Registration of title and protection of interests - How to p...

Learning Outcomes

This article explains how interests in registered land are protected and prioritised under the Land Registration Act 2002, including:

• Main principles of the land registration system (mirror, curtain, insurance) and how these guide the examiner’s approach to registered land questions
• Classification of interests (legal, equitable, overriding, registrable) and how each category is typically tested in SQE1 problem scenarios
• Protective mechanisms for third-party rights (notices and restrictions), with emphasis on when each should be used and common traps in MCQs
• Application of the basic and special priority rules (ss 28–29 LRA 2002) to determine who wins priority disputes and why knowledge is usually irrelevant
• Effects of failing to complete registrable dispositions by registration (s 27 LRA 2002), including conversion to equitable interests and loss of priority
• Scope and operation of overriding interests, particularly actual occupation and short legal leases, and how to analyse borderline factual situations
• Identification of interests not capable of protection by notice and strategic use of restrictions to facilitate overreaching on sale where trusts exist
• Systematic buyer and lender due diligence on the register and the land, used in exam fact patterns to identify which interests bind a purchaser

SQE1 Syllabus

For SQE1, you are required to understand how interests in registered land are protected and how the registration system affects the enforceability of third-party rights, with a focus on the following syllabus points:

• the main principles of the land registration system (mirror, curtain, insurance)
• the classification of interests in registered land (legal, equitable, overriding, registrable)
• how to protect interests using notices and restrictions
• the effect of overriding interests and the importance of actual occupation
• the practical steps required to ensure an interest is binding on a purchaser.
• registrable dispositions that must be completed by registration (s 27 LRA 2002) and the effect of failure to register
• the basic and special priority rules (ss 28–29 LRA 2002), including what binds a purchaser for value
• the distinction between protected registered interests and overriding interests, and the duty to disclose known overriding interests (s 71 LRA 2002)
• the role of overreaching in registered land where trust interests exist (ss 2, 27 LPA 1925) and the use of appropriate restrictions to control dispositions.

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What is the main purpose of a notice on the register of title?
2. Which interests can override registration and bind a purchaser even if not entered on the register?
3. What is the effect of a restriction in the proprietorship register?
4. How can a beneficiary under a trust ensure their interest is protected on a sale of registered land?

Introduction

The Land Registration Act 2002 (LRA 2002) sets out the system for registering title to land in England and Wales. It also establishes how third-party interests are protected and how purchasers can be sure of the title they acquire. Understanding the classification of interests and the correct methods for protecting them is essential for SQE1.

The registration system is built on three key principles:

Key Term: mirror principle
The register should reflect all legal rights and interests affecting the land, so a purchaser can rely on it as a complete record.

Key Term: curtain principle
Certain equitable interests are kept "behind the curtain" and do not appear on the register, so purchasers need not investigate them.

Key Term: insurance principle
If someone suffers loss due to an error or omission in the register, the state provides compensation.

The register for each title has three main parts: the Property Register (description of land and any rights benefiting it), the Proprietorship Register (class of title, proprietor, and restrictions), and the Charges Register (burdens such as mortgages and restrictive covenants). Entry on the register is conclusive (s 58 LRA 2002), and a registered proprietor has the powers to deal with the estate (s 23 LRA 2002), subject to properly protected third-party rights and overriding interests.

Key Term: registrable disposition
A transaction that has legal effect only when completed by registration under s 27 LRA 2002, including transfers of registered estates, legal charges, legal leases over seven years, and expressly granted legal easements/profits.

Key Term: first registration
The initial registration of title following a triggering event (e.g., transfer on sale or grant of a long lease). Different overriding interest rules apply at first registration (Sch 1) and later dispositions (Sch 3).

Classification of Interests in Registered Land

Interests in registered land are divided into several categories, each with different rules for protection and enforceability.

Key Term: legal interest
A right in land recognized by law that is enforceable against the world if properly created and, where required, registered.

Key Term: equitable interest
A right in land recognized by equity, often arising from trusts or contracts, which may require special steps to be protected.

Key Term: overriding interest
An interest that binds a purchaser even if not entered on the register, such as certain short leases, rights of persons in actual occupation, and some easements.

Key Term: notice
An entry in the charges register of the title, protecting a third-party interest so it is binding on future purchasers.

Key Term: restriction
An entry in the proprietorship register limiting the ability of the registered proprietor to deal with the land unless certain conditions are met.

Key Term: minor interest
A third-party interest in registered land that is not a registrable disposition and not overriding; it is protected by entry of a notice (s 32 LRA 2002) or a restriction where appropriate.

The effect of registration on priority depends on whether the disposition is for value (ss 28–29 LRA 2002). Under the special priority rule in s 29, a registered disposition for valuable consideration takes subject only to:

• registered charges,
• protected registered interests (proper notices/restrictions),
• and overriding interests in Sch 3. Unprotected interests lose priority against the buyer for value, even if the buyer knows of them.

Key Term: special priority rule
Section 29 LRA 2002: a purchaser for value takes free of prior unprotected interests (subject to overriding interests and properly protected entries).

Protecting Interests: Notices and Restrictions

Most third-party interests must be protected by registration to ensure they bind a purchaser.

Notices

A notice is used to protect most interests (e.g., equitable easements, restrictive covenants, options to purchase) by entering them in the charges register (s 32 LRA 2002). Note that a notice does not validate an otherwise invalid right; it preserves priority against purchasers for value.

• Agreed notice: Entered with the proprietor's consent or where the registrar is satisfied as to the interest. Application is typically made using form AN1 with supporting evidence (e.g., the instrument creating the right).

• Unilateral notice: Entered by a person claiming an interest, without the proprietor's consent, but subject to challenge. Application is made using form UN1, stating the grounds. The registered proprietor may seek cancellation; the registrar will serve notice and, if the applicant does not object within the prescribed period, the unilateral notice may be cancelled (s 36 LRA 2002).

• Unjustified notices may expose the applicant to damages for lack of reasonable cause (s 77 LRA 2002). Ensure the claimed right is capable of protection by notice and evidence supports it.

Key Term: agreed notice
A notice entered where the registered proprietor consents or the registrar is satisfied on evidence of the interest.

Key Term: unilateral notice
A notice entered by a claimant without proprietor consent, cancellable on application if not substantively defended.

If a notice is not entered, the interest may be lost on a sale to a purchaser for value. This is a frequent priority pitfall with estate contracts (options, rights of pre-emption) and equitable easements created post-2003.

Interests that cannot be protected by notice include trust interests under a trust of land (these are controlled via restriction), leasehold covenants in the demised premises, and certain short leases that override anyway. Always confirm the correct protective mechanism.

Restrictions

A restriction is used to control dispositions of the land. It is commonly used to protect the interests of beneficiaries under a trust, or to require the consent of a third party (such as a chargee) to any disposition.

• A restriction may require that no disposition is registered without the consent of a named person, or unless certain conditions are met (e.g., a certificate by a conveyancer that the terms of a trust have been complied with). Restrictions do not of themselves create or validate an interest; they control registration and can enable overreaching.

• Standard Forms include Form A (warning of a trust of land: “No disposition by a sole proprietor … under which capital money arises is to be registered unless authorised by an order of the court”), and tailored consent restrictions (requiring named party consent).

• For trust situations, a restriction helps ensure that sale proceeds are paid to at least two trustees or a trust corporation (ss 2, 27 LPA 1925), allowing overreaching of beneficial interests.

Restrictions are often appropriate to protect:

• beneficial interests under a trust of land,
• contractual rights requiring consent before disposition,
• compliance conditions in development or option arrangements.

Key Term: overreaching
The mechanism by which equitable interests under a trust are detached from land and transferred to the sale proceeds when capital money is paid to at least two trustees or a trust corporation.

Overriding Interests

Some interests bind a purchaser even if not entered on the register.

• Short legal leases: Leases granted for seven years or less override registration (Sch 3 para 1). Equitable short leases do not automatically override and should be protected (they may still override if coupled with actual occupation under para 2).

• Rights of persons in actual occupation: If a person with a proprietary interest is in actual occupation at the time of disposition, their interest may override (Sch 3 para 2), subject to two key exceptions:

  • the occupier failed to disclose the interest when reasonably asked before the disposition; or
  • occupation was not obvious on a reasonably careful inspection and the purchaser had no actual knowledge.

• Certain easements and profits: Legal easements/profits implied or acquired by prescription may override if they meet the specific criteria in Sch 3 para 3:

  • registered under the Commons Act 2006; or
  • known to the purchaser; or
  • obvious on a reasonably careful inspection; or
  • exercised within the year before the disposition. Expressly granted legal easements over a registered estate are registrable dispositions under s 27(2)(d) LRA 2002 and must be completed by registration to be legal; they will not be overriding.

Key Term: actual occupation
Physical presence on the land coupled with a proprietary right, which may give rise to an overriding interest under Sch 3 para 2, subject to enquiry and obviousness exceptions.

Courts have developed guidance on “actual occupation”. Relevant factors include physical presence, the permanence/continuity of occupation, intention to return, and visibility of occupation.

Key authorities:

• Williams & Glyn’s Bank v Boland: a spouse with a beneficial interest and in occupation may override.
• Abbey National v Cann: occupation must exist at the time of completion; the “registration gap” does not expand protection for occupation arising after completion.
• Chhokar v Chhokar: temporary absence (e.g., hospital stay) did not negate actual occupation where possessions remained and there was intent to return.
• Link Lending v Bustard: occupation was found despite residence in a care facility due to regular visits, payment of bills, and continued intention to return.
• Stockholm Finance v Garden Holdings: absence and lack of sufficient occupation meant no actual occupation.

Key Term: minor interest
A reminder that many interests affecting land (e.g., equitable easements created post-2003, restrictive covenants, estate contracts) must be protected by notice or restriction; they do not override automatically.

Worked Example 1.1

Scenario:
Liam is the registered proprietor of a house. His partner, Mia, contributed to the purchase price but is not named on the register. She lives in the property. Liam sells the house to a purchaser, who inspects the property but does not ask about other occupiers. Is Mia's interest protected?

Answer:
Mia may have a beneficial interest under a trust and is in actual occupation. If the purchaser failed to make proper enquiries, Mia's interest may override and bind the purchaser as an overriding interest.

Worked Example 1.2

Scenario:
Sophie holds property on trust for herself and her brother, Tom. A restriction is entered in the proprietorship register requiring that no disposition is registered without the consent of both trustees. Sophie tries to sell the property alone. What is the effect?

Answer:
The restriction prevents registration of the sale unless the condition is met. This protects Tom's interest and ensures that overreaching can only occur if the sale proceeds are paid to at least two trustees.

Worked Example 1.3

Scenario:
A developer grants an option to purchase land to a buyer. The buyer fails to enter a notice on the register. The developer sells the land to a third party for value. Is the option binding?

Answer:
No. Without a notice, the option is not protected and will be lost on a sale to a purchaser for value. The third party takes free of the option.

Worked Example 1.4

Scenario:
Nina claims an equitable easement (created post-2003) to use a driveway over Raj’s registered title. She enters a unilateral notice. Raj applies to cancel the notice; Nina does not respond to the registrar’s notice within the time limit. What is the likely outcome, and what are Nina’s risks?

Answer:
The unilateral notice will likely be cancelled (s 36 LRA 2002) because Nina did not defend it in time. If the application was made without reasonable cause, Nina could face a damages claim under s 77 LRA 2002. Nina should re-apply with evidence or seek the proprietor’s consent for an agreed notice.

Worked Example 1.5

Scenario:
An expressly granted legal right of way is made over a registered estate in 2020. The grantee fails to register it. In 2024 the servient owner sells to a purchaser for value. Does the right of way bind the purchaser?

Answer:
No. An expressly granted legal easement over a registered estate is a registrable disposition (s 27(2)(d) LRA 2002) and must be completed by registration to be legal. Without registration it takes effect, at best, in equity and will not override. Unless protected by notice, it loses priority under s 29 against the purchaser for value.

Worked Example 1.6

Scenario:
Omar negotiates to buy a registered freehold. A prior buyer has a 6‑month right of pre‑emption recorded only in the contract (no notice). Omar completes and is registered. Is Omar bound by the right?

Answer:
No. A right of pre-emption is an estate contract. To bind Omar, it should have been protected by a notice on the Charges Register. Under s 29 LRA 2002, Omar (a purchaser for value) takes free of prior unprotected interests, subject to overriding interests (which do not include a mere estate contract).

Exam Warning

If an interest is capable of protection by notice but is not registered, it will not bind a purchaser for value—even if the purchaser knows about it. Always check if registration is required.

A classic illustration is Midland Bank Trust Co Ltd v Green (unregistered land), but the same principle applies in registered land via s 29 LRA 2002: knowledge does not save an unprotected interest where the statute provides a clear priority rule.

Revision Tip

Always distinguish between interests that must be protected by notice, those that require a restriction, and those that may override. Use the register and physical inspection together.

In practice:

• check for restrictions in the Proprietorship Register (e.g., Form A or bespoke consent restrictions),
• check the Charges Register for notices of burdens (e.g., estate contracts, equitable easements, restrictive covenants),
• inspect the land and make enquiries of occupiers to identify possible overriding interests (actual occupation, implied/prescriptive easements),
• for trust situations, ensure overreaching by paying capital money to at least two trustees or a trust corporation.

Key Point Checklist

This article has covered the following key knowledge points:

• The Land Registration Act 2002 is based on the mirror, curtain, and insurance principles.
• Interests in registered land are classified as legal, equitable, overriding, or registrable.
• Most third-party interests must be protected by entering a notice in the charges register; trust interests are controlled via restrictions.
• Restrictions are used to control dispositions and protect beneficiaries under trusts and other consent arrangements; they do not themselves create property rights.
• Overriding interests, such as short leases and rights of persons in actual occupation, may bind a purchaser even if not registered, subject to exceptions.
• Expressly granted legal easements over registered estates are registrable dispositions and must be completed by registration; they do not override.
• Failure to register a notice may mean the interest is lost on a sale to a purchaser for value under s 29 LRA 2002, regardless of actual knowledge.
• Physical inspection and proper enquiries are essential to discover overriding interests; the “actual occupation” test is fact-specific.
• Agreed and unilateral notices have different procedures; unjustified notices risk damages (s 77 LRA 2002).
• The duty to disclose known overriding interests (s 71 LRA 2002) encourages clarity; however, failure to disclose does not destroy overriding status.
• Overreaching of beneficial interests requires payment to at least two trustees or a trust corporation; appropriate restrictions help secure this outcome.

Key Terms and Concepts

• mirror principle
• curtain principle
• insurance principle
• legal interest
• equitable interest
• overriding interest
• notice
• restriction
• actual occupation
• registrable disposition
• first registration
• minor interest
• agreed notice
• unilateral notice
• special priority rule
• overreaching