Land Registration Flashcards
Principles of Land Registration
Mirror, curtain and Insurance principle
NOTE: already existed as a foundation underpinning the LRA 1925, can be said to have been introduced by the Torrens system (Sir Robert Torrens, fundamental in introducing registered land in Australia)
LRA 2002 is a joint product of…
Land Registry and Law Comission
Law Commission Consultation Paper in March 2016
The goal of simultaneous completion of transaction and registration through electronic means should not be pursued
4 aims of LRA 2002
E-conveyancing goal in mind, it is transaction driven
1) get as many estates in land registered as possible
2) register all 3rd party rights on registry title of estate against which they are effective
3) limit number and effect of unregistered interests which override
4) if e-conveyancing: creation+transfer of most property rights ONLY through electronic entry on register
LRA 2002: revolutionary or evolutionary?
Dixon: until e-conveyancing (when our understanding of proprietary rights might have to change) –> evolution not revolution to LRA 1925
Ian Clarke: unnecessary question as the changes introduced are profound and far-reaching either way
“Title”
“We” are not a cadastral system, so we register title to land not land itself i.e. the estate, a right of ownership.
Thus, it is possible for one plot of land to have more than one title registered (freehold and leasehold)
What is a registrable state (i.e. Estate that must be registered on its transfer/creation)?
Legal freehold or legal leasehold of OVER 7 YEARS duration.
–> some estates are excluded from being registrable titles for practical reasons (maybe too short to require the protection)
LRA 2002, s. 4: Triggers for compulsory registration of previously unregistered titles
1) conveyance of unregistered freehold estate
2) transfer of existing lease > 7 years left to run
3) grant of a legal lease > 7 out of an unregistered freehold OR unregistered leasehold > 7 years (HERE, leasehold will be registered even if estate out of which it is carved is NOT)
4) creation of a first legal mortgage over unregistered freehold/unregistered leasehold > 7 left –> registration of BOTH mortgage and title over which it is created
S. 58 LRA 2002
Title by registration NOT registration of title. A title that Land Registry investigated and guarantees - ensured by fact of registration itself NOT by documents sent for registration
LRA 2002’s categorisation of 3rd party rights
1) those interests protected by registration to survive sale
2) those overreached, the 3rd party’s interest being converted into its monetary equivalent in the sale price
3) unregistered interests that override
1 December 1990
All land in England and Wales became subject to compulsory first registration - nowadays roughly 85% registered
Title in unregistered land
Title not registered but established by the title deeds of the particular property
4 parts registered land falls into
1) registered titles
2) unregistered titles which override
3) registered protected interests
4) registrable charges (mortgages)
Unregistered interests which override (overriding interests)
Automatic priority without having to be registered –> inherently proprietary (CAPABLE of binding) - legal and equitable
Registrable charges
Essentially mortgages - registered to take effect as legal mortgages, otherwise they may be equitable
What is overreaching?
Process whereby certain equitable rights (only those under a trust of land) which might otherwise have enjoyed protection though registration on occasion of sale to a purchaser for value are swept off the land and converted instead into the TRANSFER MONEY that has just been paid
Stack v Dowden: overreaching defeats overriding, exemplified in Baker v Craggs
Craggs v Baker
THE REGISTRATION GAP LIVES! Abbey National v Cann and Scott v Southern Pacific Mortgages appeared to have resolved it by equating execution of transfer to registration BUT Baker v Craggs said no.
ALSO: When overreaching occurs, a right that would have been protected against a purchaser ceases to be protected, irrespective of whether it also qualifies as an overriding interest
The Mirror Principle
Suggests that the official copy of the register should accurately reflect reality: identity of owner and all other rights enjoyed by 3rd parties should be visible to potential buyer
“The crack in the mirror”
Overriding, hidden interests - despite Mirror Principle it is still advisable and under Schs 1 and 3 of the LRA 2002 necessary to physically inspect the land
Physical inspection of the land
The existence of overriding interests is not a mistake/distortion of Mirror Principle. It recognises that it is impractical/undesirable to make absolutely everything subject to express registration - transient rights (shot leases) or rights too important to be submitted to registration requirement (those benefitting the public interest)
Registration should not replace physical inspection!
The Curtain Principle
Equitable interests in land should be hidden behind the “curtain of a special typeface trust” - purchaser only needs to concern themselves with the legal title (held by trustees) reflected on register.
No need to look behind curtain and worry about beneficiaries
BECAUSE equitable rights will be overreached if proper formalities of purchase observed (s. 2 and 27 LRA)
Equitable interests in curtain principle
Cannot affect purchaser because of overreaching but aren’t completely destroyed: proprietary rights are transferred into equivalent share in money (just paid by purchaser) –> trustees hold money on trust for equitable owner
Williams and Glyn’s Bank v Boland
Bank’s failure to look behind the curtain meant that its mortgage lost priority to the rights of the borrower’s widow (he was the sole legal owner/trustee, she was a beneficiary due to her contributions to purchase price)
Mirror principle fails when the preconditions for statutory overreaching aren’t met –> necessary to look behind the curtain
Concept of alienability
Owner of a property should be able to sell without any hidden rights getting in the way of that sale
Alteration to record an overriding interest
This is not a rectification because the registered proprietor has not suffered any loss because of the alteration - they were always bound by the overriding interest! Any losses are due to the purchase of a property with an existing interest!
The Insurance Principle
The register is guaranteed by the State as accurate and capable of being rectified or altered I’d an error has been made (especially by the Land Registry!)
Therefore: indemnity - compensation for losses due to such errors
LRA 2002 - beneficiaries
LRA 2002 does not allow beneficiaries to place a notice on the register that will bind a buyer/prevent a sale.
They may place a “restriction” on the register or attempt to invoke TOLATA
BUT: this generally cannot prevent sale
Schedule 4, paragraphs 2 and 5
The court (2) or the registrar (5) have jurisdiction to alter the register to:
a) correct mistakes
b) update register
c) give effect to any estate, right or interest expected from the effect of registration (only applies where a registered proprietor was registered with a title less than absolute)
d) remove superfluous entries
Schedule 4, paragraph 3
Register cannot be altered against a proprietor in possession unless they have by fraud or carelessness caused/substantially contributed to the mistake or any other reason it would be unjust for the alteration not to be made
Schedule 4, paragraph 1
Rectification: a type of alteration but specifically one involving the correction of a mistake AND prejudicially affecting the title of the registered proprietor
Schedule 8
Register is guaranteed as accurate by the State so an indemnity is paid from the public purse to someone who
a) suffers loss because rectification needs to be made
b) suffers loss because rectification is refused
c) when an official search has been completed by the Land Registry in error
d) where there is an error on an Official Copy of the Register
Schedule 8, paragraph 5
No indemnity is paid where the claimant has acted fraudulently or negligently
Schedule 8, paragraph 6
The amount payable if rectification is ordered must not exceed the value of the lost interest at the time immediately before rectification of the register.
The amount payable if rectification is refused must not exceed the value of loss of interest at the time the mistake was made.
The Law Commission prior to LRA 2002: reforms
a) Introduction of compulsory registration since 1990
b) Register being an open public document that can be searched without the permission/knowledge of owner
c) computerisation + online searches of register
Ss. 91-93 LRA 2002
Provisions for e-conveyancing set down: allow for future statutory instrument to specify further details
S. 93(2) LRA 2002
Once e-conveyancing has been fully introduced, transfers of land will only be effective through the same - failure to use e-conveyancing = failure to dispose of the land?
Stages of conveyancing transaction
- Exchange of contracts (legally binding, deposit of 10%, no change of ownership)
- Completion (outstanding purchase funds paid, keys handed over)
NOW the buyer must pay stamp duty land tax after which they are able to register.
THEORETICALLY there can be a delay of up to 2 months until - Registration (buyer registered as owner, name appears on proprietorship section, full legal owner)
The registration gap
THEORETICALLY delay of up to 2 months between completion and registration: technically seller is still legal owner holding property on trust for the buyer with only equitable title
E-CONVEYANCE: intended to close gap as completion, payment of stamp duty and registration would all happen at the same time with the touch of a button
The tripartite register
- Property section
- Proprietorship
- Charges section
Property section
Description, address, reference to title plan, type of estate
It can also highlight legal easements
Proprietorship section
Names legal owners, whether title is absolute, good leasehold, possessory or qualified
May also contain restrictions under LRA 2002, s. 40, entered by trustees and/or beneficiaries which highlight the existence of a trust
s. 71, LRA 2002
Duty (albeit without sanctions) for registered proprietor to disclose to the registrar any known overriding interests that may then be entered on the register
Absolute title
Seemingly no other claims on land than interests entered on the register and possible overriding interests
Good leasehold
Subject to any interests affecting the landlord’s freehold
If landlord has registered absolute title –> tenant will be given absolute leasehold title
Possessory title
Can be given by Registry if deeds are missing more common, if a squatter has successfully claimed adverse possession.
Subject to all adverse interests, not just overriding and registered protected interests
Qualified title
Rarely given, but may be given by Registry conditionally, where there is doubt over the ownership claim
Charges section
Contains notices of what are technically known as “minor interests” (mortgages, covenants)
Notices on register
The entry on the register secures priority as an interest once it has been established that the interest is valid in itself: establish first that interest exists!
Register is about priority and protection of rights and NOT their substantive creation!
1. Proprietary right has been validly created
2. See if it has been protected
S. 34 LRA 2002: agreed notices
The application to enter the interest has been made by the registered proprietor or where the registered proprietor has given consent to the applicant