Registration of title and protection of interests - Powers of a registered owner and registrable dispositions

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Overview

The Land Registration Act 2002 (LRA 2002) transformed property law in England and Wales, establishing a comprehensive system for title registration and protecting property interests. Understanding this legislation is essential for SQE1 FLK2 exam candidates. This article explores land registration, focusing on the rights of registered owners and the concept of registrable dispositions. By examining these topics alongside relevant case law and practical scenarios, aspiring solicitors will be well-prepared to handle complex property transactions and excel in their exams.

Key Principles of Land Registration

The LRA 2002 brought in major reforms to improve the security and efficiency of property transactions. Its main goals include:

  1. Guaranteeing state-backed title to registered estates and charges
  2. Creating a more transparent land register
  3. Enabling electronic conveyancing and registration
  4. Clarifying laws related to registered land

Three core principles guide the land registration system:

  1. The Mirror Principle: The register should accurately reflect all material facts of the title.
  2. The Curtain Principle: A buyer need not investigate beyond the register.
  3. The Insurance Principle: Compensation is available for losses due to inaccuracies in the register.

Powers of a Registered Owner

Range of Ownership Rights

Sections 23-26 of the LRA 2002 outline the powers of registered proprietors, such as:

  1. Selling or leasing the property
  2. Granting easements or other rights
  3. Mortgaging or charging the property

Restrictions on Ownership Powers

These powers face statutory and equitable limitations:

  1. Registered charges take precedence (Section 23(2)(a) LRA 2002)
  2. Bankruptcy rights can override owner's powers (Section 23(2)(b) LRA 2002)
  3. Overriding interests can bind the owner despite non-registration (Schedule 3 LRA 2002)

Case Study: NRAM Ltd v Evans [2017] EWCA Civ 1013

This case illustrates the limitations on a registered owner's powers. The Court of Appeal ruled that a registered proprietor's power to charge property is not absolute and can be restricted by equitable principles, especially in cases of fraud. This decision highlights the relationship between legal powers and equitable principles in land registration.

Registrable Dispositions and Their Legal Effects

Definition and Scope

Registrable dispositions are transfers requiring registration for full legal effect. Section 27 of the LRA 2002 includes:

  1. Transfer of a registered estate
  2. Granting a term of more than seven years
  3. Granting a legal charge

Legal Effects of Registration

Registration has two main legal effects:

  1. Perfection of Title: Registration completes the disposition, transferring the legal estate (Section 58 LRA 2002).
  2. Priority: Registration sets the priority of competing interests (Section 29 LRA 2002).

Consequences of Non-Registration

Failure to register leads to:

  1. The disposition only taking effect as equity, not transferring the legal estate (Section 27(1) LRA 2002).
  2. The interest being at risk of defeat by a subsequent registered disposition for value (Section 29 LRA 2002).

Example: Risks of Delayed Registration

Consider when Company A sells to Company B, but B delays registration. If A fraudulently sells to Company C, who registers promptly, C’s registered interest takes priority over B’s unregistered one under Section 29, demonstrating the importance of timely registration.

Overriding Interests: A Key Exception

Overriding interests bind purchasers even if not clear on the register. Schedule 3 of the LRA 2002 lists these interests, such as:

  1. Short leases
  2. Legal easements and profits à prendre
  3. Rights of persons in actual occupation

Case Analysis: Ferrishurst Ltd v Wallcite Ltd [1999] Ch 355

This case showcases the impact of overriding interests. The Court of Appeal found that a right to light acquired by prescription was an overriding interest binding a subsequent buyer. This ruling emphasizes that unregistered rights can significantly affect property use and value, stressing the need for thorough due diligence.

Securing Protected Registered Interests

Certain interests can be protected on the register to bind future buyers:

  1. Restrictive covenants
  2. Estate contracts
  3. Equitable easements

These can be secured through:

  1. Notices: Entries protecting interest priority on the register (Sections 32-35 LRA 2002).
  2. Restrictions: Entries regulating register entries (Sections 40-47 LRA 2002).

Practical Application: Ensuring a Right of Pre-emption

If Landowner A grants Neighbor B a first refusal right, B should apply for a notice on A's title. This ensures B's right binds future buyers. Without it, B risks losing their right if A sells to a third party who registers their interest.

Conclusion

The Land Registration Act 2002 is central to modern property law in England and Wales. For SQE1 FLK2 exam success, understanding these key areas is essential:

  1. The powers and limitations of registered owners
  2. The impact and procedures of registrable dispositions
  3. The role of overriding interests in property transactions
  4. Methods to secure protected registered interests

Knowing these topics prepares aspiring solicitors to handle complex property transactions and provide informed guidance on property matters in an increasingly legal environment.