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'The Land Registration Act 1925 was not intended to alter the practice of physical inspection, which was to remain subject to doctrine of notice. More recent interpretations fail to recognise this fact'. Discuss

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Introduction

Name: Divya Basanta Lala Class Group 6 2003 Exam Paper Question 6B 'The Land Registration Act 1925 was not intended to alter the practice of physical inspection, which was to remain subject to doctrine of notice. More recent interpretations fail to recognise this fact'. Discuss, with reference to S70(1)(g) of the Land Registration Act 1925 (now Schedule 1, para 2, Schedule 3, para 2 of the Land Registration Act 2002) Introduction The Land Registration Act (LRA) 1925 was one of the main statutes born from the 1925 code of legislation. The main purpose of the 1925 legislation was to make land more freely alienable and to reduce the onerous task of a purchaser in investigating title, whilst at the same time affording protection to the owners of equitable interests in the land. The main problem in land law is to achieve a balance between the interests of a purchaser (which includes a lesser and a mortgagee) on the one hand, and those who hold an equitable interest in the land on the other hand. The LRA 1925 brought a totally new system of conveyancing which required eventual registration of title to all land. ...read more.

Middle

As stated earlier, the purchaser had to inspect the title deed (which were piles of paper relating to legal and equitable interests in the land) very closely to see whether the seller actually owned what it was trying to sell to him. This documentary evidence was important to account for how the land became vested in him. The investigation had to go back to at least 15 years and this would provide the root of title. If the investigation of title was correctly carried out, it was considered that the purchaser had constructive notice of all interests, whether legal or equitable. However, there were some equitable interests which would not be known to exist if the purchaser relied only on investigation of title. They were equitable interests that did not appear on title deed and could be discovered by physical inspection of the land (first recognised in Hunt v Luck (1901)). Physical inspection meant to allow the purchaser to enquire about any interests, for example in cases of shared occupancy with the seller, and eradicate the limits of investigation of title. Thus, establishing constructive notice was a time-consuming and expensive process. ...read more.

Conclusion

Under the LRA 2002 Schedule 1 para 2, only actual occupation qualifies for overriding interests. Thus, when a person has a proprietary right and is in actual occupation, he has an overriding interest. But if the purchaser makes a physical inspection of the land and this person's rights are concealed or not disclosed, then the interests are not overriding. Conclusion Thus, from a modern stance, the basic problem with occupation-based overriding interests is that to require purchasers to go beyond what appears on the register and this defeat the purpose with which the LRA 1925 was introduced. Those writing the LRA wished to create a fool-proof system of conveyancing in the mirror principle which states that all interest should be perfectly reflected in the register and any reference to actual occupation is anomalous. However, it can be also be argued that the provision in s70(1)(g) specifically providing for overriding interests except where enquiry is made and those interests are not disclosed never intended to alter the practice of physical inspection. This loophole was left mainly to protect innocent parties who have equitable interests but failed to register them. This form of notice offers a fair and just solution to those parties. ...read more.

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