Registration of title and protection of interests - How to protect interests

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Overview

The Land Registration Act 2002 (LRA 2002) is a pivotal element in the land law of England and Wales. For those preparing for the SQE1 FLK2 exam, understanding the essentials of title registration and safeguarding interests is vital. This article explores the LRA 2002, outlining its impact on land ownership, the array of interests that may exist, and the methods to protect them. We'll review essential principles, case law, and applications necessary for exam success and future practice.

The Land Registration System

The LRA 2002 provides a structure for title registration, aiming to establish a reliable record of land ownership and rights, based on three main principles:

The Mirror Principle

This principle ensures the register reflects all rights affecting the land, allowing anyone to verify the legal owner and any registered interests. It aims to deliver a complete and trustworthy legal status.

The Curtain Principle

The register hides any trusts or beneficial interests, keeping the focus on legal ownership and simplifying the process for potential buyers.

The Insurance Principle

The state offers compensation for any loss due to register errors, fostering trust in the system.

Classification of Interests

Knowing how interests are categorized is key to understanding their enforceability. The LRA 2002 classifies interests as:

Legal Interests

These are straightforward interests that bind all parties if properly registered, such as freehold estates and legal mortgages.

Equitable Interests

Arising from equity principles, these interests may not be legally binding but can be enforced under certain circumstances, like beneficial interests under a trust.

Overriding Interests

These interests bind a new owner even if unregistered. Key examples include short leases and rights of those in actual occupation, as illustrated by the case Williams & Glyn's Bank v. Boland [1981].

Protecting Interests in Land

The LRA 2002 outlines mechanisms to ensure an interest is binding on subsequent owners:

Notices

Notices alert third parties to an interest and come in two types:

  1. Agreed Notices: Used when the interest's validity is undisputed.
  2. Unilateral Notices: Entered without consent, open to challenges.

Restrictions

These impose conditions on the registration of land dealings, often used to protect interests under trusts.

Example: Protecting a Beneficiary's Interest

If Alice holds a property on trust for Bob, a restriction can ensure any sale requires Bob’s consent or a court order, protecting his equitable interest.

Practical Applications and Exam Relevance

For the SQE1 FLK2 exam, candidates should be able to:

  1. Analyse Scenarios: Identify interests and suggest protection methods.
  2. Apply Provisions: Understand key sections of the LRA 2002, such as Sections 27-30.
  3. Evaluate Case Law: Learn from cases like Swift 1st Ltd v Chief Land Registrar [2015].
  4. Advise on Strategies: Recommend ways for interest holders to protect their rights.

Example: Advising on Protection Strategies

If Charlie is buying a property but discovers another potential buyer, he should:

  1. Apply for a unilateral notice to alert others of his interest.
  2. Seek specific performance of the contract to secure his rights.

Conclusion

Understanding title registration and interest protection is essential for the SQE1 FLK2 exam. Key concepts include:

  1. The three principles of land registration.
  2. The difference between legal, equitable, and overriding interests.
  3. The role of registration.
  4. How to protect interests using notices and restrictions.

By mastering these topics, students can effectively handle property law scenarios and provide sound legal advice.