The main goal of land registration is to establish a comprehensive record of property ownership. However, certain interests, known as overriding interests, exist but are not evident from the land register. Despite this, the 2002 Act continues to safeguard the rights of occupants.
Under the 2002 Act, unregistered interests that override registered property transfers must have a proprietary character.
When a purchaser enters into a sales contract, they have legal rights to protect their interest by registering it, but this does not automatically grant them the ability to convey proprietary rights to others.
This case involves a "sale and rent back" arrangement in the North East of England, where homeowners sold their properties to buyers who promised them the right to continue living in their homes as tenants. The buyers obtained mortgages without disclosing these promises to the lenders. When the buyers defaulted on their mortgages, lenders initiated possession proceedings.
One specific case involves Mrs. Scott, who sold her house in exchange for the right to stay as a tenant at a reduced rent, with the possibility of additional payments after ten years. The mortgage lender, Southern Pacific, imposed conditions on the mortgage, including only allowing short-term tenancies of up to one year and having no existing tenancies.
However, a two-year tenancy was granted to Mrs. Scott in violation of these terms. Later, a possession order was issued in favor of Southern Pacific due to defaults by the buyer, Ms. Wilkinson.
Mrs. Scott's argument centers on her equitable interest in the property, which she believes should have priority over the lender's charges. The core question is whether Mrs. Scott's interest in the property should be legally recognized and granted priority in the possession proceedings, considering the Land Registration Act 2002.
Appeal dismissed.
This case provides an opportunity to examine the application and interpretation of the Land Registration Act 2002 in situations where unregistered interests clash with registered property transactions.
Land Law notes fully updated for recent exams at Oxford and Cambridge. ...
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