Essay: Overriding interests in Land Law

Overriding interests is a very significant impairment to one of the key purposes of the land registration bill. It describes that the register should be as complete a record of the title as it can be. S.11 and 29 of Land Registration Act 2002 provides priority to overriding interests which they are not secured on the register. Unregistered interests which override the rights, they are the rights in someone’s land that have major priority to the registered title of the registered owner. This explains that they are binding on the land without have the register title of the land. As a result, it gives the permission to the person who claims the overriding interests to exercise the right against the land even though they are unregistered interests which disregard the registered title. The foremost aim of the Land Registration Act 1925 was to make land more easily alienable and to decrease the heavy work of a purchaser in investigating title. On the other hand, The Land Registration Act 2002 provides that “ the proprietorship of land in England and Wales earnings the form of title by registration rather than registration of title”. However, this essay will examine the deference between Land Registration Act 1925 and Land Registration Act 2002 and also advantage and disadvantage of those acts.
As per land registration, firstly we need to look at what does it mean by registration of titles.
Registration of titles defines the title guarantee of ownership and ensure that the land belongs to the specific person. This title guarantee works on the source of information that given by the land registry. If the land is unregistered then there will be huge problem because of absolute ownership. To prevent these problems, the land registration act came into force which can protect the land ownership and changes the way of thinking of land proprietorship and conveyancing. Land registration was examined by the member of certain people before the inauguration of parliament. In Seventeenth and eighteenth century, there were numerous bills came into force about land registration however in that time no bills were positively go through. In 1857 the Royal Commission of the United Kingdom stepped out to solve the problem of registration titles. Later on, In the year 1862 the first land registry office was founded by the act of Land Registration Act 1862. However, this act did not last longer, as Royal Commission realised that this act was quite convoluted idea. After that, the Royal Commission came up with new idea and invented new act which was the Land Transfer Act 1875. Although the Royal Commission created this act, in that time they have amended so many rules and places of those act. Eventually, in the year 1925 they have made their decision and introduced a new act which is the Land Registration Act 1925. The observable thing of this act that there are three different principles which explain the land registry system very clearly. The principle of this act are insurance principle, minor principle and curtain principle. Moreover, these three principles briefly deliberated about the formalities of equitable interest, indemnity and overriding interest.
However, the present act of the land registration is Land Registration Act 2002 which is following in every kind of land registry system. This act is totally opposite of all previous acts and it creates lot of major changes into the land registry system. Because of this act the land registry system do not need to write in the paper as it is totally based on the electronic system. The main part of this act is, it saves time and secures file as the communication make through electronic form. According to the Land Registration Act (LRA) 2002 notice does not have the ability of controlling the enforceability of ownership rights in registered land. In the event of land registry system, the title of compulsory first registration must have to be included in the land registry system which was introduced in the Land Registration Act 1897. This act comparably bit smaller than the new Land Registration Act 2002. Wherever land selling and purchasing happened, in that time the compulsory first registration of title take place as it is the main requirement for registration. Therefore, it clarifies that unregistered land should be register under its particular independent number. Furthermore, the people who has got many lands, for them voluntary registration is very useful as it is ensure the real ownership of the property as well as confirm that the land is secure by the government. S.4 of Land Registration Act 2002 confirms that it is exclude the unregistered land and from the facilities.
According to the Land Registration Act 1925 overriding interest are nothing new and existed. The operation of overriding interests will be deeply unfair for the purchaser who has not got any idea about the existence rights and buy the land without enquiries and inspection. There are several reasons notified by the Law Commission about this where they said, “most overriding interests do not have one characteristic namely that it is unrealistic to expect a person who has the benefit of the right to register it”. Furthermore, overriding status have the ability to protect those rights which begin informally. As Jackson stated that, “The rationale that underpins the informal acquisitions of interests in land would be defeated by a prescriptive method of ensuring their priority against a purchaser”.
The classifications of overriding interests are discussed in Schedule 3 of the Land Registration Act 2002 which replaced the S.70 of the Land registration Act 1925. Overriding interest involve legal leases that granted for 7 years or under, legal easements and profits a prendre, interests of persons in actual occupation, local land charges, public rights, customary rights, mines and minerals. Moreover, under paragraph 2 schedule 3 whoever hold the occupation, there any kind of interest belongs to that specific person. In National Provincial Bank v Ainsworth it was stated that, to gain overriding interest there have to be an interest which is proprietary interest and the interest must be actual occupation at the appropriate time. On the other hand, overriding interest does not include personal rights such as licence, it was held in Strand Securities Ltd v Caswell. Overriding interest must not be overreached as it is handover the rights from the land to the process of sale. Therefore, the actual occupation will not be able to protect the interest. This point was held in City of London Building society v Flegg. However in Strand Securities Ltd v Caswell Lord Denning noted that under the old law, by s.70(1)(g) of the LRA 1925, “an interest of a person in actual occupation was given overriding status”. He also added that, “Fundamentally, its object is to protect a person in actual occupation of land from having his rights lost in the welter of registration. He can stay there and do nothing. Yet he will be protected.
Under Land Registration Act (LRA) 2002 schedule 3 paragraph 2 overriding interest has been described as the most notorious and litigated interest. According to this schedule an interest can be override in two ways. A person who claims the interest is in actual occupation and that occupation will be obvious on a reasonable inspection. The other one is, a person who claims the interest is in actual occupation does not have the actual knowledge at that time. In both ways the actual occupation needed. Actual occupation can be used to determine the meaning which is explained in s.70(1)(g) LRA 1925, however, LRA 2002 made new features of obvious occupation. The LRA 2002 provides no definition of what actual occupation is. In Link Lending v Bustard (2010) Mummery LJ stated that “The construction of the earlier equivalent provisions by the House of Lords is binding on this court. The trend of the cases shows that the courts are reluctant to lay down, suggest a single test for determining whether a person is in actual occupation. However, Lord Wilberforce in Williams & Glyn’s Bank v Boland explained about plain English interpretation of actual occupation where he said that, “I do not think that the word actual was intended to introduce any additional qualification, certainly not to suggest that possession must be adverse: it merely emphasises that what is required is psychical presence, not some entitlement in law. Generally, actual occupation needs few degree of durability and continuousness, it was held in Abbey National Building Society v Cann. In Lloyds Bank v Rossest noted that the nature of the land will ensure the degree of physical appearance.
According to the Hunt v Luck, a person is only bound by the rights in actual occupation when the traditional conveyancing principles arise such as constructive notice. Mustill LJ considered that “ s.70(1)(g) does not actually say the acts constituting actual occupation must be such that a purchaser who went to the land and investigated would discover the fact of occupation and thereby be put on inquiry, the closing words of the paragraph are at least a hint that this is what parliament principally has in mind”.
It has been said that judges would not interfere or would not stand with any kind of law which contrary to the doctrine of notice. There will be huge burden for the purchaser if the title deeds examine by the unregistered system and the doctrine of notice. It is the responsibility of judiciary to make the balance between the purchaser and the occupant. There is no place for the doctrine of notice in the registered system, but it has little place in the unregistered system, the judiciary and the legislature has discovered it useful to insist certain requirements for the purchasers in registered land.
In conclusion, we may say that The Land Registration Act 2002 has been great in the modern land registration system. It creates provision to develop the correctness of the land registration system and quicken the processing of land registration system throughout England and Wales. The main purpose of Land Registration Act 2002 is that every interested parties will be able to investigate their title decently by the land registration system with an absolute inquiries and inspection. The Land Registration Act (LRA) 2002 makes the land registration system easier and faster and decreases the possibility of overriding interest rule.