Interests In Registered Unregistered Land Notes

Land Law: Legal & Equitable interests

Structure for registered/unregistered land question

• Identify the interest

• Legal or equitable right?

• Formalities for creation?

• Property protected to bind a third party?

  • For Registered land

  • And unregistered

• Conclude

Interests in land

LEGAL interests

• S1(1) LPA 1925, legal interests:

  • (a): easements and profits for freehold/leasehold period

  • (c): mortgages

  • (e) rights of entry

• Formalities

  • Must be granted by deed

  • Must be registered (unless implied easements)

Transfer of existing legal interest

• Assigned to successor—must comply with s52 LPA 1925, deed

• If failed deed, may have estate contract to transfer the interest, if s2 LPMPA + SP available

• If interest not mentioned in transfer deed, s62 LPA 1925: imply transfer of all interests in the estate, unless contrary intention express (s62(4)).

EQUITABLE interests

• All other interests are equitable interests (s1(3) LPA 1925)—starting by citing this when identifying the interest.

• Restrictive covenants

• Estate contracts

  • Includes:

  • Options to purchase

  • Right of pre-emption

• Beneficial interests behind a trust

• Equitable easements

• Equitable mortgages

• Equitable leases

• Formalities:

  • Minimum: In signed writing: s53(1)(a) LPA (exception: short leases)

  • Equitable interests that take effect as contracts must also comply with S2 LPMPA (includes failed legal interest)

  • Exception: beneficial interests under an implied trust-s53(2) LPA.

NB: for failed legal interests (eg easement of freehold/leasehold term not created by valid deed; failed legal lease) Walsh v Lonsdale: ‘equity regards as done that which ought to be done’ a failed legal interest takes effect as an equitable interest, IF (1) S2LPMPA compliant + (2) specific performance available (i.e. clean hands)

TRANSFER of existing equitable interest:

• Minimum formalities: s53(1)(c).

• If contracting to transfer, need s2 LPMPA + SP.

• When holder of absolute title in estate transfer legal estate, if doesn’t mention equitable interest in transfer deed—automatic transfer, s62 LPA 1925, unless contrary intention expressed.

Registered land, protection of interests

Compulsory first registration, s4 LRA 2002

• S4 LRA 2002---listed events trigger compulsory first registration

LRA 2002, 3 groups of legal rights:

• (1) Registrable dispositions: s27 ‘substantive registration’.

  • Legal lease over 7 years

  • Express legal easement

  • Legal charge (mortgage)

• (2) (3^rd party) interests which must be protected, s32 notice on charges register

  • by a s32 notice

  • binding on purchaser for valuable consid (s29(2) LRA)

  • not registered, not binding on purchaser for valuable consid (s29(1) LRA), unless OI under Sch 3

• (2)(a) beneficial interests under a trust—s40 restriction, subject to overreaching

• (3) Overriding interests

  • No not have to be registered/protected to be binding. Sch 3 LRA 2002.

  • Sch 3 Para 1: Legal leases not exceeding 7 years

  • Sch 3 Para 2: Interests of those in actual occupation

  • Sch 3 Para 3: Implied easements

LRA 2002, 3 parts of register

• Property register

• Proprietorship register

• Charges register

(1) registrable dispositions [[must be registered to be legal] aka ‘major interests’, s27

• Must be registered as part of creation, in order to be legal.

  • S27(2) LRA

  • Transfer (of freehold/leasehold of any length)

  • New lease of 7+ years

  • Expressly granted legal easement for a freehold or leasehold term

  • Landlord’s right of entry (right to terminate a lease)

  • Legal charges/mortgage

• S38: registrar will enter a s38 notice on charters register [[if error here, someone who suffers loss from mistake of registrar, will have claim to indemnity]]

(2(a)) registrable (third party) interests protected by notice, s32 notice, aka ‘minor interests

• Unlike registrable dispositions, do not need to be registered to be validly created but need s32 notice to be protected against a buyer of the estate.

• S32: entered on charges register.

• Failure to register: disponee takes land free of the interest (unless an OI under Sch 3 LRA).

• 2 broad categories of equitable interests

  • Commercial equitable interests (are designed to continue to bind the servient land), eg equitable easements, restrictive covenants, estate contracts etc. These require a mechanism to ensure they continue to bind the land.

  • Family equitable interests (a moveable right), eg interests behind an express or implied trust. These require something enabling the equitable interest to move from the land to the proceeds of sale.

  • So s32 registration of ‘notice’ does not apply to ‘family’ equitable interests (i.e. trusts)

• Person with benefit of the right must enter s32 notice on charges register of the burdened property.

• (3^rd party) Rights which require notice on charges register, s32 LRA [[these aren’t listed in s32, are they listed in the statute somewhere? ASK??]]:

  • Restrictive covenant

  • Estate contract of any type (eg estate contract of equitable lease; or estate contract to buy).

    • Eg, right of pre-emption (s115 LRA 2002, is an interest in land from time of creation)

  • Legal easement (is automatically entered, is a ‘major interest’)

  • Equitable easement (when it is not equivalent to a duration of a legal estate in land)

  • A spouse’s right to occupy under Family Law Act 1996

• Can be an agreed notice (s34) or a hostile/unilateral notice (s35)

• Interests that cannot be registered, s33 LRA:

  • An interest under a trust

  • A lease for 3 years or less (NB, if lease between 3 and 7 years, registration not required, but can be; if more than 7 years, is required to be legal lease)

  • A restrictive covenant between landlord & tenant.

• NB: an entry of a notice does not in itself mean the interest is valid: if simply means that if it’s valid, it has been protected.

• Effect of registration (s29(2) purchaser for valuable consideration is bound)

• [[NB: ‘valuable consideration’ in LRA 2002 does not include marriage consideration or nominal amount s132 LRA. CF, LCA 1972, for unregistered land, it does include marriage consideration]]

• Effect of...

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