#1978 - Land Registration - Land Law

Land Registration (LRA 2002)

Effect of First Registration

• Effect of first registration of Fee Simples

  • LRA 2002 S.11(2)+(3) In every case, the legal fee simple is vested in the proprietor, regardless of whether that person held such a title

    • But this is subject to three exceptions:

      • S.11(4)(a) but this is subject to interests protected on the register and (b) overriding interests.

      • S.11(5) and where the proprietor is a trustee, the beneficiaries interests bind the proprietor if he has notice of them

      • S.11(4)(c) similarly adverse possession binds proprietors with notice of them.

    • What about where the first registered proprietor didn’t own the land?

      • One the face of it RP gets good title but previous owner has some arguments available:

        • When in actual occupation, the previous owner can assert ownership by way of overriding interest

        • A claim for alteration of the register may be available

• Effect of First Registration of Leases

  • S.12(4) Estate vested subject only to

    • (a) implied and express covenants

    • (b) interests subject to an entry on the register

    • (c) overriding interests

    • (5) rights of beneficiaries he has notice of.

Registrable Interests (where land is not yet registered)

• S.4(2) A qualifying estate is...

  • s.4(2)(a) Fee Simple

  • s.4(2)(b) Leases

• Land must be registered where:

  • S.4(1)(a) Within two months of conveyance of the qualifying estate by sale or gift

  • S.4(1)(c) the grant out of a qualifying estate

    • (i) of a lease/sub lease

    • AND (ii) for valuable consideration or by gift

  • S.4(1)(d) A future lease is granted to take effect after three or more months from grant

  • S.4(1)(g) On the creation of the first legal mortgage

• Voluntary Registration

  • Under s.3 land can also be voluntarily registered at any time if land is unregistered

Registrable Dispositions (where the land is already registered and some transaction occurs)

• Dispositions within s.27

  • S.27(1): Transactions listed under s.27(2) must be registered – there is no legal title until this has occurred

    • Smith: this is more than a technicality – delay in registration will prejudice purchasers if other interests are protected or some interests become overriding prior to registration.

      • However, before registration, purchaser will have equitable interest by virtue of consideration, so long as there is writing to satisfy formality requirements

      • They can then try to gain an overriding interest instead (see below).

• Those required to be registered:

  • S.27(2)(a)Transfers

  • S.27(2)(b)Leases

    • (i) Lease of more than seven years

      • Smith: is seven years enough?

        • If all leases registered, then would clog up Land Registry and be too expensive

        • Equally, commercial leases have gone done in length so need to be court by the 7 years limit rather than 21 years as per pre 2002.

    • (ii) future lease to take effect three or more months after grant

    • (iii) discontinuous leases

  • S.27(2)(d) The Express Grant or Reservation of an easement/profit

    • Those easements passing under the general words implied into transfers don’t need to be registered – they will be overriding interests (see below)

  • S.27(2)(f) grant of a legal charge (mortgage)

• Effect of Registration

  • S.29(1): Purchasers with Registrable Dispositions made for valuable consideration will gain the lack of Registration Defence and gazump any previous unregistered interests

    • In order to gain this, purchasers need to fulfil number of requirements:

      • (1)C acquires property right for valuable consideration

      • (1)C registers property right

      • (1) B’s right is not recorded on the register

      • S.29(2) There are no overriding interests in force

  • There is no “good faith purchaser” defence

    • Midland Bank Trust Co v Green [1981]:

      • Lord Wilberforce:

        • LCA 1972 excludes a requirement of good faith for the lack of registration defence

          • Reason for this is that adding this in would bring with it the necessity of inquiring into the purchaser’s motives and this would lead to difficulties.

        • Legislative intention was clearly to eliminate necessity of inquiring into motives and states of mind.

    • However, effect of this may be softened by constructive trusts – see below.

Other Interests

• Other interests are a residual category (“minor interests” is a misleading term because any interest can be protected by as an overriding interest by actual occupation)

  • Most important characteristic is that it will not bind a registered disposition unless it is entered on the register

    • And even then, protected minor interests enjoy no priority over earlier interests.

• Some interests which can be protected (amongst others)

  • S.116(a) Estoppel claims

    • Macnair: however, estoppel will be subject to priority rules – thus the estoppel interest must be registered on the register in order to be protected against later interest.

  • S.116(b): Equities (claims to equitable remedies)

  • S.115 Rights of pre-emption

Priorities

• LRA 2002 s.28: An earlier interest will defeat a latter interest

  • Even if that later interest is registered and the earlier interest it not

  • Exceptions

    • Registrable dispositions

      • S.29 (1)Where a registrable disposition of a registered estate is

        • 1. Made for valuable consideration (so priority only given to purchasers, not voluntary transferees),

        • 2. Registered

          • Any earlier unprotected interest “affecting the estate immediately before the disposition”

            • is defeated by the transfer unless the interest is overriding (per Schedule 3)

    • Overriding Interests

      • These will be accorded priority over all other interests whether registered or not (including registrable dispositions)

  • Effect = you can’t have a bona fide purchaser defence for trusts of land

    • Smith: is disappointing that greater purchaser protection is not given

      • Cos unless you have a registrable disposition you won’t be protected by unregistered minor interests of an earlier time

        • Despite the title appearing unencumbered.

    • Law Com: this will be less of a problem when compulsory electronic registration is in force

      • Minor interests will have be entered into register before can exist

        • Smith: although trusts etc. will still be outside of this....

Overriding Interests

Schedule 3 Paragraph 1: legal leases

• Legal leases granted for term not exceeding seven years constitute overriding interests

  • Short leases requiring registration under s.4 or s.27 are not included

  • City Permanent BS v Miller [1952]:

    • Evershed MR:

      • As a matter of law, the use of the word "granted" in [paragraph (1) of LRA 2002], whether it be applied to the word "lease" or the word "term,"

        • indicates that the lease or agreement for lease which is to be an overriding interest must be a lease or agreement which is effective to create a term

          • therefore to constitute overriding interest, lease needs to be in a deed.

      • Doesn’t mean that all overriding interests must be legal interests.

        • But here, clear that equitable lease will not suffice to be overriding.

          • Cos legal leases, but not equitable interests, bind purchasers of unregistered land automatically.

• Smith:

  • Fact that short means that too cumbersome to require registration

  • Also, short length of time implies that purchaser won’t be bound for too long and lessee should be protected

    • And short leases likely to be at full rent to will provide purchaser with income in lieu of vacant possession

Schedule 3 Paragraph 3: easements

• Sch 3 Para 3(1)(a) and (b):

  • These must be legal, and the purchaser must either have notice of them or have been able to discover them had there been a reasonable search attempt

    • Me: Thus, any easements created by implied grant or reservation

    • AND come into being by a transfer of estate by deed

      • Will constitute overriding interests.

• Except Sch 3 Para 3(2):

  • The exception does not apply where the person exercises the easement within a year previous to the date of disposition.

Schedule 3 Paragraph 2: actual occupation

• When this applies

  • This paragraph (formerly LRA 1925 s.70(1)(g)) covers

    • “the interests belonging at the time of the disposition to a person in actual occupation of the land

      • So far as relating to land of which he is in actual occupation”

    • Boland – these apply to equitable interests as well.

• Requirements

  • 1. The person claiming must have an proprietary interest in the land

    • Three types of claim as proprietary for registered land:

      • S.116: Equities (claims to equitable remedies)

      • S.116 Estoppel claims

      • S.115 Rights of pre-emption

    • But not personal rights

      • National Provincial Bank Ltd v Ainsworth [1965]: H and W live in MH. H deserts W, but conveys MH and business premises to C for mortgage. H defaults. W attempts to resist sale of house as claims overriding interest.

        • Lord Hodson:

          • Personal rights cannot be overriding interests – to be so they must endure with the land and passing of ownership.

            • Rights of wife are personal only in absence of any other indication.

      • Williams & Glyn’s Bank v Boland [1981]:

        • Lord Scarman:

          • A wife has a beneficial interest in the land from contributing to the purchase price (from a resulting trust, as it turns out)

            • She enjoyed "rights," one of which, her right to occupation, was certainly an interest "subsisting in reference" to registered land.

              • Therefore, since she has actual occupation, her minor interest can be converted to an overriding interest.

    • Scope of para 2

      • Smith: what rights should fall within para 2?

        • Although perhaps not all rights should be held as not covered, it is possible that a wider range should be recognised as proprietary now registration is norm.

  • 2. Actual...