Unregistered Land: Understanding the Legal Landscape
Unregistered land, or more precisely “unregistered title land,” refers to land whose title is not yet registered with the Land Registry. This type of land is becoming increasingly rare in England and Wales due to compulsory registration triggered by events such as sales, and the benefits associated with voluntary registration of title. Initially, the aim was to replace unregistered land with registered land by 1955, but this transition is still ongoing.
Proving Title in Unregistered Land
In the conveyancing system for unregistered land, the title is established through title deeds. A prospective purchaser, typically represented by a solicitor or conveyancer, must examine the title deeds going back at least 15 years to ensure there is a “good root of title.” The need for meticulous historical investigation makes the process of transferring unregistered land more complex and susceptible to errors compared to registered land.
Protection of Third-Party Rights
Third-party rights in unregistered land bind purchasers based on the nature of the rights and whether they have been protected appropriately. Legal rights generally bind everyone, except for puisne mortgages. Most third-party equitable rights must be registered as land charges under the Land Charges Act 1972 to ensure they bind a purchaser. However, some rights are still governed by the old doctrine of notice, which complicates the conveyancing process and requires specialized knowledge.
The 1925 Property Reforms
The 1925 property legislation aimed to modernize land law and conveyancing. The reforms introduced a system to gradually bring in land registration by geographical areas and through specific events that would trigger compulsory registration of title. This gradual approach necessitated a temporary system to protect third-party rights in unregistered land.
The Land Charges Act 1925, now replaced by the Land Charges Act 1972, introduced a system for registering various types of equitable interests in unregistered land as “land charges.” Although intended as a temporary solution, this system was less cumbersome than the previous doctrine of notice. The doctrine of notice still applies to equitable rights not registrable as land charges, adding layers of complexity to unregistered conveyancing.
Mechanisms for Protecting Third-Party Rights
The 1925 reforms established that third-party rights should be protected in one of three ways. Legal rights, apart from puisne mortgages, bind everyone and do not require additional protection. Equitable rights, particularly commercial interests, should be registered as land charges. Family interests, on the other hand, should be overreached, transforming into rights in the purchase money when the land is sold rather than binding the purchaser directly.
A fourth category persists due to case law, where the ancient doctrine of notice still determines whether a purchaser is bound by certain rights. Notable cases such as ER Ives Investment Ltd v High [1967] 2 Q.B. 379, Shiloh Spinners Ltd v Harding [1973] A.C. 691, and Kingsnorth Finance Co Ltd v Tizard [1986] 1 W.L.R. 783 highlight the continued relevance of this doctrine. For example, in Kingsnorth Finance Co Ltd v Tizard, the court ruled that a purchaser could be bound by trust interests if there was notice, even if the interest was not registered as a land charge.
The Land Charges Register
The Land Charges Register records details of eleven different types of third-party interests in land:
- Class A charges are created by a person applying under a statute.
- Class B charges are created by statute rather than an individual’s application.
- Class C is subdivided into puisne mortgages, limited owner’s charges, general equitable charges, and estate contracts.
- Class D includes inland revenue charges, freehold restrictive covenants created after 1925, and equitable easements created after 1925.
- Class F is a spouse’s statutory right to occupy the matrimonial home.
If an interest should have been registered as a land charge but was not, it becomes void against most potential purchasers. This rule applies even if the purchaser was aware of the unprotected interest. Landmark cases such as Hollington v Rhodes [1951] 2 All E.R. 578 and Phillips v Mobil Oil Co Ltd [1989] 1 W.L.R. 888 illustrate the consequences of failing to register an interest.
Defective Registration and Searches
Land charges are registered against the name of the landowner rather than the land itself. This system can lead to defective registration if the charge is recorded against an incorrect or variant name. Such errors can also affect searches, potentially resulting in disastrous consequences for conveyancing. For example, in Diligent Finance Co v Alleyne (1972) 23 P. & C.R. 346, defective registration led to significant legal complications.
Legal Provisions in the Law of Property Act 1925
Section 198 of the Law of Property Act 1925 provides that a properly-registered land charge binds everyone:
“The registration of any instrument or matter required or authorized to be registered under the Land Charges Act 1972 or this Act shall be deemed to constitute actual notice of such instrument or matter, and of the fact of such registration, to all persons and for all purposes connected with the land affected.”
Section 199 further clarifies that an unprotected land charge is void even if the purchaser is aware of it:
“No person dealing with or taking an interest in land shall be affected by the registration under the Land Charges Act 1972 of any instrument or matter unless such registration is duly made in accordance with this Act.”
The full picture, however, is more nuanced. Unprotected land charges in Classes A, B, C(i), C(ii), C(iii), and F are void against anyone giving value for any interest in the land, even an equitable interest. Conversely, unprotected charges in Classes C(iv), D(i), D(ii), and D(iii) are void against anyone giving money or money’s worth for a legal interest in the land.
Key Cases Shaping the Doctrine
Several key cases have shaped the current understanding and application of laws related to unregistered land.
In Hollington v Rhodes [1951] 2 All E.R. 578, the court ruled that an unregistered land charge was void against a purchaser who provided value, even if the purchaser had actual knowledge of the charge. This case reinforced the principle that the registration system aims to provide certainty and prevent disputes based on actual notice.
The case of Phillips v Mobil Oil Co Ltd [1989] 1 W.L.R. 888 further elaborated on the consequences of failing to register a land charge. The court held that Mobil Oil’s failure to register an estate contract as a land charge rendered the contract void against a subsequent purchaser who took the land free from the unregistered interest.
Midland Bank Trust Co Ltd v Green (No.1) [1981] A.C. 513 provided clarity on the application of Section 199. The court ruled that even though the bank had actual knowledge of the unregistered interest, the interest was void because it was not registered. This case highlighted the importance of the formal registration process over actual notice.
