Time to act on Property Laws

This article was produced by the Commission and appeared in the June 2010 issue of the Law Institute Journal.

The Victorian Law Reform Commission is calling for submissions on revising the Property Law Act 1958. It has issued a consultation paper setting out proposals for reform ranging from minor technical changes to complete revision of some rules of property law. One quarter of the Act is earmarked for repeal.

The Commission proposes a new Act, drafted in simpler language and structured more logically. This will come as no surprise to property law practitioners or others who have had to navigate and apply the current Act. The Act is a miscellany of provisions, many carried forward unaltered from the Property Law Act 1928 or earlier legislation. Many provisions are so obscure and poorly drafted that they cannot be understood without a trip to the library.

A major difficulty is determining which provisions apply to land under the operation of the Transfer of Land Act and which apply only to general law land. The Commission proposes to relegate to a schedule all provisions which apply solely to general law land.

The Commission proposes that legal life estates and legal future interests should be abolished.  It has long been standard practice to create these estates in equity, behind a trust for sale, to avoid the complexities of the Settled Land Act and the legal remainder rules.

Simon Gannon said in his recent LIJ article ‘Unsettling Repercussions’ that the Settled Land Act 1958  is arcane and in need of reform. The Commission agrees. It suggests overhauling Victoria’s dual scheme of trusts for the disposition of land, which comprises the Settled Land Act and the trust for sale provisions in the Property Law Act. Recognising that the task of developing proposals for such broad reform is beyond the scope of the current review, the Commission puts forward the preliminary view that the dual scheme could be replaced with a single, unified and more flexible statutory trust.

Other areas of the Act identified for repeal or significant reform include:

  • Special rules of inheritance
  • Rentcharges
  • The enlargement of 300 year  leases into freehold
  • The capacity of alien friends, minors, represented persons with a mental illness and married women
  • Formal requirements for the creation and assignment of interests and for declaration of trusts of land
  • Vendor and purchaser disputes
  • Third party rights
  • The execution of judgments.

New provisions are suggested as well, based on reforms found in the property law statutes of other State and Territories. One idea is to insert a mistaken improver provision, to provide statutory relief to a person who makes lasting improvements to land in the mistaken belief it is his or her property. The Commission also proposes a discretionary relief provision to deal with encroachments by buildings onto neighbouring land. It would no longer be possible to obtain by adverse possession title to a portion of land upon which a building encroaches across the boundary, or which has been enclosed with a neighbour’s land through the misplacement of a dividing fence off-boundary.   

Not all of the proposals are discussed in detail, as many are simple and require little explanation. A table containing a section by section summary of all of the proposals is provided in an appendix.

The consultation paper is the result of research overseen by part time commissioner Associate Professor Pamela O’Connor. It draws on the results of reviews and reforms adopted in other jurisdictions. England and Wales, Ireland, Northern Ireland, Ontario, New Zealand, Queensland, Tasmania, the Northern Territory and the ACT have undertaken major reviews of their property law statutes and implemented significant reforms. The Commission sought comments on the proposals as they were being developed from practitioners and academics who have researched, written about and practised in property law, including members of the LIV Property Law Committee.

The Commission now seeks comments from the legal profession and the wider community about the issues it has identified and the proposals it suggests. Because the Act is wide and diverse, many practitioners will have had experience in applying at least some of the provisions; because it is outdated and arcane, many are likely to have views about the need for reform.

The Review of the Property Law Act 1958: Consultation Paper is available online at the Commission’s website www.lawreform.vic.gov.au. Submissions close on 30 June 2010.

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