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
S. 35 LRA 2002: unilateral notices
Where the applicant asks the Registrar to enter an interest against the title of the registered proprietor consulting the owner. The registrar will then contact the proprietor to see whether the owner wishes to apply for cancellation of the notice
S. 36, LRA 2002
The applicant has 15 days to respond to an application to cancel. No response –> cancellation
Who can place restrictions in the proprietary section?
1) by a beneficiary under a trust of land
2) by a trustee in bankruptcy (to prevent a bankrupt from trying to sell their property)
3) by the holder of an option (to prevent owner from breaching the option contract)
4) Serious Organises Crime Agency: suspected that property has been purchased with drug money/money laundering about to take place
Midland Bank v Green
The holder of an option to purchase estate contract can place a restriction in the proprietary section to prevent the owner from breaching the option contract
Restriction by a beneficiary under a trust of land
Most usual form of restriction: no disposition of land without payment to at least 2 trustees (ss. 2 and 27 LRA 1925)
HOWEVER: this only really sends out a warning to a prospective buyer that overreaching is necessary - it will not necessarily stop the sale from taking place!
Ss. 2 and 27 LPA 1925
Overreaching - if the purchaser of a legal estate pays the purchaser price to at least 2 trustees (REMEMBER: there can be a maximum of 4) or to a trust corporation, the proprietary rights of the beneficiaries are swept away and replaced by a monetary interest
HSBC v Dyche
Trustees have a duty to act in good faith but generally, if the purchase price/mortgage advance by lender is paid to at least 2 of them –> overreaching occurs on purchase/repossession
City of London Building Society v Flegg
Even with an overriding interest, beneficial rights can be overreached provided that purchase money/mortgage advance is paid to at least 2 trustees -
Couple bought “Bleak House”, wife’s parents, the Fleggs, contributed to purchase price with the understanding they’d live there as equitable owners –> their proprietary rights were overreached by lender who secured the 2 trustees’ (couple) signatures
Chun v Ho
Possible for the beneficiary who is in occupation and has not been overreached to invoke TOLATA 1996, s. 14: to ask for a further sale of the property or perhaps to partition it
Different stipulations as to what will bind each grade of title
Apply ONLY to first registration, afterwards regardless of whether you have an absolute or qualified title - ss. 28 and 29 priority rules apply!
Reversionary Lease
Lease of any length but which does not take effect for more than three months from the date of the grant of the lease –> triggers registration of property
Restriction: void if the lease takes effect more than 21 years from the date of the instrument
Sections 6 and 7 LRA 2002
Place obligation to register firmly in the hands of the new owner. Failure to register within two months will have the effect of creating a trust here the original owner will hold the property on trust for the purchaser
Leases: 1925 vs. 2002
Under LRA 1925, leases of over 21 years needed to be registered, LRA 2002 reduced that to over 7 years
s. 118 LRA 2002: provision that in the future this may be reduced to a lease of over 3 years - but this is not in force yet
S. 27 LRA 2002: dispositions that must be registered, following first registration at s. 4
1) any transfer of land
2) grant of a lease > 7 years
3) reversionary lease
4) express legal easement
5) legal mortgage
Section 28 LRA 2002
Priority Rules: a transferee who is not a purchaser is bound by all preexisting proprietary rights
Section 29 LRA 2002
Priority rules: a purchaser for value has priority all interests except those entered on the register and those overriding
Sched 1 LRA 2002
Interests which override in relation to first registration of unregistered land –> unregistered land not relevant
Sched 3 LRA 2002
Overriding interest in relation to registered land:
1) legal leases < 7 years
2) the proprietary rights of a person in actual occupations
3) implied easements (and profits a pendre)
Overriding interests: legal leases < 7 years
Between 3 and 7 years and created by deed
Less than 3 years, legal regardless of formalities
EXCEPTIONS: reversionary leases, leases of discontinuous nature (time shares), equitable leases and leases > 7 years must be registered to bind 3rd parties
Overriding interests: proprietary rights of a person in actual occupation
Protects any proprietary right the person already enjoys, does not necessarily protect the right of actual occupation
Schedule 3, paragraph 2
A person in actual occupation will lose their rights if, when asked, they fail to disclose their rights or if actual occupation not obvious on a reasonably careful inspection of the land by the new owner
National Provincial v Ainsworth
To have an overriding interest by actual occupation, the person must have a proprietary interest to begin with i.e. as a beneficiary or with an equitable lease
A licence is not a proprietary interest –> someone with a licence cannot claim an overriding interest of actual occupation
Abbey National v Cann
The person claiming overriding interest must be in actual occupation at the time of transfer (completion) AND registration.
Mrs Cann (mother) had proprietary right under constructive trust. Although her furniture/removal men were present at property some 35 mins before completion, she was not. Lord Oliver: being present at the time of registration was too late.
Chhokar v Chhokar
To be in actual occupation does not need actual presence at the time of transfer just evidence of your physical presence coupled with an intention to return.
Mr Chhokar was sole legal owner, Mrs Chhokar the beneficiary under a trust. They were about the start divorce proceedings so Mr wanted sold property to friend Mr Parmar while his wife was in hospital giving birth. He hid MOST of her belongings in cupboards.
Thompson v Froy || Link Lending v Bustard
Echoed Chhokar v Chhokar
Lloyds Bank v Rosset
You can be in actual occupation through your agents (here Mrs Rosset’s builders)
Hypo-Mortgage Services v Robinson
The presence of children of the claimant will not in itself give rise to a successful claim of actual occupation
Children are NOT agents
Application - actual occupation
Nine year lease that does not appear on the register –> not legal
Lease > 7 years –> needs to be registered to bind as an equitable lease
STILL a proprietary right: using lease as a trigger to claim overriding interest in actual occupation under Sch 3, para 2
–> purchaser bound by the remaining term of lease
Schedule 3, paragraph 3
An implied legal easement can override if:
…the new owner has knowledge of it at time of disposition
…it was obvious on a reasonably careful inspection
…person claiming implied legal easement can show they have been using it at any time in the last year
Schedule 3, paragraphs 10-14
Archaic overriding interests, originally governed by s. 70(1)(a) LRA 1925: manorial rights, sea walls, chancel repairs
GIVEN A 10 YEAR TRANSITIONAL PERIOD: ceased to be overriding interests in 2013. They can still be protected but must be entered on register as notice.
“adverse possessor”
must take the land as their own by essentially displacing the rights of the paper owner
LRA 2002: adverse possession
Schedule 6: change of procedure, more difficult for an adverse possessor on registered land to succeed in being awarded title of the land by registrar
Legal Aid, Sentencing and Punishment of Offenders Act 2012
S. 144: made it a criminal offence to be a squatter on residential property –> unclear how this sits with Schedule 6, seems more unlikely for a squatter to get to the necessary 10-year point
RETROSPECTIVE: unclear as to whether (even if 10 years are reached) squatters might be arrested at the point of making a legitimate claim under LRA 2002
Wallis’ Cayton Bay Holiday Camp v Shell-Mexx and BP
Lord Denning: adverse possession = acquisition of land simply by possessing it without assent or dissent of the owner
Social/economic reasons for adverse possession
1) “land”: system that validates reality - empirical not principle based, organic rather than principled
2) more desirable for property not dos and empty/abandoned for too many years: starts to fall apart, damage may be done to other property/people passing by
3) “saleability”: if all did it, housing marked might stagnate
4) social responsibility
5) Settling disputes: commercial use
RB Policies at Lloyds v Butler
“Those who go to sleep on their claim should not be assisted to recover their property”
Critique of adverse possession
Contrary to tenets of “ownership”:
just because property has been left empty for some time, why should the paper owner be penalised by losing title - doesn’t the owner have the right to do as they please with their property, including abandonment
Limitation Act 1980
s. 15(1): no action to recover land can be brought after 12 years from the date of action accrued –> prior to LRA 2002, squatter had to take possession for a full 12 years
STILL THE LAW FOR UNREGISTERED LAND
Prior to LRA 2002: adverse possession
LA 1980 did not give title to squatter per se, MERELY extinguished rights of the paper owner who was the barred to make a claim (Fair-weather v St Marylebone Property) –> paper owner said to be holding proportion trust for adverse possessor who could the apply for possessory title, which may then be upgraded to absolute title (s. 75 LRA 1925)
LRA 1925 vs. LRA 2002: proprietary right of AP
Now, there is no longer an overriding interest from day 1, proprietary right now only comes into existence at the 10-year point WHEN THE RIGHT TO CLAIM EXISTS
2 stage test to determine whether squatter is actually an adverse possessor
1) Paper owner must be dispossessed or have discontinued possession
2) adverse possessor must take land to the exclusion of all others
Test for AP: Paper owner must be dispossessed/have discontinued possession
Possession not enough, it must be adverse (Denning in Cayton, needs strong evidence that paper owner has indeed been dispossessed
The no adverse possession if intention to return has been relaxed by the courts
Leigh v Jack
Not adverse possession if land left unoccupied but evidence that paper owner intends to use it again in future –>overruled in Pye v Graham
Buckingham CC v Moran
Slade LJ: Leigh’s idea of return effectively consigned to history - owner with intention to return CAN be dispossessed if AP possesses land to the exclusion of all others (2nd stage of test)
Relying on Seddon v Smith: locks, gates, chains can be a final demonstration of intention to posses (by exclusion)
Test for AP: adverse possessor must take land to the exclusion of all others
AP needs to demonstrate 1) factual possession and 2) animus possidendi - intention to possess with the exclusion of all others
Powell v McFarlane
Grazing a cow, cutting hay and repairing fences didn’t succeed to establish intention to exclude all others - clear evidence of intention to possess and exclude
Boozy v Davis
Grazing goats and clearing shrubs not seen as evidence for intention to possess and exclude
Stacey v Gardner
installing an incinerator on the landlord’s land was not evidence for intention to possess and exclude - THERE WERE NO FENCES/BOUNDARIES
Basildon Council v Charge
Evidence for intention to possess and exclude of a single degree of occupation and physical control of the land uninterrupted by others
Morrice v Evans
Acknowledgement of ownership of paper owner will defeat claim in AP: here, he had stopped using the greenhouse when asked to do so by the owner
Lambeth BC v Blackburn
Acknowledgement of ownership of paper owner will defeat claim: here, he referred to the “possessed land” and “Lambeth’s property”
STATED: exclusion of all other likely to be inclusive factor in establishing AP
Pye v Graham
HoL: Grahams had dispossessed the paper owner and showed an intention to exclude the world at large, including Pye
No need to show intention to own land permanently, merely to possess and exclude for the requisite period of time
Leigh v Jack was formally overruled
CoA in Pye v Graham
No AP because Grahams had stated in evidence that they hoped to get a new licence –> IMPLYING THEY RECOGNISED PYE’S RIGHTS AS OWNER
Pye v Graham: Human Rights
Pye v UK: Grand Chamber, by small majority, stated that English law of AP does not quite breach Protocol 1 of the ECHR (right not to have property taken without compensation) BECAUSE law is needed to balance rights of the owner with the right of the State to protect the housing market
Schedule 6, LRA 2002
Statutory Scheme: Where a person has been in ap for at least 10 years, ending on the date of making applicator, that person may apply to the registrar to be registered as proprietor
Baxter v Mannion
Adverse possession must have been at least 10 years and is STILL occurring on the date of application: they cannot serve 10 years, quit the land, then make an application –> has to be a “single transaction”
If application under Schedule 6, paragraph 1 discloses arguable case for registration
Schedule 6, paragraph 2: notice will be sent to registered proprietor who has 65 business working days to respond with 1 of 3 options
Part 9, LRA 2002
LA 1980, s. 15 DOES NOT APPLY TO REGISTERED LAND!
Paper owner will no longer automatically lose their right after 12 years
Schedule 6, paragraph 2 NOTICE
Registrar will inform paper owner who must then take steps to recover land within 2 years - 3 options
1) consent
2) objection
3) counter-notice
Option 1 for paper owner after application for AP: CONSENT
AP will be registered as proprietor: Balevents v Sartori - local authority was happy to give narrow strip of land to AP
Option 2 for paper owner after application for AP: OBJECTION
On grounds of factual basis for AP claim being false for example. Option 3 is better.
Option 3 for paper owner after application for AP: COUNTER-NOTICE
Simply ticking a box: AP cannot be entered as new registered proprietor unless any one of 3 exceptional grounds is made out (Schedule 6, paragraph 5)
1) Estoppel
2) squatter entitled for “some other reason”
3) boundary exception
1) Estoppel exception: AP can succeed
Applicant must show they detrimentally relied on soma assurance by the paper owner in circumstances in which it would be unconscionable for the latter to resile
HM Land Registry’s EXAMPLE: squatter built on paper owner’s land in mistaken belief it was their own and proprietor has knowingly acquiesced in the mistake
Estoppel in AP vs. Estoppel
Why would they wish to rely on adverse possession (and wait 10 years) at all - proprietary estoppel is itself a sward capable of attacking proprietor’s title?
Successful proprietary estoppel claim does not necessarily guarantee title (only needs to remedy unconscionability - compensation in Jennings v Rice) vs. adverse possession/estoppel claim could get you title
Hangup with adverse possession/estoppel
Schedule 6, paragraph 5 does not say that successful AP WILL be registered as proprietor if they support AP by estoppel - they must establish they “ought to be registered”
2) “some other reason” exception: AP can succeed
HM Land Registry’s example: AP has paid purchase price for the land but it has not been conveyed to him - Bridges v Mees; AP entitle to land under will/intestacy
–> catch-all condition: unspecific nature, likely to be used by AP fearing the 2 year grace period
McAllister J in Crosdil v Hodder
REMEMBER: examples for “some other reason” for AP all have actions independent of AP!
3) boundary exception: AP can succeed (helping to solve boundary disputes
Conditions:
- Land of applicant adjacent to that claimed
- Boundary was not determined
- Adjacent year was registered for > 1 year
- applicant must have reasonable believed land belonged to them (Zarb v Parry) - anything equivalent to theft is excluded!
2 year grace period
When registered proprietor has responded (within 65 business days) after Sch 6, para 2 notice (with consent, objection or counter-notice), they have 2 years to evict squatter unless the 3 exceptions (estoppel, other reason, boundary)
6 CIRCUMSTANCES IN WHICH SQUATTER GETS TITLE
1) RP fails to respond within 65 days
2) RP consents
3) RP fails to evict within 2 years
4) boundary dispute: you reasonably believed boundary to be in the right place (Zarb v Parry)
5) Estoppel
6) “Some other reason”
REMEMBER about the 2 year grace period
NOT 10 + 2 but whenever you applied + 2
When do squatters realistically win?
Unregistered land, 12 years complete before 13 October 2003 or boundary disputes
Walker v Burton (compare with Baxter v Mannion)
Registration as protector is conclusive - a mistake does not itself make it unjust not to rectify - the applicant seeking rectification must show why it would be unjust not to rectify in light of mistake
Relevant whether that applicant has themselves been disposed and the degree to which the registered proprietor has relied on registration and dealt with land
–> failsafe where, despite being in possession and not consenting and not contributing to the mistake, the registered proprietor’s title might still be rectified
Fitzwilliam Holdings v Richall (based on Malory v Cheshire Homes which challenged in relation to the 1925 Act)
Called the strength of the guarantee of title into question by suggesting s. 58 guarantees only legal title –> following a void conveyance, the new registered proprietor would hold on trust for the original proprietor
=> would render guarantee of title largely worthless
Swift 1st v Chief Land Registrar
Lessens the impact of Fitzwilliam: s. 58 means exactly what it says - a person registered with a title has both legal and equitable title even if there is some error in the transaction leading to registration
