Registration of title and protection of interests - Interests that override registration

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Overview

Overriding interests are vital in the UK land registration system, bridging formal registries with real-world land use. For SQE1 FLK2 exam candidates, a solid understanding of these interests is essential, revealing the complex relationship between statutory law, equity, and property rights. This article explores overriding interests, their legal bases, and their role in property law today.

Historical Context and Legislative Framework

Overriding interests have changed notably over time. The Land Registration Act 1925 first recognized a variety, reflecting the complexities of unregistered conveyancing. The Land Registration Act 2002 (LRA 2002) aimed to narrow these interests to improve the register's reliability.

Key legislative changes include:

  1. Schedule 1 of LRA 2002: Defines interests that override first registration.
  2. Schedule 3 of LRA 2002: Specifies interests that override registered dispositions.

This reform balanced the protection of rightful interests with a more certain land registration system.

Categories of Overriding Interests

1. Short-Term Leases

Short-term leases, for up to seven years, automatically qualify as overriding under LRA 2002.

Key points:

  • Protected by Schedule 1, paragraph 1 and Schedule 3, paragraph 1 of LRA 2002.
  • Secures tenants' rights without burdening registration.
  • Affects both first registration and subsequent transactions.

Practical effects:

  • Requires inspection, inquiry into existing tenancies.
  • Shields tenants from losing rights due to landlords' registration oversights.

Case reference: Rainham Chemical Works Ltd v Belvedere Fish Guano Co Ltd [1921] emphasized protecting tenants' rights, forming current statutory principles.

2. Actual Occupation

Actual occupation is a complex category, needing detailed analysis.

Legal framework:

  • Governed by Schedule 1, paragraph 2 and Schedule 3, paragraph 2 of LRA 2002.
  • Interest must be supported by an equity from occupation.

Key elements:

  1. Physical presence: Must be clear on reasonable inspection.
  2. Timing: Must exist at disposition or first registration.
  3. Right nature: Must be proprietary, not personal.

Landmark cases:

  • Williams & Glyn's Bank v Boland [1981] established that a wife's interest and occupation could override a bank's charge.
  • Stack v Dowden [2007] discussed actual occupation's effects on family home interests.

Practical effects:

  • Demands investigations beyond the register, including physical checks.

3. Easements and Profits à Prendre

Easements and profits à prendre acknowledge long-standing land use practices.

Legal framework:

  • Covered by Schedule 1, paragraph 3 and Schedule 3, paragraph 3 of LRA 2002.
  • Must be legal and either:
    1. Obvious on careful inspection, or
    2. Known to the person involved in the transaction, or
    3. Used in the year before the transaction.

Key considerations:

  1. Visibility: Physical signs are considered.
  2. Knowledge: Actual or presumed knowledge matters.
  3. Recent Use: Evidence of past use can support overriding status.

Significant cases:

  • Chaudhary v Yavuz examined visibility for easements.
  • Celsteel Ltd v Alton House Holdings Ltd emphasized considering the nature and scope of use.

Legal Considerations and Exceptions

1. Fraudulent Concealment

Principle: Hiding occupation or interest can lead to losing overriding protection.

Case reference: Kingsnorth Finance Co Ltd v Tizard held that concealment could block rights as overriding interests.

2. Temporary Absence

Considerations:

  • Courts look at return intentions and absence reasons.
  • Requires detailed inquiry to see if absence invalidates occupation.

Relevant case: Abbey National Building Society v Cann stressed detailed inquiry into absence nature.

3. Overreaching

Legal framework: Section 2 of the Law of Property Act 1925 allows overreaching of equitable interests with payment to at least two trustees.

Effects: Can bypass some overriding interests, especially those from trust interests.

Key case: City of London Building Society v Flegg showed overreaching could defeat occupiers' rights.

Practical Application and Exam Focus

For SQE1 FLK2 candidates, understanding overriding interests is key for:

  1. Analyzing transactions and potential legal issues.
  2. Evaluating disputes and unregistered rights' impact on titles.
  3. Advising clients on conveyancing implications.

Exam-focused analysis should cover:

  • Recognizing overriding interests' effects on ownership.
  • Analyzing case studies involving these principles.
  • Applying legal concepts to practical situations.

Conclusion

Overriding interests are a fundamental part of UK land law, aligning the registration system with real land use. Understanding this topic is critical for SQE1 FLK2 success, enabling candidates to:

  1. Handle complex transactions with knowledge of both registered and unregistered rights.
  2. Conduct thorough due diligence in property matters.
  3. Offer detailed legal advice that considers statutory, case law, and equitable principles.

Understanding these interests equips candidates for complex property law challenges both in exams and legal practice.