The Requirement for formalities detracts

The need to ensure certainty in dealings with land expressed through formality requirements is often in conflict with the desire to leave individuals to their bargains especially if to do otherwise would generate harsh results. To some extent it can be argued that formality requirements detract the autonomy of land owners in dealing with their property. However, it may be well thought that this detraction is justifiable as insistence on certainty in land transactions brings its own fairness, at least for the society as a whole where the free alienability of land is so critical to the domestic economy.

Formalities in the legal sense can be seen as a requirement as oppose to mere habits of conventions. It is a matter of substance and must be put on a particular form in order for it to have a legal effect1. Formalities gives the land owner some sort of autonomy of its own as they can do whatever they intend to do with the land. For example once a freeholder goes through the appropriate formalities to get a deed2, they can then decide to rent out a lease from this, carving out estates of their own and selling them to raise capital.

Nonetheless, it does control landowners’ behaviour. It stops them from creating arrangements that suits their personal needs. Even if they try to ride off the legal requirements, they are still bound by equity requirements. For example, equity will recognise the existence of an equitable proprietary rights arising from an oral agreement or a promise providing that the rules of proprietary estoppel or implied trust have been fulfilled3. Arguably, the formality rules set out by Section 2 of the Law of Property (Miscellaneous provisions) Act is a demanding one.

Different people with various moral, ethical and theological views might see this as a detraction of their autonomy. However, this detraction is justifiable as the Act gives clarity and sets out a degree of uniformity for all landowners in the sense that every transaction they do has a legal effect. Another way in which formalities do affect the landowners’ autonomy stems from the cost of compliance. This is because it acts as an obstacle for the land owners that must be surmounted in transactions.

For example the delay to get a witness and legal cost by lawyers. Some have argued that formality rules only exits to give lawyers more work and to keep them in fees4. However this is implausible. I go with the opinion by Patricia Crithley5 that this is an easy area for criticism. The landowner inevitable knows that transactions in relation to land are lengthy and costly due to its social importance and financial value. A formal requirement helps marks the divide between negotiations and the conclusion of a deal6.

In fact it protects the landowners’ rights against any fraudulent transaction or outside pressure such as undue influence or duress. The lawyers involve would be able to detect any external pressure or fraudulent transactions. In addition, evidence provided by a formal document can also be useful to the third party in allowing them to discover a pre-existing property right or persistent right. This again helps promote the market value of a land and in return would benefit the landowner.