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Evaluating the Efficacy of the Land Registration Act 2002

  • 04 Pages
  • Published On: 21-11-2023

Introduction

The overarching aim of registering land is to secure easier, safer and more efficient transfer of land and to secure protection of interests in land. The Land Registration Act 2002 (“LRA 2002”) is to provide an electronic register reflecting complete and accurate title of the land that enables online investigation of the title, with absolute minimum effort of additional inquiries and inspections.

This essay will critically assess the purpose of the LRA 2002 in regard to whether it is able to provide complete and accurate information about the title to the property. It will explore the provisions regarding unregistered interests, adverse possession and alteration of mistake to make such assessment.

Whether additional inquires and inspections are of absolute minimum.

The LTA 2002 Act aims to make registration alone to confer title. The mirror principle, identified by Theodore Ruoff, the Chief Land Registrar from 1963 to 1975, provides for the Register to reflect reality of the property title. This is vital for the LRA Act as it aims to establish a system of electronic conveyancing. The register must be complete to reflect the state of title at any given point of time. This will enable online investigation of title with absolutely least additional inquiries or physical inspection of the land or property. However, the components of the mirror principle alternatively highlights that in absence of a complete register, the state of title cannot be reflected. This means the minimum physical inspection cannot be a possibility in such case.

The LRA 2002 provisions regarding unregistered interests are an exception to the objectives of complete and accurate register. Schedule 1 provides for a list of unregistered interest that can override first registration. This list forms an exception to the mirror principle. Section 3 does not make registration compulsory for such unregistered titles. Registration is voluntary. It is only Section 4 that has identified a list of transfer of freehold and leasehold estate in land of compulsory registrable. Reading Section 3 and 4, it is apparent that there will always be interests that will not be reflected in the register. This means that there will always be additional inquiries and inspection, which does not seem to be at minimum in such circumstances.

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The LRA 2002 enables unregistered interest to override registered dispositions. In this regard, it could only occur if the purchaser is a bonafide purchaser. For this to occur, there is an obligation of conducting a check on the property. This means that the LRA 2002 on one hand projects to have a complete and accurate register through e-conveyancing or register. On the other hand, by securing rights of unregistered interest, it creates an obligation on the buyer. For example, rights of the buyer over the land or property will be secured only if the purchase was bonafide. For that, the buyer had actual notice of the rights affecting the land when somebody informed them or they found themselves about the rights. Also, buyer had constructive notice if they would have been aware of interests had they checked. In Barclays bank v O’Brien, Bronwe-Wilkinson LJ ruled that if a party knows of certain fact that triggers an inquiry related to possible existence of rights of the other party, and the former fails to make such inquiry or reasonable verification regarding the rights, the former party will be treated as having a constructive notice of the earlier right and will be subjected to it. LRA 2002, s37 creates a similar obligation on the buyer to verify about such rights. It provides for unregistered interests with discretionary obligation on the part of the register to enter a notice when it “appears to the registrar that a registered estate is subject to an unregistered interest…” This may give rise to the buyer conducting a check for themselves. The equitable doctrine of notice is still relevant to cases involving rights of beneficiaries under trust or rights in unregistered lad created before 1926, such as an equitable easement or a restrictive covenant. This also gives rise to the main issues of “knowing something” that might stimulate inquiry or “wilfully abstaining from inquiry to avoid notice”. This was considered by Purchas LJ in Kemmis v Kemmis, where both the concepts require that the enquiry, if it was made, would necessarily have verified the knowledge. The obligation of checking the property may also be undertaken by the agent of the buyer. As long as there is unregistered interest and the buyer has to conduct checks or inquiries, there cannot be absolute minimum of additional inquiries and inspections.

Another aspect of the LRA 2002 is that of overriding interests that could override first disposition. Overriding interests are not minor liabilities. They bear the characteristic that it is not reasonable to expect a person entitled to the benefit of the right to register title as a tool to secure protection of the title. As such, overriding interests are protected by LRA 2002. The LRA 2002 recognises adverse possession. It allows squatters to claim protection by applying to the register as proprietor after 10 years of adverse possession. This is provided for under Schedule 6. This indicates that unless the squatters come to apply for registration, the register will not have access to the information. Thus, the fact that the right of an individual with adverse possession cannot be discovered by the register is a problem for the buyer as they cannot be misinformed by the seller in regard to the presence of such person. This occurred in Williams & Glynn’s Bank v Boland [1979] Ch 312 where the husband had misinformed the lender bank about his wife’s occupying the property. His wife had acquired the overriding interest. In such case, the register does not seem to play a more active role in verifying titles and interests over the property. Lord Denning in the case of Starnd Securities v Caswell ruled that actual occupation protects overriding interests that cannot be removed by registration. The LRA, however, aims to get property registered by the owner. It also provides for a third party to register interest they have over a property. The LRA, in order to protect rights of the owner, requires notification of the registered proprietor in case of application by a squatter. However, the issue, in regard to the question in hand, is that the buyer is under an unsaid obligation to conduct additional inquiries and inspection due to the gap in the LRA 2002.

Another instance of incomplete register may lie in the error in the register. Schedule 4of LRA 2002 provides alteration can be made for correcting a mistake and bringing the register up to date. However, it does not allow alteration in case the mistake was due to lack of proper care or because the proprietor substantially contributed to that mistake. This indicates that the mistake will remain. In the case of Kingston v Thames Water Developments, there was an erroneous transfer of a strip of land twice. There was no order for rectification irrespective of the fact that the intended owner lost his title directly because of the error. This was also not considered breach of Article 1 First Protocol to the ECHR based on the public interest to enhance protection of the registration system. This case shows that the register cannot be accurate and complete. Even though 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. However, such compensation paid by the land registry does not cover cases of fault or lack of proper care. The compensation is another way of shifting obligation on the buyer to conduct inspection and compensating them using public money. The uncertainty is at the heart of the title registration system as to extent a registered title may be rectified to remove a proprietor, who may no claim other than by reason of the registration.

Another instance of incomplete register may lie in the error in the register. Schedule 4of LRA 2002 provides alteration can be made for correcting a mistake and bringing the register up to date. However, it does not allow alteration in case the mistake was due to lack of proper care or because the proprietor substantially contributed to that mistake. This indicates that the mistake will remain. In the case of Kingston v Thames Water Developments, there was an erroneous transfer of a strip of land twice. There was no order for rectification irrespective of the fact that the intended owner lost his title directly because of the error. This was also not considered breach of Article 1 First Protocol to the ECHR based on the public interest to enhance protection of the registration system. This case shows that the register cannot be accurate and complete. Even though 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. However, such compensation paid by the land registry does not cover cases of fault or lack of proper care. The compensation is another way of shifting obligation on the buyer to conduct inspection and compensating them using public money. The uncertainty is at the heart of the title registration system as to extent a registered title may be rectified to remove a proprietor, who may no claim other than by reason of the registration.

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Conclusion

The register is an electronic system to enable compete and accurate representation of title in property. It, however, has not removed additional checks on the state of the title of the property. This essay has seen that the prevalence of issues unregistered interest, rights of person with adverse possession and provision of alteration in the register discussed here demonstrated that the effort of additional inquiries and inspections is not absolute minimum.

The prevalence of the issues means that the register cannot, at all given time, give an accurate up to date information about the title of the property. The provisions of voluntary registering of unregistered interest, under Section 3; requirement of having notice of third party right to become bonafide purchaser; registration by squatters after 10 years of adverse possession; and no alteration of mistake by the register are all strong points indicating that the additional inquiries and inspections is not absolute minimum. The provisions discussed here lead to an interesting observation that the register has shift major obligation on the parties in regarding to securing a complete and accurate register.

Legislation

The Land Registration Act 2002

Cases

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

Kemmis v Kemmis [1988] 1 WLR 1307.

Kingston v Thames Water Developments [2001] EWCA Civ 20.

Starnd Securities v Caswell [1965] Ch 958.

Bibliography

Books

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

Davys M, Land Law (Palgrave 2017)

Dixon M, Land Law (Routledge 2018)

King S, Beginning Land Law (Routledge 2015)

Lees E, The Principles of Land Law (Oxford University Press 2020)

Journals

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

Dixon M, ‘by registration or conquest: Interpreting the Land Registration Act 2002 in England and Wales’ (2013) 5(3) International Journal of Law in the Built Environment 194-206.

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

Others

  • ‘Land Registration Act 2002 Explanatory Notes’ accessed on 9 November 2020 .
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