Land Registration Act 2002

Introduction

The core aim of the Land Registration Act (LRA) 2002 is “to ensure that ownership of land in England and Wales takes the form of ‘title by registration’, rather than ‘registration of title’.” [1] This marks a radical departure from centuries of land law, which established possession as the basis of title. [2] By single-mindedly and ruthlessly focusing on registration as the way to, and proof of, title, the 2002 Act both seeks to impose order on land ownership, and protect it more vigorously. Undoubtedly both aims are partially achieved. However, I propose to argue that the Act’s statutory vision of a perfect orderly register will never be wholly realised; firstly, because the Act was not ruthless enough, retaining overriding interests despite being anathema to rational order, and secondly, because the Act’s ruthlessness in pursuit of said order led to the provision of a statutory framework for adverse possession, which provided a platform for it to thrive and survive, not ‘off the record’, but within the confines of registration as the epitome of land law.

Exposition of the aims of the LRA 2002

The LRA was enacted in response to the Law Commission Report No. 271. [3] The central focus of the Act was creation of a new land register: this gargantuan task was designed to revolutionise regulation of land ownership. Over the 21st century land has evolved to become a key economic asset; [4] it has therefore become ever more imperative that ownership can be accurately and easily determined. Landowners need to know both the precise reaches of their geographic plot and the extent of, including limitations restricting, their legal position so that they may use, enjoy and protect their asset, and transfer it at will easily and safely. Hence, the creation of a national land register by the LRA 2002 [5] was not simply an academic exercise to document, modernise and streamline all existing rights over patches of national ground. The primary intention was to facilitate widespread e-conveyancing. [6] E-conveyancing eliminates the ‘registration gap’, which under a paper system can create real problems for purchasers: until registration of title purchasers of land only have an equitable interest despite having completed the contract with the vendor; thus they can find their property affected by actions taken ‘in the gap.’ E-conveyancing would be instant, automatically updating the register at the moment the transaction takes effect, and nullifying this uncertainty. [7]

The practical change resulting from the creation of the land register is that legal ownership of land now follows from the fact of registration, rather than from the documentary or other evidence submitted ‘in support’ of an application to register. [8]

The principles governing the register are three-fold. Firstly, it is designed to detail the totality of ownership and interests over a piece of land and accurately reflect the position ‘on the ground’. [9] Being able to easily discover the identity of the legal owner, the nature of his ownership, any limitations thereon and the rights of any others over the land protects potential purchasers, and drastically reduces the potential for fraud. Secondly, the existence of ‘hidden’ interests and priorities which bind legal owners or take precedence over certain transfers of title hinders and undermines efficient e-transactions. These must therefore be eradicated or registered so that all can see the ‘true’ picture. [10] The register needs to be reliable so that legitimate purchase is not unwittingly thwarted. Thirdly, the state guarantees registered title and will indemnify owners of land when loss arises from errors in the register. [11] Mistakes can be rectified, [12] but the Land Registry is reluctant to admit excessive fallibility, and strict rules are in place controlling this power. More often, the alternative power to indemnify the injured party will be exercised. [13] For example, in Kingston v Thames Water Developments [2001] EWCA Civ 20, a strip of land was erroneously transferred twice. Rectification was not ordered, despite the intended owner losing his title directly because of errors in the registration process. It was further held that refusing rectification did not breach Article 1 First Protocol to the ECHR because there was a legitimate aim in the public interest to enhance security of the registration system, and indemnity would sufficiently compensate his loss. [14]

The 2002 Act is indeed ruthless in its operation. The vision of e-conveyancing drives the creation of the register forward. Mechanisms are in place to ensure all land in England and Wales is eventually included within the register: if registration is not undertaken voluntarily, certain actions ‘trigger’ compulsory registration. [15] Once registered, a claim is recognised by the state, and the registered owner’s title gains validity and enforceability. Ownership is no longer a private matter; there is no opt-out. Third-party interests must also be registered, [16] failing which a purchaser will take the land free of the burden. [17]

Consideration of the extent of success in achieving this aim

The 2002 Act is undeniably steadily achieving some form of “rational legal order;” a cohesive system of land registration. This is a commendable achievement, and has many benefits which have been outlined and discussed above. But the Act has kept two elements of land law alive, crucially limiting the success which the register can have in achieving its aim of protecting title and facilitating e-conveyancing:

Firstly, unregistered interests which override [18] still take precedence despite having no entry on the register, meaning that the register will only ever imperfectly mirror the reality. The Act may operate ruthlessly in all other areas, but a soft spot seems to have crept in here. The rationale behind retaining this precedence can be found in the Law Commission Report, which stated:

“… overriding interests are by no means only ‘minor liabilities’ … it is unreasonable to expect the person who has the benefit of the right to register it as a means of securing its protection.” [19]

It was deemed unreasonable to expect registration of these interests because their “informal acquisition [20] would be defeated by a prescriptive method of ensuring their priority.” It also seemed “pointless or inconvenient” for registration [21] which would merely ‘clutter’ the register and incur work disproportionate to the benefit. Some interests are protected in other ways. [22] 23The 2002 Act has put a tighter cordon around overriding interests, and has also made it compulsory for applicants for registration to specify interests of which they are aware; nonetheless, they inherently undermine the sanctity of the register. Further, for a system which abhors the informal it is an anomaly to encourage overriding interests to operate informally, and to skim over interests which bind for less than 7 years; quite a considerable length of time in a modern world.

Secondly, the doctrine of adverse possession continues to significantly limit to the protection afforded by registration, and, indeed, has been given legislative permission to do so. By detailing within the legislation how adverse possession can operate, the Act has given it a platform on which to thrive, and the lengthy guidance for practitioners published by the Land Registry certainly suggests this to be a viable challenge to be taken seriously. [24] It seems ironic that the very same Act which seeks to protect title to land contains an explicit framework for squatters to operate legitimately.

The continued existence of adverse possession under the LRA 2002

Adverse possession requires an intentional and factual possession of land which is not yours without the owners consent. [25] It has been widely argued that adverse possession is an important method of challenging hollow legal ownership and that acquiring ownership by sustained use over a period of time is a valuable means of promoting the efficient use of a scarce commodity. [26] It prevents ‘paper owners’ from simply ‘sitting on’ their asset and continually ousting those who seek to make practical use of the land. Though some commentators consider that it amounts to ‘land theft’ [27] the legislature took the opposite view and allowed adverse possession to remain a possibility under the new regime.

However, because the LRA 2002 was primarily concerned with e-conveyancing, it had to curtail non-electronic dealings to prevent the register being compromised. Thus on the face of the 2002 Act the scope for adverse possession is residual; at first glance the provisions of the Act seem to have stripped it of much of the force it once held. The new regime set out in Schedule 6 makes it far easier for owners of registered title to frustrate attempts to claim ownership of the land by adverse possession, by focusing on the underlying principle that registration alone confers title. [28]

Replacing the previous automatic effect of 12 years’ occupancy, 10 years adverse possession now only qualifies squatters to request to be registered as proprietor in place of the current registered owner. The current owner is then notified of this request, and has 2 years to oppose the application and assert their legal title. If they oppose, there are only 3 narrowly prescribed scenarios in which dispossession will still take effect: firstly, if estoppel dictates that it would be unconscionable; secondly, if the adverse possessor is actually entitled to register for another reason altogether; and thirdly, if it relates to a ‘stepping-over’ one’s own boundary where the boundary line has not been exactly determined. [29]

The impact of the Act on adverse possession

Arguably, the 2002 Act:

“relegate[s] [adverse possession] to two peripheral roles, functioning both as a way of making abandoned land marketable and also as an element in procedures for resolving boundary disputes.” [30]

Or in the words of Martin Dixon, the 2002 Act has “emasculated” adverse possession. [31] Removing any power the doctrine had without recourse to registration, and instituting an ‘early warning’ to registered proprietors arguably means that successful challenges are likely to be difficult to mount.

The Act has seismically shifted how adverse possession operates. Simple and factual adverse possession can no longer by itself deprive a registered owner of his land; [32] rather:

“… adverse possession provides access to a procedure through which the claimant may acquire title by registration.” [33]

However, rather than viewing this in the negative, I would seek to argue that the LRA 2002 has drawn adverse possession into the realm of registration, and thereby conferred a greater legitimacy on it. It has kept it from having ‘off the record’ application, and brought it to the forefront of a system focused on registration. This way, there is very real room for the doctrine to operate. To support this contention, I would point to the fact that the 2002 Act has provided for the operation of estoppel as an argument in favour of dispossession. It is perhaps questionable how, given that estoppel relies on a promise or representation, whereas adverse possession relies on the owners’ lack of consent, these can co-exist, but there is the possibility of judicial development of this argument to promote ousting paper owners seeking to assert ‘empty’ title. No precedent has yet been set, but a challenge must be awaited eagerly.

Conclusion

Ultimately, underlying the LRA 2002 is a single-minded vision: to prepare for e-conveyancing. The resulting land register is an achievement of monumental proportions, which very almost creates perfect rational order. But retaining overriding interests undermines the perfection the register can achieve, and providing for the continued operation of adverse possession disrupts its orderly operation. By making registration the sole guarantee of title, estate ownership does become more heavily protected, but by restructuring adverse possession to fit within the realm of registration there will always be room for a persistent occupant to break through that protection.