The Land Registration Act and Land Registration Rules - Essay Example

The Land Registration Act 2002 and Land Registration Rules 2003 that repealed the earlier Land Registration Act 1925, were implemented on the 13th ofOctober 2003. The significance of these two legislations lies in the fact that they have been instrumental in completely replacing the law in respect of land registration. The role and practice of Land Registry is governed by these two legislations acting in consonance. Several important achievements can be attributed to the Land Registration Act 2002 and these are set out below: 1. It brings about a simplification and modernization of the land registration law and this constitutes the first major revision of the land registration system in seventy – five years. 2. Due to the Land Registration Act 2002, the land register has been transformed in such a way that it furnishes much more detailed and complete information of a title to land and depicts in a much more comprehensive fashion, the rights and interests affecting it. 3. This statute makes available a structure for the development of electronic conveyancing. In this context, this Act will permit the procedure for dealing with registered land to gradually migrate from the present paper-based system to a system, which will not involve any paper and that will be purely an electronic system within a few years. Further, this Act totally supplants the extant 1925 legislation in order to enable land registration to become a faster, clearer and simpler process. The major changes engendered by these two legislations in respect of the law and practice of land registration have had a profound effect on everyone concerned with registered land. Several instances of these changes can be cited and some of these are: 1. It has become mandatory to register even the shorter leases. 2. Voluntary registration has been made available for new types of interest in land. 3. Changes affect the protection of third party interests. 4. The law of adverse possession or squatter’s rights has been significantly changed1. The avowed objective of this Act is to render straightforward, improve and modernise the land registration law. Moreover, this Act has made available a framework for developing the all important electronic conveyancing. Several noteworthy modifications have been brought about in the law and practice for registered land. Some of these changes influence the protection of third party interests; superseding interests; which of the interests in land can be or have to be registered and the all important issue of adverse possession of registered land2. Furthermore, electronic conveyancing will result in a much more accurate register. The new Act will also help buyers immeasurably, by providing more complete information about the rights and responsibilities of the owner. Moreover, there will be an improvement in respect of the security of property rights in and over registered land due to the provision of superior methods for affording protection to them. As an example, owners of registered land have been provided much greater protection against claims made by squatters. Aim of the Land Registry The primary objective of the Land Registry is to not only register title to land but also to record dealings like sales and mortgages with registered land. The main goals of the Land Registry are to establish and develop a secure and efficient land registration system, in order to create and permit free movement of interest in land; to guarantee title in respect of registered estates and interests in land on behalf of the Crown; to make available accurate and current land information so as to allow secure property transactions and security of title; to accomplish increasingly better performance targets as determined by the Lord Chancellor, in order to provide high quality service promptly and at lower cost3. This act has ensured a better title for registered owners as they have been accorded better protection against adverse possession. Consequently, squatters will be unable to obtain interest of the property, irrespective of the duration for which they have enjoyed such adverse possession if the existing owner raises an objection. However, this benefit has not been extended to owners of unregistered land. A new post of Adjudicator to HM Land Registry has been established by this act. Its function is to resolve disputes referred to it by the Land Registry in respect of land registration applications. A very important result of technological development is that the use of documents has been abandoned and title will comprise of information available on a database which is accessible world wide by means of the internet. The objective is to convey land transactions by electronic conveyancing. This will increase the functionality of the register, which will as a result provide a far greater amount of information and this will require the registering of rights benefiting and burdening the land. In this manner any member of the public will have the capability to refer to the register and obtain information regarding any registered title4. The UK Department of Constitutional Affairs or the DCA provides guidance on publication schemes as also specific guidance in respect of the Freedom of Information Act. Several government departments have followed this advice in respect of their Freedom of Information and records management; however, in the context of the publication of other internal guidance the adherence is erratic. Some of the initiatives are the publication of online collections of internal guidance on business planning, finance and personal matters5. It also provides “online access to the weekly bulletins it circulates to NHS chief executives, social services directors, medical directors and other health professionals. Certain other guidance is also published, for example on procurement and the department’s relations with its NDPBs6.” The Inland Revenue’s publication scheme conducts a class covering: “internal technical guidance to staff about the matters for which the Department is responsible, rules, procedures, etc. that provide a better understanding of the Inland Revenues interaction with the public; also external guidance produced for the Departments customers7.” Most of this internal guidance concerns taxation matters, however, other matters like the department’s purchasing manual; the redress manual; its guidance on risk management8 and the departmental security manual9. The Department of Work and Pensions makes available extensive internal guidance in respect of social security materials, and examples are a comprehensive Decision Maker’s Guide, and summaries of Social Security Commissioners’ decisions. The Immigration and Nationality Directorate publishes all-inclusive instructions to guide its staff in applying rules pertaining to immigration, nationality and asylum10. Further, it publishes circulars to chief police officers and police authorities11. Similarly, the Prison Service publishes prison orders, which encompass an extremely varied range of matters from staff related matters to investigation of custodial deaths, respecting religious observances, etc12. While these constitute a part of the highlights, several other schemes exist that comprise of occasional examples of internal guidance and that are not keen to publish such material. The UK Land Registry commenced online services for the general public from the 31st of January 2005. This facility provides access to around nineteen million properties in England and Wales. The records of the Land Registry consist of the title register, which indicates the legal ownership, rights and mortgages and a title plan that shows the land in each registered property. The price paid by the owners in order to purchase the land is also available. It is hoped that this facility will increase the transparency of property transactions and at the same time make transactions easy to conduct. Moreover, it is possible to search and download copies of the register and title plan information in respect of any property by merely providing the relevant details. Peter Collis, Chief Land Registrar and Chief Executive of Land Registry stated that “The Land Register is a public database and as part of Land Registry’s strategy we are committed to ensuring that it is accessible to everyone, the pilot has been enthusiastically received and we look forward to the site becoming the starting point for every member of the public who is interested in the property market13.” In Bircham & Co Nominees Limited and Stowell v Worrell Holdings Limited14 the professed exercise of land option was deemed to be invalid as the buyer’s solicitors had qualified their notice exercising the option by insisting upon the seller to leave behind certain fittings in the property, whereas the option agreement had not made any mention regarding these matters. The court held that the purchaser’s notice did not constitute an exercise of option but was instead equivalent to a counter-offer to acquire the property at a specified cost subject to the stated fittings being left in situ. Despite the fact that the subsequent conduct and correspondence of the landowner seemed to indicate that he was agreeable to leaving these fittings in situ, the option and its purported exercise met with failure as the compliance with the provisions of Section 2 Law of Property (Miscellaneous Provisions) Act 1989had been only partial15. This issue of fixtures and fittings is very subtle and in one instance the sale of a £1 million house in Kensington was almost discarded due to a freezer, which both the vendor and the buyer wanted to retain. The impasse was resolved by the estate agent who procured a replacement freezer. Fixtures & Fittings It is usually not specified as to what constitutes the property itself, and what connotes the chattels contained in it. In general, the vendor includes with the sale contract an inventory of what is included in the sale. There is no restriction on what can be excluded from a sale by a vendor, if the vendor clearly specifies his intent. In respect of items whose cost is less than £5,000, disputes can be brought before the small claims court. If no inventory has been prepared then the contract of sale implies that fixtures should not be removed, whereas fittings can be removed. A few typical examples of fixtures and fittings have been listed below. Fixtures Central-heating boilers and radiators. Sinks, baths, lavatories. Kitchen units or items of furniture that have been bolted to the floor. Wardrobes, which fit a particular space and would be incomplete if removed. Wall paintings. Light fitments Fittings Paintings or mirrors that are hung or screwed to a wall. Carpets. Curtains and curtain rails. Free-standing ovens, refrigerators and washing machines. Lampshades. Television aerials and satellite dishes. The law of fixtures states that draperies constitute personal property as it is possible to remove them easily without damage. However, the drapery rods have been classified as fixtures to be incorporated into the sale of the house. Similarly, wooden window blinds that have been permanently attached to the structure are deemed to be fixtures and form a part of the sale. A home buyer desirous of acquiring non-fixture items has to specify them in the sales contract in order to ensure that they are included in the sales price. In a similar fashion, a home seller who is not willing to sell some specific fixtures that are attached to the structure, has to ensure that such items have been itemized in the written contract. If the seller fails to do so then these items will be automatically included in the sale. Some examples are track lighting, solar systems, screens, shutters, window coverings, TV antennas, telephone and Internet wiring, window air conditioners, water softeners, security systems, etc. In the event of litigation in respect of fixtures, there are five fundamental legal rules, these are 1. The mode of attachment. This constitutes the most important rule for fixtures. If the item is permanently attached to the structure, it is legally considered to be a fixture and it is included in the homes sales price. However, items that can be detached without damaging the structure do not constitute a fixture. Some instances are, unscrewing light bulbs and unplugging a refrigerator as these can be construed to be personal property that is temporarily connected to the building. 2. The respective intentions of the buyer and seller. In instances of indefinite written sales contracts this becomes crucial. 3. Adaptability to property use. Personal property built into a home becomes a fixture and is included in the sales price. 4. Agreement between the parties. Written contracts that specify an item ensure that the item is included in the sales price. 5. Relationship of the parties. In general, in litigations, the courts are likely to favour a buyer over the seller, the tenant over the landlord, and the lender over the borrower. The important exception to this rule is that in the sale of commercial business property the business tenant is justified in removing business trade fixtures. Some examples are restaurant equipment, outdoor business signs, display cabinets, etc. However, the business seller or tenant has to ensure that the premises have been restored to their pre-sale condition. The solution is to have a well-written sales contract in real estate deals16. Those items that are physically and permanently attached are generally a part of the house sale except, unless the seller specifically excludes them from the sales contract. The best policy is to specify items to be included17. Ron exchanged a contract to sell his house and garden. The contract did not have anything to say regarding fixtures and fittings, nevertheless, Ron remove the following items prior to sale a. A large concrete flower tub containing a mature dwarf tree. b. Several fitted carpets which had been nailed down. c. A modern insulated garage door in whose place a less costly door is to be procured. d. Decorative wall panels which line the hall. The removal of the concreter flower tub is permissible. Moreover, plants and trees attached to the ground are fixtures due to their being attached to the land by roots. However, plants being grown in pots are not fixtures and the seller is well within his legal rights to remove them because such pots are not permanently attached to the real property. There are several carpets that have been nailed down to the floor. Since fittings have been defined as items that are not of a personal nature and though they are available in the property, their sale is extraneous to the asking price. Some examples of such items are carpets, curtains, blinds, etc. A fixture comprises moveable personal property, which, has been changed to real property. Since, these carpets have been nailed down to the ground, they are now to be considered as fixtures and therefore Ron cannot take them. Ron is contemplating the removal of an expensive door and substituting a much cheaper quality door. Since a door constitutes a fixture it is illegal for Ron to make such a substitution. The hall has been lined with decorative wall panels. These panels are glued on to the walls and their removal will cause damage, moreover, these panels are fixtures and cannot be removed. Therefore Ron will be breaking the law if he removes the panels. The Land Registration Act and the Land Registration Rules have completely altered the law of land registration. The Land Registration Act simplifies and makes the land registration law contemporary. It has rendered the register a better and more complete picture of the land. It also, makes the rights and interests affecting it more transparent. Further, it develops a framework for the development of electronic conveyancing. Reference List Aim of Land Registry, retrieved December 30, 2006, from http://www.ramblers.org.uk/footpaths/research/advicenote10.html Bircham & Co Nominees Limited and Stowell v Worrell Holdings Limited. (2001) 47 EG 149. http://www.info.doh.gov.uk/doh/notice.nsf/frames2?openform. http://www.dh.gov.uk/ http://www.inlandrevenue.gov.uk/freedom/foi-05.htm http://www.inlandrevenue.gov.uk/risks/risks.htm http://www.inlandrevenue.gov.uk/manuals/dsmanual/index.htm http://www.ind.homeoffice.gov.uk/default.asp?pageid=798 http://www.homeoffice.gov.uk/inside/circs Land Registration Act 2002, retrieved December 30, 2006 from http://www.landreg.gov.uk/legislation/ Land Registration Act 2002, retrieved December 30, 2006 from http://www.landregistry.gov.uk/legislation/lract2002/ Negotiating for your House, retrieved December 31, 2006 from http://www.ces.ncsu.edu/depts/fcs/housing/pubs/fcs435.html Robert J. Bruss, 2006, How to avoid home-sale trouble with fixtures, retrieved December 31, 2006 from http://db.inman.com/bruss/columns /column.cfm?StoryId=060501BB4&Display=story The Legal Executive, retrieved December 30, 2006 from http://www.ilexjournal.co.uk/special_features/article.asp?theid=1155&themode=1 UK: UK house prices publicly available online. eGovernment News – 14th February 2005 – United Kingdom – eServices for citizens. Retrieved on January 2, 2007 from http://ec.europa.eu/idabc/en/document/3889/353. Read More