Cracked Mirror

Question 1

What is registered land?

Answer 1

Registered land is property whose title (ownership proof) is officially recorded in the Land Registry, providing clarity and security in land transactions.

Question 2

What is the purpose of the Land Registration Act 2002?

Answer 2

The Land Registration Act 2002 aims to simplify land transactions, ensure clearer titles, and provide a comprehensive and authoritative record of land ownership.

Question 3

What are the three foundational principles of land registration?

Answer 3

The mirror principle, the curtain principle, and the insurance principle.

Question 4

What was the system of land ownership before the introduction of registered land?

Answer 4

Before registered land, ownership was proven through title deeds, leading to complex disputes and uncertainties.

Question 5

What is the mirror principle?

Answer 5

The mirror principle states that the land register should accurately reflect all significant details of the property, including ownership, limitations, and rights enjoyed by others.

Question 6

Why is the mirror principle called “cracked”?

Answer 6

The mirror principle is “cracked” because the register does not always show all interests affecting the land, especially overriding interests that do not need to be registered.

Question 7

What are overriding interests?

Answer 7

Overriding interests are rights that bind the land even if they are not registered, such as short leases, rights of people in actual occupation, and certain easements.

Question 8

What is the impact of overriding interests on the mirror principle?

Answer 8

Overriding interests undermine the completeness of the register, creating exceptions to the mirror principle and causing potential issues for purchasers.

Question 9

What is the curtain principle?

Answer 9

The curtain principle allows certain equitable interests, such as those under a trust, to remain hidden from the register but still legally valid.

Question 10

How does the curtain principle facilitate land transactions?

Answer 10

By keeping certain interests off the register, the curtain principle simplifies the information that needs to be checked by purchasers, promoting smoother transactions.

Question 11

What is the insurance principle?

Answer 11

The insurance principle guarantees that any loss incurred due to errors or omissions in the register will be compensated by the state.

Question 12

Why is the insurance principle important for land registration?

Answer 12

It provides confidence in the accuracy of the register and ensures that parties relying on the register are protected from financial loss.

Question 13

What is the significance of Section 58 of the Land Registration Act 2002?

Answer 13

Section 58 establishes that the register is conclusive evidence of the proprietor’s title, reinforcing the mirror principle.

Question 14

What does Section 27 of the Land Registration Act 2002 require?

Answer 14

Section 27 requires certain dispositions, such as the creation of legal estates and mortgages, to be registered to take effect

Question 15

What are the main categories of registrable interests under Section 27?

Answer 15

Fee simple absolute in possession, term of years absolute (leases over 7 years), charges by deed, and legal easements.

Question 16

How does Section 33 of the Land Registration Act 2002 protect equitable interests?

Answer 16

Section 33 excludes certain interests, like beneficial interests under a trust, from being protected by a notice, requiring other methods of protection like restrictions.

Question 17

What are some examples of overriding interests under Schedule 3 of the Land Registration Act 2002?

Answer 17

Short leases (less than 7 years), rights to light, rights of way, and interests of persons in actual occupation.

Question 18

How does the presence of overriding interests affect a purchaser’s title?

Answer 18

Purchasers may acquire land subject to these interests even if they are not registered, which can complicate their ownership and use of the land.

Question 19

What was the ruling in Abbey National Building Society v Cann [1991] regarding actual occupation?

Answer 19

Actual occupation requires a degree of permanence and continuity, and the timing of occupation is crucial for determining overriding interests.

Question 20

What is the doctrine of notice in the context of land law?

Answer 20

The doctrine of notice determines whether equitable interests bind a purchaser, based on the purchaser’s knowledge of those interests.

Question 21

How has the Land Registration Act 2002 replaced the doctrine of notice?

Answer 21

The Act emphasizes registration over notice, requiring interests to be registered or otherwise protected to bind purchasers.

Question 22

What is overreaching, and how does it relate to equitable interests?

Answer 22

Overreaching converts equitable interests into monetary claims on the proceeds of sale, ensuring that purchasers take the land free of these interests.

Question 23

What conditions must be met for overreaching to occur?

Answer 23

The purchase money must be paid to at least two trustees or a trust corporation, ensuring equitable interests attach to the sale proceeds instead of the land.

Question 24

What is the significance of City of London Building Society v Flegg [1988] in relation to the Cracked Mirror Principle?

Answer 24

In City of London Building Society v Flegg, the House of Lords held that the beneficial interests of two occupants were overreached when the property was sold, meaning the occupants’ interests were transferred to the sale proceeds. This allowed the purchaser to acquire the property free of these interests.
This case demonstrates the Cracked Mirror Principle by showing that certain beneficial interests, while not reflected on the register, can be overreached and thus do not bind purchasers.

Question 25

What is the significance of Williams & Glyn’s Bank v Boland [1981] in relation to the Cracked Mirror Principle?

Answer 25

In Williams & Glyn’s Bank v Boland, the House of Lords held that the wife’s beneficial interest, combined with her actual occupation, could override the bank’s registered charge. This meant her interest took priority over the bank’s interest, allowing her to stay in the house despite the bank’s claim. Once established, the bank could not evict her due to her overriding interest.

This case highlights a key flaw in the Mirror Principle, showing that the register may not always reflect all binding interests.

Question 26

What did Thompson v Foy [2009] clarify about actual occupation?

Answer 26

Actual occupation requires both a physical presence and an intention to occupy the property, influencing the recognition of overriding interests.

Question 27

What was the ruling in Lyus v Prowsa Developments Ltd [1982] regarding minor interests?

Answer 27

The court held that a purchaser could be bound by minor interests even if they were not entered in the register, based on contractual obligations.

Question 28

What are the practical challenges posed by the cracked mirror principle?

Answer 28

The principle creates uncertainty for purchasers who cannot rely solely on the register, necessitating thorough due diligence to uncover all interests.

Question 29

How does the Land Registration Act 2002 address the issue of overriding interests?

Answer 29

The Act attempts to balance the protection of equitable interests with the need for a clear and reliable register, but some interests remain unregistered.

Question 30

What are some criticisms of the Land Registration Act 2002 in relation to the mirror principle?

Answer 30

Critics argue that the Act fails to fully achieve the mirror principle due to the existence of overriding interests and the complexity of registration requirements.

Question 31

How does the insurance principle mitigate the issues caused by the cracked mirror?

Answer 31

The insurance principle ensures that parties who suffer loss due to inaccuracies in the register are compensated, providing a safety net despite the register’s imperfections.

Question 32

What does Martin Dixon say about the impact of overriding interests on the Mirror Principle in “Modern Land Law”?

Answer 32

Martin Dixon notes that overriding interests present a significant challenge to the Mirror Principle by introducing interests that are not visible on the register but still bind third-party purchasers. This creates a “crack” in the mirror, complicating the reliability of the register and highlighting the limitations of the principle.

Question 33

How does Elizabeth Cooke describe the limitations of the Mirror Principle in her work on land registration?

Answer 33

Elizabeth Cooke points out that the existence of overriding interests undermines the Mirror Principle by allowing certain rights to bind purchasers despite not being registered. This creates a gap between the theoretical accuracy of the register and the practical reality, making it essential to consider these limitations in practice.

Question 34

What critique does the Law Commission offer about the Mirror Principle in their report “Land Registration for the 21st Century”?

Answer 34

The Law Commission acknowledges that while the Mirror Principle aims for a complete and accurate reflection of title, the presence of overriding interests means that not all interests are visible on the register. This inherent limitation requires careful management to maintain the reliability and utility of the land registration system.

Question 35

What is the role of Section 29(2)(a)(ii) of the Land Registration Act 2002 in overriding interests?

Answer 35

Section 29(2)(a)(ii) states that overriding interests take priority over registered dispositions, even if they are not noted on the register, significantly affecting the certainty the register aims to provide.

Question 36

How do restrictions and notices function in protecting interests under the Land Registration Act 2002?

Answer 36

Notices protect the priority of registered interests, while restrictions limit how the land can be dealt with, ensuring compliance with certain conditions before transactions can proceed.

Question 37

What did Aston Cantlow PCC v Wallbank (2003) highlight about historical overriding interests?

Answer 37

The case illustrated that some historical interests, like chancel repair liabilities, can still affect landowners unexpectedly despite not being registered.

Question 38

What does Section 71 of the Land Registration Act 2002 require regarding overriding interests?

Answer 38

It imposes a duty on persons benefiting from overriding interests to disclose these interests when they affect the land, aiming to enhance transparency.

Question 39

What is the significance of Swift 1st Ltd v Chief Land Registrar (2015)?

Answer 39

The case illustrated the effectiveness of the Insurance Principle, where the court ordered compensation for a party who suffered loss due to a fraudulent transaction on the register.

Question 40

Link Lending v Bustard [2010]

Answer 40

Link Lending v Bustard clarified the concept of actual occupation, particularly for vulnerable individuals.
Ms Bustard, who had been fraudulently persuaded to transfer her home, was in a mental health hospital at the time of property transfer.
The court held that her regular visits to the property and the presence of her personal effects, combined with her intention to return, constituted actual occupation.

This case emphasised a hybrid objective-subjective test for determining actual occupation, considering the occupant’s intent and the continuity of their presence.

Question 41

Thomas v Clydesdale Bank [2010]

Answer 41

In Thomas v Clydesdale Bank [2010], the court addressed whether Ms. Thomas, who supervised renovation work on a property almost daily, was in actual occupation. Despite the property’s legal ownership by her partner, Ms Thomas claimed an interest under a common intention constructive trust.

The court held she had a reasonable prospect of success in demonstrating actual occupation, based on her physical presence of success in demonstrating actual occupation, based on her physical presence and supervision of renovations.

This case emphasises that actual occupation can include regular supervisory visits, particularly when the occupant has a clear intention to reside in the property.

Question 42

Kingsnorth Finance v Tizard [1986]

Answer 42

IIn Kingsnorth Finance v Tizard, the court held that the bank was put on inquiry about the wife’s beneficial interest because it knew the husband was married but did not verify her whereabouts.

This decision emphasized that purchasers and lenders must make reasonable inquiries if there are indications of unregistered interests. The case illustrates the limitations of the Mirror Principle, showing that unregistered interests might bind the purchaser if they are discoverable upon reasonable inspection or inquiry.

Question 43

Schedule 3 of LRA 2002

Answer 43

Reduced the scope of overriding interests by clarifying and limiting the types of interests that can override registered dispositions.

Question 44

Law Commission Report: “Land Registration for the Twenty-First Century” (2001)

Answer 44

Spoke about overriding interests being one of the biggest challenges to clarity of property interests and significant details for purchasers. Influenced the reforms aimed at reducing overriding interests.