Enforcement of Interests over Unregistered Land

Question 1

What must a buyer of unregistered land do to understand all the interests the burden/benefit the land?

Answer 1

The must undertake extensive searches to ascertain what rights exist

Question 2

What was the situation pre-1926 when it came to legal interests and whether they would be binding?

Answer 2

Properly created legal interests would bind the whole world - regardless of whether the new purchaser had knowledge or not

Question 3

What was the situation pre-1926 when it came to equitable interests and whether they would be binding?

Answer 3

• would bind purchasers who were aware or should have been aware of the equitable interest in the circumstances (doctrine of notice)
• would not bind equity’s darling - good faith purchaser for value of a legal estate in land without notice

Question 4

What is the situation post-1926 when it comes to legal interests and whether they would be binding?

Answer 4

Will continue to bind the whole world - no need to registered or for any notice to be served on anyone

Exception being puisne mortgage (second legal mortgage) which must be registered as a Land Charge

Question 5

What is the situation post-1926 when it comes to equitable interests and whether they would be binding?

Answer 5

Majority will need to be protected by notice by way of Land Charge

Doctrine of notice still applies to:

• equitable easements and restrictive covenants created before 1926
• equitable interests in a trust of land that have not been overreached

Question 6

Why does a puisne mortgage need to be registered but not a first legal mortgage over unregistered land?

Answer 6

As first legal mortgage is protected by depositing the title deeds with the mortgage lender (the mortgagee)

Second holder must therefore protect their interest by entry of a Land Charge to make third parties aware

Question 7

What interests can be protected by entry of a Land Charge?

Answer 7

• puisne mortgage (ie second or subsequent legal mortgage) - Class C (I)
• Estate contract (eg a contract to buy land, an option agreement or a contract to have a lease granted over land) - Class C(IV)
• Restrictive covenant created after 1926 - Class D(II)
• Equitable easement created after 1926 - Class D(III)
• Spouse’s matrimonial right of occupation - Class F

Question 8

What is the effect of entry of a land charge on the Land Charges Register?

Answer 8

The protected interest will be binding on a purchaser - irrespective of their state of knowledge

Question 9

Will entry of a land charge always protect an interest?

Answer 9

No - will only protect valid interests

If the underlying interest is not actually a valid interest in the land, then entry on the land charge will not confer validity and will not make it binding

Question 10

What is the effect of non-entry of an interest as a land charge?

Answer 10

• interest will be void against a purchaser (even if consideration is nominal and even if they know of the protect interest)
• interest will bind someone who is gifted or inherits the land

Question 11

How do you enter a Land Charge?

Answer 11

You enter against the name of the landowner at the time the right was granted/created

Name should be exactly as it appears on title deeds - failure to do so may mean Land Charge is null

Question 12

How do you check if the is a Land Charge?

Answer 12

Should conduct searches against all previous estate owners back to 1 January 1926

Question 13

To be equity’s darling does the value paid have to be market value?

Answer 13

No can be nominal - adequacy of value is not considered

Question 14

To be equity’s darling a good faith purchaser for value must not have notice. What notice is relevant here?

Answer 14

• actual notice - they know of the equitable interest
• imputed interest - their agent knows or ought to know of the interest which is then imputed to the buyer
• constructive notice - if they ought reasonably to know of the interest

Question 15

What obligation is on the seller when making enquiries to try to ascertain any equitable interests over unregistered land?

Answer 15

Must make a proper investigation of the title deeds and a proper inspection of the land

They should make enquiry of all occupiers of the land.

Question 16

Once an equitable interest becomes void ie defeated by equity’s darling can it be revived?

Answer 16

No - once void forever void. Cannot be revived even against someone who had knowledge of it

Question 17

What are the problems with the doctrine of notice for the perspective of the buyer?

Answer 17

• the buyer would have to satisfy all the requirements of being a bona fide purchaser for value of a legal estate without notice in order to take free form the interest
• the buyer will need to carry out extensive investigations of both the property and associated documents to find out existing equitable interests, otherwise it might find itself bound
• time consuming process, expensive and may not guarantee discovery of all interests

Question 18

What are the problems with doctrine of notice from the perspective of the owner of the interest?

Answer 18

The interest is fragile because it could be destroyed forever if a bona fide purchaser for value of a legal estate without notice purchased the land.

This would be through no fault of the owner of the interest and in circumstances where the owner could not have done anything to protect it