CA26100 - PMA: Fixtures: Meaning of relevant land, lease and interest in land

CAA01/S173 - S175

Normally the relevant land is the building or land of which the fixture becomes part.

For a boiler or water filled radiator installed in a building as part of a space or water heating system the relevant land is the building in which it is installed.

Example As in the example at CA26025 Xanadu Properties Plc owns the freehold of Kane house and installs central heating. Kane House is the relevant land for the central heating.

In the fixtures legislation a lease is:

• a leasehold interest, or
• an agreement to acquire a leasehold interest, or
• the Scottish equivalent of either of the above,

except in the context of leasing plant or machinery.

In the fixtures legislation an " interest in land" means:

• the freehold interest, or
• an agreement to acquire the freehold interest, or
• the Scottish equivalent of either of the above, or
• a lease, or
• an easement or servitude, or
• an agreement to acquire an easement or servitude, or
• a licence to occupy land.

A licence to occupy land is not an interest in land for the fixtures legislation unless it is an exclusive licence. A licence to occupy is a permission to enter and remain on land for such a purpose as enables the licensee to exert control over the land. It is this level of control that suggests that a licence to occupy must be an exclusive licence. The idea of exclusive occupancy is also supported in part by ratings law that says that there can only be one occupier of land. It follows that where a person can enter onto land for a subordinate purpose, such a licence of entry would be something less than a licence to occupy.

If an interest in land is conveyed or assigned by way of security and subject to a right of redemption, then so long as the right of redemption exists the interest held by the creditor is treated as held by the person having the right of redemption. The interest is treated as held by the person who has the right of redemption. For example, if a freehold property is mortgaged, the person who grants the mortgage sometimes holds the freehold interest in law. However, the interest is treated for the purposes of the fixtures legislation as being held by the person who mortgages the property.

Example Xanadu Properties Plc owns Kane House. It needs to raise cash so it takes out a mortgage on Kane House with Barset Bank. Once Kane House is mortgaged Barset Bank might become its legal owner, but Xanadu Properties Plc is still treated as the owner of Kane House for the purposes of the fixtures legislation.