Also known as: legal interests
Written by attorneys · grounded in primary & secondary sources — see below
An interest in property or a proceeding that originates in the rules and principles developed by courts of law as distinguished from courts of equity. The interest supplies the basis for liability when a predecessor placed a structure or chattel on land or when a third-party claim is paramount to a leasehold.
Lakeshore Industries erected a storage shed on land it later conveyed to Lunar Dynamics. After the transfer Lunar Dynamics learned the shed encroached on an adjacent parcel owned by Lance Lee. Lee sued Lunar Dynamics for trespass because the shed remained after Lunar Dynamics acquired its interest in the structure.
Landmark Realty leased a warehouse to Liam Larson. At the time of the lease a recorded mortgage held by Lone Peak Energy encumbered the property and was not terminable at the landlord's will. The mortgage constituted a legal interest paramount to both the landlord and the tenant.
Select any source to read its text and confirm it supports the definition.
Logan Lane purchased a fence from a prior owner who had erected it across Laura Lewis's boundary line. After learning of the encroachment Logan Lane left the fence in place. Lewis sued Logan Lane for trespass based on the continued presence of the fence.
Luis Lopez purchased a commercial building for value without notice of an unrecorded equitable lien held by Layla Lane. The lien arose from a prior contract with the seller. The purchaser's legal interest prevailed over the equitable lien under the recording rules.
A shareholder challenged a state tax statute allowing deductions for debts. The shareholder owed no deductible debts and therefore possessed no legal interest in the deduction question that would support standing to contest the statute's validity.
After a decedent's death his heir disclaimed an inheritance under state law. The United States asserted a tax lien against the disclaimed property. The heir's state-law disclaimer did not prevent the interest from qualifying as property reachable by the federal lien.
A legal interest arises from rules developed by courts of law while an equitable interest arises from rules developed by courts of chancery. In landlord-tenant settings a legal interest held by a third party at lease inception is paramount to the tenant's interest unless recording statutes protect the tenant.
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Liability arises when the actor or a predecessor in legal interest placed the structure on the land and the actor fails to remove it after consent or privilege ends. The same rule applies when the actor acquires the interest with knowledge that the predecessor placed the item tortiously.
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No. An equitable interest held by a third party is subordinate to a legal interest purchased for value without notice of the equitable claim. Recording statutes may alter this outcome in some jurisdictions.
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…him the right of deduction. He would be in no better condition if the law expressly authorized him to make the deduction. What legal interest has he in a question which only affects others? Why should he invoke the protection of the act of Congress in a case where he has no rights to protect? Is a court to sit and decide abstract…