Principles of registered title conveyancing
- The system of conveyancing required the long and intricate task of examining title, and proof of title depended upon a collection of title deeds which were difficult to read, impossible to understand and disgusting to touch
- There was no comprehensive official record of dealings in land because the documents that create and recorded rights in relation to the land were prepared and retained by the parties
- The fundamentail aim of the system is to eliminate reliance on title deeds and to remove the need for the repeated investgation of the same title
- By establishing and maintaining an official register which accurately records all the current details relevant to any parcel of land from a conveyancing viewpoint
- It was anticipated that e-conveyancing would not be fully operation for some years
- The suggested period of 5 years has proved to be wildly optimistic, although the electronic registration of particular registrations is starting to be introduced on a piecemeal basis
- This system would eliminate the current 3 stage paper based process applicable to any transaction in registered land involving the execution of a formal document, its lodgment with the registry and then the registration itself
- First e-mortgage was registered in March 2009
- Once fully operational, e-conveyancing will be compulsory, applying to all transactions and contracts for transactions, of a description specified by rules
Classification of interests
- Substantively registrable estates
Registrable estates are those interests affecting land that are capable of substantive registration in the sense that they generate separate titles, each with its individual register
- Estates/interests not capable of substantive registration but required to be created by registered disposition
While title to a registrable estate has been registered, the subsequent transfer of that estate or the grant out of that estate of another registrable dispotion, which is required to be completed by registration
- Other interests protected on the register
Interests which are not required to be created by registered disposition but which should be the subject of an entry on the register of the estate burdened by and/or benefiting from the relevant interest in order to protect their priority against a successor in title of the burdened estate. It includes those interests that, in the context of unregistered land, constitute land charges such as estate contracts, restrictive covenants and equitable easements. It also includes interests that are subject to overreaching such as equitable ownership interests under trusts
Classification of interests 2
- Overriding unregistered interests
Comprises those interests which are not the subject of any entry on the register of title but which are nonetheless enforeceable against a purchaser of the land or title affected. This category includes certain short leases, legal easements that have not been expressly created and the interests of persons in actual occupation of the land in question.
First Registration of Title
- It marks the moment at which the title to a legal estate in land ceases to be unregistered and becomes registered on the register of title.
- In most cases, the relevant legal estate wil be the fee simple or a lease for a term of 7+ years
- LRA 2002 s 3 - provides the voluntary registration of legal freehold estates, legal leasehold estates with more than 7 years unexpired and discontinuous legal leases of any terms; and also rentcharges, franchises and profits a prendre in gross, provided that the interest is held for an interest equitvelant to a fee simple absoloute in possession or a legal term of years absoloute with more than 7 years unexpired.
- Registrable interests other than freehold and leasehold estates are not considered further.
- A person may apply for 1st registration where the relevant estate is vested in him, or where he is entitled to require the estate to be vested in him.
- Where title to land had not previously been registered, there was no requirement to registered until there had been a disposition effecting the legal title, and even then it was not every such disposition that triggered the requirement.
Events that trigger compulsory registration
- LRA 2002 ** 4-5
- transfer of fee simple/lease that has more than 7 years to run
- grant of lease for term of more than 7 years
- grant of reversionary lease
- grant of protected first legal mortgage
Duty to apply for registration
Where one of the triggering events occurs the transferee or grantee of the registrable estate must apply to be registered as the proprietor of the registrable estate within 2 months of the occurrence of the trigerring event, although the registrar may extend this period if satisfied that there is good reason for doing so
Compulsory Registration 2
Effect of 1st registration
- Conclusivene** of registration
LRA 2002 s 58 - encapsulates 'one of the most fundamental principles of registered conveyancing' so that, even if a person is registered as proprietor for a legal estate on the strength of an intrinsically void transfer, the legal estate will nonethele** vest in the transferee
- Cla** of title
LRA 2002 ** 9-10, 62-63
- Interests affecting first registered title
LRA 2002 s 11
Cautions against 1st Registration
- 1st registration of title should not affect the enforceability and priority of such interests
- Such matters should have been resolved by the application of the principles relating to unregistered title conveyancing to the transaction that triggered 1st registration and it would simply involve the transposition of the coutcome into the mechanisms of registered title
- While an interest that is enforeceable under the principles relating to unregistered title conveyancing should continue to be enforceable following 1st registration of title
- An interest that has ceased to be enforceable as a result of the transaction should not be revived in the process of 1st registration
Dispositions of Registered Land
- Following 1st registration, the registered proprietor must effect subseuqnet dealings in the land on the basis of the registered title and in accordance with the requirements of LRA 2002
Powers of disposition and protection of disponees
- LRA 2002 ** 23-26 -
The LRA 2002 lists in s 27 those dispositions of registered land that must be completed by registration. Where a registered proprietor purports to effect any of the listed dispositions, the disposition has no effect at law until the registration requirements have been complied with
- Transfer of registered fee simple/registered lease
- Grant of lease for term of more than 7 years
- Grant of reversionary lease
- Grant/reservation of legal easement
- Grant of legal charge
Protection of 3rd party interest by entry on the r
Effect of failure to protect 3rd party interests on the register
- Notice and bad faith
- Fraud and constructive trusts - It is clear that under the LRA 1925 a registered proprietor who was fraudulent was not able to defeat an unprotected minor interest
- Personal claims - the owner of an unprotected interest whose priority has been postponed as a result of a registered disposition may have a range of personal claims against the transferor and/or the transferee of property to which the unprotected interest related. In appropriate circumstances, the transferor and/or the transferee may be liable in breach of trust, knowing receipt of trust property, breach of contract, interference with contractual rights, conspiracy to defeat unprotected rights, misrepresentation and undue influence.
Unregistered Interests that Override
- Overriding interests are matters which are not usually shown on title deeds, in consequence, it is not po**ible to form a trustworthy record on the register. Persons dealing with registered land must obtain information outside the register in the same manner and from the same sources as people dealing with unregistered land would obtain it. (Cro** J, National Provinvial Bank v Hastings Car Mart)
- The only overriding interests should be those where protection against purchasers is needed, yet it is not reasonable to expect nor sensible to require any entry on the register (Law Com No 254)
Strategies to restrict overriding interests
- Certain categories of overriding interests were abolished immediately
- Certain categories were to lose status as overriding interests after 10 years
- Certain categories were narrowed for the future
- Mechanisms to facilitate the protection of overriding interests on the register LRA 2002 ** 37
- E-convenancing would reduce the number of legally recognised rights that were not protected or registered on the register
Unregistered Interests that Override
Prospective list of overriding interests 10 years after LRA 2002 came into force
- Leases granted for 3 years or less
- Interests of persons in actual occupation where (a) that occupation is apparent and (b) the interest (i) is a beneficial interest under a trust or (ii) arose informally
- Legal easements that have arisen by implied grant or reservation or by prescription
Leasehold Estates in Land
LRA 2002 Sched 1 para 1, Sched 3 para 1
Complements the provisions on registrable estates so that only those leases that are not registrable estates can have their priority protected as overriding interests within para 1. No lease can constitute an overriding interest within para 1 if granted for a term exceeding 7 years.
City Permanent Building Society v Miller
The grant or transfer of a registrable lease which has not been completed by registration and which therefore takes effect only in equity cannot be protected under para 1, although it may constitute an overriding interest under para 2 where the lease is in actual occupation of the land. The use of the word 'granted' excluded equitable leases, because they are not the subject of a grant.
Interests of persons in actual occupation
- The rights of parties actually in occupation of the land at the time of 1st registration should not be affected by the registration, and that these rights should be protected as against all transferees so long as the parties or their successors in title remain in such occupation.
- Interest must be 'proprietary'
Spouses are not usually regarded as occupying the matrimonial home as licencees (National Provincial Bank v Ainsworth)
Overreached interests are not qualifying interests
- Para 2 Sch 1 of LRA 2002 - meaning of actual occupation is not further qualified.
- The claimant's involuntary residence in a psychiatric hospital for more than a year was held not to negative a find of actual occupation based on her regular visits to and her persistent intention permanently to return to her fully furnished home. (Link Lending Ltd v Bustard)
- Erection of a barn on farmland constituted actual occupation (Blacklocks v JB Development)
- Regular presence of builders and owners constituted actual occupation. What constitutes actual occupation of land must depend on the nature and condition of the land which is claimed to be occupied. (Lloyd Bank v Rossett)
- A purchaser is bound by all overriding interests in existence at the date of registration. There were difficulties in holding that a person who went into occupation between transfer and registration could acquire an overriding interest, because the purchaser makes enquiries of a person in occupation and the propert time for making such enquiries. (Abbey National v Cann)
Actual Occupation 2
- In the context of ordinary residential property, actual occupation can usually be equated with residence
- There is no need for continued and uninterrupted physical presence on the part of the person claiming to be in actual occupation, no the person to be physically present at the relevant time, provided that he has already established a presence involving some degree of permanence and continuity.
- Claimant who was absent from her fully furnished home for 14 months while living abroad, was held not to be in actual occupation (Stockholm Finance v Garden Holdings)
- Actual occupation cannot be equated with the context of derelict land (Malory Enterprises v Cheshire Homes
- Parking of a car constituted actual occupation (Saeed v Plustrade)
Actual Occupation 3
- The claimant had been in actual occupation of the property on the date at which the mortgage was granted, but had given up occupation by the date of its registration (Thompson v Foy)
- The date on which the relevant mortgage was registered as being the 'key date' (Mummery LJ, Link Lending Ltd v Bustard)
- In order to be able to rely on the proviso to negative an overriding interest, the purchaser must address the enquity to the person claiming that particular interest (Winkworth v Edward Baron Development Co Ltd)
- It is not sufficient that the purchaser enquires whether the occupier has some specified right, the wenquiry must relate to the rights of the occupier generally (Bank of Scotland v Hussain)
- Para 2(b) is only relevant where a puchaser has actually made inquiries; hypothetical responses to hypothetical inquiries are of no relevance (Thompson v Foy)
Occupation of part
- When the claimant may be in occupation of only part of the land over which the interest is claimed, the question arises as to whether actual occupation of part is sufficient to generate an overriding interest over the whole
Ferrishurst Ltd v Wallcite Ltd
Claimant had option to purchase land occupied by 3rd party. Option was not protected on register. It was held that the claimants were entitled to exercise the option in respect of the entire property. An occupier's overriding interest was held to extend to a part of the land comprised in the registered title, which he did not in fact occupy
Occupation through an agent
- Actual occupation does not necessarily involve the personal presence of the person claiming to occupy
- Occupation through an agent such as a caretaker or employee may suffice provided that the agent is in occupation for the purposes of the principal and not merely as his licensee.
- The presence of belongings alone without any previous occupation and intention to return was not enough to establish occupation. (Strand Securities v Caswell)
- The company was occupying as licensee in its own right and not as his agent; he was present on the premises in his capacity as managing director of the company (Lloyd v Dugdale)
Occupation by minors
Hypo-Mortgage Services Ltd v Robinson
- A child cannot be a person in actual occupation
- Its ruling applied to all minors, not merely to those of 'tender years'
- Children have 'no right of occupation of their own: they were only there as shadows of occupation of their parent'
- No thought was given to minors over 16 who are married or cohabitating who could have acquired an interest in their homes through contribution
Relevant date of actual occupation
- The question as to the time at which actual occupation is required if the priority of the interest of the occupier is to be protected as an overriding interest under para 2
- It was suggested that actual occupation is required not only at the time of the disposition but also at the time of registration (Abbey National v Cann)
Boland and its aftermath
Consent to postpone overriding interests
- A mortgagee would normall seek to secure priorty over any overriding interest under para 2 by requiring any potential claimant in occupation of the property to sign a written consent to the postponement of his interest to that of the mortgagee
- Where express consents have been challenged, the courts have generally confirmed their effectiveness (Gracegroce Estates Ltd v Boateng)
Retreat from Boland
- The developments has ensued that in most circumstances, at least in the context of acquisition mortgages, the mortgagee will take priority over any such claims to the mortgaged land
- Where a claimant knows or is deemed to know that the purchase is to be financed in whole or in part by a mortgage loan, his interest will be postponed to that of the mortgagee (Paddington Building v Mendelsohn)
- Any contribution-based equitable ownership interest that affects the legal title of the purchaser affects a legal title already encumbered by the mortgage and is therefore postponed to the mortgage (Abbey National v Cann)
Conclusiveness of the register
- Whenever a person is registered as 1 proprietor of an estate, registration operates to vest in him both the legal and the equitable titles (Sainsbury's v Olympia Homes)
- Rectification was sought to set aside a registered charge granted by the registered proprietor of land following a forged/fraudulent transfer to the registered proprietor (Barclays Bank v Guy)