#28 - Registration - Land Law

Land Law Reading Session 1 Introduction to Land Law: Rights in Rem: * A right in rem over land is a right to use the land per se and not just against one person. Rights in rem are like contractual rights i.e. with privity * Rights in rem are confined to certain types that the law recognises (unlike contractual rights in personam where we can agree that A will grant B almost any rights except illegal activity etc). This is the "numerus clauses" principle. * The numerus clausus principle exists to limit the granting of rights in rem to cases where it does more good than harm. They always do harm because (1) they make land subject to rights less valuable to a potential buyer and (2) there is a cost in discovering if there are such rights (i.e. the mere possibility of rights in rem impose a cost). However they can be good too: (1) They enhance my liberty to do with my land what I wish i.e. give rights on it, and (2) they allow wealth creation by selling such rights, and (3) it allows greater certainty to the possessor of the right since their right is not subject to my keeping the land rather than selling. Numerus clausus reconciles these factors. If a right's good exceeds harm the law calls it a right in rem, and, if not, a right in personam. * Rights in rem (members of numerus clausus): Easements (right to use one piece of land to benefit another e.g. right of way over land B, linking land A to the road); Restrictive Covenants (a class of negative easements e.g. I wont build so high that I restrict your view); Leases (allowing one person/group exclusive possession of land for a defined period); Mortgages (rights in return for obligations e.g. payment of debts); Rights under trusts (rights whose possessors can benefit from the land even though it is nominally owned by others i.e. used to divide up ownership); Licences coupled with an interest (allowing someone to go onto my land to use something they own that is situated there); Freehold Ownership. 1 * The Land Registration Act 2002 provides security of ownership by conclusively presuming that the person on the register is owner (unlike before, where all titles were about who had possessed longer i.e. relative rights). When are disponees bound? * A right in rem will affect a disponee (1) if it is entered on the register or (2) it is an "overriding interest" under schedule 3. Most rights in rem can be registered but some cannot. Unregistered land Hunt v Luck [1902] 1 Ch 428: G had fraudulently got P to hand over some property to him, which G later mortgaged to D. P claimed that the transaction was void since P's consent was vitiated. CA found that D was not given actual or constructive (i.e. presumed) notice of P's lack of consent and therefore D's title was good. Vaughan Williams LJ: "if a purchaser or a mortgagee has notice that the vendor or mortgagor is not in possession of the property, he must make inquiries of the person in possession - of the tenant who is in possession - and find out from him what his rights are, and, if he does not choose to do that, then whatever title he acquires as purchaser or mortgagee will be subject to the title or right of the tenant in possession." Kingsnorth Finance Co Ltd v Tizard [1986] 1 WLR 783: P had an equitable interest in a house, which her husband mortgaged to D without telling her. Issue was whether D bought its rights subject to those of P. Court held that the bank had constructive notice of P's interest and therefore bought subject to it. Judge John Finlay Q.C: D ought to have made further checks than they in fact did to establish whether there were other interests in the property. They failed to discharge this duty to make reasonable inquiries and therefore were put on constructive notice of P's interest. 2