Registered Land Notes

4 registration categories

1. Registered estates : freehold and legal leases for more than 7 years

2. Registered charges: legal mortgages

3. Registered interests: 3^rd party interests which are not overriding – covenants, easements, estate contracts

4. Overriding interests: don’t have to be registered

Estates and Interests in registered land which have to be registered to be legal (Registrable dispositions)

• Some interests, in a registered land context, must be registered as part of their creation in order to take effect as legal estates/interests: full list in s27(2) LRA 2002

  • Such estates are automatically binding on any new owner of the affected land: clear from the register of title

  • E.g. expressly granted easements must be registered to gain legal status: s27(2)(d) LRA 2002

Interests Protected by Entry of a Notice on the Register

• Many do not have to be entered on the register as part of the formalities for their creation (in particular equitable interests)

• S28 LRA 2002: basic rule that all interests in registered land will be binding on a purchaser

  • However: S29 LRA 2002: qualified by additional requirement to enter a notice on the charges register of the servient land in order to ensure a buyer of that estate will be bound (with the exception of ‘overriding interests’ under Sch. 3 LRA 2002

Notice on the charges register (s32 LRA 2002)

• Person with the benefit of the right must enter a notice on the charges register of the burdened property (s32 LRA 2002): provided it is not one of those excluded under s33

  • Agreed: s34 LRA 2002; or,

  • Unilateral: s35 LRA 2002

• Entry of a notice does not mean that the interest is valid; merely that it has been duly protected

• Notices appropriate for protection of interests such as equitable easements, equitable leases and restrictive freehold covenants

Interests that can’t be registered by notice: s33 LRA 2002

• Interests under a trust (registered by restriction)

• Lease for three years of less

• Restrictive covenants between landlord and tenant

Effect of failure to enter a notice on the charges register:

• Purchaser for valuable consideration of an estate registered with absolute title takes the land subject only to overriding interests and entries appearing on the register (s29(2) LRA 2002)

• S29(1) LRA 2002: if an interest is not correctly protected, a purchaser for valuable consideration takes freely from it

  • If you haven’t given valuable consideration then you are bound by all interests in the land: registered or not

• The fact that the buyer may be aware of the existence of the unprotected interest would not, on its own, alter this result

  • De Lusignan v Johnson: Buyer had express notice of an estate contract but nevertheless took freely

• Exception:

  • Lyus v Prowsa Developments Ltd: LRA cannot be used as an instrument for fraud: despite the lack of registration, there was a constructive trust in favour of : to allow otherwise would be fraud

Restrictions and overreaching

Restrictions: s40 LRA 2002

• Appear in the proprietorship register under the name of the proprietor: demonstrates that proprietor is under some restriction affecting his ability to deal with the property

Overreaching:

• Process whereby beneficial interests in land under a trust become detached from the land and transferred to the money paid to the buyer, enabling a purchaser to take the land free from those interests, irrespective of whether a restriction has been placed on the register (in registered land) prior to purchase

• Overreaching: paying money to two legal owners rather than one, meaning any equitable interest from a trust is overreached (shift from land to money)

• Important to a person who has a beneficial in land held under a trust: if no restriction is entered and payment is not paid to two trustees, overreaching will not have occurred and therefore whether a buyer is bound or not will depend on whether the person is in actual occupation under Schedule 3 para 2 LRA 2002

• Williams and Glyn’s Bank v Boland:

  • husband held the property on implied trust for himself and his wife. He mortgaged the property to the bank by legal mortgage. There was no overreaching as there was only one trustee – so the bank took subject to the wife’s beneficial interest in the property as an overriding interest (as she was in actual occupation)

• City of London Building Society v Flegg:

  • Husband and wife were the legal owners and mortgaged house to Building Society

  • Wife’s parents had an equitable interest and were in occupation

  • But as house was mortgaged by two legal owners, the parents overriding interest was overreached

Overriding Interests: Listed in Schedule 3 LRA 2002

Legal leases granted for a term not exceeding seven years: Schedule 3 para 1

• Note legal leases for a term exceeding seven years are ‘registerable dispositions’ which must be substantively registered in accordance with s27(2)(b)(i) LRA 2002

• Equitable leases may fall under Schedule 3 para 2: but best practice is to actively protect them by entering a notice on the charges register

Legal easements acquired by implied grant/reservation or by prescription: Schedule 3 para 3

Provided that:

1. Its existence is known to the buyer of the burdened land; or

2. It is obvious on reasonable inspection of the land; or

3. It has been exercised within one year prior to the disposition

Any interest held by a person in actual occupation (Schedule 3 para 2)

1. Such an interest is overriding unless:

1. It is not disclosed by the interest-holder on reasonable inquiry; and/or

2. It belongs to a person whose occupation would not have been obvious on a reasonable inspection of the land and the purchaser has no actual knowledge of the interest

2. Such an interest is only binding to the extent that it relates to land that is actually occupied: reversing Ferrishurst v Wallcite Ltd)

Application of this provision:

• Webb v Pellmount: option to...

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