Introduction
A flying freehold exists where part of a freehold property is built in, over, or under the land or property of another freehold owner. This arrangement deviates from the traditional legal principle that a landowner owns everything above their land to the heavens and everything below to the earth's core, a concept summarised by the latin maxim cuius est solum, eius est usque ad coelum et ad inferos. While not a new phenomenon, the existence of a flying freehold can introduce significant complications into the conveyancing process. This essay will argue that flying freeholds pose a considerable problem for conveyancers and their clients. The primary difficulties arise from the English law on freehold covenants, specifically the inability to enforce positive obligations for support and repair against successive owners of the adjacent property. These legal difficulties directly create practical problems in securing mortgage finance and ensuring the long-term structural integrity and marketability of the property. This essay will first define the nature of a flying freehold, before analysing the core legal problem concerning covenants, and finally assessing the practical consequences for the conveyancing transaction.
Defining the Flying Freehold and its Legal Basis
In simple terms, a flying freehold is a part of a building that overhangs or underlies another person's property. Common examples include a room situated above a shared passageway, a balcony extending over a neighbour's garden, or a maisonette where the first-floor flat is freehold and sits on top of a separate ground-floor freehold flat. In each case, a part of one property relies on another property for its physical support or shelter, but there is no leasehold relationship between them.
The difficulties associated with flying freeholds are best understood by contrasting them with the more common leasehold structure used for flats and apartments. In a leasehold arrangement, a central landlord or management company can enforce obligations on all the leaseholders to contribute towards the maintenance and repair of the building's structure and common parts. This is possible because covenants in a lease, both positive (to do something, such as pay a service charge) and negative (to refrain from doing something), are enforceable by and against the original and future tenants and landlords. In the freehold context, the legal framework is much more restrictive. The absence of a landlord and the rules governing freehold covenants mean that ensuring mutual co-operation for repairs between independent freeholders becomes a significant legal challenge.
The Core Problems: Support, Repair, and the Enforcement of Covenants
The most profound problem for a flying freehold lies in the law governing the enforcement of freehold covenants. While negative covenants (promises not to do something) can 'run with the land' and bind future owners, the same is not true for positive covenants (promises to do something, particularly to spend money). The long-established rule, confirmed in Austerberry v Oldham Corporation (1885) and upheld by the House of Lords in Rhone v Stephens [1994] AC 310, is that the burden of a positive covenant does not run with freehold land to bind successive owners.
This rule has direct and severe consequences for flying freeholds. For instance, the owner of a first-floor flat with a flying freehold is dependent on the owner of the ground floor for support from the foundations and for shelter from the roof if the roles are reversed. An obligation on the ground floor owner to maintain the foundations is a positive covenant. If the ground floor property is sold, the new owner is not bound by this promise. The owner of the flying freehold part has no legal mechanism to compel their new neighbour to undertake necessary, and potentially costly, structural repairs. The structure of their home is therefore at the risk of their neighbour's inaction.
Conveyancers have developed several methods to try and circumvent this issue, but none are entirely satisfactory. One method is a chain of indemnity covenants, where each seller requires their buyer to enter into a new covenant to perform the obligations, and to impose the same requirement on any future buyer. However, this chain is fragile; it breaks if a future owner becomes insolvent, cannot be traced, or if the covenant is simply omitted from a future transfer. Another workaround is the doctrine of mutual benefit and burden, established in cases like Halsall v Brizell [1957] Ch 169, which holds that a person cannot take the benefit of a deed without also accepting the burdens contained within it. However, its application is often uncertain and depends on the specific wording and linkage between the benefit and the burden, making it an unreliable solution.
Consequences for the Conveyancing Process and Mortgageability
These underlying legal defects translate into tangible risks during the conveyancing process. A buyer's solicitor has a duty to advise on the title and any associated risks. The lack of legally enforceable rights for support, shelter, and repair is a major defect that must be reported to both the buyer and their mortgage lender.
This brings into focus the most significant practical problem: mortgageability. Mortgage lenders are highly cautious about lending on properties that represent a poor security risk. A property with a flying freehold element where there are no adequate arrangements for repair and support is a classic example of such a risk. The lender is concerned that the property could fall into disrepair, diminishing its value and making it difficult to sell in the event of repossession. Consequently, many lenders will refuse to lend on properties with flying freeholds altogether. Those that do lend often have strict criteria, which are outlined in the UK Finance Mortgage Lenders' Handbook. They may require that the flying freehold element is a small part of the total property, or, more commonly, they will insist on the buyer obtaining a specific flying freehold indemnity insurance policy.
This insurance does not solve the legal problem; it merely provides financial compensation in the event of a loss arising from it. For example, the policy might cover the cost of legal action to enforce a right of entry for repairs or cover the loss in market value if the property becomes unsellable due to the defect. While such policies often provide the only way for a transaction to proceed, they are an imperfect solution and represent an additional cost for the buyer. The existence of the flying freehold and the need for insurance can therefore make the property less attractive and harder to sell in the future, perpetuating the problem.
Conclusion: The Extent of the Problem and Avenues for Reform
In conclusion, flying freeholds pose a significant and multifaceted problem in the conveyancing process. The extent of the problem is substantial because it stems from a fundamental and long-standing principle of English land law: the non-enforceability of the burden of positive freehold covenants. This single legal issue creates a domino effect, leading to uncertainty over essential rights of support and repair, which in turn causes major practical difficulties in securing mortgage finance and ensuring the property’s long-term marketability.
The workarounds devised by conveyancers, such as indemnity chains and reliance on mutual benefit and burden, are often flawed and unreliable. The most common 'solution', indemnity insurance, merely papers over the cracks by offering financial compensation for a problem it cannot fix, rather than providing the homeowner with the right to compel a neighbour to maintain their shared building. The Law Commission has recognised this defect and in its 2011 report, Making Land Work: Easements, Covenants and Profits à Prendre, recommended the creation of a new legal interest, the "Land Obligation," which would allow for the enforcement of positive obligations. However, these recommendations have not been enacted. Until such legislative reform occurs, flying freeholds will continue to represent a significant legal headache, adding risk, cost, and complexity to the conveyancing process to a considerable extent.
References
- Austerberry v Oldham Corporation (1885) 29 Ch D 750 (CA)
- Halsall v Brizell [1957] Ch 169
- Law Commission (2011) Making Land Work: Easements, Covenants and Profits à Prendre (Law Com No 327). Available at: <https://s3-eu-west-2.amazonaws.com/lawcom-prod-storage-11jsxou24uy7q/uploads/2015/03/lc327_easements_report.pdf>
- Rhone v Stephens [1994] 2 AC 310 (HL)
- UK Finance (2024) The UK Finance Mortgage Lenders' Handbook. UK Finance.
