Failure to observe formalities can lead to danger

If land law brings any image to mind, it might be that of a pile of title deeds. Formality has a very important part to play in land law. When it comes to something as expensive and important as land, certainty is important.

Having your name on the title deeds of a property allows you to prove you are the owner. For that reason, it is not usually possible to create or transfer an interest in land without some form of written instrument.

The instrument must also be registered at the Land Registry to create a further layer of transparency as to who owns a given piece of real estate. We rightly expect land ownership to be a matter of written record.

Sometimes, though, it might seem unjust to insist on formality. A might agree that B will be part-owner of a property even though only A's name will appear on the title deeds. A and B might be spouses, a cohabiting couple, a man and his mistress, family members, co-investors or just good friends.

But this agreement should be recorded in writing, in line with the emphasis on formality when it comes to land ownership. A failure to do so can mean that the parties' agreement or expectations will not be legally protected. If, however, B contributed to the purchase price or mortgage payments or suffered some other detriment through reliance on the agreement, it would not be fair to allow A to "escape" due to the failure to observe the formality or registration requirements imposed by land law.

There is a tension here between the values promoted by the need for a written record on the one hand, and a sense of fairness on the other.

In these cases, the law often holds A to the agreement despite its informality. When it does so, B is said to have an equitable or a beneficial interest in the property. A holds the property on trust for himself and B.