#17400 - Registration And Acquisition Of Legal Estates - Property Law

REGISTRATION AND ACQUISITION OF LEGAL ESTATES

Aims of Registration:

(1) To give greater security to land owners.

(2) To help purchasers find out what the vendor is entitled to sell.

(3) To make conveyancing and transfer of land easier by providing both evidence of entitlement and fuller details of matters affecting the land.

(4) To provide for a once and for all investigation and recording of titles.

(5) To give a state guarantee of the title.

- Certainty, efficiency and Simplicity.

Two Types:

• First Registration: when something is registered for the first time.

• Second registration: when (a) registration of new dealings (e.g. registering again after a sale) or (b) protection of third party interests.

Three different principles govern the LRA:

‘Mirror’: what you see on the register is what you get. Register= a mirror which reflects accurately and completely the current facts that are material to the title. Tension between this principle and overriding interests.

‘Curtain’: some things are kept off the register. Provides that the register is the sole source of information for proposing purchasers . Purchasers must not concern themselves with equities and trusts which lie behind this ‘curtain’ of information. Ensured through overreaching as this enables purchasers to take land free from beneficial interests under trusts.

‘Insurance’: government indemnity – state guarantees the interest if anything goes wrong. If there is a flaw in the register anyone who suffers loss as a result must be put in the same position they would be in if the register was an accurate mirror. Reflected in the provision for indemnity payments, Sch. 8 LRA.

Section 4 – when registration is compulsory “(1)The requirement of registration applies on the occurrence of any of the following events—

(a) the transfer of a qualifying estate— (i)for valuable or other consideration, by way of gift or in pursuance of an order of any court …

(c) the grant out of a qualifying estate of an estate in land— (i) for a term of years absolute of more than seven years from the date of the grant, and (ii) for valuable or other consideration, by way of gift or in pursuance of an order of any court; …

(g) the creation of a protected first legal mortgage of a qualifying estate.”

REQUIREMENTS;

• Application for first registration must be made within two months of the relevant disposition.

• Failure to register makes the disposition statutorily void, transfer or creation granted in equity only.

ss 15-22: lodging a caution against first registration: If someone has an interest against unregistered land, they can lodge a ‘caution against first registration’ to ensure that this is taken into account when the land is registered.

Different types of title:

Law Society’s concerns about the Land Registry:

• The fact that the rationale for splitting policy making and delivery is not explained. Such a split risks creating increased layers of operation, making the process more complex and increasing costs.

• The ability of the Office of the Chief Land Registrar to regulate and manage a service delivery company effectively, particularly given government's previous attempts at managing external agencies.

• Non-registration services becoming the most important part of the business to shareholders of a privatised entity, particularly if there were no statutory control on prices, resulting in resources being diverted away from core registration services.

DISPOSITIONS (TRANSFERS) OF REGISTERED LAND

s23 Owner’s powers

“(1) Owner’s powers in relation to a registered estate consist of:

(a) power to make a disposition of any kind permitted by the general law in relation to an interest of that description, other than a mortgage by demise or sub-demise, and

(b) power to charge the estate at law with the payment of money.”

s24 Right to exercise owner’s powers

“A person is entitled to exercise owner’s powers in relation to a registered estate or charge if he is: (a) the registered proprietor, or

(b) entitled to be registered as the proprietor.”

- Registered proprietor has unlimited powers of disposition unless a restriction is entered (s26 LRA, 2002).

What can be registered?

s. 27(2)(a) A transfer

“(b) A term of years for more than seven years …

(d) the express grant or interest of a kind falling within s. 1(2)(a) LPA 1925 (easement)

(e) the express grant or interest of a kind falling within s. 1(2)(e) LPA 1925 (rights of entry).

(f) the grant of a legal charge.”

What happens if it isn’t registered?

s27(1): “If a disposition of a registered estate or registered charge is required to be completed by registration, it does not operate at law until the relevant registration requirements are met.”

• ‘it does not operate at law’ ie. it operates in equity.

Only legal interests are registrable dispositions.

PRIORITIES

What has priority?

s. 28 (if nominal value) first created takes priority – you’re bound by whatever predates you!

• If there is no or nominal consideration (e.g. gift, inheritance, token payment) the person with the estate or the interest (the disponee) is bound by all pre-existing encumbrances.

• So if there is a lease and you gain a profit a prendre for nominal consideration, the lease is pre-existing and so binding.

• First in time has priority, regardless if legal or equitable.

s. 29 if ‘for valuable consideration’ (money) first registered takes priority – if money has already changed hands, first registered takes priority!

• Any pre-existing interests are lost unless protected in the register or overriding.

• For s29 you need valuable consideration (money) + a registerable disposition (go back to s27 to check if you have one).

s28 or s29 – which do I apply? Was there valuable consideration? (Usually money but could be an object of value or a hand in marriage.)

• Yes – first registered takes priority (s29)

• No – first created takes priority (s28)

Effect(s) of registration? “The effect of sections 27 and 29 of the 2002 Act is that, although a registrable disposition takes place when it is executed, neither a conveyance nor a charge takes effect at law until registration, and the consequence is that a purchaser and a mortgagee acquire equitable interests on completion.” Lord Collins in Scott v Pacific Mortgages [2014] para. 40.

• So, there’s a gap between when you get your legal and equitable interests – ‘the registration gap.’

Encumbrances at first registration

Minor interests can be protected either by putting (a) a notice or (b) a restriction on the register.

1. Notices

s32 – Notice

“(1)A notice is an entry in the register in respect of the burden of an interest affecting a registered estate or charge.

(2)The entry of a notice is to be made in relation to the registered estate or charge affected by the interest concerned.

(3)The fact that an interest is the subject of a notice does not necessarily mean that the interest is valid, but does mean that the priority of the interest, if valid, is protected for the purposes of sections 29 and 30.”

s34 – Entry on application

“(1)A person who claims to be entitled to the benefit of an interest affecting a registered estate or charge may, if the interest is not excluded by section 33, apply to the registrar for the entry in the register of a notice in respect of the interest.

(2)Subject to rules, an application under this section may be for—

(a)an agreed notice, or (b)a unilateral notice.

(3)The registrar may only approve an application for an agreed notice if—

(a)the applicant is the relevant registered proprietor, or a person entitled to be registered as such proprietor, (b)the relevant registered proprietor, or a person entitled to be registered as such proprietor, consents to the entry of the notice, or (c)the registrar is satisfied as to the validity of the applicant’s claim.

(4)In subsection (3), references to the relevant registered proprietor are to the proprietor of the registered estate or charge affected by the interest to which the application relates.”

(b) Restrictions - Restriction on dealings (s.41(1)). - If two or more people are registered as proprietor the registrar MUST enter a restriction (s. 44(1)).

s40 – Nature “(1) A restriction is an entry in the register regulating the circumstances in which a disposition of a registered estate or charge may be the subject of an entry in the register. (2) A restriction may, in particular— (a) prohibit the making of an entry in respect of any disposition, or a disposition of a kind specified in the restriction; (b) prohibit the making of an entry— (i) indefinitely, (ii) for a period specified in the restriction, or (iii)until the occurrence of an event so specified…”

s41 – Effect “(1) Where a restriction is entered in the register, no entry in respect of a disposition to which the restriction applies may be made in the register otherwise than in accordance with the terms of the restriction, subject to any order under subsection (2). (2) The registrar may by order— (a) disapply a restriction in relation to a disposition specified in the order or dispositions of a kind so specified, or (b) provide that a restriction has effect, in relation to a disposition specified in the order or dispositions of a kind so specified, with modifications so specified…”

s47 - Withdrawal “A person may apply to the registrar for the withdrawal of a restriction if— (a) the restriction was entered in such circumstances as rules may provide, and (b) he is of such a description as rules may provide.”

S.33 Excluded Interests – things that don’t need to be/can’t be registered.

“No notice may be entered in the register in...