The 1925 legislation radically reduced the number of estates and third party rights that may survive at law and therefore limited the number of interest that could bind the purchaser.
The 1925 legislation required that equitable rights would either be overreachable or registrable regardless of whether the purchaser new or not they were bound by legal interests. The major purpose of the LPA 1925 in relation to unregistered conveyancing is to bring certainty and stability to third party rights in land. Under 1925 legislation a number of areas needed to be noted in order to examine the operation of third party rights in unregistered land.
Land charges only concern land, which is unregistered. The LCA 1925 is a major provision in which unregistered land is subject to. It is important to note that it does not protect all interests in the land. Those interests, which are left out side it, are subject to the doctrine of notice.
There were obvious problems and difficulties involved and surrounding the LCA since 1925. Some of the key problematic areas were that the land charges register was incomplete, resulting in many equitable interests being non- registrable. The fact that the register is a name based register and therefore can cause confusion and difficulties as wrong names may have been entered on it. Also the fact that the LCA 1972 does not protect the rights of a person in actual occupation of the land.
In relation to the LRA 2002 there is shift away from the distinction between legal and equitable interests in land. The abandonment of the doctrine of notice occurred to ensure the elimination of dangers involved with conveyancing for purchasers, which were also apparent pre- 1926. This could be viewed as a positive reform of the 2002 act as it brings certainty and stability for people who have rights in land, which is owned by someone else. Although in the past if there was a conflict between a buyer of a legal interest in land and the owner of some existing equitable interest it would have been resolved by the doctrine of notice, as in Kingsnorth Finance Co Ltd v Tizard.
Registered land is subject to the provisions of the Land Registration Act 2002 previously the LRA 1925. The recent changes introduced by the LRA 2002 impact on the effectiveness and level of protection given to third parties by changing orders of a means of enforcement of judgement. Before the act came in place on the 13th of October 2003 it was possible to register third party interests as cautions, notices, restrictions or inhibitions. The act now only provides for two types of entry to protect third party interests. These are notices and restrictions.
Third party interests were protected under the 1925 act by falling into either one of two categories: minor interests and overriding interests. The 2002 Act has since abandoned this area although the essential distinction still remains the same. The abandonment of these two areas could appear unfair to the third party involved. In relation to minor interests if an interest was appropriately entered on to the register it would offer protection as the purchaser would be bound by it, but if abandoned this may constitute as being rather unfair as it would not offer protection.
A major flaw, which was identified in the 1925 act, is that interests in registered land may fall into one class and sometimes into another. For example an individual with a minor interest is in occupation, they my either seek to protect their interest by entering it on the register or may rely purely on their occupation, therefore would constitute as an overriding interest. As an interest maybe unprotected the fact that the individual wants to purchase the freehold may be classed as an overriding interest, as in Webb v Pollmount Ltd
‘Interests which override’ in the 2002 act are narrower than they were in the 1925 act.
In order for the interests to continue to affect registered land , more of them will have to be entered onto the register under the LRA 2002. This is an aim of the 2002 act as it is trying to ensure that as many interests as possible are entered on the register, but at the same time the way in which these interests are protected will change. The reclassification of ownership rights is fundamental to the LRA 1925 system.
In the past there has been, concern as to what exactly is meant by the term ‘actual occupation’ in relation to overriding interests. Despite the reform contained in the 2002 act the matter is apparently still rather ambiguous and doubtful. This has caused much judicial discussion. The case of Hodgson v Marks gave rise to this matter and was continued in Williams & Glyn ‘s Bank Ltd v Boland. Which raised the question of whether a minor interest, could turn in to an overriding interest, if the owner of that right was in actual occupation of the land. The LRA 2002 aims to ensure that the register is an accurate reflection of title by reducing the categories of overriding interest.
As previously mentioned before the changes of the 2002 Act there were four ways in which third party interests could be protected. The question is whether the abandonment of inhibitions and cautions by the act will reduce the protection to third party rights that were given under the 1925 act? Although the 2002 act has expanded the scope of ‘Notice’.
There are now two types of notice rather than just one. An ‘Agreed Notice’ is similar to a Notice under the LRA 1925, which requires the registered owners consent. The introduction of the Unilateral Notice on the other hand does not require the owners consent or require the land registrar to validate the claim. It is reasonable to suggest that with the extension of Notice, the Unilateral Notice offers further protection under the LRA 2002 for third party interests than the LRA 1925 did.
Restrictions, under the LRA 2002 have somewhat been modified compared with the rules under the 1925 act. Restrictions under the new act can be used in many circumstances, which include where a restriction or an inhibition would have been used under the LRA 1925. A Notice is the correct entry to use to protect an interest that is intended to bind third parties as it provides priority for the interest. This is more beneficial as a restriction provides no priority over third party interests.
The scope of land registration in relation to both unregistered and registered land is vast. In the above there has been discussion on various aspects, which have been at the forefront of reform by the LRA 2002, although it is important to recognise that reform, may or may not have been the best solution in terms of protecting third party interests in land. The most important reforms of the 2002 act is the way the law has been changed regarding adverse possession and overriding interests.
It is recognised that for many years the LRA 1925 has been subject to much criticism and in many respects unsuited to modern times. Undoubtedly the pervasive problem in land law resolves around the extreme difficulty in satisfying the twin objectives of alienability and fragmentation. According to Gravells (1995) in relation to alienability:
“The purchaser of land wished to ensure that when he purchased the, land he actually acquired title to that land and the full range of ownership rights over that land.”
Whilst in relation to fragmentation, “The purchaser wished to ensure that he was aware of all third party interests which maybe enforceable against the land and which may effect his use and enjoyment of the land.”
From this it is reasonable to suggest that legislation which has been enacted over the year’s show that the law has yet to get it right in relation to satisfying these two objectives as they have yet to reconcile with each other.
From the above the changes that have been introduced by the LRA 2002 in relation to the protection of third party interests are substantial. Like its predecessor the aims and objectives of the new act are similar, but the new procedures are more complex. However with the abandonment of various areas of the 1925 legislation which this country has become a custom to for many years, the question has to be asked whether the introduction of a more 21st century approach will cure the problems that have occurred and become evident in the past or just create further difficulties?
See Land Registration Act, Real estate review winter 2003- 2004,
Except: trust interests which were over reached, and equitable interests of which the buyer for value did not have notice provided she acted in good faith.
That is, they are binding on the whole world except the bona fide purchaser of a legal estate for value without notice.
Except an unregistered puisne mortgage.
Which are the land charges register under s.2 LCA, the rules of overreaching and the doctrine of notice.
Which sought to protect the buyer from the doubts surrounding, or involved with the doctrine of notice, and to protect the holder of the interest. This was done by registering the interests on the registers.
These registers were governed under the Land Charges Act 1972 previously the Land Charges Act 1925. Interests, which could be registered here, were generally the ones that the buyer would find difficult to discover.
The LPA 1925 s.1 (1) states that the only estates in land which are capable of subsisting or of being conveyed or created at law are: An estate in fee simple absolute in possession or a term of years absolute (Thomas, 2003-2004)
Interests, which are registrable as land charges, cannot be overreached; this conclusion was reached in the case of Birmingham Midshires Mortgage Services Ltd v Sabherwal
[2000] 80 P & CR 256.
The purchaser of land needs to know whether they are bound by any person who has rights over the land and the owner of these rights needs to ensure that that their rights are protected. It does appear that it is in everyone’s interest to have a valid conveyancing system in order to allow a balance between the purchaser and the third party.
Firstly, dependent on the nature of the interest, does the third party interest survive a transfer of land? Secondly it is important to know whether the interest is legal or equitable and thirdly although the third party right may not be binding on the owner of the land, the interest or right may still be enforceable between the parties who created the right (Dixon, 2002) As in Barclays Bank v Bhur [2001] EWCA Civ 1023.
Dealings in unregistered land people are required to do their own searches of the register in order to discover any protected interests in the land.
Where the holder of title was also in actual occupation of the land, would only bind a purchaser if protected by an appropriated entry on the register – see Thompson (2003) pp112?
Listed under section 70 of the LRA 1925 and were interests which did not appear on the register of title but would bind the purchaser of the land – see Thompson (2003) pp112.
See Than & Coldham (2004)
In to four different statutory classes.
In relation to third parties it will allow them to know in advance how to protect their interests or rights if something was to happen to the land, for example if it was sold. - See Dixon (2002) pp 37
In comparison it is similar to a Caution Against Dealings under the old act, but with one advantage. By giving priority to the interest to the extent that it is valid, will mean that there will be a benefit to those who are entitled to register their interests against property - Williams (2003). Prior to this a Caution Against Dealings would provide the same benefit. It is important to note, that there are various areas that need to be protected under one of the notices rather than the other. For example: A Matrimonial Home Rights Notice needs to be protected by an Agreed Notice
It is important to note that Notices and Restrictions are intended for different functions, and it is not possible for a Restriction to protect an interest that is or could be subject to notice.
An inhibition, which was previously protected under the LRA 1925, is now protected under a Restriction in the 2002 Act.
It makes it more difficult for a squatter to acquire that is registered at the land registry. This is beneficial in terms of providing an incentive for owners of unregistered land to apply for voluntary registration. There are also transitional provisions to protect squatters who satisfy the old rules – see Land Registration Act 2002, Real estate review (2003-2004).
The LRA 2002 seeks to reduce the number of overriding interests, and replace as many as possible with entries on the register – Land Registration Act 2002, Real estate review (2003- 2004).
