In the world of land law, there’s a common saying: “If it’s not in writing, it doesn’t exist”. Essentially, this means that for something to be legally binding, it will usually need to be written into a lease or contract. However, there is a useful exception to this rule known as proprietary estoppel.

This doctrine can be used to modify rights over property or give rise to new rights. It often serves as a safety net to ‘estop’ the freeholder from enforcing its legal rights when it would otherwise be unjust for them to do so.

The steps involved to satisfy a claim under the doctrine of proprietary estoppel are as follows:

1. Some form of assurance is made by one party to another that they will acquire a right over the land in the future.
2. They reasonably rely on this assurance.
3. And by relying on this assurance, they suffer to their detriment (often the party may have taken action or omitted from taking action by relying on the assurance, and as a result of this, suffered a clear form of loss or disadvantage.)

Once the above three steps are satisfied, the court will then consider whether it would be unconscionable for the freeholder to go back on their word.

In practical terms, this principle could be applied to some of the following situations:

1. A farmer promises their child they will inherit the farm after they retire in exchange for the child working on the farm for free until the parent’s retirement. In doing so, the child turns down education and career opportunities and works at the farm for many years. The parent then seeks to withdraw this promise. In this situation, proprietary estoppel could be used to enforce the transfer of the property to the child.
2. A landlord makes a promise to their tenant that they will one day have the option to purchase the property from them. Acting in reliance on this statement, the tenant carries out significant improvements to the property expending large amounts of money. The landlord then tries to withdraw the offer and retain the property for themselves. In this case, proprietary estoppel could be applied to enforce the purchase option.

In essence, proprietary estoppel can act as a lifeline in instances where all other legal avenues may fall short, by enforcing promises made by one party while simultaneously safeguarding interests of the other parties.

If you are currently in a situation where you think proprietary estoppel might apply, or you need more information, contact our Dispute Resolution team today for a confidential consultation.