Law of Property Act 1925 & Reforms PDF

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Law of Property Act 1925 Before 1925, the purchase of land was fraught with difficulty for potential purchasers. The process was lengthy and cumbersome, requiring extensive investigation into the seller’s right and title to sell the land, and made more complicated by the fact that several different legal estates existed in land, each of which had to be investigated and proved to the fullest degree. Having embarked on this expensive and time-consuming process, there was also no guarantee that the purchaser would acquire encumbered title to the land. This is because a purchaser would be deemed to be bound by equitable rights of third parties (even if unknown to the purchaser) through the application of the doctrine of constructive notice. All in all, this led to an unsatisfactory state of affairs which was ripe for reform, and prompted the introduction of a raft of legislation in 1925, including the Law of Property Act 1925 (the “LPA 1925”). The main object of the 1925 legislation was, therefore, to “facilitate and cheapen the transfer of land”[1]. Of these statutes, the LPA 1925 primarily consolidates and reforms statutory law relating to conveyancing and the law of property, and is regarded as an “essential part of any conveyancer’s bible”[2]. Whilst some of the 1925 legislation has since been updated and supplemented over time, the framework and principles outlined by the LPA 1925 remain in effect to this day[3]. The LPA 1925 is divided into several parts, some of the more significant provisions of which are discussed below. Part I of the LPA 1925 [4] sets out certain general principles as to legal estates, equitable interests and powers and it has been said that the “modern law of real property is now understood as the hierarchy of legal estates and interests and the equitable interests established under the LPA 1925”[5]. https://www.lexisnexis.com/uk/legal/#ref38375F5265616C5F50726F 70657274795F303128312D3838295F3637_13One of the key changes made by the LPA 1925 was to streamline interests in land. The number of legal estates in existence was reduced to two – (i) the term of years absolute, and (ii) the fee simple absolute[6]. In addition, only a limited number of legal interests as outlined in section 1(2) of the LPA 1925 could be created, with all other interests being classed as equitable interests (including the rights of a beneficiary under trusts of land, interests estate contracts and restrictive covenants)[7]. It should be noted here that the provisions of the LPA 1925 do not operate in a vacuum, but should be viewed in tandem with the overhaul of the land law system implemented at the time, most notably the registration system introduced by the Land Registration Act 1925 and the provisions of the Land Charges Act 1925. Provision was made for the registration of interests, and

where registration was necessary, the owner of the equitable interest had to register it and thus, having registered his interest, would be protected because registration is deemed to constitute actual notice of such interests[8]. In addition, concurrently with these changes, the statutory device of “overreaching” was introduced, which assisted with regulating priority to land[9]. A conveyance to a purchaser of a legal estate in land (whether registered or unregistered) could ‘overreach’ any equitable interest affecting that estate, whether or not the purchaser had notice thereof, if certain conditions were met[10]. In such instance, the equitable interests would attach to the proceeds of sale, allowing the purchaser to take the property free of such interests[11]. Apart from these fundamental changes to the way interests in real property were held and operated, certain other changes to conveyancing and land law practice were introduced by the LPA 1925, in line with the overriding objectives mentioned above. For example, section 36(2) of the LPA 1925 introduced a “new and very useful”[12] method for severing joint tenancies by way of written notice. Part II of the LPA 1925[13] included certain provisions dealing with contracts, conveyances and other instruments. In particular, sections 52 and 53 provide that, subject to limited exceptions, all conveyances of land (or interests therein) must be in writing, and where required, by way of deed. Section 62 simplified the conveyancing process by providing that where informal rights exist in relation to two properties in separate ownership, all existing appurtenant benefits (for example, easements) will pass automatically with a conveyance, together with any rights or privileges existing for the benefit of the estate without any express mention of them in the conveyance. As many of the provisions of Part III of the LPA 1925 previously dealing with powers of attorney have since been repealed, the provisions of Part III of the LPA 1925[14] are now concerned mainly with mortgages and rent charges. Part V of the LPA 1925[15] is concerned with leases and tenancies, and covers a wide range of issues in relation to the same, although the provisions of the Landlord and Tenant (Covenants) Act 1995 have superceded some of these provisions in relation to leasehold covenants executed after 1996. Although the LPA 1925 primarily deals with conveyancing and real property matters, it has a wide range of application, and applies to both choses or things in action and choses or things in possession (e.g. chattels and land). One of the more “radical” changes effected by the LPA 1925 was to permit any form of property, whether real or personal, to be limited in tail[16]. Prior to the enactment of the LPA 1925, under common law, an estate tail could not be carved out of chattels or personal property. This changed with the introduction of section 130(1) LPA 1925, thus allowing for beneficial interests under trusts for sale to be entailed.

Many of the provisions of the LPA 1925 are still in force today, creating, together with the other developments in land law since that time (including the Land Charges Act 1972 and the Land Registration Act 2002), a truly modern law of real property. There is no doubt, however, that the revamp of the UK land law system, which started with the introduction of the 1925 legislation (including the LPA 1925), will continue to progress as the law evolves to meet the social, economic and political needs of today’s society. Total number of words (excluding title, footnotes and bibliography): 1018 REFERENCES CITED: 1. Bray, J., ‘Unlocking Land Law’ (4th edition, 2014, Routledge) 2. Brilliant, S., Atkin's Court Forms ‘Land Registration’ (2015 issue, LNUK) vol 25(3) 3. Butterworth’s Property Law Service, ‘Division III: Grant of Leases (General)’ (Issue 86, December 2015) 4. Burn, E.H. and Cartwright, J., ‘Cheshire and Burn’s Modern Law of Property’ (18th edition, 2011, OUP) 5. Clarke, S., and Greer, S., ‘Land Law Directions’ (3rd edition, 2012, OUP) 6. Halsbury’s Laws of England, ‘Real Property and Registration’ (5th edition, 2012) vol 87 LEGISLATION CITED: 1. Land Charges Act 1925 2. Land Charges Act 1972 3. Land Registration Act 1925 4. Land Registration Act 2002 5. Landlord and Tenant (Covenants) Act 1995 6. Law of Property Act 1925 Halsbury’s Laws of England, ‘Real Property and Registration’ (5th edition, 2012) vol 87, para 48

[1]

Butterworth’s Property Law Service, ‘Division III: Grant of Leases (General)’ (Issue 86, December 2015), 323 [2]

[3]

Judith Bray, ‘Unlocking Land Law’ (4th edition, 2014, Routledge), 44-45

[4]

Law of Property Act 1925, sections 1-39

Halsbury’s Laws of England, ‘Real Property and Registration’ (5th edition, 2012) vol 87, para 48

[5]

[6]

Law of Property Act 1925, section 1(1)

[7]

Law of Property Act 1925, section 1(3)

Sandra Clarke and Sarah Greer, ‘Land Law Directions’ (3rd edition, 2012, OUP), 48-49 [8]

Simon Brilliant, Atkin's Court Forms ‘Land Registration’ (2015 issue, LNUK), vol 25(3), para 76 [9]

[10]

Law of Property Act 1925, section 2

Halsbury’s Laws of England, ‘Real Property and Registration’ (5th edition, 2012) vol 87, para 260 and 710

[11]

E H Burn and J Cartwright, Cheshire and Burn’s Modern Law of Property’ (18th edition, 2011, OUP), 510 [12]

[13]

Law of Property Act 1925, sections 40-84

[14]

Law of Property Act 1925, sections 85-129

[15]

Law of Property Act 1925, sections 139-145

E H Burn and J Cartwright, Cheshire and Burn’s Modern Law of Property’ (18th edition, 2011, OUP), 599 [16]

Land Law: The Uncertainties of Land Registration. Law Student Essay The social and economic advantages of land[1] being freely alienable have been recognised since at least the eighteenth century and motivated the statutory reforms of the nineteenth and early twentieth centuries[2]. Since 1990, the whole of England and Wales has been subject to compulsory registration. The aim of land registration is to define the power of the owner of the land[3] and prove ownership. The current legislation’s aim is to identify and guarantee the purchaser by putting things down in writing using deeds or contracts and create fairness and certainty. Land registration can be quite problematic especially when dealing with intangible rights in property such as easements, licences, profits, estates and incorporeal property. There are many uncertainties regarding land law; it will be suggested that these doctrinal uncertainties explain the intractable nature of some of land law's classic dilemmas, whilst simultaneously impeding constructive responses to the more immediate pressing challenges of 21st century land law[4]. When registering land, it is very important to acknowledge not only the current legislation, which is initiated under the Land Registration Act 2002 but also the repealed 1925 Act which should be considered when dealing with transactions that have taken place before 13 October 2003[5].Under Section 1 of the 1925 Act, a list of estates, interests and charges over land are mentioned which are capable of being legal and therefore conveyed[6]; all other estates, interests, and charges in or over land take effect as equitable interests[7]. In other words, even if the essential requirements have not been carried out while transferring land, a persons’ rights will not be lost. In circumstances where a deed has not been completed in order for the land to be legal and only a written agreement has been carried out the land will be protected in equity[8]. It seems that equity offers enormous protection regarding land conveying which gives potential applicants a ‘fall-back’ if they fail to perform the specific conditions. But mistakes happen. Rights that could and should have been registered are sometimes overlooked. And where there are mistakes, there are often those who would seek to take advantage of them[9]. Mistakes in land law regarding registration could also be considered as unawareness or confusion in a person. Due to the complexity of the matter, landowners tend to lack full knowledge of land registration. Realistically, not everyone is appreciative and familiar with land law legislation; the exquisite intricacies can be a considerable disadvantage to the potential landowner. The question is whether land law is too ‘strict’ and inflexible for a typically interested candidate. Morally, everyone should have the right to purchase property and benefit from it either for enjoyment or economic reasons[10]. Practically, if the law around property was more unequivocal, there would be a great burden lifted from solicitors who deal with paperwork and the time consumed when dealing with matters around property would be diminished. It seems that it has been identified and acknowledged that there is a certain perplexity when it comes to land law. Therefore, the law does offer some sort of protection to potential property

owners. The ‘mirror’ principle is one of the three fundamental operating principles of registered land. The point is simply that if the register reflects the full character of the land, any purchaser and any third party can rest assured that they are fully protected; the purchaser is aware of what he is buying and the person with an interest in the land knows that it will be protected[11]. However, there is an exception or also known as a ‘crack’ to the ‘mirror’ principle termed ‘overriding interests’. Overriding interests are interests to which a registered title is subject, even though they do not appear on the register. They are binding both the registered proprietor and the person who acquires an interest in the property[12]. The controversy regarding ‘overriding interests’ is the protection available to persons in ‘actual occupation’[13] of the land in matter. In Williams & Glyn’s Bank v Boland[14], it was stated that the occupiers’ wife’s beneficial interest was overriding by virtue of her actual occupation[15]. There is finally a provision to section 70(1) (g) , currently under Schedule 3, in that if a person is asked and fails to disclose his interest, he loses his status as an overriding interest, but if a registered chargee fails to ask a person because his occupation is unknown[16], the chargee is unprotected[17]. The ‘curtain’ principle is the second fundamental operating principle of registered land. The main point is to facilitate the alienability of land by freeing the purchaser from the effort and worry of dealing with equitable owners[18]. Finally, the ’insurance’ principle is a guarantee of a title from the State if it is duly registered, and insures against any defects or other mistakes in the register[19]. The three principles may give potential purchasers a protection of their rights regarding land law. Another potential problem as to the registration of land that can cause frustration to landowners and purchasers is the registration gap. There is a period of time which ranges from weeks to months between the completion of a property disposition and the actual registration of land[20]. The problem is that a purchaser is not considered the legal owner of the land until it is fully registered to the system[21]. In Brown & Root Technology Ltd v with Sun Alliance & London Assurance Co[22], it was held that a valid break notice was not legitimate because the assignment that was attempted by the tenant was not registered[23]. In Abbey National Building Society v Cann[24] it was held that when determining occupation, it becomes valid on the date of completion of the transaction rather on the date of registration[25]. The current Law Registration Act 2002 seems improved and more simplified compared to the old 1925 Act. The law’s aim is to protect landowners and purchasers creating a more straightforward system. Section 27 (1) and (2) of the Act could be described as ‘triggers’ to registration of title[26]. Basically, it gives the right to the purchaser to be protected by equity if a disposition is not registered in accordance with the requirements, which is substantially beneficial. Also, under Section 29 (2) (a) (ii) of the new Land Registration Act 2002 priority is given to overriding interests even though they are not protected on the register and mainly attempts to reduce those overriding interests[27]. The categories of the overriding interests are set out under Schedule 3 of the 2002 Act which repealed Section 70 of the 1925 Act. The general approach remains the same in the new Act, but there has been one significant proposal that differentiates the two Acts; a system of e-conveyancing. In a world where you can buy nearly everything on-line, it would be rather obvious to have the ability to also purchase or convey land. The implementation of Part 8 of the Land Registration Act 2002 created the legal framework to enable the "transfer and creation of interests in registered land by electronic means"[28].An effective system of electronic conveyancing requires not only that dispositions can be made and registered electronically but also that the

necessary funds can be transferred simultaneously[29]. By enforcing this system, certainty and immediacy of registration will be provided. The ‘registration-gap’ will no longer exist, removing concerns of priority from applicants, as registration will be immediate[30]. Most importantly, it will be possible to investigate land title on-line, with the absolute minimum of additional enquiries and inspections offering complete protection to all parties involved[31]. Although e-conveyancing has been introduced in the current Act it still fails to be put in action. Malcolm Dawson, Chief Land Registrar and Chief Executive, confirmed a halt to the development of the e-conveyancing programme late in 2011 as he believed that "in current market conditions, uptake of a new e-conveyancing system could be limited"[32]. Later on, in 2014 the Law Society Gazette reported on October 13, 2014 that, a "long awaited econveyancing system" would go live in spring of the following year[33]. No details have been released yet about the matter and at this stage it is unclear whether it will be possible for electronic documents to be created, "signed" and lodged directly with the Land Registry from this portal[34]. Some question the effectiveness of the system and whether it will lead to further economic efficiency and greater property wealth. It is a rather fair question because it remains unknown whether a person will be willing to have their titles open to public inspection, and others may not want to pay the fees associated with registration[35]. If the Land Registry’s aim is to encourage all landowners to register their unregistered titles, the system of e-conveyancing may be the wrong answer. On the contrary, some feel the system is a more approachable method giving the opportunity to all buyers and sellers of land to act in a more straightforward manner. Even with the implementation of this system, it is safe to say that it will not solve the peculiar problems that may arise regarding land registration. One of the main aims of the Land Registration Act 2002 was to simplify and improve the process of land registration in preparation for the electronic revolution to come[36]. Therefore, it is not yet possible to have a clear conclusion regarding e-conveyancing at least until it is tested. In conclusion, land registration remains a complex matter and presupposes a wide range of knowledge not only from the current Land Registration Act 2002 but also from the previous Land Registration Act 1925 in order to conduct accordingly. Major problems have been identified by the Law Commission regarding the 2002 Act, such as failure of protecting legitimate landowners and the impairment of enforcing e-conveyancing, but there is no doubt the Commission will provide a package of proposals that will ameliorate the current land registration. As much confusion as the system contains it seems that the land registration system is quite effective showing nearly eighty percent of land in England and Wales as registered[37]. As for e-conveyancing, it is rather a political matter and it is up to the Government whether it decides to enforce the system and create a more workable, reasonably secure system[38].

[1] s 205(1)(iiiA) - Law of Property Act 1925 - “Land” includes land of any tenure, and mines and minerals, whether or not held apart from the surface, buildings or parts of buildings

[2] Louise Tee, The Rights of Every Person in Actual Occupation: An Enquiry into Section 70(1) (g) of the Land Registration Act 1925, Cambridge University Press 1998, The Cambridge Law Journal, 57 [1998], pp 328–351 [3] Land Registration Act 2002 – Chapter 9 [4] THE IDEA OF PROPERTY IN LAND Kevin Gray and Susan Francis Gray [in Susan Bright and John K Dewar, Land Law: Themes and Perspectives (Oxford University Press 1998), 15 – 51] [5] The Law Commission, Consultation Paper No 186, Easements, Covenants And Profits À Prendre [6]Section 1 of the Law of Property Act 1925 1 Legal estates and equitable interests. (1)The only estates in land which are capable of subsisting or of being conveyed or created at law are— (a)...