and enjoyment of the Co
LAND mm
on
La
Kelsen v Imperial Tobacco Co (of Great Britain and Ireland) Ltd w
[1957] 2 QB 334
A crane or a billboard on neighbouring property intrudes above the LAND, the
Tort Of Trespass To Land is committed.
 Business Law
FORMS OF PROPERTY

PROPERTY Real Property LAND

However, a plane or a satellite that passes over the property is NOT

TRESPASSING since it is above the height necessary for the
Owner’s ordinary use and enjoyment of the LAND.

Common Bernstein of Leigh (Baron) v Skyviews & General Ltd

Law
[1978] QB 479
Hey!!! That plane was Skyviews & General Ltd tried to sell Baron Bernstein an aerial
trespassing in my photograph of his home. Bernstein sued Skyviews for TRESPASS,
airspace arguing that it had invaded the airspace above his property.
The COURT decided that the flight of an aircraft many hundreds of feet
above the ground did not constitute a trespass because the rights of the
Owner of the surface to the airspace above should be restricted ‘to such
height as is necessary for the ordinary use and enjoyment of his land and
the structures upon it, and . . . above that height he has no greater rights
in the airspace than any other member of the public’.
 Business Law
FORMS OF PROPERTY

PROPERTY

Real Property Personal Property

LAND FIXTURES TANGIBLE INTANGIBLE

(Chose in (Chose in
Possession) Action)
 Business Law
FORMS OF PROPERTY

PROPERTY Real Property FIXTURES

Ownership of REAL PROPERTY also includes ownership of

the FIXTURES on the LAND.

A FIXTURE is something that has been or is intended to be

permanently attached to the land in order to enhance the
LAND in some way.

A FIXTURE is something that was previously Personal

Property but which has now become part of the Real Property.
 Business Law
FORMS OF PROPERTY

PROPERTY Real Property FIXTURES

FIXTURES include:

Buildings In-Ground
Swimming Pool

Taps Carpets Air Conditioning

Units
 Business Law
FORMS OF PROPERTY

PROPERTY Real Property FIXTURES

Whether or not something is a FIXTURE is a question that may arise

when Real Property is sold. If there is a dispute over:

whether a particular asset is a whether an asset is included as

FIXTURE and therefore part of the SECURITY FOR
automatically the property of OR THE LOAN when Real
the new Owner OR remains Property is mortgaged
property of the previous Owner

No. That’s a Well, the

This is
FIXTURE. Mortgage says
It was the Van Gogh is
MINE!
attached to a FIXTURE
the wall with
screws.
 Business Law
FORMS OF PROPERTY

PROPERTY Real Property FIXTURES

In deciding whether or not something is a FIXTURE, the COURT will

consider:

the INTENTION of the person This Van Gogh will be

who attached the object to the perfect in this room. It
LAND or building, should stay here forever!!

the ease or difficulty with

which the object can be It’s easy. I’ll just
removed from the LAND or pull it out and put
building, it in the Ute

whether substantial damage

will be caused by the object’s See? It was easy. And
removal no damage at all….
 Business Law
FORMS OF PROPERTY

PROPERTY Real Property FIXTURES

An object that has been attached to the LAND or building but Don’t worry buddy,
you’re coming with
which is NOT a FIXTURE is known as a Fitting.
me when we move
An example of a Fitting is a washing machine.

Australian Provincial Assurance Co Ltd v Coroneo

(1938) 38 SR (NSW) 700 at 712–713
FACTS: A Theatre was sold. The COURT was called upon to decide whether
certain assets — the seats, the switchboard and the projector — were FIXTURES
that passed to the Purchaser or Fittings that remained the property of the Vendor.
HELD: The COURT decided that because the switchboard and the projector were
securely and permanently attached to the building they were FIXTURES.
However, the chairs were only bolted to the floor while movies were being shown
and could be removed and stacked elsewhere when the theatre was used for other
purposes, and the COURT concluded that they were, therefore, Fittings.
 Business Law
FORMS OF PROPERTY

PROPERTY Real Property FIXTURES

But, it’s mine!!

No. Sorry. You screwed that Plasma TV into the wall. That
makes it a FIXTURE. The Lessor owns it now.

Look!! I could easily remove it since it was just connected

by some bolts.

Nope. It’s a FIXTURE according to the Common Law.

Could it possibly be an… ah….ah…. (think of something

quick) ..ah … tEnAnT FIXTURE?

Um, ah… ..ah … tEnAnT FIXTURE? Well,

that’s…..um…new. {oh no, he’s using the COMMON
LAW against me}
 Business Law
FORMS OF PROPERTY

PROPERTY Real Property FIXTURES tEnAnT

What if the property is rented to a Lessee or tEnAnT

who attaches FIXTURES to the building?
IF it can be shown that the FIXTURES were attached
for the purpose of trade, ornament or domestic
convenience, they will be classified as tEnAnT’s
FIXTURES and they will not become the property of
the Lessor or Landlord.

Instead, the Lessee will be entitled to remove the

FIXTURES during the lease or within a reasonable
time after the end of the lease
 Business Law
FORMS OF PROPERTY

PROPERTY Real Property FIXTURES tEnAnT

What if the property is rented to a Lessee or tEnAnT who

attaches FIXTURES to the building?
Most modern commercial leases will state explicitly that the
Lessee is not permitted to install FIXTURES without
the permission of the Lessor
Also, modern commercial leases will contain terms setting Um, sorry. Your
out what is to happen to the FIXTURES upon expiry of lease clearly
the lease. specifies that
hanging nails shall
NOT penetrate the
outer surface of
the walls.
 Business Law
FORMS OF PROPERTY

PROPERTY Real Property FIXTURES tEnAnT

Spyer v Phillipson
Common Law
[1931] 2 Ch 183
FACTS: A Lessee of a house installed oak and pine panelling,
valuable antique fireplaces and a chimney. The Lessor
sought to prevent the Lessee from removing them at the
end of the lease, arguing that they were FIXTURES and
had become part of the property.
HELD: The COURT decided that because the objects
had been
attached to the house for the enjoyment of the Lessee
and not to permanently improve the Lessor’s property,
they were tEnAnT’s FIXTURES and the Lessee was,
therefore, permitted to remove them.
 Business Law
FORMS OF PROPERTY

PROPERTY

Real Property Personal Property

LAND FIXTURES TANGIBLE INTANGIBLE

(Chose in (Chose in
Possession) Action)
 Business Law
FORMS OF PROPERTY Real Property

LAND
{{clears throat}}…

That’s correct.
Freehold Leasehold

Strictly speaking, all

Real Property is
Fee Life legally owned by the
Crown. When someone
Simple Estate ‘buys’ Real Property
they in fact acquired an
interest or estate in the
Real Property that is
less than complete
Ownership
 Business Law
FORMS OF PROPERTY Real Property

LAND
{{clears throat}}…

That’s correct.
Freehold Leasehold

Strictly speaking, all

Real Property is
Fee Life legally owned by the
Crown. When someone
Simple Estate ‘buys’ Real Property
they in fact acquired an
interest or estate in the
Real Property that is
less than complete
Ownership
 Business Law
FORMS OF PROPERTY Real Property
LAND Freehold

A Freehold Estate is an interest in Real Property of uncertain

duration.

A Freehold is the closest thing to Ownership possible

under our system of LAND Law

A Freehold, in the eyes of most people, is Ownership

of the LAND.

There are two principal types of Freehold Estate.

Fee Simple Life Estate

 Business Law
FORMS OF PROPERTY Real Property

LAND Freehold Fee Simple

The most common type of Freehold Estate is Fee Simple

A holder of Fee Simple effectively has unrestricted Ownership of

the Real Property, subject only to the rights of the Crown.

We finally have our {{{ clears

house. As holders of
the Fee Simple, we
throat }}}
are the Owners.
That’s
Oh, right. We’re just correct.
the Freeholders.

A holder of a Freehold can transfer or bequeath the Real

Property to whoever they choose.
 Business Law
FORMS OF PROPERTY Real Property

LAND

Freehold Leasehold

Fee Life
Simple Estate
 Business Law
FORMS OF PROPERTY Real Property

LAND Freehold Life Estate

A less common type of Freehold Estate is a Life Estate

A holder of a Life Estate is effectively the Owner of the Real

Property for their own lifetime (or sometimes the lifetime of
another) after which the Property automatically passes to
another person

Here you Thanks

go sweetie Grandpa
 Business Law
FORMS OF PROPERTY Real Property

LAND Freehold Life Estate

A less common type of Freehold Estate is a Life Estate

A holder of a Life Estate is effectively the Owner of the Real

Property for their own lifetime (or sometimes the lifetime of
another) after which the Property automatically passes to
another person

Oh no.
Grandpa!!
Oh no
 Business Law
FORMS OF PROPERTY Real Property

LAND Freehold Life Estate

This person is said to be entitled to the REMAINDER.

The holder of the Life Estate is entitled to rent and other

income from the Property, but CANNOT transfer or
bequeath the property to another.

Oh yes.
I got the
remainder!!
Oh yes.
 Business Law
FORMS OF PROPERTY Real Property

LAND

Freehold Leasehold

Fee Life
Simple Estate
 Business Law
FORMS OF PROPERTY Real Property

LAND Leasehold
The other type of Estate is Leasehold.

The holder of the Leasehold estate is entitled to possession of the

Real Property for a limited period of time.

After that period of time has expired, the right to possession of the
Real Property ‘REVERTS’ or returns to the Owner.
 Business Law
FORMS OF PROPERTY Real Property

LAND Leasehold
The other type of Estate is Leasehold.

The holder of the Leasehold estate is entitled to possession of the

Real Property for a limited period of time.

After that period of time has expired, the right to possession of the
Real Property ‘REVERTS’ or returns to the Owner.
Thank
Here you
you go
 Business Law
FORMS OF PROPERTY Real Property

LAND

Freehold Leasehold

Fee Life
Simple Estate
 Business Law
TYPES
OF
OWNERSHIP
Can we buy a house
now?

Do you know the

different types of
ownership there are?

Um….

Ok. Here we go….

again.
 Business Law
TYPES OF OWNERSHIP
It is possible for Real Property to be Owned by more than
one person at a time

When there are two or more Co-owners there are two possible
arrangements:

JOINT TENANCY
TENANCY IN COMMON
 Business Law
TYPES OF OWNERSHIP
JOINT TENANCY
When Co-owners are JOINT TENANTS they have an equal and
undivided interest in the Property

For Co-ownership to qualify as a JOINT TENANCY,

four requirements must be satisfied, known as the ‘FOUR UNITIES’.

Unity of Possession Unity of Interest

Each JOINT TENANT is entitled Each JOINT TENANT has the
to Possession and Occupation of same interest in the Property in
the whole of the Property terms of extent and duration

Unity of Title Unity of Time

Each JOINT TENANT acquired Each JOINT TENANT acquired
their interest in the Property from their interest in the Property at
the same legal document, the same time.
 Business Law
TYPES OF OWNERSHIP
JOINT TENANCY

Unity of Possession Unity of Interest

IF any of these requirements are Not Satisfied,

the Co-ownership is a TENANCY IN

COMMON rather than a JOINT TENANCY

Unity of Title Unity of Time

 Business Law
TYPES OF OWNERSHIP
TENANCY IN COMMON

A TENANCY IN COMMON Unity of Possession

will still be characterised by Each TENANT is entitled to
Unity of Possession Possession and Occupation of the
whole of the Property
The only way to provide that
each Co-owner has Possession
of separate parts of the
Property is to subdivide the
property

TYPES OF OWNERSHIP
TENANCY IN COMMON
A TENANCY IN COMMON
will still be characterised by
Unity of Possession
The only way to provide that
each Co-owner has Possession
of separate parts of the
Property is to subdivide the
property
Business Law
Unity of Possession
Each TENANT is entitled to
Possession and Occupation of the
whole of the Property
There are some KEY
DIFFERENCES between the
two forms of Co-ownership
 Business Law
TYPES OF OWNERSHIP

There are some KEY DIFFERENCES between the two forms of

Co-ownership

TENANCY IN COMMON JOINT TENANCY

A TENANCY IN COMMON does A JOINT TENANCY is characterised by

not need to have Unity of Interest the RIGHT OF SURVIVORSHIP

In a TENANCY IN COMMON it If one JOINT TENANT dies, their share

is possible for Ownership to be of the Property automatically passes to the
shared unequally remaining owner or owners, even if the
deceased’s will provides otherwise.
 Business Law
TYPES OF OWNERSHIP

There are some KEY DIFFERENCES between the two forms of

Co-ownership

TENANCY IN COMMON

A TENANCY IN COMMON will A TENANCY IN COMMON will

be the preferred form of Co-
ownership when the Co-owners
have contributed to the purchase
price in different amounts
be the preferred form of Co-
ownership where the Co-owners
have acquired their interest at
different times or from different
legal documents.
 Business Law
TYPES OF OWNERSHIP

There are some KEY DIFFERENCES between the two forms of

Co-ownership

JOINT TENANCY

JOINT TENANT is A JOINT TENANCY

the preferred form will automatically become a
of Co-ownership TENANCY IN COMMON
for spouses. if any of the FOUR UNITIES
ceases to be present

For example, if a Co-owner sells

their interest in the property to
another.
 Business Law
TYPES OF OWNERSHIP
TENANCY IN COMMON

Strata Community
Title Title
 Business Law
TYPES OF OWNERSHIP
TENANCY IN COMMON

Strata Community
Title Title
 Business Law
TYPES OF OWNERSHIP
Strata Title TENANCY IN COMMON

Legislation in each JURISDICTION permits

the subdivision of Real Property into a
combination of smaller lots and common
property

Strata Titles Act 1988 (SA) Community Titles Act 1996 (SA);

A LOT is owned The COMMON PROPERTY is owned and

separately by an managed by a body corporate or owners’
Individual Owner corporation representing the individual owners.

That’s And all of this COMMON

my unit PROPERTY belongs to
up there. the Body Corporate of the
Property.
 Business Law
TYPES OF OWNERSHIP
Strata Title TENANCY IN COMMON

Strata Title refers to the Vertical Subdivision

of the airspace above land into, for example, a
high-rise accommodation block

The COMMON PROPERTY would

consist of shared areas such as:

stairwells elevators

reception areas gardens

 Business Law
TYPES OF OWNERSHIP
TENANCY IN COMMON

Strata Community
Title Title
 Business Law
TYPES OF OWNERSHIP
Community TENANCY IN COMMON
Title

Community Title refers to the horizontal and/or vertical

subdivision of LAND
For example, a Residential Complex with the common
property consisting of shared pathways and facilities.
 Business Law
TYPES OF OWNERSHIP
Community TENANCY IN COMMON
Title

The Legislation in each jurisdiction regulates the management and

conduct of the body corporate/owners’ corporation,

Strata Titles Act 1988 (SA) Community Titles Act 1996 (SA);

There This is
should be a public
playground parking
there.
And some
And the easements
rubbish for the
bins there. water line
 Business Law
TYPES OF OWNERSHIP
Community TENANCY IN COMMON
Title

Strata Titles Act 1988 (SA)

Community Titles Act 1996

(SA);

The body corporate/owners’ corporation should have provisions

that regulate the operation of the Property. They include:

the holding of meetings financial issues insurance

the maintenance of the the settlement of disputes

common property between the owners
 Business Law
TYPES OF OWNERSHIP
TENANCY IN COMMON

Strata Community
Title Title
We don’t have to worry about
this. We’ll be Joint Tenants.

And we’re not really into

apartments.

Ok. That’s good to hear.

 Business Law
Can we buy a house
now?

Oh no. Now that we

know the key
concepts, we can
focus on Legal and
Equitable Rights in
Real Property.

Um….
 Business Law

Oh Dear….maybe
we’ll talk about that in
the next lecture.
 Business Law
CONCLUSION FORMS OF PROPERTY LAND
Real Property Freehold
PROPERTY CONCEPTS
LAND FIXTURES Fee Simple
Ownership
Personal Property
& Life Estate
Possession TANGIBLE INTANGIBLE
Leasehold
(Chose in (Chose in
Possession) Action)
Real Property
TYPES OF OWNERSHIP
&
Personal Property JOINT TENANCY
TENANCY IN COMMON

Strata Title
Community Title