24) Land Registration Part 2 PDF

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24) Land Registration Act 2002 part 2 Land Registration Part 2

28. Basic Rule- older interest has priority over newer interest 29- Effect of registered Disposition - Older interest is postponed to newer registered interest unless older interest is protected - Grant of lease that is not a registerable disposition is treated as if registered when granted Protected Interests 29(2) the priority of an interest is protected if the interest - Is a registered charge - The subject of a notice in the registered - Falls within schedule 3 A registered Charge - 132 General Interpretation - “charge” means any mortgage, charge or lien for securing money or money’s worth - – “registered charge” means a charge the title to which is entered in the register o Security interest in land Other ways to protect an interest outside of registration is entry of notice s32 or entry of restriction s40 Notice in a register - 32 Nature and Effect - (3) The fact that an interest is the subject of a notice does not necessarily mean that the interest is valid, but does mean that the priority of the interest, if valid, is protected for the purposes of ss29-30 o Something lodged in registration system o Registration is the event that creates the interest o Notice does not tell you if you have the interest but if you do have the interest then the notice will protect it - 33 Excluded Interest - (a)an interest under a trust of land o Cannot file a notice o Interest under a trust are not meant to bind the land - (b) a leasehold estate in land which is granted for a term of three years or less… and is not required to be registered o There is protection under 29(3) o Short leases not worth the trouble and cost of entering into register so will take effect as overriding interests - (c) a restrictive covenant made between a lessor and lessee… relating to the demised premises

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24) Land Registration Act 2002 part 2 o binding effect of leasehold covenants are through common law rules and Landlord and Tenant Act 1995 Restrictions - 40 Nature - (2) a restriction may… prohibit the making of an entry in respect of any disposition, or a disposition of a kind specified in the restriction… indefinitely, for a period specified in the restriction, or until the occurrence of an event so specified Schedule 3 – unregistered interests which override registered dispositions - 1. Leasehold estates in land o not valuable as longer leases as likely to been bought for a premium o not a burden for purchaser of fee simple o owner will be entitled to rental income - 2. Interests of persons in actual occupation o not specific category but any proprietary interest of a person in actual occupation of the premises o interest must be a property right to the land occupied including equity  Ainsworth vs Boland 

Denning LJ, giving judgment in the Court of Appeal, found that her right took the form of a license coupled with an equity, which he, with characteristic (if somewhat unflattering) 4

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gallantry, called the “deserted wife’s equity”. The House of Lords rejected this finding. While it recognized that Mrs. Ainsworth had a right to live with her husband wherever he may be, this right was not to a specific piece of land. In other words, it was not a property right, but a personal right enforceable only against her husband and therefore it could not bind the bank. Mrs. Boland, in similar circumstances, was luckier. She was able to show that she had a proprietary right: she had contributed money towards the purchase of the house and so had a proprietary interest under a resulting trust. Her actual occupation of the property protected that interest.

o owner of the right must not consent to the disposition

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a third party in the position of the bank has to direct its enquiries to the person who may hold a right “inconsistent” with the title of registered proprietor and to gain her consent. Consent can be implied. If the beneficiary under a trust knew that a mortgage was required and did not object to it, then the court would regard that as implied consent

o the occupation must be discoverable on a reasonable inspection  occupation does not give constructive notice of the occupier’s interest  protects the occupier’s interest against dispositions to which he has not consented to  occupiers may be vulnerable as they do not control the legal title and so ma be deprived on their home by the legal owner’s breach of trust  this priority allows beneficiaries who are also occupiers a small step towards protecting them from trustee’s with legal title in a breach of trust 

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Kingsnorth Finance Co Ltd v Tizard [1986] 1 WLR 783 from lecture 33, in which the mortgagee was expected to deduce from the surroundings that Mr Tizard had a wife. Although the case involved unregistered land, the case is often referred to as one of the few authorities on the scope of inspections. The Court found that occupation meant physical occupation, but not continuous and uninterrupted presence. Discontinuous presence does not disrupt occupation, but the occupier must intend to return. This point is illustrated memorably in Chhokar v Chhokar [1984] FLR 313. Mr Chhokar attempted to defeat his wife’s interest in the house by taking advantage of her absence to sell the house to Mr Parmer. Her absence occurred when she went into hospital to have the couple’s baby. When she returned, she 3

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found that her husband had disappeared and that Mr Parmer had changed the locks. With barely contained apoplexy, the Court found that her absence from home did not disrupt her actual occupation. It was clear that she occupied the house: it was her sole residence and her absence was obviously intended to be temporary. By contrast, in Thompson v Foy [2009] EWHC 1076 (Ch), [2010] 1 P & CR 30, the claimant’s intention not to return despite the presence of her belongings meant that there as no actual occupation.  Lewison J took the opportunity to give (obiter) guidance on the timing of occupation and on the occupier’s intention.  He thought that not only did the claimant of an overriding interest have to be in occupation at the time the registrable disposition is made (i.e., when the deed is executed) but that her occupation should continue until the disposition is completed by registration.  The problem for Mrs Thompson was that at the relevant time she had already left the property not intending to return, although she had left some luggage and furniture which she had thought to send for later. Although the act of keeping belongings on the premises may mean that your occupation is obvious even when you are not there (e.g., Tizard), it must be coupled with an intention to return (e.g., Chhokar). 4

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 o occupation itself is not a right in land, (2) protects the interests of the person in occupation not the occupation itself 3. Easements and profits a prendre o express legal easements must be registered s27(2)(d) o but interest by implication may be protected o

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An unregistered express legal easement cannot be saved under schedule 3, paragraph 3, because it is equitable and paragraph 3 only protects legal easements

o Most cases here Made to justify the overriding interests and works because they are too minor to pose much of a burden on the purchases or that it would be unreasonable in the circumstances to expect the owner of the interest to register it

Leasehold Estates - A leasehold estate in land granted for a term not exceeding seven years from the date of he grant, except for o (a) a lease the grant of which falls within section 4(1)(d), (e) or (f) o (b) a lease the grant of which constitutes a registrable disposition  S29(4) treating as if registered and here it gives it the protection  On what basis would you take advantage interest over the owner  4(1)(d) more than 10 years in the future  4(b) lease of more than 7 years must be registered Persons In Actual Occupation - An interest belonging at the time of the disposition to a person in actual occupation, so far as relating to land of which is in actual occupation, except for—an interest of a person of whom inquiry was made before the disposition and who failed to disclose the right when he could reasonable have been expected to do so o Are you in actually occupation AND o Do you have interest in the land o If the occupation would not have been obvious on reasonable inspection will not have interest protected

Paddington v Mendelsohn, -

the Court of Appeal had the opportunity to revisit the problem of implied consent in relation to someone in 5

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actual occupation of registered land. The defendant, Mrs Mendelsohn, was the registered proprietor’s mother. She argued that her actual occupation gave her extra protection not available to beneficiaries under a trust of unregistered land. However, she had known that her son could not buy the property without a mortgage loan. HELD- The Court held she had authorised him to charge the property, and so she did not have priority despite her occupation. Further, Browne-Wilkinson LJ held that her actual occupation did not give her any greater rights under the trust than she would ordinarily have.

National Provincial Bank Ltd v Hastings Car-Mart Ltd [1964] -

Russell LJ o

It seems to me that section 70 in all its parts is dealing with rights in reference to land which have the quality of being capable of enduring through different ownerships of the land, according to normal conceptions of title to real property. If such a right as is now in question is not of this quality, I would not be prepared as a matter of construction to hold that it is embraced by the language of section 70

National Provincial Bank v Ainsworth 1965 - Husband lives in house with wife and 4 children - Husband deserted his wife - They move out - Husband in financial trouble with business and so transfers the house to the company - Company mortgaged house to bank - Bank sought possession of house - Mrs trying to resist that 6

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Mrs was in occupation of the land but Held she does not have proprietary interest in the land Deserted wife’s equity o Husband has duty to provide home for his wife o Wife’s right to A home is not a right to any specific home o Personal right only enforceable only against husband Lord Wilberforce o

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any right of an occupier becomes by this subsection binding on a purchaser who does not inquire. The answer to this, in my view, is that provided by Lord Denning in the passage I have already quoted. This Act is a registration Act concerned (in this instance) to provide that certain rights are to be binding without registration and without the necessity for actual notice. this Act is, in this respect, bringing about a substantive change in real property law by making personal rights bind purchasers; second, that there is a difference as to the nature of the rights by which a purchaser may be bound between registered and unregistered land; for purely personal rights including the wife’s right to stay in the house (if my analysis of this is correct) cannot affect purchasers of unregistered land even with notice.

Williams & Glyn’s Bank v Boland - Wife contributed financially - Lord Wilberforce o “each wife contributed a substantial sum of her own money toward the purchase of the matrimonial home or to paying off a mortgage on it. This, indisputably, made her an equitable tenant in common to the extent of her contribution.” - As she contributed to paying off the mortgage will be constructive trust - Women have contributed to buy the house or making mortgage payment and so that gives them the interest - But even if they had an interest they did not have occupation and so could not have an interest - Lord Wilberforce: “ Then, were the wives in actual occupation? I ask: why not? There was physical presence, with all the rights that occupiers have, including the right to exclude all others except those having similar right.”

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“Occupation, existing as a fact, may protect rights if the person in occupation has rights. On this part of the case I have no difficulty in concluding that a spouse, living in a house, has an actual occupation capable of conferring protection, as an overriding interest, upon rights of that spouse.

Lloyds Bank v Rosset - Buy a house to renovate for their family home - Nov to Jan builders at work on renovation with wife there daily - Nov husband contract with vendor- valid contract of sale done so house held on Trust for the husband - Dec- Husband completed purchase and granted charge the bank KEY date, at that point was the wife in actual occupation - HELD she was- even if she didn’t live there o Builders were in occupation as agents of husband and wife o Wife had interest in the house based on constructive trust interest as house was to be both theirs and even if she wasn’t giving money contribution she still was - HL HOLDS SHE DOES NOT o HL don’t need to discuss occupation as she does not even have an interest - Nicholls LJ: “ I accept that in ordinary speech one normally does equate occupation in relation to a house with living there. If a person is intending to move into a house but has not yet done so, he would not normally be regarded as having gone into occupation. That is the normal position, with a house which is fit for living it. But that does not provide the answer in the present case, where the house was semi-derelict.” o She was preparing to move in but was not in occupation o Occupation of land does not mean interest in it Easements and profits - (1) a legal easement or profit a prendre, except for an easement or a profit a prendre… which at the time of the disposition— o (a) is not within the actual knowledge of the person to whom the disposition is made and o (b) would not have been obvious on a reasonably careful inspection of the land over which the easement or profit is exercisable  S27 tells us it doesn’t take effect at law until registered  Means it is only equitable  Means it is not protected by Schedule 3 - Easement and Profits o (2) The exception in (1) does not apply if the person is entitled to the easement or profit proves that it has been exercised in the period of one year ending with the day of the disposition  Even if person acquiring registered interest does not know you have an interest and wouldn’t have been obvious, if today I acquired land you have an easement I didn’t know about it and

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24) Land Registration Act 2002 part 2 could not have known, if you can prove in the last year you exercised your power in a way then you do not have protection

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