Enforcement of Interests over Registered Land

Question 1

What are the three categories of interest for registrable land?

Answer 1

• registrable dispositions
• interests protected by entry
• overriding interests

Question 2

What is the basic rule of priority?

Answer 2

An interest of whatever kind will take priority over later dispositions

Question 3

What is the effect on priority of the operation of s 29 of the LRA 2002?

Answer 3

A registrable disposition of a registered estate made for valuable consideration will take priority over any pre-existing rights in the land except those which have been protected on the register or those which are overriding interests

Question 4

Who is a donee and what is the priority rules in relation to them?

Answer 4

• donee is someone who has been gifted or inherits the property
• they are bound by the basic priority rule ie they take the land subject to all pre-existing interests, irrespective of whether they have been protected by registration

Question 5

What legal interests must be registered to take effect ie be enforceable?

Answer 5

• transfer of existing freehold or leasehold
• grant of a new lease for a term of more than seven years
• express grant or reservation of an easement
• grant of a legal mortgage
• grant of landlord’s right of entry

Question 6

An equitable interest in land can be validly created and exist without registration but how can it be protected?

Answer 6

It can be protected so enforceable either through entry of a notice or restriction

All equitable interests other than an interest in a trust of land must be protected by the entry of a notice in the Charges Register of the burdened land to bind subsequent purchasers (buyers or lenders)

Question 7

Does the entry of notice always mean that the interest will be binding?

Answer 7

No - will only be binding if the interest has been properly created

If it has not been properly created even with notice it will not be binding

Question 8

What interests may be protected by entry of a notice?

Answer 8

• restrictive covenants affecting freehold land
• estate contracts
• equitable easements
• equitable leases
• legal leases more than 3, up to 7 years (optional)

(not trust interests)

Question 9

What interests may be protected by entry of a restriction?

Answer 9

• interests the are not to last indefinitely such interest in a trust of land - overreaching restriction
• registered proprietor of the land is bankrupt - trustee in bankruptcy will want restriction so land cannot be sold without their consent

Question 10

What is overreaching?

Answer 10

Where purchaser can take the land free of any equitable interests held by a beneficiary

Question 11

What is the process for overreaching?

Answer 11

Purchaser must pay the capital money to at least two trustees.

Effect being that the equitable interest of beneficiaries transfers from the land to the monies paid

Question 12

What are overriding interests?

Answer 12

Interests that will bind a purchaser for value, whether a buyer or lender, even though they have not been protected by registration

Question 13

What are the main overriding interests?

Answer 13

• legal leases granted for a term of seven years of less
• equitable interests held by people in actual occupation of the land, subject to exceptions
• implied legal easements or profits a prendre, if conditions are met

Question 14

What are classic examples of equitable interests in land that may be overriding interests?

Answer 14

• equitable interests in a trust of land
• equitable leases
• options to purchase

Question 15

When will equitable interests in land be an overriding interests ie what requirements must be met?

Answer 15

• must be an equitable interest in the land

AND

• holder of the interest must have actual occupation of the land

Question 16

What will amount to actual occupation of the land meaning an equitable interest in the land is an overriding interest?

Answer 16

• permanence and continuity of holder being there
• must be in actual occupation at time of transfer of deed and possibly registration too
• not defeated by temporary absences such as holidays. hospital stays or business trips
• there will be a point where prolonged absence means there is no actual occupation

Question 17

When will there not be an overriding interest even though holder of the land is in actual occupation?

Answer 17

• where holder of the interest (or their solicitor) was asked fails to disclose the right which they could reasonably have been expected to do (those who do not know of interest cannot reasonably be expected to disclose of interest)
• interest of person in occupation where it would not have been obvious on a reasonably careful inspection of the land at time of disposition and person to whom disposition is made does not have actual knowledge of their interest at the time

Question 18

When will implied legal easements be binding as an overriding interest?

Answer 18

• the new owner has knowledge of it

OR

• the new owner did not know about it but it was obvious on a reasonable inspection of the land

OR

• it has been exercised within the 12 months immediately before disposition