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'Schedule 3, para.2 Land Registration Act 2002 protects the purchaser at the expense of the innocent occupier'. Consider the truth of this statement.

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Introduction

PROPERTY LAW ESSAY Oct 15th 'Schedule 3, para.2 Land Registration Act 2002 protects the purchaser at the expense of the innocent occupier'. Consider the truth of this statement. The Land Registration Act 2002 came into force on 13 October 2003 and generally has been welcomed by academics and practitioners. One of the main categories of change introduced by the 2002 Act is changes to the nature and scope of overriding interests in registered land. The aim of this part of the 2002 Act is to ensure that, as far as possible, the register reflects the true nature of the rights in the land concerned. Section 70(1) of the 1925 Act, which created a category of property right that could bind the purchaser of a registered title when unregistered and even undiscoverable, will no longer cause problems for the buyers of land since it no longer exists. However, it has been replaced by a smaller category of rights, for which registration is strongly encouraged. ...read more.

Middle

In this case a registered leasehold title included offices and a garage, each of which was let on a separate sublease to a different tenant. The sublease of the offices gave the subtenant an option to purchase his landlords reversion i.e. to acquire the registered leasehold title to both the offices and garage. The lease was assigned to the purchaser for value and Ferrishurst Ltd, the sub tenant of the offices sought to enforce its option against that purchaser. The option was not protected as a minor interest by any entry on the title to the lease, but Ferrishurst claimed an overriding interest arising from actual occupation. The Court of Appeal held that an occupier need not be in actual occupation of the whole plot comprised in the registered title and could enforce an overriding interest against the part which he did not occupy. This decision is now reversed by application of the new regulations and this emphasises that 'actual occupation' is really just a warning to an intending purchaser of the existence of third party rights in the land, not in itself a guarantee of such rights. ...read more.

Conclusion

It is only where the rights of the person in actual occupation were truly impossible for a reasonably prudent purchaser to discover that protection has been removed by the 2002 Act, such as in Chokkar v Chokkar and Malory v Cheshire. In Malory v Cheshire the land in question was awaiting development by Malory Enterprises Ltd, which claimed an overriding interest under s.70 of the 1925 Act. The Court considered that because the company had maintained fences around the land and taken other physical measures to exclude trespassers this amounted to actual occupation. In Chokar v Chokar a wife with an equitable interest in the matrimonial home was son holiday when her husband absconded with the proceeds of the sale of the house. The Court of Appeal held that she was in occupation and the purchaser was bound by her right. It is difficult to think of new situations where the interest is undiscoverable and unfairness would result, so arguably this reform may have little effect? It certainly doesn't to me seem to offer excessive protection to the purchaser at the expense of the innocent occupier. ...read more.

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