This section is from the book "Real Property, An Introductory Explanation Of The Law Relating To Land", by Alfred F Topham. Also available from Amazon: The New Law Of Property.
I. Power to Sell.
(1) Provided he gives notice to the trustees of the settlement.
He must give one month's notice to the trustees. His power is not in any way dependent on the consent of the trustees; the object of giving them notice is merely that they may watch over his exercise of the power, and appeal to the court if they think he is exceeding it or using it unfairly.
The consent of the trustees is required only if he wishes to sell the principal mansion house or the lands occupied therewith.
It was thought that some further restriction should be imposed, if he wished to sell the house in which the family had always lived, and therefore the consent of the trustees or the Court is required (t).
A house is not considered to be a principal mansion house if either (1) it is generally used as a farm house, or (2) if the park and lands usually occupied with the house do not exceed twenty-five acres (i).
(2) The price must be the best price that can reasonably be obtained. The tenant for life is a trustee of his powers for the other persons entitled under the settlement.
(gg) The explanation is that the tenant for life sells as a sort of agent for all the persons interested in the property. (h) Settled Land Act,. 1890, s. 10.
(3) The purchase money must be paid to the trustees and invested by them, and the investments must be held on the same trusts as the land.
Money arising from the sale of land or from the exercise of any of the other powers of the tenant for life is called " capital money." This means that it must be treated as capital, and invested, and must not be paid to the tenant for life as income. When the investments are made, the income of the investments is paid to the tenant for life.
II. Power to exchange the settled land for other land in England. The land taken in exchange must be held on the same trusts as the original land. Notice must be given to the trustees, and their consent must be obtained if the principal mansion house is to be exchanged. If the values of the exchanged lands are not quite equal, money may be taken or given to make up the difference (i).
III. Power to Lease.
The tenant for life may make leases of the land to endure beyond his own life, provided -
(1) The rent is the best that can reasonably be obtained.
(2) The lease must take effect in possession within twelve months (h).
E.g. a lease cannot be granted in 1908 to commence in 1912.
(3) Notice must be given to the trustees (or their consent obtained in case of the principal mansion house).
Exception. - Leases for not more than 21 years do not require notice to the trustees (1).
(i) Settled Land Act, 1882, s. 3 (iii.), and s. 21 (iv.).
(k) Ibid., s. 7 (i.).
(l) Settled Land Act, 1890, s. 7.
(4) The periods for which leases are allowed are: -
(a) Building Leases, 99 years (m).
(b) Mining Leases, 60 years.
Where the mines are already opened (nn) a tenant for life can at common law, apart from the Act, work the mines himself, and where the mines are not opened a tenant for life, who is unimpeachable for waste, can open and work them apart from the Act; but he cannot make a lease for that purpose for longer than his own life, except under the Act.
A tenant for life who is liable for waste cannot apart from the Act work un-opened mines at all.
When mines are worked the capital value of the land is gradually decreased, because the land without the minerals is often worth very little.
It is therefore thought right that if the tenant for life wishes to take advantage of this Act, he should not be allowed to keep all the proceeds of the working of the mines under the lease, and therefore he must set apart and pay to the trustees part of the rent in each year. Where he had power himself to work the mines, he is naturally not compelled to set aside so much as if he had no such power. Consequently the following rules are made: -
If the tenant for life is unimpeachable for waste in respect of minerals (i.e. if he could have worked the minerals himself), he may keep 3/4 of the rent of a mining lease, and 1/4 must he paid to the trustees and invested.
If the tenant for life is impeachable for waste in
(m) Note as to the nature of building leases. When a tenant in fee simple has vacant land which is suitable for building, he frequently makes a long lease, usually for 99 years to a builder, at a small rent, in consideration that the builder will build houses upon the land. The rent of the houses will be paid to the builder for the 99 years, subject to the payment of the small rent or " ground rent " to the tenant in fee simple. At the end of the 99 years the land with the houses on it reverts to the tenant in fee simple.
(nn) He Chaytor,  2 Ch. 804.
respect of minerals (i.e. if he could not have worked the mines himself), he may keep 1/4 only of the rents, and 3/4 must be paid to the trustees and invested.
The tenant for life, of course, gets the interest on the part which is invested.
(c) Other Leases, 21 years (n).
This applies to all leases other than building or mining leases, e.g. agricultural leases, or a lease of a house already built, i.e. an "occupation lease."
IV. Power to make improvements on the settled land, and to have them paid for out of capital money.
These provisions as to improvements are very detailed and technical, and the student may fairly be content if he can master the following main principles.
The tenant for life should draw up a scheme of the improvements required, and it should be sanctioned by the trustees and approved by the Board of Agriculture, or by a surveyor appointed by the trustees and approved by the Board or by the Court (p). If, however, this is not done, the expenditure may be allowed by the Court (p).
The power to spend or allow capital money for improvements only exists under the three following heads: -
(i.) Under the Act of 1882 (q): For various purposes including drainage, sea walls, roads, cottages, farm houses, tramways, railways, water supply, etc.
(n) Settled Land Act, 1882, s. 6.
(o) S. 26.
(p) Be Tucker's S. E. (1805), 2 Ch. 468.
(q) S. 25.
(ii.) Under the Act of 1890 (r):
(b) Structural alterations and repairs, if reasonably necessary for letting the house and land.
(c) Re-building houses ordered to be demolished by a local authority.
(d) Re-building the principal mansion house, but not more than half the annual income of the settled estate must be spent.
(iii.) Under the general jurisdiction of the Court.
This is only allowed for salvage, that is, when the expenditure is absolutely necessary to preserve the property from ruin (s). Such cases are very rare.
The principal forms of expenditure which are not allowed are therefore -
(1) Ordinary repairs.
For though, as we have seen, a tenant for life cannot be made responsible for permissive waste, i.e. cannot be compelled to do the repairs, yet it is his duty (morally, at least) to keep the estate in a reasonable state of repair, and therefore if he does the repairs he cannot recover his outlay out of the capital moneys.
(2) Alterations and additions, if he intends to live in the house himself.
These are only authorized to enable the house to be let: if therefore he finds the house is not sufficiently commodious for himself, he must pay for the alterations.
(3) The extra cost of re-building the mansion
(r) s. 13.
(s) Re De Teissier's S. E. (1893), 1 Ch. 153.
house, if the cost exceeds half the annual value of the estate.
V. Power to cut and sell timber.
(a) If the tenant for life is unimpeachable for waste he can cut and sell the timber (except timber planted for shade or ornament) apart from the Act, and can keep the whole proceeds himself.
Note the difference between this rule and the rule relating to a lease of minerals on p. 44.
(b) If the tenant for life is impeachable for waste he cannot cut timber except under the Act, and he must then (1) get the consent of the trustees or the court; and (2) set apart 3/4 of the proceeds as capital money (t).
VI. Power to sell heirlooms or chattels settled to go with the land.
Heirlooms (in the strict sense of the word) are chattels which by force of a special custom descend with the land: e.g. crown jewels. Other chattels are sometimes settled as nearly as possible in the same way, and are frequently spoken of as heirlooms.
Before the Act a person absolutely entitled to an heirloom could sell it during his life, but there was no power even for the Court to allow heirlooms or settled chattels to be sold by a tenant for life.
D'Eyncourt v. Gregory, 3 Ch. D. 635.
The house on the settled estate was small. Valuable pictures which had been settled as heirlooms entirely filled two rooms and were being spoilt for want of attention. The tenant for life could not afford to have them properly looked after.
Held, the Court has no "power to order a sale of the pictures.
By the Act the tenant for life may sell such settled chattels, but only under an order of the Court.
(t) S. 35.
The Court will not make the order for sale unless it is really for the benefit of the estate as a whole.
Re Hope (1899), 2 Ch. 679. The Court refused to allow the tenant for life, who was in difficulties through his own extravagance, to sell a famous diamond for £18,000.
The proceeds of sale must be invested as capital money, or may be applied in the purchase of other chattels to be settled in the same way.
VII. Power to mortgage the fee simple. - This is only allowed for certain purposes for the benefit of the estate.
E.g. for paying off incumbrances on the Settled Land.