Law of Property Act 1925: Freehold, Leasehold and Ownership Rights
The Law of Property Act 1925 remains an important part of property law in England and Wales. It helps define legal estates and contains rules affecting freehold and leasehold ownership, deeds, trusts, easements, rights of way and restrictive covenants.
Published: 29 July 2026
What Does the Law of Property Act 1925 Do?
The Act simplified older land law and reduced the estates capable of existing as legal estates to two main forms: freehold and leasehold. It also established important rules concerning legal interests, property transfers, beneficial ownership and private rights affecting land.
Key point: The Act is not a complete property-ownership rulebook. Modern transactions also depend on the Land Registration Act 2002, trust law, leasehold legislation, planning law and the wording of the property’s title documents.
Does the Law of Property Act 1925 Apply Across the UK?
Despite being discussed as UK property law, the Act principally applies to England and Wales. Scotland and Northern Ireland have separate land-registration systems and different property terminology and legislation.
Buyers in Scotland may encounter title sheets, real burdens and servitudes. Buyers in Northern Ireland should check the Land Registry folio, Registry of Deeds and relevant Northern Ireland property law.
The explanations below therefore relate mainly to property in England and Wales.
Freehold and Leasehold: The Two Legal Estates
Freehold ownership
A freehold, legally described as an estate in fee simple absolute in possession, normally continues indefinitely. A freeholder usually owns the building and the land within the title.
Freehold does not mean unrestricted ownership. A freehold property can still be affected by:
- restrictive covenants;
- rights of way and other easements;
- mortgages and legal charges;
- estate rentcharges or management charges;
- planning and building-control requirements; and
- rights benefiting neighbouring properties.
Leasehold ownership
A leasehold, legally called a term of years absolute, provides ownership for a fixed period under a lease. The lease controls how the property may be used, maintained, altered, occupied or sublet.
The lease term starts when the lease was originally granted. It does not restart when the property is sold. Buyers should check the remaining term, service charges, ground rent where applicable, major works, building insurance, permissions and restrictions.
Most flats in England and Wales remain leasehold, although houses can also be leasehold and commonhold is available as an alternative form of ownership for some shared buildings.
Legal Ownership vs Beneficial Ownership
Property ownership can be divided between the legal estate and the beneficial interest.
Legal ownership
The legal owners are the registered proprietors shown on the HM Land Registry title. They can legally transfer, mortgage or otherwise deal with the property, subject to restrictions on the register.
Where there is more than one legal owner, they hold the legal estate jointly. The legal estate itself is not divided into separate percentage shares.
Beneficial ownership
Beneficial ownership concerns who receives the practical and financial benefit of the property. This may include the right to occupy it, receive rental income or receive part of the sale proceeds.
Beneficial shares can be equal or unequal. For example, two people may be registered as legal owners while agreeing that one owns 70% and the other owns 30% of the beneficial interest.
Joint tenants and tenants in common
- Beneficial joint tenants: own the beneficial interest together without defined shares. When one dies, the interest normally passes automatically to the surviving owner.
- Tenants in common: hold separate beneficial shares. A person’s share can normally pass under their will or intestacy.
HM Land Registry records the legal estate, not the exact beneficial shares. A Form A restriction may indicate that the property is held on trust, but it does not confirm who owns each share or the percentage involved.
A written declaration of trust can record deposits, ownership shares, mortgage contributions and how sale proceeds should be divided. This is particularly important for unmarried couples, family-assisted purchases and investors contributing different amounts.
Easements and Rights of Way
An easement is a property right that benefits one piece of land over another. A right of way is one type of easement, but easements can also cover drainage, water pipes, cables, access for repairs or the use of shared facilities.
Easements can be created expressly in a deed, arise by implication or, in certain circumstances, develop through long use known as prescription. Section 62 of the Law of Property Act can also operate in some transactions to pass existing rights with a conveyance.
What buyers should check
- Does the right benefit the property or burden it?
- Does access cover vehicles, pedestrians or both?
- Does it allow parking, loading or only passing over the land?
- Who pays to repair a shared drive, road or drainage system?
- Can gates be installed or locked?
- Is the route clearly shown in the deed or plan?
- Does the lender accept the access arrangement?
Warning: A visible drive or path does not automatically prove a legal right to use it. Some easements can also bind a property without a straightforward register entry, so the title and supporting deeds need careful review.
Restrictive Covenants on Property
A restrictive covenant is a private promise limiting how land may be used. Common examples prohibit business use, additional buildings, external alterations, parking certain vehicles or dividing a property into flats.
A restrictive covenant is separate from planning permission. Receiving planning permission does not automatically remove a private covenant, and complying with a covenant does not remove the need for planning consent.
Old covenants should not simply be ignored. Their wording, the land benefiting from them and the identity of anyone entitled to enforce them must be investigated.
Can a restrictive covenant be removed?
Possible options include obtaining a release from the person with the benefit, applying to modify the wording or applying to the Upper Tribunal under section 84 of the Law of Property Act 1925.
The Upper Tribunal can discharge or modify qualifying restrictive covenants, but it cannot use section 84 to remove positive covenants or easements such as rights of way.
Before contacting anyone: Speak to your conveyancer before approaching a person who may benefit from a covenant. Contact can affect whether restrictive-covenant indemnity insurance remains available.
Practical Property Ownership Example
Amira and Daniel buy a freehold house using unequal deposits. The title lists both as registered proprietors, but it does not show their agreed 65% and 35% beneficial shares.
The house also uses a private shared drive. The title grants a right to pass over the drive but does not clearly mention parking or responsibility for resurfacing it. A covenant restricts business use from the property.
Before exchange, their conveyancer should check the access wording, maintenance arrangements and covenant. Amira and Daniel should also consider a declaration of trust recording their beneficial shares and what happens if the property is sold.
Property Title Checklist Before Exchange
- Confirm whether the title is freehold or leasehold.
- Check that the seller is entitled to transfer the legal estate.
- Review the property register, proprietorship register and charges register.
- Read any filed transfer, conveyance, lease or deed mentioned on the register.
- Check rights benefiting the property and rights held by neighbours.
- Confirm legal pedestrian and vehicle access.
- Understand private-road, drainage and shared-area maintenance costs.
- Check whether covenants affect extensions, letting, pets or business use.
- Agree beneficial shares and succession arrangements for joint purchases.
- Remember that a title plan normally shows general, not exact, boundaries.
Common Property Ownership Misunderstandings
- “Freehold means no restrictions.” Freeholds can have covenants, easements and estate charges.
- “Both names on the title mean 50% each.” The title does not record exact beneficial shares.
- “An old covenant no longer matters.” Age alone does not make a covenant unenforceable.
- “Planning permission overrides the title.” Planning approval and private property rights are separate.
- “Using a drive proves access.” Physical use and legal entitlement are not necessarily the same.
Frequently Asked Questions
Is it the Property Law Act 1925 or the Law of Property Act 1925?
The correct legal title is the Law of Property Act 1925. “Property Law Act 1925” is a common informal reversal of the name.
Does the Law of Property Act 1925 apply throughout the UK?
No. It principally applies to England and Wales. Scotland and Northern Ireland have separate property laws, terminology and land-registration systems.
Can a freehold property have covenants and service charges?
Yes. Freeholds can be affected by restrictive covenants, easements, estate rentcharges and contributions towards private roads, open spaces or shared facilities.
Is a right of way the same as an easement?
A right of way is a type of easement. Easements also include rights involving drainage, pipes, cables, support and access for inspection or repairs.
Does HM Land Registry show beneficial ownership shares?
No. The register records the legal owners, not their exact beneficial shares. These may be recorded in a declaration of trust, transfer document or other evidence.
Can an old restrictive covenant be removed?
It may be released by agreement or discharged or modified by the Upper Tribunal in qualifying cases. Age alone does not automatically make a covenant unenforceable.
Final Takeaway
The Law of Property Act 1925 created much of the structure still used for property ownership in England and Wales, but the practical answer is always found in the individual title, deeds, lease and supporting documents.
Before committing to a purchase, make sure you understand what you will legally own, who will benefit financially, which rights come with the property and which restrictions may limit your future plans.
Sources and Further Reading
- UK Legislation: Law of Property Act 1925. Accessed 29 July 2026. Used to verify the legislation’s title and provisions concerning legal estates, formalities, interests in land and restrictive covenants.
- HM Land Registry: Search the property register. Accessed 29 July 2026. Supports the explanation of title registers, title plans, tenure and rights of way.
- HM Land Registry: Practice Guide 24: Private trusts of land. Accessed 29 July 2026. Supports the distinction between legal and beneficial ownership and the use of Form A restrictions.
- HM Land Registry: Practice Guide 62: Easements. Accessed 29 July 2026. Supports the information about registering and protecting easements.
- HM Courts & Tribunals Service: Guide to discharging or modifying restrictive covenants. Accessed 29 July 2026. Supports the explanation of section 84 applications and the Upper Tribunal’s powers.
- GOV.UK: Leasehold property overview. Accessed 29 July 2026. Supports the explanation of lease terms and time-limited ownership.
- Registers of Scotland: Land Register of Scotland. Accessed 29 July 2026. Supports the explanation that Scotland has a separate land-registration system.
- nidirect: How to find property and land information in Northern Ireland. Accessed 29 July 2026. Supports the Northern Ireland regional information.