‘On determination of a lease, any beneficial easements granted by the lease come to an end. You should therefore check whether the reversionary estate has the benefit of an equivalent beneficial easement, if necessary. If not, you will need to decide whether the two estates should continue to be held separately and the lease should not, therefore, be determined.’

Because of this, many freeholders have in the past decided not to merge a lease with the freehold, so that they can ensure that they preserve the benefit of any leasehold easements. But, a recent CA decision has changed the law in this regard (and led to the LR withdrawing its above advice).

The case involved two neighbouring properties subject to 999-year leases, with one of them having a right of way over the other. The problem was that a subsequent owner of the lease with the right of way also bought the freehold of that property, and the question eventually arose as to whether or not the right of way still existed (or whether it was lost when the lease was extinguished through merger into the freehold). The CA took the view that the right of way did survive. It was wrong to think of the easement as being ‘attached to the lease’; the legal requirement is that an easement has to be appurtenant to a dominant tenement, but not necessarily to any particular interest in the land for the time being. Thus, an easement might be for a term of years (eg for 999 years), but it does not necessarily have to be attached to a leasehold interest of equivalent duration. All that is required is that the grantee does have an interest that is at least co-extensive with the period of the easement. Accordingly, the merger of the lease into the freehold did not bring the easement to an end.

For many years the assumption has been that a leasehold easement will automatically end if the lease is merged into the freehold. But, what the CA discovered was that there was no existing authority to that effect; it was merely an assumption, and it was an assumption that was wrong. Accordingly, the traditional practice of not merging a leasehold and a freehold (so as to safeguard any easements) would no longer seem to be necessary. Wall v Collins [2007] EWCA Civ 444. Source: www.practicallaw.com (subscription service). © Practical Lawyer