The New Land Registration Act - Essay Example

Land Law This discussion will first entail an overview of the Land Registration Act of 2002 and the Housing Act of 2004 then explain how these Acts simplify and modernise land title registration as well as the acquisitions and rental of property. The advantages and disadvantages of these reforms for both the home or land owner and the conveyancing practitioner will also be considered. The Land Registration Act of 2002 began enforcement in October 2003. It signals a new system for storing and safeguarding the registration of interests in land. Its requirements could have considerable connotations for landowners and lenders, anyone who has an interest in the acquisition or leasing of land. The purpose of the Act is to ensure that the registered titles to land meet the requirements of certainty, transparency and simplicity. In general, the two main objectives of the Act are to “eliminate unregistered title by encouraging landowners to register their title to land and to ensure that the registers held at the Land Registry provide a complete and accurate reflection of the title at any given time” (Vizards, 2003). These goals are to be met by the implementation of technologically advanced methods by which to register property. Paper titles will no longer be issued as proof of title to a property. The original title documents will be disposed of by the Land Registry. Electronic records will be kept and following registration, a landowner or mortgagee will only be supplied with a title information document (Vizards, 2003). The government provides a structure for the continued development of electronic conveyancing in this Act. There are also many important changes to the way law is practiced for registered land. “In particular changes affect protection of third party interests; overriding interests; what interests in land may or must be registered; adverse possession of registered land” (Land Registry, 2005). Shorter leases must now be registered voluntarily. Registration is available for interests in land previously unregistrable. The reformation of the law relating to adverse possession changes certain third party rights (Land Registration Act, 2005). Tenants in shopping centres and flats will be able to look at leases granted to other tenants and thereby discover any differences of payments made for similar space and amenities (Vizards, 2003). An important change in the Act is the introduction of a new system that addresses issues involved with adverse possession for registered land. The effect of this new law will render registered land virtually squatter-proof. To take advantage of this, people owning unregistered properties are well advised to apply to the Land Registry for voluntary registration. “In line with the Acts objective that the Register should show a full picture of any registered title, the number of overriding interests, to which property is subject to, will be reduced and some are to lose their overriding status after 10 years. For the first time, overriding interests are to be treated differently on first registration and on subsequent dealings” (Druiff, 2002). The Housing Act of 2004 introduced wide-ranging major reforms to “the house buying process, changes to the social housing sector, measures to improve the condition of housing; the introduction of licensing to the private rented sector” (Housing Act, 2004). This Act substitutes the previous housing fitness standard with the Housing Health and Safety Rating System. This system launches two new licensing requirements for privately rented property. As a new requirement of the Act, agents must generate a home information pack for the buyer before selling any residential property. “The Act makes other provisions about housing, including changing the right to buy scheme, strengthening the rights of park home owners, extending the power of the Housing Corporation to give social housing grants to non-registered social landlords and enabling local authorities to secure occupation of long-term empty private sector homes” (Explanatory Notes, 2004). As a general description, home information packs are described as a collection of documents relating to the property being sold, or the terms on which it is being offered for sale. Before advertising a property, the property owner or their estate agent must have a home information pack of standard documents available for potential buyers to inspect. An offer to buy a property and acceptance of that offer are usually made ‘subject to contract,’ in England and Wales. Under most circumstances, the approval of an offer does not constitute a contract until written agreements are exchanged which establishes that a legally recognised contract has been attained. Between agreeing terms and exchanging contracts, both the buyer and seller commonly do a number of things. For the seller, this could include: “obtaining the title deeds to the property; establishing title and producing Land Registry office copy entries where the property is registered; replying to pre-contract enquiries; preparing a draft contract” (Explanatory Notes, 2004). The buyer usually conducts local searches and makes other enquiries of the local authority and other organisations. The buyer may also arrange a survey. Therefore these documents and information are, under current practices, normally available only after terms have been negotiated and agreed subject to contract. “Part 5 of the Act aims to bring forward the availability of some of this information to the start of the process. It requires the person responsible for marketing a residential property to have a home information pack before marketing begins. The pack is expected to contain documents and information similar to those mentioned above, including a report on the condition of the property” (Explanatory Notes, 2004). The main accomplishments of the Land Registration Act of 2002 are the simplification and modernisation of land registry law (Druiff, 2002). The Act will make implementation of the law simpler by removing unnecessary procedures and replications. This Act represents the first major renovation of land registration law for more than 70 years “to modernise the property register so that it provides a more complete picture of a propertys title to land, e.g. by recording more fully the rights and interests affecting it, particularly those rights that were previously not recorded” (Druiff, 2002). The Act creates a framework in which it will be possible to transfer and create interests in registered land by electronic conveyancing means. It does so by enabling the formal documents to be executed electronically; and providing for a secure electronic communications network. The Act mandates the use of modern technology, so that the process becomes easier, faster and cheaper to take on the primary communications that the land law governs. “It makes the law clearer and more accessible by modernising and changing the language, codifying, consolidating and repealing obsolete provisions from the statute book, so that individuals, organisations and their legal advisors can more readily ascertain and understand their rights and responsibilities” (Halliday, 2003). The Act assumes that people are more likely to comply with the law if it is simple, clear and accessible and they consider it up-to-date and fair. “This land law reform should also result in more compliance, fewer disputes and therefore less need for expensive legal advice when disputes do arise, as well as a greater confidence in the administration of justice” (Halliday, 2003). The Land Registration Act creates a structure in which it is possible to transfer and create interests in registered land by enabling the formal documents to be executed electronically and providing for a secure electronic communications network. Registering title provides an up-to-date official record of who owns land and removes the need to examine the background of the title. It is a safe and straightforward way of transferring land between parties that cuts the cost of conveyance and helps to prevent fraud. “A registered title is guaranteed. If somebody suffers a loss because of a mistake or an omission from the register, he or she may be able to get compensation” (Collis, 2005). Registration can alleviate many problems in title transfers, which may, up to the time of first registration, have been the subject of conditions of sale and enquiries. “Many unregistered titles have been successfully re-established by registering them after title deeds have been lost or destroyed. Registering a title should reduce costs because it makes conveyancing work a lot simpler. It also helps to prevent fraud, which can result from copying or withholding title deeds” (Collis, 2005). The Land Registration Act of 2002 was intended to make the conveyancing process faster, more assured and possibly more cost effective as opposed to the old paper system. Implementation of the system requires new methods of operating by the Registry and by conveyancing agents because the execution of property documents and their subsequent registration will be simultaneous and the process of registration will be initiated by conveyancers. Access to the land registration database network is controlled by the Land Registry which also controls the changes which can be made to the register. “The Land Registry will be obliged to make arrangements for access to the network by those who wish to undertake their own conveyancing” (Explanatory Notes, 2002). The benefits of electronic conveyancing can be maximised if it is used by all property owners. “Electronic conveyancing enables dispositions with a connection to land registration to be made by means of documents in electronic form to enable registration to be made a pre-condition to effect dispositions of registered land or other interests which are the subject of a notice in the register; to enable an electronic network to be set up to carry out functions related to registration; to provide for circumstances in which conveyancers may be required to use electronic means to complete and register transactions simultaneously” (Explanatory Notes, 2002). This system gives the opportunity for solicitors to give clients a faster, better quality service and makes paper searches a thing of the past. Leases or mortgages electronically filed to the Land Registry will be exposed to public examination. Parties to a transaction, especially landlords, will be concerned about the disclosure of commercially sensitive information. “Landowners with unregistered titles beware! If ever there was a carrot for voluntary registration of your title then the new law relating to squatter’s rights would surely qualify” (Vizards, 2003). Under the new law, it has now become more difficult for squatters to acquire title to registered land. The law as it relates to adverse possession (in so far as it relates to registered land) will in effect be eliminated. Under the old title laws, “anyone who had encroached on another’s land for a period of 12 years without legal challenge would effectively become entitled to claim ownership of the land under the Limitation Act 1980” (Vizards, 2003). This contingency will continue to be applied to unregistered land. “However, the Act will now entitle a squatter to apply to be registered as proprietor of registered land after being in possession for only 10 years. A squatter will acquire title to registered land only by registration of his interest. The Land Registry will give notice of the application to the registered proprietor, the registered chargee, or in the case of a lease, the registered proprietor of any superior registered title” (Vizards, 2003). The Act gives the paper title owners the advantage and is of major disadvantage to the squatter. It has become more problematic to acquire title by adverse possession. An early warning system is introduced requiring a registered proprietor to be notified of an application by a person who has been in adverse possession for 10 years to register a new title. “The registered proprietor will be able to serve a counter-notice and take action to evict the squatter within 2 years. If he fails to do so, the squatter may apply again and his application to be registered will succeed” (Smith, 2003). In addition, all leases that are granted for more than seven years or allocated when the lease has more seven years remaining, must now be registered. The limit used to be twenty one years. This is intended to put much more commercially leased property onto the land register. Leases taking effect for more than 3 months ahead, including some timeshare leases must also be registered, even if granted for seven years or less. “The Act also introduces a new system for the protection of third party rights. The longer term impact of the Act includes the introduction of e-conveyancing, a method by which electronic means will be used to enable a property to be sold, changes to the way in which disputes are handled including the appointment of an independent adjudicator and crown land becoming registrable” (Brackett, Hart & Pratt, 2003). There are many benefits and advantages of title registration. The properly registered title of a property determines who owns the property and provides a description of that property and what rights and obligations affect it. A registered title is a guaranteed title, the register describes the property, who owns it and what rights and obligations affect it. A plan of the property is also provided based upon the Ordnance Survey. “This information is essential for buyers and lenders. By registering your title it also provides prospective buyers with proof of ownership. It is also now easier and more convenient to get an official copy of the register and title plan as proof of ownership. There is no risk if the original documents are destroyed. All registered titles are now stored in electronic format by The Land Registry, with plans to provide direct access to this information by computer which should assist to speed up transactions including sales and mortgages” (Brackett, Hart & Pratt, 2003). The circumstances by which squatters can claim ownership of a registered property have been severely limited by the 2002 Act thereby better protecting owners of registered properties. Both Acts serve the benefit of the state, property owners, buyers and tenants. The state saves money and the legal system isn’t as locked-up in land disputes. Land owners have more convenient access and an unimpeachable stake to their property. Buyers know more about their purchase in advance of a contract. Tenants have an open book to prices charged to others in the same general location. The open-book, efficient, streamlined title service and property definitions have served to make the system more trustworthy and well-organised. References Brackett, Hart and Pratt. (12 January 2003). “Premises and Land: Latest News.” Brackett, Hart and Pratt Solicitors. Retrieved 14 February 2006 from < http://www.b-h-p.com/?page=23&lang=en&layout=def&category=26&newsnr=18> Collis, Peter. (December 2005). “Land Registry Public Guide 8.” Land Registry Office. Crown Copyright. Retrieved 14 February 2006 from Druiff, Naomi. (2002). “Land Registration Act 2002 – An Overview.” Consilio. Retrieved 14 February 2006 from “Explanatory Notes to Housing Act 2004.” (2004). Crown Copyright. Retrieved 14 February 2006 from < http://www.opsi.gov.uk/acts/en2004/2004en34.htm> Halladay, John. (March 2003). “Quinquennial Review of the Law Commission.” Department for Constitutional Affairs. Retrieved 14 February 2006 from < http://www.dca.gov.uk/majrep/lawcom/halliday.htm> “Housing Act 2004.” (2004). ePolitix.com. Retrieved 14 February 2006 from < http://www.epolitix.com/EN/Legislation/200311/0700B60A-C0E2-42E6-BFF4-90BFE120F59E.htm> “Land Registration Act 2002.” (2005). UK Land Registration Services. Retrieved 14 February 2006 from < http://www.landsearch.net/landregistry/lr2002.html> Land Registry. (2005). “Land Registration Act 2002: About the Act.” Retrieved 14 February 2006 from Smith, Herbert. (June 2003). “United Kingdom: The New Land Registration Act.” Retrieved 14 February 2006 from Vizards, Tweedie. (2003). “Solicitors and Parliamentary Agents.” The Land Registration Act 2002. Retrieved 14 February 2006 from Read More