Registered land system

Question 1

What is Registered Land?

Answer 1

Where ownership and interests have been transferred onto a register.
The Land Registration Act 2002, effective 13 October 2003, governs registered land.

Question 2

The Register

Answer 2

People register their title to the land. Registration of title refers to the title being recorded at HM Land Registry.
Each title register comprises three registers;

1. Property register
2. Proprietorship register
3. Charges register

Question 3

Property register

Answer 3

Identifies the land and contains
• the postal address and reference to a filed plan
• any rights the property has over other land such as easements
• its status as freehold/leasehold
• the grade of title

Question 4

Proprietorship Register

Answer 4

Identifies the owners of the land and contains
• the names of the registered proprietor(s)
• any restrictions affecting the land

Question 5

Charges Register

Answer 5

Details other people’s rights over the land, for example
• easements and restrictive covenants to which the land is subject
• any registered charges

Question 6

Registration of title

Answer 6

S4 Land Registration Act 2002 provides that it is compulsory to register title to land after a certain trigger event:

Question 7

What are the trigger events?

Answer 7

1. The transfer of
   • an unregistered legal freehold estate; or
   • an unregistered legal lease which has more than seven years left to run at date of transfer
2. The grant of a legal lease (out of an unregistered estate)
   • of over 7 years; or
   • which is to take effect more than 3 months from the date of the grant
3. The grant of a first legal mortgage over
   • an unregistered legal freehold; or
   • an unregistered legal lease which has more than 7 years left to run

Question 8

First registration process

Answer 8

After the trigger event has occurred, the new title owner must apply to the Land Registry for registration within two months. Otherwise, the legal estate reverts back to the transferor/grantor leaving the new owner with an equitable interest only.

• Once the owner has applied to register their land, the Land Registry will examine all the title deeds of the property and will then create its unique register of title; On competition of registration, the new owner (now referred to as the registered proprietor) is issued with a title information document - this is for information only and is not proof of title.

Question 9

Proving Title to Registered Land

Answer 9

t is only the register itself held by the Land Registry which constitutes an up to date record of a title. On a sale of registered land, the seller’s solicitor will provide the buyer’s solicitor with an official copy of the register - which is time stamped.

Question 10

Grades of title

Answer 10

On first registration, a title is put into a class and recorded on the register - which determines how reliable the title is considered to be. The classes are

• Absolute freehold - Nothing dubious about title. Vested with proprietor and is subject only to entries on the register and unregistered interests which override. The title does not have to be perfect - if registrar believes any defect will “not cause the holding under the title to be disturbed” absolute title will be given s9(3) LRA 2002.
• Possessory freehold - No documentary evidence of title, but proprietorship is evidenced by possession. Can be upgraded into absolute title after being in possession as proprietor for 12 years s62(1), (4). A person who buys an estate with possessory title will be bound by any interests in the land in existence before registration

• Qualified freehold - Arises where registrar allows a title to be registered but there is some uncertainty/defect about the state of the
proprietor’s title.

• Good leasehold - application to register leasehold estates where the title of the landlord has not been produced to Land Registry.

Question 11

Alteration and rectification of the register

Answer 11

Once registration has taken place, the title is state guaranteed and cannot be challenged. However:
• Schedule 4 provides that the register may be altered in specific circumstances (LRA 2002); and
• Schedule 8 provides a power for indemnity from state funds if any person suffers los as the result of rectification of the register
(LRA 2002).

Question 12

Registration of dealings with registered land under s27 LRA 2002

Answer 12

The situation referred to is where title to land is registered and the registered proprietor then deals with the land in some way - known as a “disposition” in LRA 2002.

Section 27 LRA 2002 sets out certain dispositions of a registered title which must themselves be registered to operate at law:

• Any transfer of the registered estate (freehold or leasehold)
• The grant of a legal lease out of a registered title
• of over 7 years or
• which is to take effect more than 3 months from the date of grant or
• which provides for discontinuous possession
• The grant of a legal charge (i.e. legal mortgage) over a registered title
• The express grant or express reservation of a legal easement out of the registered title

Note that all of the dispositions are legal estates or interests which, if not registered will lose their status and revert to equitable status only
(Section 27 LRA 2002).

Question 13

Third Party Interests in a Registered Title

Answer 13

s29 LRA 2002 provides that a purchaser for valuable consideration of the registered title who completes his or her purchase by registration, is bound only by:

1. Interests protected by entry of notice on the register
2. Overriding interests in Schedule 3 (i.e. they do not appear in the register but still bind the purchaser)
3. Registered charges (i.e. legal mortgages recorded on the register).

It does not matter whether the interest is legal or equitable. If it does not fall into any of these categories, the purchaser is free from the
unprotected interest.

Question 14

Entries on the Register

Answer 14

There are two types of entry that can be made on a register in respect of third party interests:

1. Notice
2. Restriction

Question 15

Notices

Answer 15

An interest which is the subject of a notice will bind a purchaser.

There are two forms of notice:
1. An agreed notice - can be entered if either the registered proprietor agrees to the entry of the notice or the land registrar is satisfied with the validity of the applicant’s claim to the interest

2. A unilateral notice - which is entered onto the register without the consent of the registered proprietor, who will be notified by the registrar of the entry. If the proprietor doesn’t object, it will remain on the register. If there is an objection, the applicant must prove the validity of the interest within a specified time.

Question 16

Interests that cannot be protected using a notice (s33 LRA 2002)

Answer 16

1. a beneficial interest under a trust
2. a legal lease granted for three years or less
3. restrictive covenants in a lease

Any other interest can be protected using a notice. If an interest is not protected by way of notice, then the purchaser is free from that unprotected interest unless it is an overriding interest listed in Schedule 3. If an interest is neither, it will not bind the purchaser even if he or she knew about it.

Question 17

Restrictions

Answer 17

A restriction is another type of entry that can be put on to the register in respect of third party interests.

A restriction is not supposed to be binding on the purchaser, but rather specifies conditions that need to be met before the disposition takes place which, if not met, will prevent it from being registered at the Land Registry (e.g. sale of registered land subject to the consent of a particular person).

Question 18

Restrictions, overreaching and the interest of a beneficiary under a trust.

Answer 18

• A restriction is the only way to enter on the register the interest of a beneficiary under a trust (as it is excluded from s33 LRA 2002).

The function of the restriction is to warn the purchaser of the land to overreach the interest of the beneficiary; that is, to transfer the beneficiary’s equitable interest in the property to the proceeds of the sale following the sale to the purchaser. To do this, all that is required is that
the purchaser pays the purchase money to at least two trustees or a trust corporation (s27, LPA 1925; Boland). The money must not be paid to the beneficiaries, unless they are the trustees – and if there is only one trustee the purchaser must insist on the appointment of another.

If there is a restriction on the register and overreaching has taken place, the purchaser takes the legal estate free of the beneficiaries’ interests – even if he has actual notice of them - and the beneficiaries cannot claim any rights in the property and their only remedy is damages
against the trustee. If there is a restriction on the register and overreaching has not taken place, the purchaser will be subject to them unless he can prove that he did not have notice of them.

Question 19

Overriding Interests

Answer 19

Section 29 provides that “overriding interests” bind the purchaser even though they are not recorded on the register. Schedule 3 LRA 2002 provides the overriding interests that bind a purchaser of the registered title:

Para 1
• A legal lease granted for a term for 7 years or less from the date of grant. However – there are exclusions to this category which have to be registered with their own title number under S27:

1. A legal lease which doesn’t take effect in possession until at least 3 months after grant
2. A legal lease which provides for discontinuous possession

Para 2
• An interest of a person in actual occupation
There are two requirements to be met:
1. An existing interest; and
2. Actual occupation

An existing interest must be a recognised proprietary interest (i.e. an estate contract or a beneficial interest under trust; Flegg). However, certain rights are statutorily excluded from being overriding interest, including the rights of a spouse or civil partner to occupy the family
home under s31(10) Family Law Act 1996 and future leases which are compulsorily registrable (unless they have already taken effect in possession at the time of the disposition).

A person is in actual occupation of the property where “there is some physical presence, with some degree of permanence and continuity” (Malory Enterprises Ltd v Cheshire Homes (UK) Ltd 2002) and, where the person is temporarily absent, whether the occupier had “previous occupation, a “continuing intention to return and whether his or her belongings remained in the property” (Hoggett v Hoggett). Presence of belongings alone is not sufficient (Caswell). Occupation through an agent (i.e. someone looking after your house at your request) is possible (Abbey National v Cann).

Where a person has an existing interest and is in actual occupation, that condition will not override unless:

1. the person with the interest, if asked about it before the purchaser bought the land, didn’t fail to disclose it when he could reasonably have been expected to do so;

AND
1. The person’s occupation would have been obvious on a reasonably careful inspection of the land at the time of the disposition;
OR
2. the purchaser had actual knowledge of the interest at that time
It does not create any new right to occupy the property - but rather gives overriding effect to any interest already belonging to the occupier
which has not been protected by entry on the register.

Para 3

• An implied legal easement (i.e. one that has not been expressly granted, registered, and put on notice
The interest must be legal – an equitable interest will not be overriding. All legal easements take effect a overriding interest on the first registration. On dispositions of a registered estate, the creation of an express legal easement cannot take effect as an overriding interest and must be protected by notice in order for it to take effect at law - until then it will be an equitable interest and cannot be overriding (LRA 2002).

An implied legal easement will be overriding where:

1. The purchaser actually knows about it; or
2. The easement would be obvious on a reasonably careful inspection of the land; or
3. The easement has been used within one year before the disposition; or
4. It is registered under the Commons Registration Act 1965