Registration of Title
1. The system of registration of title introduced by the Land Registration Act 1925 reflected three principles:
i) the ‘mirror principle’;
ii) the ‘insurance principle’;
iii) the ‘curtain principle’.
2. The ‘mirror principle’ holds that the register is an accurate and conclusive reflection of relevant interests affecting the land in question.
3. The ‘insurance principle’ guarantees the accuracy of the register and, if the register is found to be inaccurate, persons affected by rectification may be entitled to be indemnified (Sch 8).
4. The ‘curtain principle’ protects the purchaser of land from interests concealed behind the entries on the register, e.g. trusts affecting the land.
4.2 The Land Registry
1. The Land Registry consists of three registers.
The Property Register
This describes the property and includes all legal rights enjoyed by the property over neighbouring land, such as easements. It will refer to a filed plan prepared from an ordnance survey map.
The Charges Register
This section shows details of any incumbrances registered against the estate, e.g. easements, restrictive covenants.
The Proprietorship Register
This shows the name and address of the registered proprietor of the relevant title, the date of registration and the nature of the title, e.g. absolute, good leasehold, qualified or possessory. It also shows any restriction on ownership including rights in equity behind a trust.
2. Since 1988 the general public has had open access to most titles entered on the register for the payment of a fee. Previously access was only with the permission of the registered proprietor of the land.
4.3 Classification of Interests in Registered Land
1. In registered land there are four categories of interests:
a) registrable interests;
b) registered charges;
c) minor interests (now called burdens on the register);
d) interests which override the register.
2. Registrable interests are rights in land capable of substantive registration: the fee simple absolute in possession and the term of years absolute in possession if it exceeds seven years.
3. Although registration of title is now compulsory there remain substantial numbers of unregistered titles.
4. There is no requirement to register title unless there is a disposition affecting the title which triggers registration, e.g. a conveyance for value.
5. If there is no disposition within the meaning of the act then registration is not necessary. If property is owned by a corporate body or a charity then property may not change hands for considerable periods of time.
6. As an incentive to landowners to bring property within the system of registration there is a reduction in registration fees for anyone who registers their property voluntarily.
4.3.1 Events that Trigger First Registration
1. S4(1) LRA 2002 lists the events which trigger compulsory registration:
a) Transfers of a qualifying estate either for valuable consideration or by way of gift or in pursuance of an order of any court or by means of an assent;
b) Leases granted for more than seven years;
c) First legal mortgages of a qualifying estate;
d) Grant of a ‘right to buy’ under the Housing Act 1985.
4.3.2 First Registration of Title
1. When unregistered land is registered for the first time the registration can take several different forms:
Absolute freehold title – the owner has all the rights of a fee simple absolute owner subject to rights appearing on the register and overriding interests. This is the most frequently awarded class of title and is the most reliable.
Possessory freehold title – an applicant will get a mere possessory title if they cannot produce sufficient documentary evidence of title. A possessory title will be subject to all adverse interests existing at the date of registration.
Qualified freehold title – this title is granted where the applicant has some defect in his title so that registration takes subject to that defect. The grant of this title is extremely rare.
2. An application for first registration must be made within two months of a disposition triggering first registration.
3. Failure to register has drastic effects. The disposition becomes statutorily void for the purposes of transferring, granting or creating a legal estate and the title takes effect in equity only. The title reverts back to the vendor who holds it on bare trust for the transferee.
4. After first registration all subsequent transfers of title must be recorded in the register to take effect at law.
5. Until registration the vendor holds as trustee and the purchaser has only an equitable estate in the property.
6. There is no time limit for registration of title in subsequent dealings in registered land, but delay risks the possibility of dealings in the property by the vendor.
4.4 Definition of Minor Interests (Called Burdens on the Register Under LRA 2002)
1. All interests in registered land which are neither registrable estates/charges nor interests which override the register take effect merely in equity and are known as burdens on the register.
3. These interests can be protected by entry on the relevant register of title of either a notice or a restriction.
4. Once an interest has been protected in this way, subsequent transferees of the registered freehold or leasehold estate will be bound by such interests.
5. Failure to register makes the interest ineffective against a purchaser for value of any subsequent registered disposition, and it is irrelevant that the purchaser knows about the interest.
6. The purchaser should check the register prior to completion to see if there are any rights affecting the vendor’s land.
7. Where there are two or more interests that have been duly protected by entries on the same title, the priority of the interests is governed by their dates of creation and not by the date of registration.
4.4.1 New Methods of Protection of Minor Interests
The LRA 2002 allows only two forms of protection for entries on the register: notice and restriction.
Entry of a notice protects an entry against a purchaser of the registered estate for valuable consideration (notices can be either consensual or unilateral).
Entry of a notice does not guarantee the validity of the interest.
Some interests cannot be protected by notice, e.g. interests under a trust of land (should be protected by restriction), a lease for not more than three years and restrictive covenants in leases (cannot be entered on the register).
Normally the notice will be an ‘agreed notice’ between the parties.
A unilateral notice may be entered without the consent of the registered proprietor although they have the opportunity to object.
These literally ‘restrict’ any dealings with the registered estate or charge.
Restrictions under the 2002 Act replace inhibitions and restrictions under the old laws.