The Land Registration Act 2002[1] came into force on the 13th October 2003.

This reclassification is important, as Schedule 3 rights are more limited than those under Schedule 1, so that after first registration, rights should be registered for them to bind any subsequent dealings with the land. Certain interests such as franchises and manorial rights will lose their overriding status after ten years, and therefore must be registered in this period if they are to affect the land. Certain leases and easements (as above), are required to be individually registered for them to bind, therefore these interests will no longer override. Many cases regarding overriding interests under the LRA 1925 concerned the rights of those in actual occupation. Schedule 3 limits actual occupation only allowing it to have an overriding effect if the occupation is patent. This seems to make the law fairer yet it must be questioned what interpretation the courts may take of  ‘patent’ in determining the outcome of cases.

An applicant must also disclose any overriding interest that is within his knowledge, once again making the whole system more transparent for purchasers. The emphasis regarding interest that override is on rights being registered and unregistered rights not being binding. This said interests that override are still retained within the new Act. Even in their new more limited form, one must realise that there is still the possibility of interests that are not visible on the register, affecting the nature of the title that is being purchased. The purchaser will therefore not be able to completely rely on the register as a complete and accurate reflection of the state of the title to land. The general aim of the Law commission regarding interests that override is neatly summarized in report no 271 : ‘interests should be overriding only where it is unreasonable to expect them to be protected in the register’.

 

Four separate classes’ governed ‘Minor Interests’ under the LRA 1925. The 2002 Act has reduced this and now interests can be protected by an entry of a notice or a restriction. Notices combine the functions of notices and cautions as they were under the LRA 1925, and restrictions combine the functions of the old restrictions and inhibitions. Notices have also been split into distinct categories, namely notices that are consensual and unilateral. Consensual notices (those acknowledged by the registered proprietor) will bind the land as there is obvious agreement regarding them. Unilateral notices (those not acknowledged by the registered proprietor) can be removed from the register on the application of the registered proprietor, however if this application is not made then the unilateral notice will confer protection.

Dixon argues that the provisions of the LRA 2002 regarding ‘minor interests’ (although not so called in the Act), concern matters of detail and not groundbreaking questions of principles. This seems to be a fair statement as much of the ‘old law’ remains unchanged. The validity and voidness rules remain and interests will bind if registered and be void if not. Questions of priority will still be determined by reference to the time of the creation of an interest, this seems sensible, as the introduction of electronic conveyance will mean that in time, the creation and registration of an interest will occur simultaneously.  

 

This said it could be argued that the new laws regarding restrictions and notices have significantly changed. Section 33 of the LRA 2002 details matters that can’t be protected by notice, therefore reducing the scope of the old act. The reduction from four to two categories of interests will also allow the law to be less complicated and more systematic, regarding the protection of these interests. This more pragmatic approach to the protection of so called ‘minor interests’ should allow purchasers to more easily distinguish rights that may concern them when dealing with land.

The laws regulating adverse possession have been significantly changed by the LRA 2002. The right to title by mere possession has been removed and squatters will no longer be granted automatic overriding status. Under the new laws (covered by part nine of the Act), squatters who have been in adverse possession of the land for ten years (as apposed to twelve under the LRA 1925) will be able to apply to have the title to the land registered in their name. If such an application is made, then the Land Registry will notify the registered owner of the land concerned. The land owner then has sixty five working days to return notice and if this is not done the squatter will be registered as proprietor, with the same title as the original owner held. If counter notice is returned, and the squatter cannot prove one of the limited defences, then the registered owner has two years in which to remove the squatter.

 The new requirements regarding adverse possession provides far greater protection for owners of land than the 1925 legislation did. In fact this protection is hoped to become another trigger for the voluntary registration of land, as the rules of unregistered land regarding adverse possession have not been altered. Therefore, landowners may decide to register their land so that they can gain this vital protection. This will increase the number of titles on the register. The implementation of this part of the Act should be fairly unproblematic as long as the registered owners of land keep their addresses for service up to date on the register. If this is not done then they may not be able to be notified of any adverse possession claims and the sixty-five day limit may pass by.

One of the most drastic aims of the LRA 2002 is the introduction of electronic conveyancing. The Act aims to disregard the current system of paper transfer of registration, in favour of a system that is purely electronic. The first benefit that this will bring will be the removal of the ‘registration gap’. A transfer of land that is electronically conveyed will automatically register the purchaser as the new proprietor and the gap will no longer exist. This will offer greater protection to purchasers who will instantaneously receive registration to the new land. As discussed above, electronic conveyancing will also allow new interests in land to be simultaneously created and registered. This will allow the register to show an accurate reflection of the state of the title to the land, thus fulfilling the aims of the Law Commission. It is hoped that the new electronic system will be implemented within the next ten years.  

In theory these provisions will allow the investigation of title online. There have been a number of criticisms regarding this section of the Act. Although the new system has been welcomed by practitioners, commentators have noted many problems that are likely to occur. Provisions regarding electronic conveyancing have been attacked as too costly and over ambitious. Problems regarding electronic signatures and the security of a completely electronic system have also been suggested as major downfalls of the provisions. It seems that although faultless in theory, the provisions may not in practice be easily implemented. ‘Government IT projects in the United Kingdom have a very poor record’ and one has to question whether the outcome of the project in hand will suffer a similar fate.

The whole system envisaged under the LRA 2002 is one of openness. Any document (paper or electronic), which has been received by the Land Registry after the 13th October 2003 will be subject to inspection by any person. Therefore the public will be able to search for a register of title and any documents relating to their own application. Although this policy of openness applies, the Act recognises that some of the information held by the registry may be sensitive and has placed provisions for applicants to be able to apply for prejudicial information to be omitted from a document. Rule 131 of the Land Registration Rules 2003 defines prejudicial information as information that is likely to ‘Cause unwarranted damage’ or ‘distress’, or as information ‘that if seen by others would be likely to, prejudice the applicants commercial interests’. This definition is unspecific and this could cause problems for implementation, as case law will have to develop the limits and scope of this part of the Act. If information is deemed to fall under rule 131, then it will be granted as an ‘Exempt Information Document’, with the registrar having power to remove it from the access of the public.

The Land Registration Act 2002 has been described as a ‘veritable masterpiece of legal scholarship and draughtsmanship’ and this essay has by no means considered all the changes it implements. This said the new Act has had an obvious effect on the way in which registered land is dealt with. The aims of the Law commission were ambitious and one can chart the substantive changes to the law that have tried to effect these aims, yet there are obvious areas that may prove problematic. Only time will tell how these issues will be dealt with and whether the full enactment of all the provisions of the LRA 2002 will be successful.

 

---