Gifting land, is it that easy?

So, you’re fortunate enough to own some land, and you wish to gift parts to your children. Maybe you’ve been sitting on a piece of land for some years, and are now looking to transfer into your company name, for redevelopment. 

Or, you find yourself in a similar situation to these.

Rights of way

One thing to consider when splitting land, is the future, or current need of rights of way. 

As lawyers, we commonly refer to these as “legal easements”, and all legal easements must be in writing. Typically, an easement will allow you to pass and repass to and from the property, to the nearest public road, over someone else’s land (servient land). 

Easements not only refer to rights of way by foot, but can be for: telephone wires, drainage, electrical cables or water etc. We refer to these as “service media” easements, and they can either be above or below ground.

I’m bringing these to your attention because you might be considering gifting equal portions of your land to your children. 

Now, child one, who is receiving the piece of land that abuts a public road and has all services on their boundary, might have received land with a higher valuation than that of child three. Child three is receiving the bleak parcel of land two plots away, which is landlocked with no access to running water, or drainage. It would not be advisable to rely on the siblings to rectify this problem, especially when one will not be benefitting from the rectification.

The same principle applies to a property developer, who is looking to divide their land into plots, to sell on to the public. 

Easements may need to be granted, or reserved for each plot.

Restrictions on the land

It is fairly common in rural parts, but not exclusively, that land might already be spoken for. 

It is always best that a lawyer checks your legal title before you make commitments, or you could undertake this yourself, if you know what to look for, and to save on your initial costs. 

Your land may be subject to long term overage provisions that require consent from the overage beneficiary. Overage provisions are used to restrict land usage, unless an “overage payment” is paid to the original seller for the uplift in value.

The land you own might be held on trust, under a Declaration of Trust. 

This would restrict any gifting that you were considering, as the disposition might be in breach of your duties as a trustee. Or, the land might be subject to a small or large scale conditional contract, which benefits a developer who has been trying to obtain planning permission for the past 10 to 15 years. 

In this case, your disposition may require consent from the developer.

Previous promises on the land - known as Proprietary Estoppel

Another aspect to consider, before gifting your land, is whether you have already promised your land to someone else. 

This does not need to be in writing, as you might have verbally promised the previous gift, or you may have led someone to believe that they would be receiving your land. 

The person you promised the land to previously can potentially enforce your promise if: 

1) they received assurances from you that they were to receive the land

2) that person has relied on your assurances, and;

3) you have knowledge that the person has acted on your assurances to their detriment. 

This is a brief overview of a complicated area of law, but if this occurs, then a member of our Dispute Resolution Team can assist.

If you have any questions about your land, please feel free to contact me for assistance.