#19930 - Land Registration - Land Law

The registered title system

• When land is registered, the title is recorded on a Land Register maintained by the Land Registry.

• When establishing who has a legal estate in a particular plot of land, you look at the Land Register, not title deeds

• Remember: not every estate in land can be registered:

  • All freehold estates and all leasehold estates longer than seven years must be registered on conveyance.

  • Leases shorter than three years’ duration can’t be registered, and the registration of leases between three and seven years’ duration is optional.

• Leases shorter than seven years’ duration count as overriding interests (LRA 2002, sch. 3, para 1), the rationale being that the Land Register shouldn’t be cluttered with short-lived legal estates.

• When registered, a legal estate gets a unique number, and details of the estate are recorded. The Register says:

1. what type of estate has been registered (leasehold or freehold);

2. what mortgages and other loans exist as security on that estate; and

• The mortgage lender has a legal estate so if owner defaults on the mortgage, they have a right to take possession of the property and sell

3. what interests in the estate have been protected by registration. (registration = actual notice to disponees.)

• If the Land Registry makes a mistake e.g., failed to register an estate or interest correctly, an affected disponee can claim compensation for any loss incurred (LRA 2002, sch. 8) and demand that the register be corrected (sch. 4).

• Once you register your estate, the Land Registry gives it a grade of title (LRA 2002, ss.11-12). There are four possible grades, ranging from ownership of the freehold (absolute title) to rights acquired through adverse possession (possessory title).

Registration of interests

• Remember too that many equitable interests can be recorded on the Land Register.

• Depending on the interest, it will be recorded either as a ‘Notice’ of a third-party right in the land (LRA 2002, s 32) or as a ‘Restriction’ preventing a title holder from taking stipulated actions regarding the land (LRA, s 40).

Mirror principle

• Transparency: as a disponee, you want to see what rights exist over the land you’re obtaining. The register is supposed to mirror most of those rights.

• Interests that can be registered but have not been will not bind a disponee for value

• Parliament’s objectives was the protection of disorganized or vulnerable interests. Vulnerable interests might not be satisfactorily protected if their protection depends on interest-holders registering them.

• LRA 1925, s 70, provided that some interests ‘override’ the registration system: they bind disponees, including disponees for value, even if they haven’t been registered.

Overriding interests

• Main ones: leases for less than seven years’ duration, legal easements and the rights of actual occupiers.

• LRA 2002 also redefines overriding interests so that disponees have a better chance of not being bound by any such interest after having tried and failed to discover it (we also need to take into account disponee’s interest)

Actual occupation

• LRA 1925 created overriding interests, but it did not say what disponees were supposed to do to discover them.

• This was especially a problem when it came to the interests of people in actual occupation of land.

• Basic principle:

  • You hold a proprietary right over some land. The right is an interest ratheer than an estate. The interest either hasn’t been or can’t be recorded on the Land Register. Normally, we say that this interest is an equitable right in rem (binds everyone but the disponee for value. If the disponee has not provided value, then it is governed by the basic priority rule)

  • But: equitable right in rem + occupy the land upgrades your interest into legal right in rem. Your occupation does the work of registration.

    • Example: you would have an equitable right is when you contributed to the purchase price of the property (Scenario 3: A holds the freehold title to the house and B does not, but B is in occupation of the house and has contributed towards the purchase price

Being in actual occupation

• Interests of persons in actual occupation of land were originally given overriding status under the LRA 1925, s 70(1)(g).

The rights requirement

• The occupier must hold a right: s 70(1)(g) refers to ‘[t]he rights of every person in actual occupation’.

• LRA 2002 sch 1 para 2 similarly refers to ‘interests belonging to a person in actual occupation’.

1. What matters is the fact of actual occupation and also that the actual occupier holds a property right/interest in the land.

2. The law protects the right, not the occupation.

3. Often, the protection of your right enables you to inhabit the property. But not necessarily …

• Kling v Keston Properties [1985]:

  • Facts: A had option to purchase B’s garage, and (with B’s consent) kept his car in the garage. A could have registered the option but didn’t. B sold garage to C (disponee for value). C said A couldn’t use garage any longer.

  • Held: A’s keeping his car in the garage constituted actual occupation and so he could enforce his option as an overriding interest.Occupation, here, = car parking.

  • The nature of the overriding interest is that A gets to keep his car in the garage but nothing more than that. Actual occupation does not mean that you personally get the right to occupy the property

• No right = no overriding interest

  • Scott v Southern Pacific Mortgages [2014] UKSC(there must be a right at the time that the disponee obtains the property otherwise it would not be fair for the disponee )

    • Facts: Title-holder D had promised C a lease over his (D’s) land. C was in actual occupation. But D hadn’t kept his promise when he secured a mortgage over the land from SP. D then defaulted on the mortgage. SP took action to possess and sell the land. C claimed he had an overriding interest frustrating SP’s action.

    • SC held: C’s claim failed. C did not have a property right at the time of disposition

    • LRA 2002 sch 3 para 2: occupier must have a right “at the time of the disposition” (the creation of the mortgage). D hadn’t fulfilled any of his promises to C when the mortgage was taken out, so C had no right in the land.

Relevant factors in actual occupation

• Actual occupation has to be discoverable by a disponee. So, what’s the test?

• Strictly speaking, there isn’t one – though case law establishes at least two important points:

1. There has to be some degree of continuity and permanence to your occupation (though you can still be in actual occupation while temporarily absent because hospitalized, on holiday, staying in your second home, etc). The courts are looking for evidence of a proprietary right accompanied by a continuing intention to occupy.

• Link Lending v Bustard [2010] EWCA:

  • Actual occupation upheld even though occupant had, at time of inspection, been hospitalized for past 6 weeks (and hadn’t been seen at the property for longer still).

  • CA was convinced that the occupant hadn’t given up on her intention to return to the property. Her personal belongings were still at the property reinforced this conviction and she continued to pay utility bills

• Compare Stockholm Finance v Garden Holdings [1995]:

  • Facts: Mother (M) bought house, and made a conditional gift of it to her daughter (D) (which meansD had a proprietary). M told D that at some point in the future, she (M) may have to use the house as security for a loan. D moved into the house. M then took out a mortgage using the house as security. D then left the house. 14 months later, M defaulted on the mortgage. Lender (S) wanted to sell the house to get its money back. At this point, M gets D to move back into the house so that D might prevent sale by asserting a right of actual occupation.

  • Held: D wasn’t in actual occupation. Her move back to the property was simply a means to an end. She had no general intention to occupy the property but had moved back in hoping M could negate S’s power of sale.

2. Actual occupation can be occupation by proxy:

• Building on derelict land (Malory v Cheshire Homes [2002] EWCA (claimant’s “occupation” evident from his having built a perimeter fence on the land and having boarded up broken windows);

• Presence of builders, caretakers or other employees carrying out work for you on the land (Lloyds Bank v Rosset [1989], CA; Abbey National v Cann [1991]).

• The proxy element is often cited as evidence of continuing intention to occupy (as in Link Lending).

Occupation by proxy: 3 qualifications

1. There has to be something about the proxy element that raises the possibility of there being an actual occupier who is someone other than the legal title holder: presence of chattels usually doesn’t establish actual occupation (though see Chhokar v Chhokar).

2. Use of access rights (stairs, paths, etc) isn’t actual occupation: Chaudhary v Yavuz [2011] EWCA

3. Children don’t have overriding interests:

• Can hold property rights (e.g., have beneficial entitlements to land because they’re named as beneficiaries under a trust of land).

• But they can’t claim overriding interests because they’re not judged to be in actual occupation.

• Rather, they’re adjudged to be on the land only by virtue of the fact that their parents occupy it. Nourse LJ: “They have no right of occupation of their own.... [T]hey are there only as shadows of occupation” of their parents. Hypo Mortgage Services v Robinson [1997]

Williams & Glyn’s Bank v Boland [1981] AC 487

• In Boland, the HL held that B’s beneficial entitlement is a property right, and that if B holds this right and is also...