Land Registration

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  • Created by: Nikki
  • Created on: 09-04-16 16:18

Goals of registered title system

(1) simplification of conveyancing

(2) transparent land rights

(3) free alienability

(4) protection of vulnerable interests

Some tension amongst these goals -->

  • ideally all estates and interests should be discoverable on LR
  • but we also recognise that significance of some interests in land is such that we ought not leave their protection to voluntary registration --> LRA 1925 s70 --> interests which can 'override' the registration system

Academic idea that all rights should be mirrored in the register 

  • the more accurante the LR the simpler and more transparent conveyancing is 
  • but mirror isn't perfect --> some interests will bind disponsees irrespective of registration --> overriding interest
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Details of registered title system

LRA 2002

2 key principles --> right in rem only binding if it appears on register or if it operates as an overriding interest

Sch3 --> 10 circumstances in which a right will be an overriding interest --> 10th = actual and apparent occupation of the land

If Land Registry makes a mistake the disponee, as the victimof the error, can claim compensation for the loss incurred (LRA, sch8) and demand that the register be corrected (Sch4)

LR tells you:

  • what the legal estate is that has been registered
  • what mortgages and other loans exist as security on that estate
  • what other TP interests have been protected by registration --> registration of these interests = actual notice to disponees
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Actual Occupation (1)

LRA 1925 --> s70(1)(g) --> 'the rights of every person in actual occupation'

LRA 2002 sch 1 para 2 refers to 'interests belonging to a person in actual occupation'

What matters is not only the fact of actual occupation but also that the actual occupier can prove se holds a property right/interest in the land that's about to be registered

Scott v Southern Pacific Mortgages --> promise of a property right is insufficient; occupier must have the right at the time of the disposition

If you live in a house you're usually in actual occupation of it

  • even if physically absent
  • may not be main home
  • may not even be 'real' home
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Actual Occupation (2)

No specific test of actual occupation but some important points help:

(1) There has to be some degree of continuity and permanence to your occupation 

  • courts are looking for evidence of a proprietary right accompanied by a continuing intention to occupy 
  • Link Lending v Bustard --> AO upheld even though occupant had been hospitalised for 6 weeks and hadn't been in the property for longer still. Presence of physical possessions added to inference of occupation
  • Stockhold Finance v Garden Holdings --> D not in AO as move back to property was means to an end --> no general intention to occupy the property but had moved back in with the hope of negating S's power of sale
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Actual Occupation (3)

(2) Actual occupation can be occupation by proxy 

e.g. inferred from regularly parking car on land, moving furniture into house or, if property is uninhabitable, from presence of builders, caretakers or other employees 

  • Kling v Keston Properties --> another car in garage, which didn't appear to be the owner's --> agent didn't ask whose it was when he should have
  • Abbey National v Cann --> Mrs C's agents moving furniture into house in presence of AN inspector. house already furnished, inspector should have asked whose furniture was being moved in
  • Lloyds Bank v Rossett --> LB agent inspected  property - builders there - didn't ask who they were working for, just assumed they were working for Mr R, should have asked who they were working for 

Note:

  • there will have tob e something about the proxy element that specifically points to here being an actual occupier who is someone other than the legal title holder
  • children can't claim to have overriding interests: although they're in actual occupation of their parents' land as a matter of fact, they can't assert occupation as a matter of right - their presence is explained by their parents' proprietary entitlements, not because they have interests in the property themselves
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Actual Occupation (4)

Reasonable inspection requirement 

LRA 2002 sch 3 para 2(e) provides that a disponee won't be boudn by the claim of actual occupier if two conditions were met:

(1) the actual occupation wasn't obvious on 'reasonable careful inspection' of the land;
(2) the asserted right of occupation was not within the 'actual knowledge' of the disponee at the time of the disposition

So an actual occupation claim won't bind a disponee if the fact of C's actual occupation wouldn't have been discovered by anyone carrying out a reasonably careful inspection of the land, and if the disponee didn't know of C's right to occupy 

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Actual Occupation (5)

Unreasonable non-disclosure

LRA 2002 sch 3 para 2(b) provides taht a dipsonee will not be bound by actual occupation if the occupier failed to disclose his property interest 'when he [the occupier] could reasonably have been expected to do so' 

Not clear when a court might conclude that it would be reasonable to have expected an actual occupier not to have disclosed his or her proprietary interest 

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The end of notice?

Obj of LRAs is to get rid of notice as a method of assessing whether interests in registered land will bind a disponee

2002 Act goes further than LRA 1925 in trying to ensure that a disponee obtaining reigstered title is fully aware of as many interests in the land as possible - inc overriding interests - before agreeing to transfer going ahead --> hence reduction of poss types of overriding interests and requirement of reasonable inspection

Doctrine of notice still in 2002 registration scheme, even though it's not supposed to be --> disponee must inspect land - idea being that all overriding interests will be discoverable on normal inspection

If a court determines that an overriding interest which the disponee failed to discover was discoverable on reasonable inspection, then the disponee will be bound by it...

...which you might say is another way of concluding that the disponee will be deemed to have constructive notice of that interest

Real issue isn't whether the concept of notice lives on (it does), but whether it causes a problem

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5 things that can defeat actual occupation

(1) overreaching occurs

(2) actual occupation cannot be proved

(3) the disponee (a) inspected the land carefully but didn't discover actual occupation, and (b) didn't know of the occupier's right of occupation at the time of the disposition

(4) the occupier failed to disclose her interest when she could reasonably have been expected to do so

(5) the actual occupier impliedly consents to the disponee acquiring an interest int he land that should have priority over hers 

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Future of overriding interests

LRA 2002 provides for statutory instruments to be made adding rights to list of those required to be registered, and so unable to operate as overriding interests

Envisagd that such instruments would be made in the context of intro of e-conveyancing

At first sight, overriding interests should not be affected by this development

  • feasibility of registering organised transactions online would not make it more reasonable to expect disorganised rights to be registered too
  • possibility of seraching register for organised rights would not make it less easy to make the quite different inquiries that th design of sch3 makes relevant to disorganised rights

Challenge this view by pointing to a trend to align our way of living with possibilities offered by IT

  • future of communciation devices 
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Human Rights

If your right in rem has to be registered before it can operate as such, this may be an interference with your possessions, engaging Art 1 ECHR (and interference with Art 8 on appropriate facts)

However, not so clear there is such an interference --> while registration of a right to bind a disponee may constitute interference, in the case of registration before a right will exist as such at all there may not be an interference since the right does not yet exist --> courts haven't decided on this yet

To the extent that there is inteference --> justified if it displays 'proportionality' -->

  • arguments for registration = perfectly proper ends
  • specific registration rules seem apt to deliver them proportionately (whilst overriding interests still exist)
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Consenting out of a right

Rule established in Bristol and West Building Society v Henning -->

  • If you have a right in rem over land which is iether registered or qualifies as an overriding interest but you consent to the disponee not being bound by the right after all, he will not be bound by it
  • established in Bristol case in context of unregistered land
  • applied to registered land in Paddington Building Society v Mendelsohn

Underlying analysis

  • analysis in Bristol v Henning is unsatisfactory
  • alternative analysis -->
    • if you go along with my steps to sell or mortgage our house you will be prevented from setting up against the disponee any interest that would otherwise bind him, on the basis that you are estopped from doing so
    • by going along with my steps you have impliedly represented to the disponee that you will not set up your right against him; and the disponee has relied on that representation to his detriment, by undertaking on his part in the disposition; so you may not go back on your representation
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Argument for complete registration

  • provisions for rights in rem to bind when registered are generally welcome
    • difficulty and costs of transaction should be diminished
    • market in land lubricated
    • threat of people being bound by rights of which they do not even know ahead of time, and so of having their liberty damaged, largely eradicated
  • criticism and controversy about overriding interests
    • counter to key aim of registration regime
    • disrupts aim to accurately display all aspects of the title to a given piece of land
  • conclusive register cannot be an end in itself --> must be desired as a means to more fundamental ends --> 
    • needed so as to promote the market in land by reducing the difficulty and cost of transactions involving it 
  • registration has this effect, but argument's logic requires all relevant right to be registered
    • if any can bind disponee without registration this will introduce costs as disponee seeks to discover wehtehr this will occur in his case
    • costs invovled in searching for even one such right are likely to be no less than those generated by having to search for many
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Argument for retaining overriding interests

  • disorganised rights are acquired in circ where parties do not relaise, or only have a vague idea that they are dealing with legal rights at all; or, if they do realise any of this, they often assume that the law itself will'see them right'
    • lawyers not enlisted; very rarely registered
  • even if law required registration of disorganised rights these would not normally be complied with 
  • English law maintains a moderate position
    • appropriate to allow those hwo can to settle their own rights
    • support those who fail to do so but deserve them nonetheless
  • if disorganised rights are to survive, there must be provision for them to affect disponees without registration --> overriding interests
    • LC --> it is 'neither reasonable to expect nor sensible to require any entry on the register'
  • rules sympathetic to rights arising in disorganised ways are required --> overriding interests is the way to achieve this
  • without overriding interest possible interference with ECHR provisions by registration rules is unlikley to be considered proportionate
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Compromise between the two arguments

  • LRA 2002 has adopted a compromise --> shape is to be found in Sch 3
    • doesn't give overriding status to all disorganised rights --> must fall within one of the 9 listed categories, or be accompanied by actual and apparent occupation
  • Thesis -->Sch stipulations are calculated to ensure that even disorganised rights achieve overriding status only if they are readily discoverable by a disponee
    • readily --> easily/cheaply
    • this would make the compromise a princpled one
  • 3 difficulties with thesis
    • (1) description of it just given is more robust than terms of the Act itself --> concepts in Sch 3 often more malleable
    • (2) since, on this account, the compromise would aim to allow a disorganised right to bind a disponee, despite non-reg, when the disponee could easily discover it, one would expect it to contain a rule whereby a disponee who actually knows of such a right is bound by it without more
    • (3) the 'easy discoverability' thesis, whilst is would profile the overriding interest compromise in a defensible way, does not in fact capture the rules in sch3 very accurately 
  • thus we remain at a loss as to principles controlling which disorganised rights are and which are not given overriding status 
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