Registration of title and protection of interests - Registra...

Learning Outcomes

This article outlines registration of title to land and protection of interests under the Land Registration Act 2002 (LRA 2002), including:

• Aims of the LRA 2002 and the mirror, curtain, and insurance principles, including limitations of the mirror principle due to overriding interests
• Triggers for first registration, available classes of title, and consequences of late or non-registration
• Registrable dispositions under s 27 LRA 2002 versus interests protected by notice or restriction, and exclusions from notice under s 33
• Priority rules under s 28 and s 29 and their effect on purchasers for valuable consideration
• Agreed notices versus unilateral notices, and appropriate use of restrictions to control dealings and support overreaching
• Overriding interests under Schedules 1 and 3 (short legal leases, persons in actual occupation, certain legal easements and profits) and their conditions and exceptions
• Effect of overreaching on beneficial interests under a trust and interaction with overriding interests in actual occupation
• Practical steps for purchasers and conveyancers to investigate, protect, and prioritise interests in registered land

SQE1 Syllabus

For SQE1, you are required to understand the registration of title to land and the protection of interests under the Land Registration Act 2002 (LRA 2002), with a focus on the following syllabus points:

• the aims and principles of the Land Registration Act 2002 (LRA 2002)
• first registration triggers, classes of title, and cautions against first registration
• registrable dispositions (s 27 LRA 2002) and when title passes (on registration)
• the s 28 basic priority rule and the s 29 rule for purchasers for valuable consideration
• protection of interests by notice (s 32) and restriction (s 40), and exclusions from notice (s 33)
• the nature and categories of overriding interests (Schedules 1 and 3), including the conditions and exceptions
• the doctrine of overreaching and its practical interaction with trusts and actual occupation
• practical implications for purchasers and conveyancers in investigating and protecting third-party rights

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. Which of the following is an overriding interest under the Land Registration Act 2002?
   1. a registered charge
   2. a restrictive covenant protected by notice
   3. a legal lease for 5 years
   4. an estate contract
2. What is the effect of failing to register a registrable disposition of a legal estate in registered land?
   1. The disposition is void and the legal estate remains with the transferor
   2. The disposition is valid but only as an equitable interest
   3. The disposition is valid and binds all future purchasers
   4. The disposition is valid only if the parties had actual notice
3. Which principle states that the register should reflect all rights and interests affecting the land?
   1. Mirror principle
   2. Curtain principle
   3. Insurance principle
   4. Overreaching principle

4. True or false? A person in actual occupation with a beneficial interest under a trust will always have an overriding interest binding a purchaser, even if the purchase money is paid to two trustees.

Introduction

The Land Registration Act 2002 (LRA 2002) governs the registration of title to land in England and Wales. It replaced and modernised the earlier registration regime to make ownership and dealings with land clearer, faster, and safer. A fundamental change is that title passes on registration: registrable dispositions of registered land operate at law only once they are completed by registration. The regime seeks to uphold three principles—mirror, curtain, and insurance—while recognising limited exceptions, notably overriding interests, which balance purchaser protection with fairness to certain occupiers and users of land. Understanding the triggers for first registration, classes of title, priority rules, and the mechanisms for protecting third-party rights is essential for accurate advice and problem solving.

The Principles of Land Registration

The LRA 2002 is built on three main principles: the mirror principle, the curtain principle, and the insurance principle. These principles guide the operation of the register and the protection of rights in land.

Key Term: mirror principle
The register should accurately reflect the ownership of land and all rights and interests affecting it, so that anyone inspecting the register can see the true state of title. The mirror is not perfect because certain limited interests override the register.

Key Term: curtain principle
Certain equitable interests, especially those behind trusts, are kept off the register and do not affect a purchaser, provided statutory requirements for overreaching are met.

Key Term: insurance principle
The state guarantees the accuracy of the register and provides compensation (indemnity) for loss caused by mistakes or omissions in the register.

The mirror principle is moderated by overriding interests. The curtain principle works in practice by overreaching: where purchase money is paid to two trustees or a trust corporation, beneficiaries’ equitable interests under a trust are transferred from the land to the proceeds, allowing the purchaser to take free of those interests. The insurance principle is implemented by statutory indemnity provisions where the register is altered or rectified.

The Structure of the Register

The register for each title is divided into three parts:

• Property register: describes the land and notes any rights benefiting it (for example, rights of way); the title plan is referenced here.
• Proprietorship register: shows the name and address of the registered proprietor, the class of title, and any restrictions limiting the proprietor’s powers.
• Charges register: records burdens on the land, such as mortgages and certain third-party rights (e.g. restrictive covenants protected by notice).

Official copies further indicate edition dates and other header information that conveyancers use to manage priority and ensure up-to-date information.

Registration of Title and Registrable Dispositions

Only certain legal estates can be registered as titles—freehold (fee simple absolute in possession) and leasehold (term of years absolute, typically those exceeding seven years). Title may first be registered voluntarily, but compulsory first registration is triggered by specified events, such as transfer on sale of a freehold, an assent by personal representatives, a deed of gift, and the grant or assignment of a lease with more than seven years to run. An application must usually be made within two months; failure to do so means the legal transfer is void at law, the legal estate reverts to the transferor, and the transferee holds only an equitable interest. The transferor typically becomes a bare trustee pending proper registration.

When a registrable disposition of a registered estate occurs, it must be completed by registration to take effect at law (s 27 LRA 2002). The key registrable dispositions include:

• transfer of a registered freehold or leasehold estate
• grant of a legal lease with more than seven years to run (and certain shorter leases, e.g. reversionary leases taking effect more than three months after grant)
• express grant or reservation of legal easements, profits, and legal rentcharges
• a first legal mortgage created out of the estate

If the disposition is not registered, it does not operate at law. The transferee acquires only an equitable interest (if any), vulnerable to loss of priority against a purchaser for valuable consideration who registers.

Key Term: registrable disposition
A transaction involving registered land that must be registered to be effective at law, such as a transfer, grant of a lease over seven years, or a legal charge (mortgage).

Key Term: class of title
The quality of title awarded on first registration (e.g. absolute, possessory, qualified, good leasehold). Classes can be upgraded where evidence emerges or sufficient time passes without challenge.

Key Term: caution against first registration
An entry by someone claiming an interest in unregistered land to be notified if the land is about to be registered, enabling them to object or protect their claim on registration.

Key Term: bare trustee
A trustee whose only duty is to hold property and follow lawful instructions of the beneficiary, commonly arising where a disposition is void at law pending registration.

Priority of interests: s 28 and s 29 LRA 2002

The default priority rule (s 28) preserves priorities by date of creation. However, a registered disposition for valuable consideration (s 29) takes subject only to interests that are protected on the register (by notice or restriction), overriding interests, and interests excluded from the s 29 regime. An unprotected interest will be postponed to such a registered disposition even if the purchaser had actual notice. Volunteers (e.g. gifts) are not protected by s 29; the s 28 rule applies.

Worked Example 1.1

A sells his registered freehold to B. B pays the price and receives a signed transfer, but B does not register the transfer at HM Land Registry. Who holds the legal estate?

Answer:
The legal estate remains with A until registration. B has only an equitable interest until the transfer is registered.

Protection of Third-Party Rights

Third-party rights in registered land are protected either by registration (as a notice or restriction) or, in some cases, as overriding interests.

Key Term: notice
An entry in the charges register protecting a third-party interest (such as a restrictive covenant or option) so that it binds future purchasers.

Key Term: agreed notice
A notice entered with the proprietor’s consent or evidence satisfactory to the registrar, protecting interests such as options or equitable leases.

Key Term: unilateral notice
A notice entered without the proprietor’s consent by a person claiming an interest; the proprietor can apply for its removal or require the claimant to prove it.

Key Term: restriction
An entry in the proprietorship register limiting the registered proprietor’s powers, often used to protect interests under a trust or to require consent for certain dispositions.

Some rights cannot be protected by notice (s 33 LRA 2002), notably beneficial interests under a trust of land. Those interests should be protected by a restriction on the proprietorship register. Family home rights under the Family Law Act 1996 can be protected by appropriate entries to alert purchasers.

Protecting by notice confers priority under s 29 if the disposition is for valuable consideration. Failure to register a protectable interest means a purchaser for value who registers is likely to take free of it, even with notice.

Overriding Interests

Some interests bind a purchaser even though they do not appear on the register. These are called overriding interests and are set out in Schedules 1 and 3 of the LRA 2002. The main categories are:

• Legal leases granted for seven years or less (Schedule 3, para 1)
• Interests of persons in actual occupation (Schedule 3, para 2)
• Certain legal easements and profits (Schedule 3, para 3)
• Some customary and public rights

Key Term: overriding interest
An interest in registered land that binds a purchaser even though it is not entered on the register, such as a short legal lease or the rights of a person in actual occupation.

Key Term: actual occupation
Physical presence or occupation appropriate to the nature of the property, assessed at completion of the buyer’s disposition. Whether occupation is “actual” is fact-specific.

Persons in actual occupation (Schedule 3, para 2)

A person’s proprietary interest coupled with actual occupation at the time of the disposition can override. However, there are exceptions:

• if on reasonable enquiry the occupier failed to disclose their interest (when they could reasonably be expected to)
• if occupation would not have been obvious on a reasonably careful inspection and the purchaser lacked actual knowledge of the interest

Illustrative authorities include:

• occupation can exist despite temporary absence (e.g. hospital confinement) and visible signs of occupation: Chhokar v Chhokar
• occupation can exist where a vulnerable occupier intended to return and maintained links with the property: Link Lending v Bustard
• long-term absence with no sufficient physical presence or intention to return may defeat a claim: AIB v Turner
• “occupation” is not made out by mere use of a staircase or balcony to reach premises: Chaudhary v Yavuz

Key Term: overreaching
The statutory process by which certain equitable interests—especially under trusts of land—are detached from the land and transferred to the capital money on sale, provided purchase money is paid to two trustees or a trust corporation.

Overreaching prevails over para 2 overriding claims: if purchase money is paid to two trustees, a beneficiary’s equitable interest will be overreached even if they are in actual occupation (City of London Building Society v Flegg). Restrictions on title can be used to signal and enforce the need for two trustees.

Legal easements and profits (Schedule 3, para 3)

Express legal easements created on or after 13 October 2003 must be registered against the servient title to exist at law and bind purchasers. Implied or prescriptive legal easements may override if they meet para 3 conditions—known to the purchaser, obvious on a reasonably careful inspection, or exercised within the year preceding the disposition. Equitable easements do not generally override and should be protected by notice.

Worked Example 1.2

C buys a registered freehold from D. At completion, E is living in the property and claims a beneficial interest under a trust. The purchase money is paid to D and another trustee. Is E’s interest overriding?

Answer:
No. If the purchase money is paid to two trustees, E’s beneficial interest is overreached and does not bind C, even if E is in actual occupation.

Legal leases not exceeding seven years (Schedule 3, para 1)

Short legal leases bind without registration. Longer leases must be created by deed and registered; if not registered, they only exist in equity, do not override under para 1, and risk postponement under s 29 unless protected.

Worked Example 1.3

F grants G a 10-year lease of registered land by deed, but G does not register the lease. What is the status of G’s interest?

Answer:
G has only an equitable lease. The legal estate remains with F until registration.

Worked Example 1.4

H grants an express legal easement by deed over registered land to benefit K’s registered title. The servient title does not have the easement registered. K later sells the dominant land; the buyer seeks to enforce the easement. Is the easement binding on a new purchaser of the servient land?

Answer:
No at law. An express legal easement over registered land must be completed by registration against the servient title to exist at law and bind; without registration, only an equitable easement may exist and will not override. Protection should be by notice.

Worked Example 1.5

M has a beneficial interest and has lived at a cottage for years. Before completion of the sale to P, M is abroad for medical treatment. Her furniture remains and she intends to return. The buyer’s inspection notes furnishings and recent utility payments. Does M have an overriding interest?

Answer:
Likely yes. On these facts, actual occupation persists despite temporary absence, and the occupation would have been obvious on a careful inspection. If her interest is proprietary (e.g. constructive trust), it can override under para 2.

Exam Warning

Overriding interests are an exception to the mirror principle. For SQE1, remember that not all interests are on the register—always consider overriding interests when advising a purchaser. Check whether actual occupation is established at the date of the disposition and whether any exceptions apply. Also consider whether overreaching displaces the claim.

Consequences of Non-Registration

If a registrable disposition is not registered, the transferee does not acquire the legal estate and will usually have only an equitable interest. That interest may lose priority against a purchaser for valuable consideration who completes and registers their disposition (s 29 LRA 2002). Even actual notice does not save an unprotected interest from postponement under s 29. By contrast, if title passes by gift or the disposition is not for valuable consideration, s 28 applies and earlier interests retain their priority absent other rules.

For express legal easements post-October 2003, failure to register against the servient title means no legal easement exists; the would-be holder may rely on an equitable easement (if there is a specifically enforceable contract) and must protect it by notice to avoid postponement under s 29.

Practical Implications for Purchasers and Conveyancers

Purchasers and their solicitors must:

• inspect the register and title plan for entries affecting the land, including notices and restrictions; check class of title and any limitations
• raise specific enquiries and inspect the property to identify possible overriding interests (e.g. occupiers, signs of occupation, or routes suggesting implied easements)
• ensure that all registrable dispositions are completed by registration—title passes on registration; avoid proceeding without registrations that confer legal status
• apply s 28/s 29 thoughtfully: determine whether the buyer is giving valuable consideration and whether any third-party rights have been properly protected on the register
• protect their own interests by entering appropriate notices or restrictions and obtaining undertakings where necessary
• if buying from a sole trustee of trust land, require the appointment of a second trustee and payment to two trustees to ensure overreaching (and consider registering a restriction to that effect)
• advise clients about the risks of unregistered or overriding interests and the limits of the mirror principle

Key Term: agreed notice
A notice supported by the proprietor’s consent or satisfactory evidence, conferring clear priority protection.

Key Term: unilateral notice
A notice entered by a claimant without proprietor’s consent; susceptible to challenge and removal if unfounded.

Key Term: actual occupation
Occupation appropriate to the property, assessed at the time of completion, which may be evidenced by presence, belongings, and continuity, and is subject to statutory exceptions.

Key Term: overreaching
The mechanism detaching certain equitable interests from the land on sale when capital money is paid to two trustees or a trust corporation.

Revision Tip

Always check for signs of occupation or use by third parties when acting for a purchaser. Overriding interests are not always obvious from the register. Pair careful inspection and targeted enquiries with a robust registration strategy (notices and restrictions) to secure priority.

Key Point Checklist

This article has covered the following key knowledge points:

• The Land Registration Act 2002 governs the registration of title to land in England and Wales and aims to simplify and secure conveyancing.
• The mirror, curtain, and insurance principles underpin the system of registered land.
• First registration is triggered by specified events; failure to register within time renders the legal transfer void at law and leaves only equitable rights.
• Classes of title (e.g. absolute, possessory, qualified, good leasehold) may be awarded and can be upgraded.
• Registrable dispositions must be completed by registration to take effect at law (s 27 LRA 2002).
• Priority is controlled by s 28 (default) and s 29 (purchasers for value) LRA 2002; unprotected interests risk postponement under s 29.
• Third-party rights are protected by notice (agreed or unilateral), restriction, or, in some cases, as overriding interests; some interests (e.g. beneficial interests under a trust) are excluded from notice and protected via restriction.
• Overriding interests bind purchasers even if not on the register—main categories include short legal leases, persons in actual occupation (subject to statutory exceptions), and certain legal easements and profits.
• Overreaching removes certain equitable interests from the land when purchase money is paid to two trustees, defeating otherwise overriding claims of beneficiaries in occupation.
• Express legal easements over registered land must be registered against the servient title to exist at law and bind; implied or prescriptive legal easements can override if para 3 conditions are met.
• Purchasers and conveyancers must investigate both the register and the property and must use notices, restrictions, and overreaching to manage risk and secure priority.

Key Terms and Concepts

• mirror principle
• curtain principle
• insurance principle
• registrable disposition
• notice
• agreed notice
• unilateral notice
• restriction
• overriding interest
• actual occupation
• overreaching
• class of title
• caution against first registration
• bare trustee