Land registration has been made compulsory for the whole of England and Wales since 1st December 1990. The land is not automatically registered, there are certain trigger events, such as the sale of property/land, on the occurrence of such a trigger event, it is compulsory to register the land with the HM Land Registry.
The Land Registration Act 2002
The objectives of the Land Registration Act 2002 (LRA 2002) are as follows:
- The introduction of electronic conveyancing.
- To make the register at HM Land Registry a complete and accurate record of the title to the land in question so that it is possible to investigate title to land on the line, with the absolute minimum of additional inquiries and inspections.
The LRA 2002 distinguishes between first registration (of land previously unregistered) and registration of a transaction with land that is already registered.
Compulsory first registration
The title MUST be registered in the following situations:
- On the transfer of a freehold estate.
- On the grant of a lease of more than seven
- On the transfer of a legal lease with more than seven years to run.
The estate owner must apply for registration within two months of the transaction otherwise the transfer becomes void.
Voluntary first registration
Title may also be registered voluntarily by the estate owner
Once registration has taken place, the title is guaranteed by the state (United Kingdom Government), and cannot be challenged. There is a power in the Land Registration Act 2002 for alteration of the register in specified circumstances specified in the schedule 4 and for indemnity from state funds if any person suffers loss as the result of rectification of the register under schedule 8.
John lost the title of his property due to the fault of the Land Registry, John will be compensated from State funds and he will recover any loss suffered due to the mistake of the Land Registry.
A register of all registered titles is kept by H.M. Land Registry. In the registered land system, the owner is referred to as the ‘registered proprietor’. The registered proprietor receives a Title Information Document which comprises an official copy of the register and an official copy of the title plan. (Please refer to Step 2)
The register is divided into the Property Register, the Proprietorship Register, the Charges Register and the title plan.
Grades of Title
When the title to a property has been investigated, the Registry will allocate a class of title to it, which indicates to a person acquiring the property the varying degrees of reliance which can be placed on the registered title.
The classes of the title are:
- Absolute (no conditions are attached to ownership and an owner is free to do whatever he/she thinks is appropriate for his property
- Possessory (The person only holds possessory occupation)
- Qualified (some conditions are attached)
- Good leasehold (the owner has bought a specific period of time in the estate for example 30 years)
Registration of Dealings (where the title is already registered)
Following disposition of registered land must be registered in order for them to be valid.
- Any transfer of the freehold estate or of a lease with more than seven years to run must be registered or entered into the register
- The grant of a legal charge must be registered
- Easements and profits a prendre (except easements granted through the operation of s.62 LPA) must be entered in the register as soon as these rights are granted
- Rent charges and rights of re-entry associated with leases must also be registered
Third Party Interests
A purchaser of registered land will need to know if there are any third-party interests affecting the land, for example, easements, freehold covenants, estate contracts etc. (Please refer to these chapters)
A purchaser acquiring the registered title takes it subject to:
An entry of a notice in the register –
These are third party interests that are binding on a purchaser even though they are not protected by an entry on the register.
Entries on the register
Under the Land Registration Act, 2002 all interests which are not overriding interests should be protected by an entry on the register.
There are two methods of protection, namely the entry of a notice and the entry of a restriction.
The person with the benefit of the interest in order to be protected can apply to the registrar for entry of a notice on the register so that the interest will bind future purchasers of the burdened land.
John granted his neighbour Linda a right of way over his property. In order to protect that right, Linda can protect this right by applying to Land Registry to register the right
There are three types of notice:
- An agreed notice – the registered proprietor agrees to the entry of the notice or the registrar is satisfied with the validity of the claim.
- A unilateral notice – this is entered on the register without the consent of the registered proprietor. Notice of the entry on the register will be given to the proprietor, who can then apply for a cancellation of the notice. This will happen automatically if the person claiming the benefit of the right does not object to the cancellation within a specified time.
- Registrable dispositions – those interests requiring registration under s.27 LRA 2002 will be automatically protected by the registrar by an entry of a notice on the register.
Interests that cannot be protected by the entry of a notice:
- interests under a trust or a settlement;
- an interest in any coal or coal mine;
- a lease granted for three years or less;
- restrictive covenants made between a landlord and a tenant;
- an interest capable of registration under the Commons Registration Act 1965.
A restriction is a means of preventing some entry in the register except to the extent that it is permitted by the terms of the restriction.
Restrictions can be used to prohibit dispositions (sale or distribution) either generally or of a particular kind, indefinitely or for a specified period or until the occurrence of a specified event e.g. obtaining the consent of a named person or ensuring compliance with overreaching by making sure that any payment is made to two trustees.
Where two or more persons are registered as trustees, the registrar will automatically enter a restriction, in the case of a tenancy in common, to ensure that overreaching takes place.
Charges on Land
- All charges affecting registered land must be entered on the register in order to take effect as a legal charge.
- Registration is necessary to preserve the chargee’s (the person who requests to place a charge in register) priority against earlier dealings with the title where the existing interest remains unprotected and against later dealings with the title, including later mortgages.
Effect of Non-Registration
A non-registration of a registrable disposition will make the dealing in the land void and may have a serious consequence upon the purchaser of the land. (please refer to constructive trusts for more details)
Overriding interests are interests that bind the purchaser even though they do not appear on the register. They are considered to be an unsatisfactory feature of registered conveyancing. The LRA 2002 reduced the number of categories of overriding interests.
The list of overriding interests differs slightly depending upon whether you are dealing with a first registration or a subsequent dealing with land that has already been registered.
Schedule 1- First registration – unregistered interests which override first registration
- 1, para.1 – a lease granted for a term not exceeding seven years from the date of grant overrides first registration.
There are 3 exceptions where a lease of a shorter duration must be registered in its own right and cannot take effect as an overriding interest. These exceptions are as follows:
- a right to buy lease;
- a lease that takes effect more than 3 months after it is made;
- certain leases granted by private sector landlords.
- 1, para.2 – an interest belonging to a person in actual occupation of the land overrides first registration.
- 1, para.3 – a legal easement or profits a prendre overrides first registration.
An equitable easement cannot be an overriding interest.
- 1, para.4 & 5 – a customary right or a public right overrides first registration.
- 1, para.6 – Local land charges override first registration.
- 1, para. 7, 8 & 9 – preserve the overriding status of a limited class of mineral rights.
Schedule 3 – Where title is already registered – unregistered interests which override registered dispositions
- 3, para.1 – a lease granted for a term not exceeding seven years from the date of grant overrides registered dispositions.
(However, there are a number of exceptions which include the three exceptions mentioned above in relation to first registration.)
- 3, para.2 – an interest belonging to a person in actual occupation of land overrides registered dispositions, subject to a number of exceptions.
The occupier must have an interest in the land. Mere occupation alone is not enough.
The interest belonging to a person in actual occupation of the land will NOT enjoy overriding status in the following circumstances:
- if the person with the interest was asked before the disposition occurred and he or she failed to disclose their interest when they could reasonably have been expected to do so;
- if the person’s occupation would not have been obvious on a reasonably careful inspection of the land at the time of the disposition and the person to whom the disposition is made did not have actual knowledge of the interest at the time.
- 3, para.3 – a legal easement or profits a prendre overrides registered dispositions subject to a number of exceptions.
Unlike the situation on first registration, there are exceptions which give this provision a much more limited scope.
A legal easement (please refer to easements) will only be an overriding interest and thereby bind a purchaser if:
- it is registered under the Commons Registration Act 1965; or
- the purchaser actually knows of it; or
- the easement is patent (which means that it would be obvious on a reasonably careful inspection of the land); or
- it has been exercised within the period of one year before the disposition.
Therefore, if a legal easement is latent and the purchaser has no actual knowledge of it and it has not been exercised within the last year, it will not constitute an overriding interest.
While every effort has been made to ensure the accuracy of the information provided in this article, it does not constitute legal advice and cannot be relied upon as such. Each legal case and issue may have unique facts and circumstances, as a result legalally does not accept any responsibility for liabilities arising as a result of reliance upon the information provided. For further help and guidance, you can always rely on and seek advice from our experienced lawyers.