Registered and Unregistered in the UK Land System - Essay Example

? LRA 2002 TABLE OF CONTENTS Introduction………………………………4 2. Registered Land…………………………4 3. Aspects of Overriding Interests………5 4. Purchasers of Registered Lands……..6 5. Conclusion……………………………….9 6. References……………………………….11 Abstract The paper discusses how the reforms brought about by the Land Registration Act 2002 will help the registered land purchasers, especially from the standpoint overriding interests. 1. Introduction In Wales and England, there are primarily two main systems of conveyancing, registered and unregistered in the UK land system, as governed by the 2002 Land Registration Act or LRA 2002. Previous to this act, the unregistered lands were regulated by the 1925 property legislation and the common law and equity rules. The creation of the 2002 Land Registration Act brings about a revolutionary change in the way conveyancing in Wales and England is carried on, and also to create a modern land registration system1. The primary aim of the Land Registration Act 2002 is to significantly reduce the amount of overriding interests which can potentially bind a registered title purchaser and replace most of them with entries which are registrable. 2. Registered Land Registered land refers to the land where the title of the land has been registered into the Land Registry and the objective is to make an registered entry of ownership of land and also of the third party which is involved into the registration process. The theory states the purchaser may not need to look other than into the register to make enquiries regarding the price of land purchased. In actual condition, if overriding interests are applicable on a piece of land, which may happen even in case when the buyer is bound to the land and the name of purchaser appears nowhere into the register, then the purchaser needs to look far beyond the register. Registered land ownership is often more striking than the ownership of unregistered land.2 Wherever the title has been registered, they are bound to be ascertainable and registered from the register; however it is often subject to overriding interests. 3. Aspects of Overriding Interests Overriding interests are mainly the interests that are given for registered land which has not been registered and it binds the purchaser to the land. Overriding interests can be divided into two categories - the overriding on the first registrations (mentioned under LRA 2002 of s. 1) and the overriding registered disposition (mentioned under LRA 2002, s. 3). In both the schedules, similar categories of interests' terms are mentioned, although there are many restrictions within the scope of these interests. Overriding interests is applicable on short leases and it provides the right to people who are actually occupying the land,3 while it does not include mortgages of registered land or estates, the third parties which are registered against the estate and the short term lease which overrides minor interests. If the third party is overriding interests against the registered estate, then it automatically gets the right to bind the buyers. This can be compared to the legal interests, which is provided against unregistered title. If the third party does not override, then it becomes the minor interest which will bind the purchasers only in a condition when it is protected through some type of register entry (This is comparable to the land charges required for registration). It is stated by the mirror principle that until it affects the title, the legal use of the enjoyment of the land can never be complete and this means the category should be abolished or it should be significantly reduced. There are sometimes a number of interests which includes the legal and equitable interests which are not on the register and it binds the purchaser of the land, irrespective of the inconsistency of notice with the concept of title registration.4 Other related aspects of the proposals of overriding interests involve the principle issue in addition to the safety provisions. In the current scenario, the registered titles are subjected to the possibility of effective application for the minor adjustments in various lists of conditions and there is no regulations which limits the type of interest to the subject of claim for adjustments or rectification, and this status analyzes the rectifications to find out the effects of overriding interests. Rectification is similar to overriding interests and both are means of claiming unregistered interests against the proprietor of the registered land.5 In certain cases, rectification may result in breaking down of certain mirror principles. However, the breaks identified through rectification can be wider as compared to the cracks assessed by the overriding interests. These breaks are wider as it is used to change many aspects of registration which involves the statutory provision which are drawn not only in terms of interests which may be the case of the application, but also in terms of the situations when the adjustments are actually requested. These rectifications can be shallow in the conditions when it is discreet, also it includes four exceptions which are not found when the person owns registered proprietor. In the current context, the minor adjustments regarding the overriding interests is not refused in normal circumstances because in case it is refused, the interest continues to subsist for a long period and it will have reverse impact on the land.6 In the present case, protection is not given, although it appears payable, which includes the applicable legal costs which are required to be paid when the land is exposed to various interests. 4. Purchasers of Registered Lands Since 2002, the tag of overriding interests changed and the act has been replaced by 'interests that override'. The main purpose of 2002 Act is to provide a true picture of the land mentioned. The category of property rights mentioned under the Section 70(1) of 1925 Act used to bind the owner of the title, even when it was unregistered or undiscoverable, which reduced a number of problems of the buyer of the land. The 2002 Act initiated the obligation to have electronically registered forms of disposal and without it, no enforcement right existed under the law or the equity and hence, overriding cannot be done. The whole country now comes under the compulsory rule of land registration and only a few cases are allowed voluntary registration, although it is preferred due to low fees of application. This is attractive change for many as it eases the process of sale and also because the registered proprietors are provided more protection for adverse possession claims as compared to unregistered counterparts. The procedure of protection in case of land ownership, has been changed with the new 2002 Act where you do not have separate category for minors, although minors who are named get the rights which is protected by the notice which is mentioned in the registered title in s. 28-30 and also Part 4 of the Act.7 The rights of 2002 Act reduces obligations of the owner of the registered title, until it is entered into the register. The category mentioned under the overriding interests has been reduced under 2002 Act, and now it follows that the owner will have to enter more interests into the register. Land can be bought on short lease which are not registered and are called overriding interests, which means lease can be granted for maximum term of seven years and the registration process is slightly different in the case of registered and unregistered property. It should be made clear if the third party (where the third party can be constructive trust interest) is minor or overriding, the overriding interests becomes a major issue for the buyer of the registered title. Overriding interests may not be registered and thus the buyer may be bound to overriding interests, which affects the purchased title even if he knows or does not know about it. The 1925 Land Registration Act listed the "old laws" of overriding interests under 70(1) and the section consisted mainly of lettered paragraphs. Several of these interests which are mentioned under 70(1) are not practical and only 5 categories of overriding interests are relevant in practice. The aim of the LRA 2002 is to restrict overriding interests, which are imposed on the buyer of registered title and in my consideration; the new act fully achieves its purpose. However, the 2002 Act complicates the matter of two or more different types of overriding interests and Schedule 1 lists the conditions of unregistered interests which are applicable on first registration.8 Schedule 3 lists the unregistered interests for overriding registered dispositions. Limited practical applicability of the Schedule 1 has been previously discussed, and now the new rules can be implemented in case easements, and the profits overriding interests, which are boasted as a reform, can make the life easy for the buyers of registered land. It can be concluded the latest set of rules are highly complicated and secondly, these rules provide limited easements while the benefits are mostly excluded as it becomes overriding interests. The new set of rules does not become overriding legal easement or profits, when - 1. No physical evidence of its existence is left on the land 2. It has been exercised at least one time annually before the land is transferred. From the point of the view of the buyer, the registered land should be recorded in the register for the title of land. The main aim is to ease the process and reduce the overriding interests which would be implemented at the end. The balance should be achieved, while paying the interests on the land which may be biased towards the needs to record the rights on the register which binds it to the purchaser. People who want to completely get rid of overriding interests should look at it from the point of the buyers without paying regards to the interests of the other parties involved in the transaction. The whole class of overriding interests has suffered criticism where its terms and concepts have been criticized.9 The critics point towards the overriding interests which has reverse impact on the registered titles of the land where there is no mention of the register. It was also mentioned in the "Land Reform Now."10 5. Conclusion In the new Land Registration Act, title investigation is faster and is less complicated. Furthermore, title is guaranteed by the HM Land Registry, this basically means that a person who could suffer a loss owing to the mistake of register, and requires a rectification, would be guaranteed a payment of indemnity by the Registry. Although for everyone who suffers a loss, compensation is not always available. If a rectification is made for giving effect in case of an overriding interest, no compensation is payable. One of the other major benefits is that risk of a purchaser is greatly reduced by registration, especially when the purchaser has third-party rights. This is due to the fact that a purchaser of a registered land is completely free from all the hindrances, other than the issues which are safeguarded by overriding interests or a register entry. 6. References Battersby, G. (2005) “More Thoughts on Easements under the Land Registration Act 2002" May/Jun Conveyancer and Property Lawyer Bogusz, B and Sexton, R (2011) "Land Law (Complete)", OUP Oxford; 2 Edition Cooke, E. (ed.) (2003) ‘Proprietary Estoppel and Formalities in Land Law and The Land Registration Act 2002: Theory of Unconscionability’ in Modern Studies in Property Law, Oxford: Hart Jackson, N. (2003) ‘Title by Registration and Concealed Overriding Interests: The Cause And Effect Of Antipathy To Documentary Proof.’ LQR 119 (Oct), pp. 660–691. McEwen, A. (2001) “Land Reform in Developing Countries: Legal and Institutional Aspects.” Presented at the 2nd International Conference on Land Management, Anglia Polytechnic University, Danbury, UK Omar, P.J. (2006) “Equitable Interests and the Secured Creditor: Determining Priorities" Nov/Dec Conveyancer and Property Lawyer 518 Read More