A History of English Land Law and the LRA

The enactment of the Land Registration Act 2002 is a fundamental watershed in English land law and represents the culmination of the process of transition to a comprehensive system of registration of title, which has taken more than a century. Whilst some land will no doubt remain unregistered for many years to come, the statutory system of registration is now indisputably the norm.^[1]

In 1925, English land law was the focus of comprehensive statutory reform. The Land Registration Act (hereinafter LRA 1925) was enacted in an attempt to simplify the ownership of land and, in a modern context, establishes the basic framework of contemporary English land law. The 1925 Act remodelled the system, eliminating many difficulties and founding the Land Registry, to govern the ownership of the transfer of land and replace the doctrine of notice as a means of determining priority issues. This process has since been reformed with the endorsement of the Land Registration Act 2002 (hereinafter LRA 2002). The LRA 2002 is the product of several years work by the Law Commission and the Land Registry and has been explained as potentially more far- reaching than the reforms enacted by its predecessor. In this essay, the writer will seek to present a clear and comprehensive exposition of the law in relation to the LRA 2002. The writer therefore endeavours to take account of all major developments, specifically in relation to the freehold ownership of land, which is the main area to be reformed, although the arguments are by no means exhaustive.^[2]

The circumstances’ in which it is obligatory for the ownership of land to be registered and the effects of registration or failure of registration, will firstly be discussed, in light of the fact that legal rights and interests in land will nowadays almost always be needed to be created by registration. The LRA 1925 recognised just two kinds of registered estate, namely freehold and long lease, whereas, the LRA 2002, by virtue of s. 3, broadens the categories to encompass freehold estates, leasehold estates with more than seven years unexpired, leases for discontinued periods (for example timeshare leases), leases taking effect in possession more than three months from the date of grant, leases to which the Housing Act 1985 applies, and rentcharges, franchises and profits a prendre in gross.^[3] Where a freehold estate or a lease with greater than seven years unexpired is sold, transferred as a gift (s.4(1)(a), mortgaged as a first legal mortgage, or, by virtue those leases to which s.4(1)(c) applies, are granted out of a freehold or leasehold estate, it is compulsory to apply for registration.^[4] Under s6(1) and 6(3), the person accepting the grant or transfer has to apply for the interest to be registered. There is no compulsory registration for rentcharges, franchises or profits a prendre at present, although voluntary registration of these rights is possible and even encouraged. The LRA 2002 ensures that if these rights are not enforceable within 10 years from the commencement of its enactment, they will not be enforceable against land following first registration or a disposition of land which has already been registered, unless their existence has been notified by virtue of s117.^[5] In the circumstances where registration is compulsory, any failure to apply for registration within two months will not enable the execution of a legal estate.^[6]

Freehold can perhaps be described as the most important interest in land, as this is synonymous to the actual ownership of land. Freehold ownership of land is capable of existing as a legal estate, by virtue of s1(1)(a) Law of Property Act:

An estate in fee simple absolute in possession … capable of subsisting or of being conveyed or created at law.

What represents good title is essentially dependent upon whether the land is registered or unregistered. In terms of the freehold title to land registration, the subject to which we are concerned here, an attempt to introduce a comprehensive system was demonstrated by the passing of the LRA 2002. Where the title to land has been registered it is not necessary to demonstrate a sufficient root of title in each circumstance, rather, legal ownership of land is effectively determined by the registered proprietor being registered on the Land Register.

In terms of the conveyancing process itself, the LRA 2002 makes one important reform. In the Law Commission Consultative document, Land Registration for the Twenty-First Century, a step towards electronic conveyancing is expected, in relation to Part 8 and Sch 5. The idea is to replace the current process for completion and registration of the transfer of a register in land, enabling the two processes to occur simultaneously. The consequence would eliminate registration gaps. As Stevens and Pearce state, these new procedures have not yet been implemented, rather as Harpum and Bignell anticipate; they will be introduced gradually over the next five years.^[7]

The LRA 2002 has a significant contribution to the law on priority of interests in relation to the transfer of freehold land. The question is whether the transferee obtains the title in accordance with the pre-exiting rights of third parties. Again the issue depends on whether the land is registered or unregistered. In circumstances where the freehold land has already been registered, issues of priority will be determined by the statutory provisions of overreaching in addition to the LRA 2002. As Stevens and Pearce recognise, a transfer of freehold title is a registered disposition of land, therefore LRA 2002 by virtue of s29 will mean that a transferor of the freehold title for valuable consideration will have priority over every pre-existing interest, except those deemed to have ‘protected priority.’ Where the land is unregistered, issues of priority will be affected by the statutory rules of overreaching in accordance with the effect of the first registration of title. Existing legal interests will bind the purchaser in additional to any equitable interests. The rights which are binding on the purchaser will be recorded on the register, including those rights to which the Land Registrar is aware. Stevens and Pearce summarise that the LRA 2002 states that the first registered proprietor will obtain the land in accordance with the following interests: any adverse rights recorded on the register of the property; the overriding interests in Sch 1, and; the rights acquired by adverse possession of which the registered proprietor has notice.

Thus far, this essay has discussed the usual means of acquiring the freehold ownership of land, however, it is recognised that a person can obtain title to land by taking possession of it over a sufficient period of time. The law works on the basis that an owner has an obligation to protect his own interests, and that if he does not take advantage of the remedies available to ‘evict’ squatters, he does not particularly value the land that has been adversely possessed. The authority for this is R.B. Policies at Lloyd’s v Butler.^[8] It was stated in this case that land owners should not ‘go to sleep on their claims’ and cannot expect the assistance of the courts if they do so. In accordance with the LRA 1925 a squatter would be registered as proprietor of the land following adverse possession for twelve years or more, by virtue of s75(2). In the interim period prior to registration the proprietor would hold the land on trust for him.^[9] The LRA 2002 however, introduces a new procedure whereby a squatter does not have the automatic right to be registered as proprietor due to the adverse possession. There are therefore now two distinct areas of adverse possession, one applying to registered land and the other to unregistered land.

Therefore, in the context of adverse possession of unregistered land, the squatter may obtain good title by virtue of twelve years adverse possession. It is necessary to note that the squatters’ rights will be protected if the land is subsequently sold and registered. For three years subsequent to the LRA 2002, the interests of the squatter will pertain to an overriding interest, and as sch 12, para 7 maintains, this will occur regardless of whether he was in actual occupation of the land and whether the registered proprietor knew of them being there.

On the other hand, in the context of adverse possession of registered land an entirely new approach is introduced, by virtue of the 2002 Act. Its implementation means that section 96 provides for the overruling of s15 Limitation Act 1980. Therefore, the title of a registered proprietor is not necessarily extinguished by simply the act of adverse possession for the relevant time period. To overcome this rule, stringent statutory criteria must be met, as found in sch 6 of the 2002 Act. Only then will the squatter be entitled to register as a proprietor. In sum, a squatter may be registered as proprietor in the event of active or passive consent from the land owner or if the owner fails to take action to recover the land subsequent to his knowledge that it is being adversely possessed. The squatter may apply for registration of his interest after ten years’ of adverse possession, sch 6 para 1(1), if other interested parties consent to his application or if his circumstances relate to those set out in para 5(3). If however, the land owner does not take action to recover possession of his land, the squatter may be entitled to registered as proprietor, following a period of two years, para 6(1). The effect of the new provisions, as Stevens and Pearce note, is that the likelihood of a squatter gaining ownership of land will be significantly reduced.^[10] This follows the assumption that most land owners will endeavour to protect their interest when they acknowledge the existence of a squatter on their land.

This essay attempts to demonstrate the wide-ranging implications of the introduction of the LRA 2002, particularly in relation to freehold ownership. The true implications of the Act remain to be seen at this early stage of its initiation.

Bibliography

Stevens & Pearce, Land Law, 3^rd edition Sweet & Maxwell, 2005

Thompson, Modern Land Law, Oxford University Press 2003

Harpum & Bignell, Registered Land: The New Law, 2002, Jordans

Law Commission No 271 (2001), Land Registration for the Twenty-First Century- A Conveyancing Revolution, para 698

Footnotes

^[1] Stevens & Pearce, Land Law, 3^rd edition Sweet & Maxwell, 2005 preface

^[2] The writer has consulted the textbook shown previously as this is the most up to date indication of the present law. However, in relation to the 2002 Act, there are limited ‘landmark’ cases, since the true implications of the Act have not yet been felt. The writer therefore advises the reader to consult cases pertaining to the 1925 Act for further instruction.

^[3] LRA 2002, s3(1)(a) s4(2)(a), s3(1)(a) 3, s3(4), s4(1)(d) s6(3)(a), s4(1)(b) s4(1)(e)

^[4] including leases for discontinued periods, taking effect more than three months from the date of grant, and to which the Housing Act 1985

^[5] Op Cit 1, p 74

^[6] s6(4), s7

^[7] Harpum & Bignell, Registered Land: The New Law, 2002, Jordans

^[8] [1950] I KB 76

^[9] LRA 1925 s75(1)

^[10] Op Cit 1, at 148