Unregistered land: enforcement of interests

Question 1

SUMMARY OF EVERYTHING

Answer 1

Question 2

What is unregistered land?

Answer 2

Land that has not been protected at the Land Registry

Question 3

Where is the title information contained for unregistered land?

Title information shows who owns the property

Answer 3

Various old paper title deeds showing:
* History of land
* Who has owned the land
* How the beneficial title is held where there are co-owners
* What rights benefit and/or burden the land

Held by the rights holder and not a centrally administered authority

Question 4

What is the epitome of title?

Answer 4

A bundle of title deeds containing the most relevant detail about the property - seller required to show this to buyer when deducing title

May have lots of old title deeds of varying degrees of usefulness

Question 5

What happens with the epitome of title on completion?

Answer 5

Handed over to buyer and buyer sends these to Land Registry so land and buyer’s ownership can be registered for the first time

Question 6

As there is no central register containing details about rights that benefit or burden unregistered land, what should purchasers do to ascertain any third-party proprietary rights?

Answer 6

Conduct extensive searches to ascertain what rights exist

Different rules depending on nature of right and year it was created

Question 7

What was the rule on enforceability of legal rights pre-1926?

Answer 7

Where a person held legal interest over land, they could enforce interest over anyone who came to own/occupy land - even if new owner did not know or should not have known prior to purchase

Question 8

What was the rule on enforceability of equitable rights pre-1926?

Answer 8

Not automatically binding - only where successor was/should have been aware of interest upon purchase

Question 9

What does equity’s darling mean?

Pre 1926

Answer 9

Where successor was a bona fide (good faith) purchaser for value of a legal estate in the land without notice of prior interest, they would take the land free from that interest

Question 10

When will unregistered land become registered? What happens to proprietary rights if it doesn’t become registered?

I.e. what is the trigger?

Answer 10

• A sale will trigger registration
• Until unregistered land is sold, the priority and protection of interests will depend on unregistered principles

Question 11

What are the rules on enforceability of legal rights for unregistered land post-1926?

Answer 11

Same as pre-1926; legal rights created by deed will continue to bind the whole world and there is no need for it to be registered/any notice to be served (buyer should inspect historic title deeds etc.)

Exception is a puisne mortgage (second legal mortgage) which must be registered as a land charge

Question 12

Does it matter whether new legal owner knew about legal rights of unregistered land before purchasing?

Answer 12

No - will be bound by any legal interests

Question 13

What are the rules on enforceability of equitable rights for unregistered land post-1926?

Answer 13

Equitable interests created post-1926 will need to be protected by registration of a Land Charge to ensure they are binding on a purchaser for value

NB ‘Land Charge’ has nothing to do with the Charges Register in registered land official copies

Question 14

For what equitable interests will the doctrine of notice continue to apply for as they cannot be protected under a Land Charge?

More on this in a bit

Doctrine of notice = (pre-1926 rule) equitable interests not automatically binding and only binding where successor was/should have been aware of interest upon purchase

Answer 14

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

Question 15

What is the land charge entered against?

Answer 15

The name of the landowner (in the title deeds) at the time the right is granted/created - this is what you carry out a search against

Not the address of the property

Against name of landowner because they are the ones burdened by the right - land charge search carried out to see what the land is burdened by

Question 16

Against what name should you search when searching for land charge?

Answer 16

Name in the title deeds (not elsewhere e.g. birth certificate)

Question 17

What will a failure to protect an interest against the correct name as spelt in the title deeds result in?

I.e. interest holder does registration wrong

Answer 17

The interest will be unenforceable and not binding on the new owner of the burdened land

Protection is a nullity

Question 18

What interests can be protected by entry into the Land Charges Register?

Meaning they will bind any future owner of burdened land

Answer 18

• Puisne mortgage (second/subsequent legal moertgage) - Class C(I)
• Estate contract 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

CI - second mortgage because you don’t C-I-to-eye with the first mortgage
CIV like HIV which would leave you in a right (e)state (contract)

D(II) = 2 Is = (1) restrictive (2) covenant
D(III) = three = E(asement)

Question 19

If an equitable interest is not protected by a Land Charge when it should have been, will it not be binding on any new owner of land? How does knowledge/consideration work here?

I.e. effect of non-entry

Answer 19

• Not on purchaser (even for nominal consideration) even if they have actual knowledge of the interest
• Will still be binding on donee (inherits/gifted)

Question 20

What happens if compulsory first registration is not followed?

Answer 20

Legal ownership reverts to seller after 2 months

Question 21

What happens to the rights once the land is registered for the first time?

Answer 21

Governed by the registered land system

Question 22

Summary card

Answer 22

Question 23

Can a person who is gifted the land ever be ‘equity’s darling’?

Answer 23

No - they are not a purchaser for value

Question 24

Why can a puisne mortgage not be created by deed as with a normal mortgage?

Answer 24

• First legal mortgage over unregistered land is protected by depositing of title deeds with mortgagee
• Not possible for a second legal mortgage (puisne mortgage) to be protected like this because title deeds already held by first mortgagee
• Therefore a second mortgagee must protect their interest by entry of land charge

Question 25

Will the interest, if land charge entered onto register, be binding on a purchaser even if they do not know about it?

Answer 25

Yes - overcomes uncertainty with old doctrine of notice

Question 26

What will entry of a land charge not do for the interest?

Answer 26

Guarantee the validity of it

If something registered that is not actually an interest in the land = protected by entry of land charge will not confer validity of it

Question 27

Is the state of the purchaser’s knowledge relevant re non-entry of a land charge?

Answer 27

No - state of purchaser’s knowledege is irrelevant

Purchaser can know of non-entry and still not be bound by it

Midland Bank Trust - farmer granted option by father to purchase unregistered farm - son did not protect option by land charge - father wanted to deprive son of option and sold land to wife for nominal value - (non-)entry onto register is conclusive as to notice regardless of purchaser’s knowledge - mother was a purchaser and therefore not bound by option

Question 28

How is the existence of a registered land charge over unregistered land discovered?

Answer 28

Search must be made of the register against full names of estate owners as spelt in title deeds - should be made against all previous estate owners back to 1 Jan 1926

Cumbersome process

Question 29

Since 1926, what does the doctrine of notice still apply in respect of?

Repeat of earlier card

Doctrine of notice = (pre-1926 rule) equitable interests not automatically binding and only binding where successor was/should have been aware of interest upon purchase

Answer 29

• Equitable easements and restrictive covenants created before 1926
• Equitable interests in a trust of land that have not been overreached and therefore the interest has not transferred from the land to the purchase money

Cannot be proteced by land charge

Question 30

What is the relationship between the doctrine of notice and equity’s darling?

I.e. the application of the doctrine of notice

Answer 30

Under doctrine of notice, equitable interest over the land (which cannot be protected by land charge) is binding on anyone except equity’s darling

e.g. interest in a trust of land that has not been overreached will be binding on anyone except equity’s darling

Question 31

Who is equity’s darling?

Answer 31

A bona fide purchaser for value of a legal estate without notice

• Bona fide = good faith
• Purchaser = any person acquiring interest in land otherwise than by operation of law (e.g. intestacy)
• Value = money or money’s worth (inc nominal considration)
• Legal estate = freehold or leasehold (or charge by way of legal mortgage)
• Without notice = without any actual, constructive or imputed notice

Question 32

Is the amount of value in the definition of equity’s darling investigated?

Answer 32

No

As long as not gifted!!

Question 33

What are the 3 types of notice?

I.e. the types of notice a buyer can have

Answer 33

1. Actual = actually knows of equitable interest
2. Imputed = where buyer’s agent (e.g. solicitor) has notice which is then impuited to buyer
3. Constructive = purchaser fixed with constructive notice if they fail to pursue a line of enquiry which ought reasonably to have been made (e.g. purchaser aware there may be covenants restricting use of land but fails to discover exact content)

E.g. Kingsnorth - husband held unregistered matrimonial home on trust for himself and his wife - marriage broke down and wife moved out but returned regularly for kids and kept clothing there and sometimes stayed overnight - plaintiff finance company sent surveyor to inspect property when husband secured legal mortgage, husband said wife no longer living in property but could see state of house but made no further inquiries - loan agreed and paid to husband alone thus not overreaching wife’s equitable interest - court held that finance company had imputed notice of wife’s equitable interest through constructive notice of surveyor; would have been reasonable for him to make further enquiries based on what he knew - finance company were not equity’s darling and thus bound by equitable interest

Question 34

What are the obligations of a purchaser under constructive notice to make enquiries limited to?

Answer 34

Proper investigation of title deeds and proper inspection of land

E.g. evidence of worn tracks suggesting a right of way?

Question 35

What should the purchaser enquire about re occupiers of the land?

Answer 35

Should ensure it makes enquiry of all occupier of land - where purchaser discovers it is not dealing with legal owner, the purchaser should enquire of that person what interest, if any, they hold in the land

E.g. Hunt - presence of tenant in land placed purchaser on constructive notice of tenant’s leasehold interest

Question 36

Once equity’s darling purchases the land, and the equitable interest becomes void, can it bind subsequent purchasers?

Answer 36

No - it cannot be revived (even if subsequent buyer has notice)

Question 37

Summary of pre-1926/doctrine of notice/equity’s darling

Answer 37

• Interest which cannot be protected by Land Charge (i.e. pre-1926 rights / interests that have not been overreached) will be binding on everyone except ‘equity’s darling’ (a bona fide purchaser of the legal estate for value without notice)
• Notice can be actual, constructive or imputed.

Question 38

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

Answer 38

• Has to satisfy all requirements of equity’s darling to take free from interest
• Would need to carry out extensive investigations of both property and associated documents to find out about existing equitable interests otherwise may be bound
• Time-consuming, expensive and may not guarantee discovery of those interests which should be discovered

Question 39

What is the problem of doctrine of notice on owner of interest?

Answer 39

Could be destroyed forever if equity’s darling purchases land - could be through no fault of owner of interest

Question 40

What is the difference between registered and unregistered land on the enforcement of an equitable interest that has not been overreached?

Answer 40

• Registered: interest may be binding if interest holder is in actual occupation
• Unregistered = interest binding on everyone except equity’s darling