Unregistered LAND (Autosaved) PDF

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UNREGISTERED LAND MD: 99-129 Unregistered Title – Third Party Rights (Legal/Equitable Interests) – Rights which must be registered as land charges – Consequences of Non-Registration. –

Introduction:

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There are two systems in the UK for land law which both share the same type of property rights (proprietary rights) such as leaseholds, freeholds, easements and covenants and they share the concept of overreaching. Registration is a new system (even though its 100 years old) – was brought into place to make it straightforward as possible for a purchaser of land to discover, before buying the property what rights he will take subject to and in the case of registration of title, to assure him that the seller actually owns the land he is purporting to transfer. The LAND REGISTRATION ACT 2002 replaced and modified LRA 1925 which provided a system of registration of land (land where the title is still evidenced by deeds) and NOT title of land (system of land ownership whereby the actual title to the land is registered and where recourse to the deeds is no longer necessary or impossible). = more than one title applicable to the same piece of land. Unregistered law – old system – 14% of the land in the UK is unregistered. Prove “root of title” in land in a simple way – sold land you would have to prove that you were the owner – prove title by proving title of the previous owner. I.e. you are proving that you have a better right to possess the land than anyone else – to do this you must show a convincing documentary title to the property. But this doesn’t conclusively prove that title exists. Unregistered land means that title of land cannot be found in the register of titles governed by the LRA 2002. Unregistered land is land for which the title must be proved from the conveyancing history of the land as evidence by the documents of titles (deeds and other related documents such as those creating easements). Unregistered land has its own system of independent partial registration, Title deed – formal record of ownership which is tied to the identity of a particular person at a particular time. Searching for a good root of title. Eventually they began to set max year to find a good root of title. First deadline was 50 years, then 30 years, now its 15 years. Problem of land itself – often subdivided – all people can’t use the same deed so therefore you wouldn’t have a deed as there’s only one deed. Lawyers then started to make copies of deeds to give to the sublets. When you copy stuff you can make mistakes and you can have a fake copy – fraud/forgery. Williams & Glynn’ sBankvBol and(1981) – process is said to be ‘the wearisome and intricate task of examining title’. Why did unregistered land exist for hundreds of years when there are so many problems with it?

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Unregistered Land:

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This means that title of land has not been registered – when buying and selling land, you would have to rely on the examination of the title deed to the property and make other enquiries rather than having the register to rely on. – Some rights are registered as land charges but as the actual title to the land is not registered they are registered against the name of the estate owner, i.e. the owner of the legal estate freehold or leasehold.  If land charge is not registered – not be binding on a purchaser, even if he/she does have notice.  Aim was to facilitate the registration of title to land whereby a persons’ ownership of the land would be entered upon an official register and the third party rights affecting that land would also be entered on to that register.  Registration of land charges – prior to 1925 – whether the purchaser would be bound by equitable interests turned on whether he was able to establish he was a bona fide purchaser of a legal estate without notice which meant that he had to establish that he made all the enquires which the law considered ought reasonably to have been made when purchasing the land. o They had to fix problems in unregistered land –problem of notice and root of title. o They had to introduce framework for new system of registered land  After 1925: Lord Birkenhead (The Times, 1920) (He introduced the system): ‘Its general principle is to assimilate the law of real and personal estate and to free the purchaser from the obligation to enquire into the title of him from whom he purchases, and more than he would have to do if he were buying a share or a parcel of stock.’ Strategies of the 1925 Act:  The 1925 act reduced the number of legal estate which could exist to two: fee simple absolute in possession (only legal freehold estate which can exist) and terms of years absolute. All other estates can only exist in equity. Also, the number of legal interests which would bind a purchaser of land would be bound by land, irrespective of notice was also reduced.  Also, the reduction of the number of legal estates and interests in land led to a corresponding increase in the number of equitable interests. 1925 – the question of whether or not a purchaser would be bound by equitable interests turned on whether he was able to establish that he was a bona fide purchaser of a legal estate without notice – which required him to establish that he made all enquires which the law considered ought reasonably to have been made when purchasing land. This assists a holder of an equitable interest to be able to securely protect their right where such rights were allowed to be made as land charges. Aim – enabling the purchaser to have a simple means of making an official search of the land charges register = discovering what third party rights the property he was buying would be subject.

Third Party Rights in Unregistered Land

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Person who obtains title to unregistered land over which an adverse third party interest already exist is bond by that interest – does the third party interest survive a transfer of the land? This may depend on both the nature of the third party interest and or the status of the new owner. Would need to know whether the third party right is equitable/legal.

The Enforceability of Legal and Equitable Rights  

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There are a small group of legal estates and interests (set out in s.1 LPA 1925) and all other interests in land are equitable. Legal estates bind the world, while equitable interests can be defeated in various ways. This is the position if the title is unregistered. General rule: legal rights bind the world = old pre 1926 rule. This means that if a person buys, or comes to possess a piece of unregistered land he will take that land subject to virtually every legal interest over it. The “state of mind” of any transferee of the land, the nature of his title or indeed any other matter is not relevant. This rule can be seen to be unfair that legal rights should bind the land automatically is those purchasers who investigates their purchase properly. The rule is that legal rights bind a transferee whether or not he knew about them and whether or not they were in fact obvious from an inspection of the title deeds or lands – most cases however the purchaser will be aware. Wyld v Silver (1963) – property developer who had brought a piece of land and wanted planning permission to create 5 house on the land. Land was suited in a village and it transpired by an act of parliament -1719 the villages had a right to hold an annual fair on the land. This was discovered later on in the process after Wyld purchased the land. Right had not been used since 1865. The court granted an injunction to restrain the property developed from building the houses otherwise they wouldn’t have been able to hold the fair. The purchaser couldn’t/didn’t have known about that right didn’t matter –irrelevant. Also the fact the builder acquired planning permission, this alone is not sufficient.  Exception to this rule = provided by puisne mortgages and this is a legal mortgage over land over which the documents of title of the mortgaged land have not been deposited with the mortgagee (lender), usually because an earlier legal mortgage already exists and this earlier lender has the documents – doesn’t have the ability to prevent dealings with the land so the puisne mortgagee is not protected against further dealings with the burdened land. Equitable rights: bind the world except for…a bona fide purchaser of a legal estates (freehold, leasehold) for value without notice (not automatically binding). Successors in title – land has been conveyed to a bona ide purchaser who is not bound by prior equitable interest – can a subsequent purchaser who doesn’t have notice be bound; whether the equitable interest will be revived – Wilkes v Spooner – courts held it wasn’t. one the land has been conveyed to a bona fide purchaser – any equitable interest are overridden = removed from the land. Exception = land is conveyed to a person who had previously owned the land and who was at that time bound by the interest in question. The key: without notice (buy land without notice). Does the purchaser know about the equitable interest? No notice – not bound. What is a purchaser? Person who acquires property through the act of the parties and not be the operation of law. Person who acquires property under a will = purchaser but someone who succeeds to property in intestacy is not.

Normal rule: two competing equitable interests, the first one prevails. 3 exceptions = better right to legal estate (Assaf v Fuwa – trustee didn’t have notice of the equitable interest, the beneficiary under the trust had a right to have the legal estate conveyed to him); later acquisition of the legal estate; mere equities (mistake, fraud). LEGAL INTERESTS  Legal interests are automatically effective against the land over which they exist, even if they exist, even if not granted by the current landowner. They will bind automatically any person coming into ownership or occupation of the land, be they a purchaser, recipient of a gift, devisee under a will or an adverse possessor.  Once a legal right has been established over the burdened land there is no need to make further enquiries in order to assess whether that legal right is binding.  Reduction in legal estates: LPA 1925, s 1. The only estates in land which are capable of being created at law are: a) an estate in fee simple in possession (freehold) (This is in possession unless it is subject to some prior freehold estate such as a life estate – any fee simple in remainder cannot be made legal). b) A term of years absolute (leasehold). This occurs when a lease is granted initially for a specific period, such as one year and at the end of that period it is renewed automatically for a further period. Leases may continue indefinitely until either the landlord or the tenant brings it to an end by a process of serving a notice to quit upon the other. – Term which is either certain at the outset or is capable of being made certain upon the service of a notice to quit. LPA 1925, s 1(2): (a) an easement right (positive right to do something over nearby land such as exercise of a right of way over it BUT this can amount to a restriction on another’s use of land which will be the case if there’s in existence an easement of light which will restrict a landowners ability to build on his own land =obstruct the flow of light) or privilege in or over land for an interest equivalent to an estate in fee simple absolute in possession or a term of years absolute = take effect as a legal interest. Covers profit e prendre which is the right to go onto another’s land and to take something from the land which include the right to take wood or fish. (b) a rentcharge in possession issuing out of or charged on land being either perpetual or for a term of years absolute or a fee simple absolute; (right of the owner to receive a periodical payment from the owner of the burdened land).

Right is independent of any other interests in the land. No new rent charges may be created after 1977 and rent charges still in existence having been created prior to that date will expire at the latest by 2033 (Rentcharges Act 1977 ss 2,3) (c) a charge by way of legal mortgage; (d) rights of entry exercisable over or in respect of a term of years absolute or annexed, for any purpose, to a legal rentcharge.  

S1 (3) all other estates, interests, or charges in over land shall take effect as equitable interests (e.g. life estates, fee tail or a base tail). General formality rule: LPA 1925, s 52(1) - To create a legal estate or interest, you must use a deed. If a deed is not used then unless the transaction is exempt from this formal requirement, no legal estate or interest would be created.

EQUITABLE RIGHTS a) Land charges – six classes of the LCA 1972 which must be registered against the name of the estate owner of the land that is to be bound at the time of the right’s creation. If registered they are binding on a prospective purchaser of the land even if “hidden” from the purchaser. Not registered = void against a purchaser of a legal estate, or a purchaser of any interest, depending on the category of the land charge. Unregistered land charges remain binding on a person who is not a purchaser such as a person who inherits the land or receives it as a gift. b) Overreachable rights e.g. co-ownership rights are not registerable as land charges. These will take effect in the money paid by the purchaser: they will be swept of the title of overreaching. These fall under two groups: family interests and commercial interests. 1. Family interests: where land is settled on A for life, to B in fee tail, remainder to C in fee simple then after 1925, neither A, B nor C have legal interests in the property. Neither A nor B have fee simple in the land but C does have fee simple but isn’t in possession. The Settled Land Act 1925 – A the tenant for life is given a legal fee simple and to preent A from selling the property and then misaapplign the purchase money, 2 trustees would be appointed and any purchase money would be paid to them. (Trustess would invest the capital money which was realized by the sale of the land who would pay interest to A – representing his estate in the land. A dies – interest is entitled to B & B’s death/dies before A =B’s lineal heir would be entitled to the money – provided that the fee tail has not enlarged into a fee simple on the failure of B’s heirs =C would be entitled to the sum. Previous interests now become interests in money which are called overreached. The purpose of S.1 LPA 1925 = all 3 are able to have equitable estates in land. 2. Commercial interests: person may own land and covenant with his neighbour that he will only use the land as a private residence = “restrictive covenant”. Paid for either as an independent transaction or as part of a commercial transaction involving the sale of the land in question. This cannot be overreached and its enforceability is made dependent upon registration. Without notice: (old law) 1. Actual notice (rare) –actually knows about the equitable interest when purchasing the house – bound by the interest. You are deemed to have actual notice of any matter which has been registered, irrespective of his true state of mind. Information would have come to their attention from an reputable source and not from casual conversations. 2. Constructive notice – common type. What the purchaser should have known when the purchased the land. Test: Law of Property Act 1925, s.199 ‘a purchaser is not to prejudicially affected by notice of…any instrument or matter unless it is within his knowledge, or would have come to his knowledge if such inquiries and inspections had been made by him as ought reasonably to have been made by him.’ Got to look at: (2 main sources of information – enquires which a purchaser ought reasonably to make) A. investigation of title – when title is unregistered, possession of land is indicative of ownership ownership in fee simple “no man in his senses would take an offer of purchase from a man merely because he stood on the ground” (Hiern v Mill). Seller of the land would be required to deduce his title to the land and the purchaser would then investigate it – required documentary evidence of a historical account of how the land came to be vested in the vendor – going back 15 years = document known as the “root of title”. If purchaser didn’t carry out this in full, he would be deemed to have constructive notice of an equitable interest which would have been discovered has such an investigation been properly conducted. B. inspection of land - Hunt v Luck [1901]:‘...RULE: if a purchaser or a mortgagee has notice that the vendor is not in possession of the property, he must make enquiries of the person in 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. (Make enquires about the person who is in possession of the land if not you will be subject to their rights) Problem is shared occupation of land. E.g. Caunce v Caunce [1969]- purchaser should make enquires about the other occupier – matrimonial home in the sole name of the husband and the wife had contributed in paying for the house. Husband remorgaged the house without telling his wife. The bank made no enquires of the wife when remortgaging the house. Husband couldn’t pay back and the bank took possession. Would the bank be bound the wife’s equitable interest – did they have constructed notice of land. The judge said that the bank wouldn’t be bound by the wife’s interests, not right for agents, solicitors to become snoopers and busybodies in relation to the house they were buying. ‘A wife’s occupation of a matrimonial home should be regarded as being a shadow of that of her husband.’

Williams & Glynn’ sBank v Boland (1981) – reaffirmed the position in C v C – wife is not a shadow of their husband – attitude seen as ‘heavily obsolete’ (Lord Wilberforce). Held: purchaser in principles would have constructive notice of the rights of occupiers who shared the property with the vendor. Kingsnorth Finance v Tizard [1986] – house was in the sole name of Mr T & the wife was an equitable co-owner of it. They had separated and she lived with her sister and only stated in the house when he was not there. She did visit the house on a daily basis to collect their 2 children from school. T applied or a loan to be secured by a mortgage against the house. On his application, T indicated that he was single. Surveyor inspected the house, and interviewed T who was told that the house was untidy because Mrs T had recently left (may still have an interest in the house). Mortgage was then granted and Mrs T had defaulted the repayments, held that the mortgagee was bound by Mrs T’s equitable interest on the basis that it had constructive notice of it. Caunce no longer stands after Boland – recognition that people living with the legal owner of a house may have an interest in it and those rights are deserving of protection when the property is mortgaged without their consent. Pre-arranged v unannounced inspections? Court: agent = surveyor would have to drop into the house at midnight ie unannounced – check whose there to satisfy whose there. 3.

Imputed notice: LPA 1925, s.199(1)(ii)(b) – purchaser will be regarded as having notice of nay matter which has, in respect of the same transaction in which the question arises, comes to the knowledge of is solicitor or other agent or would have come to the knowledge of the solicitor or agent has that person made such enquires should reasonably have been made. Solicitor is most likely to acquire notice. Tizard – notice was imputed to the finance company on account of constructive notice been acquired by any surveyor to them to inspect the property. Limitation of this notice is that the notice must have been acquired in respect to the same transaction, otherwise if a solicitor had acquired notice in a previous transaction, this notice would be imputed to his present client.

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Land Charges

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When a person wishes to purchase unregistere...