How the unity of seisin principle can create issues for mortgages of part, property purchases and subsequent sales
- What is an easement?
In simple terms, an easement is a right enjoyed by one parcel of land (known as the dominant land) over a different parcel of land belonging to somebody else (known as the servient land).
Under section 1(2)(a) of the Law of Property Act 1925, easements can only exist legally if they are granted forever or for a specified length of time.
Easements can be positive and negative. A positive easement is a right for the dominant land to use the servient land. For example, a right of way over neighbouring land to access your own. Negative easements are rights the dominant land can enjoy without interference from the servient land, such as a right to light.
All easements must have the following characteristics:
- the dominant land and servient land are separate;
- the right must benefit the dominant land;
- the dominant and servient land must be owned and controlled by different people; and
- the right must be one that is capable of being granted.
The third characteristic is known as the unity of seisin principle, which follows the reasoning that you do not need an easement over your own land.
More specifically, if two parcels of land are owned and controlled by the same person, then one parcel of land does not need an easement over the other for it to be fully enjoyable as land. For example, I would not need an easement if I, owning both parcels A and B, needed to use the driveway forming part of parcel A to access parcel B.
If parcel A were owned by someone else, I would need an easement to use its driveway to access parcel B. However, you cannot grant an easement across your own land while you still own it.
2. How the unity of seisin principle can cause issues with mortgages of part
A lender will often secure the repayment of a loan by securing a mortgage over the borrower’s land. Sometimes the mortgage security is only taken over part of the land owned by the borrower.
A mortgage will usually afford the lender several remedies in the event of default by the borrower. One of these remedies is a power of sale. This is where having only taken a mortgage over part of the borrower’s land can prove tricky.
A lender exercising a power of sale may find that the mortgaged land does not have the necessary easements to make it saleable, due to the unity of seisin principle. At this point, the borrower cannot grant the required easements because the borrower continues to own both the ‘dominant’ land (i.e. the borrower’s land subject to the mortgage) and ‘servient’ land (i.e. the borrower’s land without the mortgage). The borrower also cannot grant the lender an easement because the lender does not own the land requiring it. The lender may not be able to recover the loan monies secured by the mortgage if the land is missing the relevant easements it requires.
One solution for the lender could be to enter into a separate deed at the same time as the mortgage with the lender, which legally obliges the borrower to grant the necessary rights to any onward buyer. In the event that the lender then exercises its power of sale it will also be able to exercise its rights under that deed requiring the borrower to grant the necessary rights to an onward buyer.
Landowners granting lenders mortgages over part of their land should anticipate that additional documents may need to be entered into.
3. How the unity of seisin principle can cause issues in property purchases and subsequent sales
You may be interested in purchasing land adjoining your property. While such land is owned by your neighbour, your land may have the benefit of easements over it.
Issues can arise after you purchase the adjoining land. As you would own both parcels, any easements enjoyed by one parcel over the other would have been terminated on completion of your purchase. Therefore, any subsequent transfer of the land to another person, including family, would require those easements to be expressly granted or reserved again.
Our Agriculture and Rural Land team can assist you with any queries you may have in respect of easements, transfers of part and mortgages. Please contact Laura Czapski, a Legal Director in our Agriculture and Rural Land team or another member of our Agriculture and Rural Land team if you are seeking legal advice in this regard.
Article contributor, Caterina Magenes, Senior Paralegal
