Modernisation of Land Law
Conveyancing is the process whereby legal title is transferred from seller to buyer. This requires an understanding of land law, contract law, trust law and to a lesser extent, working with finance and figures.
English Land law was modernised by five key pieces of legislation passed in 1925; the so-called “Birkenhead” legislation. The principal Acts were the Law of Property Act, the Land Registration Act, the Trustees Act, the Settled Land Act and the Land Charges Act.
The Law of Property Act 1925 reflects many of the principles embodied in the Land and Conveyancing Law Reform Act, 2009. The Land Charges Act provided for registration of certain interests in “unregistered” title lands. It also created a system of local land charges, which has no equivalent in the Republic of Ireland (Ireland). This legislation later replaced and modernised in 1975 is the cornerstone of the system of local searches and enquiries referred to below.
English contract law is almost identical to Irish contract law. The principles of contract formation, interpretation, performance, breach and enforcement are almost identical. The Law of Property (Miscellaneous Provisions) Act 1989 provides that contracts for the sale or transfer of an interest in real property must be in writing.
Trust law is broadly similar to that in Ireland. The Trustee Act 1925 modernised the 1893 legislation which is still in force in Ireland. It has been further updated by the Trustee Acts 1996 and 2000.
Basic Land Law Principles
The Law of Property Act 1925 provided for two legal estates in land; the freehold absolute estate in possession and leasehold estate. It provided for five legal interests, the principal interests being easements and charges. Interests can affect estates in land. All other interests must subsist as equitable interests under a trust, either declared or deemed to exist by statute.
The purpose of the 1925 legislation was both to rationalise the law and streamline conveyancing. The seller of a legal estate may sell it free from an equitable estate or interests, where he sells to a bona fide purchaser for value of the legal estate, who does not have constructive (imputed) notice of those interests.
The legislation also provided that where the legal estate is sold by two trustees (who receive the purchase monies), the sale overreaches the interests of all beneficiaries. There is no principle of constructive notice in this case. The rights of the interest holder attach to the proceeds of the sale. A similar, but a slightly different principle, was introduced in the Irish 2009 Land Law Reforms.
The Land Registration Act scheme follows this approach. There are freehold and leasehold titles. Legal interests, such as easements and security charges, are registered against titles in the Charges Registers, part 3 of the registered title. The principle of constructive notice is significantly limited. A sale by the registered owner sells free from most interests, other than registered interests, interests protected by notice and overriding interests.
Systems of Title and First Registration
In England and Wales, as in Ireland, there are two systems of title and conveyancing, namely the unregistered and registered systems. More than 80% of titles are now registered in HM Land Registry. Since December 1990, all of England and Wales is an area of compulsory registration.
The Land Registration Act 2002 contains an extended list of acts that will trigger the first registration obligation. A buyer of unregistered title land will be subject to first registration. A lessee must register, save in the case of new leases of less than 7 years or unregistered leases with a term of 7 years or less to run.
The application for first registration must be lodged within 2 months of completion, failing which legal title reverts back to the previous owner who will hold the property on a bare trust and the transfer will be void.
Unregistered title is rarely encountered because registration in the Land Registry has been compulsory on transfers since 1990. The concepts applicable to unregistered title conveyancing in England and Wales are broadly similar to those applicable in Ireland. The unregistered title system relies on evidence by way of deeds to prove a period of unchallenged ownership.
The title is proved by the production of a chain of deeds (or a single deed) at least 15 years old. The original deeds are required and will be delivered to the buyer where they relate to the entire property in sale. The system relies on the production of the original documents from persons who have proper custody of them.
The title should be traced from a “good root” of title, assuring the entire interest in sale for value, a transaction on which it can be reasonably supposed, that prior title has been fully investigated. A good root must show a minimum period of unchallenged ownership of 15 years. Inconsistent conveyances, mortgages and easements, etc., on the chain of title, should be discharged.
There is no direct equivalent of the Registry of Deeds. The major legal interests subsist by law and are asserted by the production of the deeds. Minor interests in land are protected by registration in the Land Charges Register, which in this context, is similar to the Registry of Deeds. Once the instrument creating the interest has been registered, registration is deemed actual notice to third parties; thereby ensuring that they are bound by it.
The main Land Charges are as follows
- a puisne (usually a second or lower ranking) mortgage not protected by possession of the deeds;
- an estate contract (option or contract to convey the legal estate);
- a restrictive covenant made after 1926;
- the rights of spouses or civil partners to occupy the matrimonial / shared home.
Equitable interests under a trust do not affect a bona fide purchaser of the legal estate in the property, without notice of that interest. Notice in this context includes constructive notice; i.e. notice of that which would have come to the attention of the buyer if he had made proper conveyancian ng enquiries. The buyer must inspect the actual property and is on notice of that which he would have discovered if he had done so.
Registered Title Conveyancing
The registered title system initially relied on the production of Land/Charge certificate, since abolished by 2002 Act. The title is now evidenced by the issue of a Title Information Document only (now the official copy of the register). On registration in the Land Registry, the title deeds are no longer evidence of title, although their terms may be relevant if they create easements, covenants, etc.
A sample English title document it is provided. It is described as a copy or certified copy “title” (equivalent to a Folio in Ireland). It is described by a County or area code and a number (e.g. “NYK123456”; (a North Yorkshire Title.) The Title Document is a copy of the Register kept by HM Land Registry.
The Title Information Document format is broadly similar to that of an Irish Folio. Part 1 describes the property and refers to the official map, the interest in the property (such as the lease under which it is held) and appurtenant easements. It usually states the address with a postal code. It refers to the Title Plan, which marks the property and may also mark the location of other rights such as easements.
Part 2 is the Proprietorship Register, which sets out the name of the owner and the class of title. Part 3 is the charges register. This will list leases, mortgagors (charges), easements and restrictive covenants, etc., which affect the registered title. Priority is determined by the order of registration.
As in Ireland, registered title is in effect, State guaranteed title. There is a right of compensation for loss arising from errors arising in HM Land Registry.
The best class of title available is absolute title, be it freehold or leasehold. Other classes include possessory title, where the applicant’s title is based on adverse possession or if title deeds have been lost or destroyed. The title can be upgraded, for example, possessory to absolute where title deeds subsequently discovered.
Restrictions and notices can be registered with or without agreement, to protect third party interests in registered land. Equitable interests under trusts are not noted on the register. They are usually protected by registration of a notice or restriction. The former is equivalent to a caution, giving the right to intervene and assert the interest against the title holder. The latter protection is equivalent to an inhibition under Irish law.
So-called “overriding interests” affect registered titles to land without registration. They are broadly equivalent to but narrower than the burdens described in Section 72 of the Registration of Title Act, 1964. The most important overriding interests are
- leases with terms of less than seven years;
- the rights of persons in actual occupation (e.g. squatters and persons with equitable interests) unless on an enquiry made, the rights holders fail to disclose the interest;
- easements known to the buyer, or obvious on careful inspection
Certain classes of more obscure overriding rights lost their status as such on 13th October 2013.
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