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Dixon 'The reform of property law and the LRA'

  • Both acts are intended to simplify the processes by which land transactions are carried out. 
  • Transformation of overriding interests- minimised the occasions that these can affect registered title. 
  • Took easements out of overriding interests. Possibility that the act could be applied flexibly as judges seek fairness. 
  • Said that short legal leases (under 7 years) shall override first registration or registered dispostion. Rationale is practical and designed to support e conveyancing. 
  • Actual occupation- while there is welcome reform there is uncertainties. The circumstances in which a person may be asked about their rights are many and varied and the introduction of a reasonableness criterion must introduce uncertainty that can only be settled by litigation. The 'obvious' threshold is contraversial. Reform is from fear of a problem, not an actual problem. Judges will have to determien what amounts to 'a reasonably careful inspection' and may create lots of litigation since each will have to be decided on facts. 
  • Formalities for creation of new rights- under LRA 2002 there will be new requirements for the creation and transfer of proprietary rights in registered land. Essential for e-conveyancing and in time these new rules will render the distinction between legal and equitable rights largely irrelevant in registered land. First step will be the implementation of ...
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Dixon 'The reform of property law and the LRA'

  • legislation permitting the conclusion of valid contracts adn deeds in electronic form. When s93 comes into force certain dispositions will only have effect if they are electronically registered. Under the fully operative provisions in LRA 2002 failure to observe mandatory electronic formalities will not even result in the creation of an equitable right, let alone one existing at law. Property professionals may be slow to appreciate this dramatic change. Due to the act being designed to support e conveyancing there will be a period of time during which the substantive law has changed, but the system designed to support it is not in place. 
  • (Econveyancing has been paused.) 
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Gardner 'The LRA 2002- the show on the road'

  • The acts aim was that all conveyancing would take place by electronic transaction. Want dispositions to be effected by their electronic registration. Aspires to an interest being valid and having power being co-teminus with its being registered. 
  • Consitutive registration- not fully delivered. Not all interests require registration for their existence. It remains possible in some circumstances to gain land by adverse possesion. The state of the register is always liable to amendment by alteration, acknowleding the register may be wrong. At odds with the idea that it is conclusive. 2002 act aspired not to make the register a mirror image of title but title itself.
  • Overriding interests- leave significant queries to the facts. Also with alteration it says the register can correct a mistake but doesnt detail what a mistake is. 
  • Since the act came into force the electronic conveyancing has been discontinued and case law has trended away from the register being conclusive. Econveyancing put off in 2011 until there is a healthier financial climate. Few conveyancers had intended to conduct business electronically. The lapse of econveyancing hasnt killed the act and it has run on traditional methods for a decade. Econveyancing would have one significant improvement- removal of the registration gap. It would prevent adverse interests arising in the delay between the effectuation of the disposition and its registration. 
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Gardner 'The LRA 2002- the show on the road'

  • If registration is to be constitutive then it must be conclusive. Subject to s64 which details the possibility of alteration of the register. Mistake remains undefined but is not confied to 'mistake through some official error in the course of examination of the application for registration.' A conclusive regime logically has no space for the idea that the register may be wrong. 
  • To say rights can only come into existence by being registered would largely negate the existence of proprietary estoppel or prescription. A perfectly constitutive registeration regime would thus be in the wider sense imperfect. 
  • The act allows the above interests to arise without registration and be overriding interests. Law Commission said 'interests should only have overriding status where protection against buyers is needed but where it is neither reasonable or sensible to require any entry on the register.' In a piece of legislation setting out to regulate the whole territory of conveyancing this is a deficiency. Commission seemed not to notice that there was no common ground between acknowledging overriding interests and the ideology of title by registration.
  • Registration of titles is beneficial. Static security (those with the land) and dynamic security (those wanting to buy the land.) Must rememeber that land registration is a set of rules controlling the operation of peoples interests in land that they have no alternative but to live on, and that comprises the locus of their society. 
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Smith 'Property Law'

  • 1925 LRA tried to bring law up to date. Three main reforms can be seen- 1) many doctrines of earlier law that were outdate, complex and confusing. Their abolition caused little problem. 2) numerous sections implying terms into conveyance, leases and trusts. Effect of legislation is to shorten documents. As implied terms can almost always be excluded, a statuory implied term that is unrealistic or out of date will lengthen documents. 3) provisions amending the effect of interest on purchasers. Legal rights would bind automatically. Equitable rights bind when known. 
  • Made only 2 legal estates: freehold and leasehold. Made it so you cannot create new rent charges and would be phased out over 60 years. 
  • Dealt with overreaching- designed to prevent fraud by a single trustee. The concept already existed but created new overreaching powers. Purpose was to make it easier to buy and sell land. The scope for overreaching is limited. 
  • Can register land charges. 
  • Assessing the 1925 legislation- worked pretty well. The need for reform is shown by the Law Commission covering central areas such as trust of land, mortgages, land registration, easements and covenants. Made when land was the principle asset. Now land is no longer the most important form of capital (share are) and settlements are relatively uncommon. 
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Smith 'Property Law'

  • Overall the 1925 legislation bears the appearance of a succesful attempt to deal with the problems of the past, rather than addressing concerns of the present. 
  • LRA 2002- the law guarentees the title of the purchaser (once registered). Subject to exceptions all legal and equitable interests must be entered to be binding. It is only legal estates and interests that can be protected, equitable interests can merely be protected. Several legal interests are overriding interests (short leases and some easements) and so bind purchaseres without registration. Equitable interests are overriding but only with actual occupation. Cant rely on the register alone. 95% of titles are registered and all will be in the next decade. 
  • Registration of title- the proprietorship register identifies the owner, the property register identifies the land and any benefits and the charges register lists interests adverse to the land. Public register. Three principles- mirror, curtain and insurance. 
  • 4 types of interest- registrable dispositions (legal fee simples and leases), interests created by registrable dispositions (dispositions by a registered proprietor which has to be completed by registration), minor interests (protected but dont bind purchasers) and overriding interests (affect purchaser without being protected by register.) Registration enables the purchaser to discover all the details of the interest and to rely on their being correct.
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Smith 'Property Law'

  • Effect of first registration- legal fee simple is vested in the proprietor regardless of whether that person previously held that title. Due to effect of s11(4) of LRA subject only to interests protected on the register and overriding interests. 
  • Leases- a legal lease exceeding 7 years can be registered like a fee simple. May be 2 or more titles for the same land. Every grant of lease over 7 years must be registered and have 2 months to do so. Future lease taking place over 3 months away must be registered. Discontinuous lease (say a week each year) should be registered as well. Guarentees the lease but not defects in the landlords title. 
  • Registrable dispositions- a registered proprietor has wide powers. s26 in very important Deems the power of the proprietor to be free of any limitation though remains liable for breach of duty. Important for trusts of land. . 
  • Dispositions within s27- transfers- no legal title will pass until registered. Before registration the purchaser will have an equitable interest due to consideration provided there are formalities. If transfer is a gift and the donor does everything in his power to complete the gift equity sees it as complete. When econveyancing becomes compulsory there will be no rights without electronice entry. Proprietors are given a 'title information document.' 
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Smith 'Property Law'

  • Leases- leases granted for more than 7 years are registrable dispositions. Used to have to be 21 years. Most contraversial part of Law Commission reforms. May go down to 3 years in econveyancing. 
  • Registered charges (mortages)- do not need their own titles. Can only be entered into an existing registered title. 
  • easements and profits- easements dont have own separate titles. If legal they may be entered on title of land benefited and a notice is entered. Compulsory registration operates only when there is an express grant. Implied easements will normally be overriding interests. Failure to comply will result in it being equitable. 
  • LRA s29 says that so long as there is valuable consideration, any earlier unprotected interests will be defeated by the transfer, unless that interest is overriding. 
  • Overriding interests- extensive and important exception to registration principles. Bind a purchaser. Can lead to register alteration with no compensation to purchaser. Legal leases not exceeding 7 years are overriding interests. 
  • Overriding interests relate to land in which there is actual occupation. Must be obvious on reasonable inspection. Must exist at date of disposition. Have to balance need for purchasers to buy land quickly and have confidence in the register and protecting those occupying land and being ignorant of the register. 
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Smith 'Property Law'

  • shouldnt extend principle too far especially when they could have legal advice. Overriding interests were reduced in the act. 
  • Alteration of the register- provisions in the 2002 act represent a radical departure from the previous law, both in regard to terminology and substantive rights to alteration. Rectification only applies to an alteration which corrects a mistake, and which adversley effects the title of the registered proprietor. Administrative alteration is also possible to put in an overriding right. Rectification may significantly reduce reliability on the register. 
  • Idemnity- often two innocent parties and one must lose. Registration system can offer compensation to those who lose out in priority disputes. Cant be used to compensate where the registration system hasnt caused loss. Alteration to the register to give effect to overriding interests does not result in indemnity being payable. They dropped this to make it viable. The current level of indemnity runs at about £10 million a year. This is small compared to the income from fees. Claims must be brought within 6 years. The majority are minor admin errors within the Land Registry. The number of claims is tiny compared to the 4 million registrations a year. 
  • Assessing land registration- came under attack in the 1980's due to the delays, especially for first time registration. Computerisation has resulted in greater efficiency. 
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Smith 'Property Law'

  • Time taken to process applications has fallen considerably and so have criticisms. Easier to discover state of title. If title is registered the Land Registry charge a fee. Level of fees has fallen since the 1990's. Falling further due to efficiency. Has potential to make sale of land much quicker. Registration offers better protection to buyers and sellers. Purchaser knows he can rely on getting good title if the seller is registered proprietor. Extent of land will be described. Any adverse claim must be on the register. In reality overriding interests mean that you cannot rely on register alone. Attempts made by the 2002 act to limit overriding interests constitute a highly desirable development. 
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