REAL PROPERTY LAW

Classification of Property
In law a distinction is made between real and
personal property.
 Land
At common law land included the air space above the
soil up to the stratosphere and all matter below the
surface to the earth’s core.
Fixtures
 Crown Ownership
The Crown owns all land which is a concept that derives
from the feudal system in England that developed from
the 11th century. The Crown granted interests in land,
called estates.
 Estates in Land
An estate in land is an interest in real property
that allows possession either now or sometime
in the future for a specific or unlimited period of
time.
 Co-ownership
All estates may be held by more than one
person.
There are two forms of co-ownership:

• Joint tenancy
• Tenancy in Common
Joint Tenants
Four Unities
Survivorship Rule
Tenants in Common
 Torrens System
The Real Property Act 1886 (SA) establishes the
Torrens System, devised and named after Sir
Robert Torrens, a South Australian public
servant.
 Objectives of the Torrens System
The basic aims of the Torrens System are to:
• Provide a public register from which persons can
discover relevant title information 
• Simplify conveyancing
• Increase the security of persons acquiring interests
in land
• Provide a government guarantee that the
information on a certificate of title is complete 
• Simplify the investigation of title
 Certificate of Title
For each piece of land that is held under the Torrens
System there is an original certificate of title which is
located at the Lands Titles Office, a government
department.
On the front of the Certificate of Title is the Volume and
Folio number (top right hand corner), a description of the
land and a map of the land based on surveyed
measurements.
On the certificate of title all interests affecting the land are
registered, including estates, mortgages, leases and
easements.
 Torrens System - Priorities
Under the Torrens system:
 
• all registered interests have priority over unregistered interests

• priority of all registered interests is determined by date of

registration

• Priority of all unregistered interests are determined by date of

creation or date of execution “all things being equal” (i.e. there
must be no evidence of fraud or negligence)
 
 Indefeasible Title
Sections 10, 69 and 70 of the Real Property Act 1886 provide
that the title of every registered proprietor of an interest is
absolute and indefeasible.
 
This means that a registered proprietor’s title to the land,
whether a fee simple estate, mortgage or lease, once
registered, is incapable of being taken away.
 
A registered proprietor cannot have their interest challenged
and is not subject to any unregistered interests even if created
prior in time.
 Legal and Equitable Interests
An interest in property recognised by the common law
is called a legal interest and an interest in property
recognised by equity is called an equitable interest.
In relation to Torrens system land, a legal interest is one
that is recorded on the registered title, and an
equitable interest is one that has been created by the
owner of the land but is not recorded on the title.
 Caveat
A caveat is a recording on the register that informs
others of unregistered interests. It is a registered
instrument (not a registered interest) which:
• Warns any third parties dealing with the
registered proprietor of the caveator’s interest;
and
• Prevents the registration of any subsequent
interest on the title on which the caveat is noted
without the caveator’s permission.
 Effect of a Caveat
The caveat not only acts as a warning device but
it also has an effect on priorities of interests.
A caveat is not a registered interest but rather a
registered instrument giving notice of an
unregistered interest. As a result a caveat does
not give priority over all prior and subsequent
registered interests.
 Caveatable Interests
Examples of caveatable interests include:
• A purchaser’s right under contract of sale 
• Unregistered mortgages
• Unregistered leases> 1 year
• Other unregistered interests such as
easements and restrictive covenants
• A right to future possession of the land
 Leases
The essential requirements for a lease are that
the grantor must give the grantee:
• exclusive possession of the defined parcel of
land
• for a period of time that is ‘capable of being
rendered certain’
• for the payment of rent (except if set out in a
deed)
 Exclusive Possession
Exclusive possession is more than exclusive
occupation. It means effective control of the
premises and a right to exclude all others
including the landlord (subject to limited rights
of entry given to the landlord either by the
agreement of statute, essentially to enter with
notice to inspect or repair).
 Licence to Occupy
A lease is a proprietary interest. A licence is
merely a personal one which may be:
(a) bare- i.e. where no consideration is payable
and is revocable at will by the licensor; or
(b) contractual – i.e. where the licensor’s failure
to allow the licensee to exercise their rights
under the license is a breach of contract.
 Creation of Leases
In South Australia s 36 of the Law of Property
Act 1936 requires interests in land, including
leases, to be at least evidenced in writing, so
that a purely oral lease would be unenforceable.
 Leases – Torrens System
Leases are registrable interests under the Torrens
System.
Unregistered leases thus take effect as equitable leases
Section 69(h) of the Real Property Act 1886 (SA) creates
an exception to indefeasibility in the event that: ‘at the
time when the proprietor becomes registered, a tenant
shall be in actual possession of the land under an
unregistered lease or an agreement for a lease or for
letting for a term not exceeding one year’.
 Fixed Term Lease
A fixed term lease (sometimes called a lease for
a term of years) is one expressly created for a
fixed period.
Periodic Tenancy
 Leases - Covenants
Covenants in the lease may arise as:

Express terms; or

Implied terms
 Express Covenants
 A covenant that the lessee will keep the premises in ‘good and tenantable
repair’ during the tenancy.  

 A covenant as to user.

 A covenant not to assign or sub-let.

 A covenant that the lessee will pay the rent.

 
 A covenant that the lessee will pay all rates and taxes, except those expressly
made the duty of the landlord

 A covenant granting an option to renew. Options to renew are generally

construed strictly. Even a small omission in following the stated procedure
may prevent the lessee from enforcing the option.
Implied Covenants – Common Law
 That the lessee will have quiet enjoyment of the
premises.  
 That there will be no derogation from grant.  
 Fitness for habitation.  
 That the lessor will use the premises in a tenant-
like manner.  
 That the lessor will yield up possession to the
landlord at termination.  
 Implied Covenants - Legislation

In South Australia the following Acts imply terms

into residential, retail and commercial leases:

Residential Tenancies Act 1995 (SA)

Retail and Commercial Leases Act 1995 (SA)
 Determination of a Lease
Determination refers to the ending of the lease. The
most obvious is by expiry of a fixed term lease.
A clause in a fixed term lease may allow termination
by notice.
At common law a periodic tenancy may be determined
by notice by either party. The period of notice
corresponds with the period of the tenancy.
Under legislation determination of a periodic tenancy
is given in accordance to the notice provisions.
 Remedies for Breach of Covenant
In South Australia the remedies available for
breach of covenant under residential and
commercial leases are determined by common
law principles in conjunction with the legislative
provisions under the Residential Tenancies Act
1995 (SA) and Retail and Commercial Leases Act
1995 (SA).
 Retail and Commercial Leases
The Retail and Commercial Leases Act 1995 (SA)
provides protection to certain lessees of retail
premises.
The Act does not apply if the rent payable on the
premises exceeds $250k pa or the lessee is a
public company or in a number of other
circumstances listed in s4.