Theodore Ruoff and the Mirror Principle: The Impact of LRA 2002 on Land Registration in the UK Do you agree with this statement

Introduction

The Land Registration Act 2002 (“LRA 2002”) provides for title by registration and not registration of title. Its aim is to provide for easier and efficient transfer of land, securing protection of interests in land, and to bring stricter regulation of land ownership. This essay will discuss the aspects of title by registration; unregistered interests; alteration; occupier; and adverse possession.

Title by registration

Theodore Ruoff, the Chief Land Registrar from 1963 to 1975, proposed the mirror principle, which provides for the Register to reflect the reality of the property title. Henceforth, the LRA 2002 provides for electronic registration evidencing the complete and accurate title of the land where one could examine the title, with less inquiries and inspections.

The aim of the LRA 2002 is to make registration the only means of acquiring title to the land. Thus, Section 4 provides for compulsory registration when there is a transfer of a qualifying estate; and unregistered legal estate; grant of a qualifying estate; creation of a protected legal mortgage of a qualifying estate. At the same time, the LRA 2002 also provides for voluntary registration under Section 3, which applies to unregistered estate in land, a rent-charge, a franchise, or a profit a prendre in gross, subject to the condition that the estate must be vested in the applicant or they are entitled to require the estate to be vested in them.

• Elizabeth Cooke, The New Law of Land Registration (Bloomsbury Publishing 2003) 124.
• Martin Dixon, Land Law (Routledge 2018).
• Mark Davys, Land Law (Palgrave 2017) 44.
• Sarah King, Beginning Land Law (Routledge 2015) 23.
• Aruna Nair, ‘Forgery and the Land Registration Act 2002: The Marginalisation of Discretion’ (2013) 24(3) King's Law Journal 403-412.
• ‘Land Registration Act 2002 Explanatory Notes’ accessed on 23 December 2020 .
• The Land Registration Act 2002, Section 4(1)(a).
• Ibid, Section 4(1)(b).
• Ibid, Section 4(1)(c) to (f).
• Ibid, Section 4(1)(g).
• Ibid, Section 3(1)
• Ibid, Section 2.

Unregistered interests

The LRA 2002 provides for certain unregistered interest overriding first registration. Section 3 mentioned earlier provides for voluntary registration for such unregistered interest. For example, a bonafide purchaser can override the first registration. The rulings in Barclays bank v O’Brien, that if the purchase was aware of rights that affected the land and they failed to make necessary inquiry, they cannot be held a bonafide purchaser. Thus, the purchaser must have conducted a property check; and should not have any notice of rights affecting the land. In Kemmis v Kemmis, Purchas LJ ruled that if the enquiry was made, the purchaser would have verified the knowledge regarding any rights affecting the land.

The rulings mentioned above are relevant to the LRA 2002, Section 37 that provides for unregistered interests where the register should enter a notice regarding the rights affecting the land. This causes the issue of “knowing something” that might stimulate inquiry or “wilfully abstaining from inquiry to avoid notice”.

Alteration

Based on the notion of a bonafide purchaser, the LRA 2002 also has brought about a simpler form of rectification of land registry records. Schedule 4 of the Act provides for alteration of the registry where the transfer to the current registered proprietor involved a mistake. However, this provision does not allow alteration of a mistake caused by the absence of care or the proprietor substantially contributed to the error. This occurred in the case of Kingston v Thames Water Developments where there was no order for rectification of the erroneous transfer of a strip of land that happened twice. This left the intended owner without his title.

The exception to the rule of alteration is that the alteration will not be allowed where the current proprietor is innocent, and the alteration will prejudice the current proprietor. This is

• Land Registration Act 2002, Schedule 1.
• Barclays bank v O’Brien [1994] 1 AC 180.
• Ibid.
• Kemmis v Kemmis [1988] 1 WLR 1307.
• Judith Bray, Unlocking Land Law (Taylor & Francis 2014) 40.
• Ibid.
• Elizabeth Cooke, The New Law of Land Registration (Bloomsbury Publishing 2003) 124.
• Kingston v Thames Water Developments [2001] EWCA Civ 20.

qualified indefeasibility. The provision of alteration means that the register cannot be accurate and complete, which contradicts the aim of the LRA to give a complete and accurate title by registration. To compensate the affected party, the LRA 2002 provides for insurance principle, where the state provides guarantee to the accuracy of the register and will compensate those who have suffered loss due to errors in the register. Thus, in case of rectification, the current proprietor will be indemnified.

Proprietor in Possession/Occupier

Section 131 provides that a proprietor is in possession when they have the physical possession of the land, when the land is in possession of their tenant, mortgagee, licensee, or beneficiary. In case of mortgagees, Section 131 does not make them a proprietor in possession. Thus, the LRA 2002 protects third parties who are in actual occupation of land. Such protection overrides registration where “that the mere fact of his occupation was enough protection against a purchaser”. Thus in HSBC Bank plc, an occupier’s beneficial interest under a constructive trust was held to override the interest of the lender.

Schedule 1 and Schedule 3 of LRA provide such protection prioritising an interest arising out of actual occupation. This protection is also applicable to freehold estate, leasehold estate as well as registered disposition. The three schedules have to be read with Section 11(4)(b) and Section 12(4)(C) that allow unregistered interests listed under Schedule 1 to overrides registered freehold estate and leasehold estate respectively; and with Section 29(2) and of 30(2) that allow overriding of registered estate and registered charges respectively by interest under Schedule 3.

While reading the overriding principles, the obligation of reasonable validation or enquiry discussed above applies here. Thus, if the claimant would have had found any rights affecting the land through an enquiry, and they failed to do so, there cannot be any overriding of

• Elizabeth Cooke, The New Law of Land Registration (Bloomsbury Publishing 2003) 124.
• Sarah King, Beginning Land Law (Routledge 2015) 23.
• The Land Registration Act 2002, Schedule 8(1)(2)(a).
• Elizabeth Cooke, The New Law of Land Registration (Bloomsbury Publishing 2003) 130.
• Mark Davys, Land Law (10th Edition, Palgrave Macmillan 2017) 52.
• HSBC Bank plc v Dyche and another [2009] EWHC 2954 (Ch).
• The Land Registration Act 2002, Schedule 1(2).
• Ibid, Schedule 1(2) and Schedule 3(2).
• Ibid, Schedule 1, Schedule 2, and Schedule 3.

interest. According to Schedule 3, paragraph 2(b), in dispositions, if the claimant fails makes enquiry before the disposition and they fail to disclose the interest, there cannot be any overriding of interests.

Adverse possession

Section 96 provides that there is no limitation period regarding actions to recover possession of land. However, Schedule 6(1)(1) provides that where a person has an adverse possession for the last 10 years and is still in possession, this person can apply for registration as the proprietor of the dispossessed proprietors’ estate. Notice has to be sent as per Schedule 6(2) and to other interested parties.

Schedule 6 serves two purposes. It cautions the owner to get their land registered otherwise the 10 years limitation will end allowing a person with an adverse possession to apply for registration. It also allows the owner, as per Schedule 6, to frustrate the attempts of such a person as registration alone can confer title. Thus, once notified, the current owner has 2 years to oppose the application.

The problem with the notification provision is that the register will have access to the information about adverse information only when it applies for registration. This poses a challenge for potential buyers who can be misinformed by the seller about the presence of the adverse possessor. In Williams & Glynn’s Bank v Boland, the wife had acquired an overriding interest. However, the husband had misinformed the lending bank about this occupation. This shows that the register does not mirror the reality regarding the title and interests affecting the property. However, if the claimant squatter shows unconscionability, being registered as proprietor; has equity by estoppel and registration would be the appropriate response, then adverse possession will override registration.

• The Land Registration Act 2002. Schedule 3, paragraph 2(b).
• Elizabeth Cooke, The New Law of Land Registration (Bloomsbury Publishing 2003) 140.
• Barbara Bogusz, ‘Bringing Land Registration into the Twenty-First Century. The Land Registration Act 2002’ (2002) 65(4) The Modern Law Review 556-567, 558.
• Williams & Glynn’s Bank v Boland [1979] Ch 312.
• Sledmore v Dalby (1996) 72 P & CR 196 where assurance, detriment and reliance are established, but the circumstances do not allow the claimant to take the land, that would be unconsciousable.
• Elizabeth Cooke, The New Law of Land Registration (Bloomsbury Publishing 2003) 142.

To conclude, the provisions on registration of compulsory and voluntary registration provide for protection of those who own the land and those who have rights in the land. The LRA 2002 provides rights and obligations ensuring that non-compliance to its provisions will not confer protection that it provides. The obligation regarding unregistered land complies with the aim of the LRA 2002 to confer title by registration effective given that the purchaser is obligated to make the necessary enquiry to become a bonafide purchaser.

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Bibliography

Legislation

The Land Registration Act 2002

Cases

Barclays bank v O’Brien [1994] 1 AC 180

HSBC Bank plc v Dyche and another [2009] EWHC 2954 (Ch)

Kemmis v Kemmis [1988] 1 WLR 1307

Kingston v Thames Water Developments [2001] EWCA Civ 20

Sledmore v Dalby (1996) 72 P & CR 196

Williams & Glynn’s Bank v Boland [1979] Ch 312.

Books

Bray J, Unlocking Land Law (Taylor & Francis 2014)

Cooke E, The New Law of Land Registration (Bloomsbury Publishing 2003)

Davys M, Land Law (10th Edition, Palgrave Macmillan 2017)

Dixon M, Land Law (Routledge 2018).

King S, Beginning Land Law (Routledge 2015)

Journals

Barbara Bogusz B, ‘Bringing Land Registration into the Twenty-First Century. The Land Registration Act 2002’ (2002) 65(4) The Modern Law Review 556-567, 558

Nair A, ‘Forgery and the Land Registration Act 2002: The Marginalisation of Discretion’ (2013) 24(3) King's Law Journal 403-412.