Registered Land

Question 1

Weaknesses of deed registries

Answer 1

Did not guarantee title, becuase it is n_ot_ dispositive

Not universal

Not a cadastral system

Not compulsory

Question 2

Weakness of deed registries

Does not guarantee title

Answer 2

• Did not guarantee title, because it was not dispositive
  
  • If an act is dispositive, it transfers the right to the other person
  • Registration was only a record that a title had been created or transferred (by deed), but did not create title or pass it itself, it was the deed itself which vested title

Question 3

Weakness of deed registries

Not universal

Answer 3

• If a transaction giving rise to the deed was flawed, then so was title regardless of its registration, and the transferee was not protected
  
  • E.g. fraudster X forged a deed to register his title, C looks at the register to see who owns it and see’s X’s name there, and feels confident that she is buying it from the right person. C ends up with no title at all (nemo dat quod habet)

Question 4

Weakness of deed registries

Not cadastral

Answer 4

• Arranged by name of the title holder rather than by reference to the parcel of land by a unique index number. Purchasers had to know the name of the person against whom all the rights were held [see Oak Co-operative Building Society v Blackburn]
• A cadastral register is one that is order in order of plot of land

Question 5

Land Charges Register

Answer 5

• Land Charges Register set up by the Land Charges Act 1925 (and now governed by the LCA 1972) to record charges over unregistered land.
  
  • Entries made against the name of the freeholder.
  • Being phased out by compulsory registration.

Question 6

Registration of title

Answer 6

• From 1926-2003: Land Registration Act 1925 and Land Registration Rules 1925
• From 2003-present: Land Registration Act 2002 and Land Registration Rules 2003 (SI 2003/1417)
• Records legal effect of transactions between parties
  
  • Dispositive: changes legal ownership by effecting a disposition between transferor and transferee.
  • Vests legal title regardless of validity of prior transaction
  • State guarantees title
  • Unregistered land principles protect possession, registered land principles protect ownership and is closer to the Roman idea of dominium.

Question 7

Conveyancing of land before 1926

Answer 7

• Title to land is unregistered
• Documentary title – title established by deeds; purchaser must investigate ‘root of title’
• Good root of title – deeds going back at least 40 years (then 15 under s 44(1) LPA 1925, as amended by s 23 LPA 1969
• System complex, time-consuming and expensive. Presents a shackle on the economic exploitation of land as a resource of wealth.
• Economic and social changes by later 19^th – early 20^th C force Parliament to make changes: 1925 legislation

Question 8

Basic priority rules before 1925

Answer 8

• Rules that establish how earlier rights bind later rights or if later rights can bind free earlier rights over the same piece of land
• Before 1925, legal rights bind the world whilst equitable interests were subject to the doctrine of notice [Hunt v Luck]
  
  • The doctrine now never applies to registered land
• Hunt v Luck: “if a purchaser or a mortgagee has notice that the vendor or mortgagor is not in possession of the property, he must make inquiries of the person in possession – of the tenant who is in possession – and find out from him what his rights are, and, if he does not choose to do that, then whatever title he acquires as purchaser or mortgagee will be subject to the title or right of the tenant in possession”

Question 9

Doctrine of notice

Answer 9

• Your conscience was deemed to be affected by any rights the purchaser knew about or should have known about in the circumstances and having had made an inspection
• The purchaser who took free of rights was known as ‘equity’s darling’
  
  • The bona fide purchaser for value without notice
  • Somebody who in good faith gives consideration and does not know about (and should not be expected to know about) in the circumstances the existence of any existing rights
  • There is actual, constructing and implied notice

Question 10

Kingsnorth Finance v Tizard

FACTS

Answer 10

• Mr T was the sole legal owner, but W has a beneficial interest resulting under a trust. T separated from W, who lives nearby but often stays over to look after the children, and leaves her things in the home. T applies to mortgage the home to KF. KF sends a representative to the house, and asks if T is married, to which he lies and says he is not; KF agrees to the mortgage. T defaults, KF wants possession, W resists

Question 11

Kingsnorth Finance v Tizard

HELD

Answer 11

• : KF was fixed with constructive notice, as it was apparent that another adult lived at the premises (there were clothes in the cupboard)
  
  • Her presence was discoverable upon a reasonable inspection (is it reasonable to go through someone else’s cupboard)
• The mortgage was only secured in equity over the half owned by Mr T and thus in danger of negative equity

Question 12

1925 REFORMS

Answer 12

• To protect purchases and move away from the doctrine of notice
  
  • The register abolished the need for the doctrine of notice
• Aims to make land as easily traded as other property (e.g. stocks and trades)
• Creation of two separate but concurrent systems of protecting existing interests and the interests of purchasers, which are sometimes at odds; they did not have compulsory registration
  
  • Unregistered land: where title and legal rights are unregistered but equitable interests are entered on a Land Charges Register; charges register
  • Registered land: where title is registered along with legal rights and equitable interests; still exists; title register
• There was a reduction of the freehold estate to one – the fee simple absolute in possession
• Reduction of number of legal owners to four, who hold the title as a single document
  
  • Abolition of legal ‘tenancies in common’
• Introduction of the mechanisms of overreaching: allows a purchaser paying at least two trustees to take property free from beneficial interests under a trust
• Simplification of conveyancing and move away from doctrine of notice
  
  • Limited to ‘family’ (as opposed to ‘commercial interests’) held in a trust for sale of unregistered land (now a trust of land)
  • In registered land, these interests are over reachable
• The restriction of number of legal owners and keeping beneficial interests off the title so as not to affect purchasers makes conveyancing simpler, cheaper and therefore more attractive.
• Encourages market in land.

Question 13

Unregistered conveyancing

Answer 13

• Title is not registered, and thus it must be shown by producing title deeds
• Legal rights bind the world
  
  • Purchasers will take subject to these rights, regardless of whether or not they knew about it
• Equitable ‘commercial’ interests must be registered under the estate owner’s name on the LCA 1972
  
  • If it is not on the register, it does not bind the purchaser, even if the purchaser knows about it
• The only time the doctrine of notice applies is when you are dealing with a trust of land and there are a beneficial interests

Question 14

Midland Bank v Green

FACTS

Answer 14

• Father Walter sells son Geoffrey option to purchase the family farm (Gravel Hill Farm, Thornton-le-moor, Lincolnshire) (estate contract – a Class C(iv) land charge), son fails to register interest; father later decides to defeat son’s interest by selling farm to wife at an undervalue. She clearly knew of charge – the only reason for the transfer was to defeat the charge.
• Question for court was whether notice could save the son’s interest.

Question 15

Midland Bank v Green

HELD

Answer 15

• If there is no registration, then C cannot be bound even if C was aware
• “The Act itself provides a simple and effective protection for persons in [the son’s] position … by registration”

Question 16

Visibility of legal rights

Answer 16

• Almost all legal rights are not recorded
  
  • Second legal mortgages need to be registered on LCR because the first mortgagee has a deed
• There is usually no visual evidence visible by presence of a tenant

Question 17

UNREGISTERED LAND

Registrable interests on lang charges register

Answer 17

LCR s2-5

• Equitable mortgages
• Equitable easements
• Other equitable interests
  
  • Restrictive covenants
  • Estate contracts (includes equitable leases)
  • Options to purchase
  • Rights of pre-emption
• Second legal mortgages (needs to be registered on the LCR because the first mortgagee has a deed)

Question 18

LCA 1972

Answer 18

• Charges are entered against the name of the freeholder
• Charges here refers to any commercial interest and not just a charge or mortgage
• Also, not to be confused with the part of the register of title called the Charges Register in registered land

Question 19

‘Family interests’ and doctrine of notice

Answer 19

• Only applies to beneficial interests in a trust, “old” commercial interests and interests arising by estoppel
• Constructive notice: a purchaser is not affected prejudicially by anything unless “it is within his own knowledge or would have come into his knowledge if such inquiries and inspections had been made as ought reasonably to have been made by him” (or by his agent) [s199(1ii) LPA 1925]

Question 20

Problems with unregistered conveyancing

Answer 20

• A register based on owner’s name rather than title can lead to confusion: see Blackburn and Barrett.
• A search certificate, rather than the register, is conclusive, so a registered charge may be lost if a search is not carried out properly.
• Some equitable rights are not registrable, so that the doctrine of notice, with all its uncertainties, is still applicable in some cases: see Tizard.
• The rights of persons in actual occupation of the land are not protected: see Carrick. So, owners of interests in unregistered land lack the ‘safety net’ available to those with similar interests in registered land.

Question 21

Lloyds Bank v Carrick

FACTS

Answer 21

• Mrs C entered into a contract with new in-law Mr C for lease. This becomes an estate contract. The estate contract is a registrable charge. She had not registered is, and so it was not effective against the bank [LCR s4(5)]. She was in occupation, but she did not have an equitable interest in a trust, so the doctrine of notice was not effective

Question 22

Unregistered land is moribund

Answer 22

ss 4-5 LRA 2002: registration of title is required on the occurrence of any of the following ‘triggering’ events (if you do anything with the land, you are required to bring the title onto the register):

• Transfer of a qualifying estate by sale, gift or order of court (i.e., transfer of the freehold)
• The grant out of a qualifying estate of an estate in land for a term of years absolute of more than 7 years (i.e., the creation of a long lease)
• The creation of a legal mortgage of the qualifying estate
• The grant of a short lease not taking effect in possession

Question 23

Registered v Unregistered land

Answer 23

UNREGISTERED LAND

REGISTERED LAND

No registration of title

Title is registered

Legal interests are not registered

Most legal interests are registered

Registration of land charges (only equitable commercial interests)

Equitable commercial interests are entered as notices on the register

Doctrine of notice for ‘family’ (trusts) interests

No doctrine of notice

Some interests are overriding interests