Land transfer law – Unregistered titles

- Most land in this country is known as registered land – purpose to prove you own
the land and to get info from central registry found at land registry
- Less than 20% is unregistered – no electronic info about
- Protection of interest – you have land that you have to deal which is unregistered,
when the seller seeks interest they might bring a pile of title deeds
- What is land lecture – legal estate and legal interest and equitable interest
- Legal – created by formality and found in a deed but not always
- equitable – what is fair and reasonable determination – there are many interest in
land that is equitable instead of legal
- the freeholder state in land or lease holder state in land and also legal interest –
looking at an unregistered context, they are binding the world, if you can prove you
have a legal estate in land, anybody would be subject to the estate you own. If you
have a legal interest an example would be a legal easement
- if you have that particular interest and someone wants to buy the land then that
interest would bind them if they bought that land
- that will also be the case if someone seeks to take security or like a mortgage, if you
have a pre-existing interest in that land like an easement, then this would effectively
bind that person
- particular fact is set out in s.1(1) and s.1(2) of the law of property act
- there are only 5 legal interest in land, they are very restricted in there number –
s.1(3) – any other interest relate to land are effectively equitable in nature, whether
or not them interest need protecting formerly, legal interest does not have to be
formerly protected as the bind the whole world because of the nature.
- Equitable interest whether or not they need to be protected formerly protected
depends on the type they are. If you look at the diagram, it shows the majority of the
diagram looks at the different classes of equitable interest
- Basically we need to categories if something is equitable interest and if it is we need
to see if it is protected via central charges register or is it protected by the doctrine
overreaching or doctrine of notice.
- First thing we need to decide when looking at equitable interest is what sort of
protection is relevant to that particular interest, in very basic terms.
- If particular equitable interest is categories as a commercial interest then the way
you need to protect that, therefore anyone buys that land or takes security over it is
bound by your interest, you have to make sure its adjusted appropriately what is
called a central land charge.
- If rather than a commercial interest, you think that the interest you have is a family
based interest or interest that arises because you have a beneficial interest in land,
then the doctrine of overreaching be relevant to how that interest is protected or
whether or not binds somebody that seeks to buy the land by the legal owner.
- Family based interest arising from a trust based interest (co-ownership interest)
- If the particular interest does not fall into either of the category, so it is not a
commercial interest protected by statues or a family based interest to which the
doctrine of overreaching applies, then we have to have something that covers
everything else. That is covered by the doctrine of notice
- Commercial interests – this is covered by a list of different types of commercial
interest which is set out in s.2 of land charges act 1972 – this particular register was
actually created for any interest arose after the 1st of January 1926 so if there is a
commercial interest applying to land that fell to be created before that date for
example a restrictive covenant then that particular type of interest couldn’t be
protected under the central land register because the system of registration didn’t
arise before the 1st of January 1926. However, would fall under the catual list under
the doctrine of notice. However commercial interest that was created on or after the
1st of January 1926 which will be the majority of particular interest then we need to
work out which class of commercial interest actually falls within. We need to work
which category it falls within, this include 6 section a-f, the most important one is c,d
and f, the others are very rare
 Basically the system is this, if somebody that has a particular commercial
interest that falls within the classes within a-f and they want to make sure
that it is protected, make sure that anybody seeks to purchase the land or
maybe take a mortgage on the area of land, are bound by that particular
interest, then they are need to register appropriately.
 If they do that s.198 of property act tells us that the registration of that
particular land interest should be deemed to constitute actual notice of such
instrument or matter. In laimants term if you properly protect a commercial
interest over land that you have benefit off, then anybody that seeks to buy
or take security over that land would be subject to your interest so you’ve
protected it appropriately.
 Class C and the types of commercial interest that basically would be covered
under this particular class, all of them are sort of need to be noticed, say for
C2 which is very rare but for example C1 a puny mortgage, this is a legal
mortgage which is a mortgage that complies with the formalities.
 Legal mortgage not protected by the deposit of the title deeds, now this is
talking about a situation where may historically have land that has more than
1 charges on it. So if you have somebody who has lent money to an owner of
unregistered land but that owner had already in the past granted somebody
else a mortgage over the land, so the first legal charge had already been
granted, normally in historically, the first legal charge owner would actually
protect there interest by holding the title deeds over the property, but
because anyone who gave funds or sort of the land to the owner and was a
second, third or forth legal charge owner, wouldn’t actually be able to hold
the title deeds because they were held by a third party. Therefore, if you
have a second or subsequent legal charge which is known as a puny
mortgage, you would make sure any buyer or lender of that land was subject
to that interest by protecting it on the register as a c1 puny mortgage. C3 are
unusual for example an equitable mortgage would which is very unusual but
do exist, if you had an equitable interest in relation to land you would protect
that by a c3 central land charge. C4 central land charge is more common so
for example if you took an option agreement over land, this means that you
have an option should you want to in a define period in the future to go back
to the owner of the land and say right I want to buy the land from you, if you
have an option agreement then you need to make sure that contract is
 known to any other person potentially to buy that land as well. The way you
would protect that commercial agreement which is a commercial interest,
you would need to register that particular interest as a central land charge.
You register an interest against the name of the person that owns the land at
the moment. If your option agreement, you think of yourself as the option
agreement buyer of the land then the current owner or the seller of land
would be the person who you registered that interest against.
 Class D by far the most important class is D2 – which are restricted covenants
of freehold land this is your C post 1st January 1926 interest
 D3 is for equitable easements, they are fairly unusual and you shouldn’t
worry about them too much. The final interest is one that is that actually fall
to be protected as a commercial interest but technically is almost family
based in nature.
 Class f is a spouse or civil partnered right to occupy the family home under
the family law act. What this means is, a spouse or civil partner who is not a
legal owner of property and again you will get more use to that concept
when looking at co-ownership, they can protect there right to occupy as that
particular status of person is not to do with any money that they contribute
which is a separate issue, which is a beneficial interest, this is all to do with
effectively there right as a spouse or civil partner of the side of the family
home, they can protect that as a class f central land charge. This kind of an
entry maybe put on against the other spouse in the relationship, if the non
owning spouse or civil partner, this person is concerned maybe there are
proceedings in train because they have a sort of relationship with their
partner who is the legal owner has broken down. The way to protect their
interest and right to stay should effectively the property be sold or there will
be some sort of property to be sold.
- Effect is if the person with the beneficial interest fails to register it as a central land
charge – the way you actually protect these interest is that you protect them against
the name of the person who owns the land in question, who owns the legal estate in
the landing question, in basic terms you fill out a form. If you haven’t correctly
protected that particular interest then section 199 of the law of property act
indicates that it won’t bind a purchaser of that land. But there are a slightly different
explanations of what kind of a purchaser would not be bound of interest depending
on the class of central land charges were dealing with.
- If you are looking at Class A or B, C1, C3 or F then they are void if it has not been
registered appropriately against a purchaser for value have any interest in land. If
you are looking at C4 estate of contract or any of the classes within D mostly known
as restrictive covenant, if they haven’t been registered property then they are void
against a purchaser of the legal estate for money or moneys worth
- The concept of any interest is slightly wider than money or moneys worth which
means anything that is worth money. Such as land, so an unregistered charge within
class c4 or any of the sub classes of D is therefore not void against someone whos
bind only an equitable interest in land or is getting married in consideration because
marriage consideration is not deemed to be paying money or money’s worth. So that
sort of a person which is fairly unusual, whether they are bound or not by an
unregistered interest will still depend on the doctrine of notice
- We also have the concept of purchaser, someone that buys land is included in good
faith for valuable consideration but this also includes leasees or mortgagees, this is
someone giving security or taking security over land, they are also within the
concept of a purchaser. Purchaser does not include anybody who is a volunteer,
which is someone who was given the land as a gift, so they are not a purchaser as
they haven’t paid and value or a squatter. They would be bound by the interest but
not properly protected.
- The main case is middle land bank v green case which was a long running family
dispute but also Horrington brother ltd v roads. Even if somebody is looking to buy
land knows of a particular third party rights but that particular third party rights is a
commercial interest and hasn’t been properly protected then it doesn’t actually
change the fact that as there has been a lack of registration, the contract will not
bind that third party
- The middle land bank v green case – this case also looks at what is meant by valuable
consideration. The courts of appeal and house of lord disagreed on that but the
house of Lords decision is the most important decision – this is an important case
just to see the impact of non- registration
- Failure to register commercial interest appropriately meant that interest which in
that particular case was an option agreement didn’t bind later purchaser of that
land.
- Lloyds bank v carrot case – couple of additional concepts on constructive trust
- Problems with the Land charges system
 Spite registration – you might find sometimes system is used to enter
something or seek to protect it just to make life difficult for the owner of
land. Some people might argue that a class F land charge, could be put on as
a spite registration if there are particular problems in a marital relationship
for example. Or you may argue if somebody has a right to occupy as a non-
owning spouse, then they have every right to protect their interest not
withstanding the rationale of them do it at a particular time.
 One particular issue with the system which may be a fair critism that it is a
very exact system, the way you actually fall to protect any sort of interest is
to complete a form. So your going to be the person that has the benefit of
interest for example a benefit of a restricted covenant or an option
agreement for example. You will have to fill out a form and one of the
element is you have to register the interest against the name of the estate
owner of the area of land that you are effectively taking the interest in
relation to. There are a couple of cases which show the consequences of
actually getting the name potentially wrong, in the Diligent Finance v Alleyne
[1972]; the title deeds were in the name of one person, and his wife
registered a class F central land charge but against the first name and his
surname, a potential lender of the land searched against the name. the
search result did not reveal the wife’s interest which was only registered
against the first and last name and not the full name of the husband.
Therefore the wife’s interest was seen as void due to non-registration, which
you might feel as unfair as she did register it against his name but
unfortunately it was not his full name
 Oak Co-operative Building Society v Blackburn [1968]. There are a slight
change to the name which has a far impact to the name on whether or not
the interest is binding on later purchasers of the legal estate.
 The non- registration point is this, the system is very clear if you have a
commercial interest which arising after the 1st of January 1926 against land
that is registered and it falls within the categories that was listed previously,
then if you fail to register it, then it will not bind a future purchaser of the
land even if they knew about the interest.
 middle land bank v green case – shows the injustice of the system but
effectively some people may argue that its certain as a system.
 The pre-root charges is something you have to be aware of because this
system has you registering an interest against the owner of the land or
what’s called the estate owner
 If we look at someone that wants to buy an unregistered land, the way
unregistered land works, is basically you are giving a buyer titles deed to
prove that the seller owns the land and what the land is subject too. The rule
in unregistered land is that you have to as a seller give what’s called proof of
ownership, going back 15 years. So that effectively means that if you bought
the unregistered land more than 15 years ago, then you will probably find the
main thing that you need to send to the buyer’s solicitors is the conveyance
when you bought the land. There may be other pre-root conveyances which
you also send, you send those if they highlight interest that will bind future
buyers for example restrictive covenant.
 The problem with the system is that because you don’t have to produce all of
the title deeds going back to 1926 when this system was created, there may
be some sort of central land charge registered against the name of the estate
owner that a buyer may never have effectively been given information about
because for example that estate owner must’ve bought the land in the 1930
and it is not necessary for that that particular conveyance with their name on
to actually be deduced
 The main issues are wrong names, spelling the name incorrectly and also
when you register a particular interest to begin with and also the impact of
none registration on people arguably that have the benefit for commercial
interest on that land.
 Commercial interest is protected under the central land charge system
 If something is not capable of being protected because it is not a commercial
interest then the second means by which this particular interest falls to be
comes as protected, its called overreaching. The system of protection, the
central charge system and this particular doctrine which is known as
overreaching is pretty must exclusive. So if something is a commercial
interest then it is not capable of being overreached because commercial
interest has to be protected as central land charges. Overreaching looks more
at family based interest in very broad terms. If an interest is not capable of
being registered as a central land charge which means its not a commercial
interest or something that does not fall in class F, spouses or civil partners
right to occupy because of the status of themselves in capacity, if it does fall
in the classes mentioned earlier, then it may be capable of overreached. The
 reason of introducing overreaching because it provides certainty for a
purchaser and arguably protects the beneficiary.
 Overreaching – s.2(1) law of property act 1925 amended – details what
overreaching. Is there a particular interest that is capable of being
overreached? Interest arising under a trust, this looks to protect an interest
that arising in an equitable interest, were someone is not a legal owner of the
land but they have contributed in some way for example financially, they
there for have a beneficial interest that is protected via trust vehicle. That
kind of a person that has interest in that land and whether or not someone
binds off that legal owner takes subject to that that interest would potentially
on whether or not that interest has been overreached.
 Lenders or mortgagees sell property as what we call mortgagee in
possession. If a mortgagee sells land or transfers the legal estate as a
mortgagee in possession, if there are subsequent charges granted in relation
to that land for example, the first charge holder seeks to sell a land as a
mortgagee in possession then that sale will overreach the interest of later
holder of security over that land. Also if the seller buying court order
overreaching will apply and also there are overreaching machinery relevant
to settle land interest but that is not an area that you need to concern with.
 How do you make overreaching happen? You have somebody buying land
from someone else and the land that is being bought is subject to a beneficial
interest of a third party arising via a trust. To actually overreach that
beneficial interest of the person that have an equitable interest, to overreach
that interest you need to pay money or the purchase money received by
what we call here, two trustees or a trust cooperation. Here the most
common way would be 2 trustees. If there are 2 legal owners of the legal
estate of land, then although a solicitor would receive the money from the
buyer of the land, the receipt is by the 2 legal owner, the 2 trustees.
Beneficial interest in relation to that property will be overreached. Put
another way the purchaser will not need to worry about the person with the
beneficial interest even if they know about them because the beneficial
interest will not bind them because the purchaser has basically activated the
overreaching machinery correctly.
 Example of a land which is owned by 2 legal owners and there is a 3 rd party
with a beneficial interest because you have 2 trustees, 2 owners of the legal
estate, when the purchase money is paid and received by them to actually
sell the property then the beneficial interest in that property is to the one to
which the purchaser is not subject because overreaching would’ve occurred.
However, if there is a sole legal owner property, in another way there is one
trustee of land and the money is paid by the purchaser in that situation and
there is again a third party with an equitable interest in that property, then
overreaching would have not been achieved. This means that technically the
purchaser may be bound by subject to the rights of the person with the
beneficial interest, whether or not the purchaser is bound by that interest
will then be fall to be decided under the finial catchall category- doctrine of
notice.
  The concept of overreaching actually applies the same to land that is
registered and unregistered so if we are looking at overreaching when we get
to registered titles, the same machinery applies.
 What about interest that is commercial but arose before the 1st of January
1926 or what about for example a family based interest that could’ve been
overreached but hasn’t been?
- Doctrine of notice – catchall category
 An equitable interest that falls under this catchall category will not bind what
is known as monies purchaser of a legal estate for value without notice,
might be known as equitees darling. Its saying if someone is a purchaser of a
legal estate in land for value, any they don’t have notices of a particular
interest involved then they will not bind subject to it. If we talk about notice,
we then have to categories into three types of notice; actual notice,
constructive notice or imputed notice.
 Actual notice – the purchaser knows of the interest involved
 Constructive notice – what he would’ve discovered if he made enquires. If
the evident of a third party living is apparent when he has viewed the house
but still ignores it, he might be subject to that interest as he had constructive
notice of it. He should make enquires that a reasonable person would’ve
made.
 Imputed – there agent of solicitor has notice of the particular interest, the
purchaser is then deemed to know. If you actually looking to buy a property
and it is residential then a solicitor acting for you would raise a standard for
of enquires to the seller about the property. One question would be if
anybody is living at the property who is not a legal owner but is more than 18
years of age. As that sort of a person that may have an equitable interest, if
they have contributed to the purchase price or financially, that would mean
they might have an equitable interest that might bind the purchaser. If the
seller was honest and say for example my father lives at the property and the
buyer receives that form then the solicitor would have that responsible to
make further enquires and take steps to ensure that the buyer does not take
the property subject to that equitable interest. If the seller is a sole owner,
you would then expect something to happen to ensure the doctrine of
overreaching applies so a second trustee is appointed, effectively if that
doesn’t happen and the purchaser buys the land with that person’s interest
not having dealt with appropriately, the purchaser with enquire the land with
that info and interest because they are not a monifying purchaser value
without notice, they have noticed, not themselves but a solicitor has that
knowledge.
 Pre 1st January 1926 – commercial interest would fall to be covered by
doctrine of notice
 Sole trustee – where you have somebody with a beneficial interest arising
under a trust but there is one legal owner so a sole trustee, where therefore
the doctrine of notice will not apply.
 Equitable estoppel and equitable right of entry – are relevant to the doctrine
of notice but the ones that we don’t focus on this course.