LRA 2002

Question 1

Why should you register your land?

Answer 1

• Security of title gives protection against claims of adverse possession
• Greater certainty and security about what you own
• Potential buyers increasingly expect land to be registered before buying
  
  • Not registered land is a disincentive for future purchasers
  • You will get more interests in your land if you
• It simplifies conveyancing, transactions are easier and potentially less costly for those involved

Question 2

LRA 1925

Answer 2

• The LRA 1925 assumed that the solution to this complication was a short list of obvious things
  
  • Freeholds
  • Long leaseholds (21 years and over)
    
    • Anything under 21 years was an overriding interest
    • LRA 2002 changed it to 7 years
  • Mortgages
• Everything else was kept of the register to make it easier
• Most of these interests were called “overriding interests”
• They still are a trap for the unwary purchaser

Question 3

Leapfrogging section of LRA

Answer 3

s27, s28, s29

Question 4

Modern registration

Answer 4

• Both simpler and more complicated than unregistered conveyancing
• Records the legal effect of the transaction between A and B
  
  • You have to have the prior transaction by deed and contract, and then registration – this is one whole disposition
    
    • The disposition is not completed until the interest is registered (as regards the third party)
• Registration completes the disposition between A and B
• Vests the legal title in B [s58 LRA]
  
  • Because it vests the title without anything else, even if B is a fraudster
• Registration guarantees the effect of that legal title
  
  • If there is a mistake, the registry has to indemnify you

Question 5

Issues with modern registration

Answer 5

• The registry deals well with simple cases
  
  • Freehold with a long lease or mortgage
  • The rules work for most people
• Most complicated cases may pose a risk, depending on how the ‘priority rules’ work
• The cost of a system which is cheap and easy for most is that some people lose out big time

Question 6

Mordern registration

Public record

Answer 6

• The land registry is a public office
• Anyone can access records for a small fee
• Everything is computerised and online
• It is not yet in ‘real time’
  
  • There is no electronic conveyancing yet
• Thus, the pre-1926 formalities are preserved
  
  • Deed signed by the parties and presented to the Land Registry (after registration deed can be disposed of)

Question 7

Modern registration

Protection for both interest holders and purchasers

Answer 7

• Two tensions: static v dynamic security
  
  • The existing interest holder wants to keep what they have (their static security; the status quo should say) as against the dynamic security of a purchaser who wants to acquire
  • The purchaser will very quickly have a static interest once they have acquired the property
• Protects the purchaser by freeing them from earlier unprotected interests
• Protects the interest-holder by making their interest enforceable against future purchasers by giving them methods to protect their interests
• If an interest is unprotected, it will not bind the purchaser, but it will always bind the original grantor (as a matter of contract)

Question 8

Principles of registration

Answer 8

• Mirror: register should reflect all interests affecting the estate
• Curtain: purchasers should not be affected by trust interests which are behind the curtain of the register
• Insurance: the state guarantees the accuracy of the register and so will indemnify anybody who loses in certain circumstances

Question 9

Williams & Glynn’s Bank v Boland on the LRA

Answer 9

• the LRA 1925 “is designed to simply and to cheapen conveyancing … from any burden not entered on the register, with one exception (the overriding interest) he [the purchaser] takes free. Above all, the system is designed to free the purchaser from the hazards of notice which, in the case of unregistered land, involved him in enquiries, quite elaborate, failing which he might be bound by equities”
  
  • Registration gets rid of the doctrine of notice
  • Actual occupation is not notice

Question 10

The Mirror

Answer 10

s27, s32 and s40 LRA

Question 11

MIRROR

s27 LRA

Answer 11

• S27 LRA lists the dispositions that must be completed by registration or they will not have legal effect (i.e., they will not bind third parties). But they will still bind the grantor in equity. These are the legal interests
  
  • Freehold
  • Leasehold over 7 years
  • Legal express easement
  • Legal mortgage

Question 12

MIRROR

s32 LRA

Answer 12

• S32 lists other encumbrances (equitable commercial interests) that must be entered as a notice on the register
  
  • Everything that is not in a trust
  • Equitable lease
  • Equitable charge
  • Equitable easement
  • Option to purchase
  • Right of pre-emption

Question 13

MIRROR

s40 LRA

Answer 13

• S40 allows restrictions to be entered against the title, limiting the circumstances in which a disposition can be registered
• Alerts the would-be purchaser to the fact that the single party is not free to deal with the party – there is probably a beneficiary to a trust here and unless you are paying two trustees or get the consent of the beneficiaries you will be bound by the interest
• Trust interests are not supposed to be registered because they are not to bind third parties; they are removed from the land and put into the proceeds of sale
• Restrictions regulate the circumstances in which a disposition of a registered estate or charge may be the subject of an entry in the register. Either can be sought without the consent of the registered proprietor who must be notified and who will be able to apply for cancellation of the notice, or object to an application for a restriction.

Question 14

Registrable dispositions

Answer 14

s27 LRA

• Transfer of freehold
• Creation or assignment (transfer) of lease
  
  • Of more than 7 years
  • Short lease not taking effect in possession but having been created by deed
• Express grant or reservation of an easement
  
  • Easements can be acquired by implication or application of law and are exempt from registration
• Grant of a legal charge (mortgage)

Question 15

Argyle v Hammond

FACTS

Answer 15

Mr Steed had given his mother Mrs Steed power of attorney while he was abroad. She used it to transfer his house to her daughter Mrs Hammond, who mortgaged it to the claimant building society and then disappeared. Mrs Steed had the transfer to Mrs Hammond set aside for undue influence, but the question for the Court of Appeal was whether the charge that Mrs Hammond had executed while registered as proprietor, should remain. Since the transfer to Mrs Hammond had not been voided at the time she granted the charge to ABS, it could remain.

Question 16

Argyle v Hammond

HELD

Answer 16

s58 Vests the title even where it would not otherwise have vested

• “It will be observed that vesting of the legal estate occurs ‘without any conveyance.’ It operates by the fact of registration alone by a kind of statutory magic entirely regardless of the facts which have led up to registration”
• Until the register is rectified, Mr Steed has the power to do anything with the power
• s58 can give the fraudster transferable rights

Question 17

Entry of notice

Answer 17

s32

• Residual category: interests not named, but basically catches all equitable commercial interests (not in a trust)
  
  • Equitable easements
  • Restrictive covenant
  • Options to purchase
  • Equitable leases
  • Equitable charges
• Weaker form of protection; does not confer validity where the transaction itself was flawed

Question 18

Things that cannot be protected by entry of notice on the register

Answer 18

s33

• Beneficial interests in a trust are meant to be overreached and detach them from the land
• Leases under 3 years taking effect in possession: too short to bother with, and protected as an overriding interest
• Leasehold covenants (these are protected by a different statutory regime [Landlord and tenants Covenants Act]

Question 19

Restrictions

Answer 19

ss40-44

• Limits the circumstances in which a disposition may be the subject of an entry in the register
  
  • There is also a restriction on the owners power to transfer the land free of any interests
• Usually to prevent single trustee from dealing with land without beneficiary’s consent [s40(3b)]
• Designed to ensure overreaching occurs [s44(1)]

Question 20

Priority before 1926

Answer 20

The common law rule was that the right created earlier is the better right

Now, it is the right registered earlier is the better right

Question 21

The orderly queue rule

Answer 21

s28 LRA

• “Except as provided by s29 and 30, the priority of an interest affecting a registered estate or charge is not affected by a disposition of the estate or charge” – all other things being equal, earlier rights are better
• As between equal interests the earliest in time prevails

Question 22

Exceptions of the orderly queue rule

Answer 22

• : s29(1), the leapfrog effect: “where a registrable disposition of an estate is made for value, completion by registration has the effect of postponing to the interest under the disposition any interests affecting the estate immediately before the disposition whose priority is not protected at the time of registration” The same for charges [s30 LRA]
  
  • Disposition – transfer or creation by deed
  • Of a registrable (i.e. one that is listed under s27(2)) interest is
  • Made for value – no gratuitous transfers)
  • Completion by registration – s27(1) says it is not effective at law until registered
  • Will postpone to it (i.e. it will take free of) any interests that are
  • Not protected (in the prescribed ways by registration, entry of notice or as OI) at the time of registration