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You are here: BAILII >> Databases >> The Law Commission >> Land Registration For The Twenty-First Century: A Conveyancing Revolution (Report) [2001] EWLC 271(3) (9 July 2001)
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Cite as: [2001] EWLC 271(3)
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PART III FIRST REGISTRATION
INTRODUCTION
3.1 In this Part we examine five issues:
(1) the legal scope of title registration and the extent of land that may be registered under it;
(2) the circumstances in which an owner of an interest in unregistered land may apply to register it with its own title;
(3) the circumstances in which a disposition of unregistered land must be registered and the consequences of a failure to do so;
(4) the effect of first registration; and
(5) cautions against first registration and the cautions register.
3.2 The principal concern of this Part is with first registration. The first registration of a title may be either voluntary or compulsory. Registration is presently compulsory on the making of certain dispositions of unregistered land, and the range of such dispositions was extended substantially by the Land Registration Act 1997.[1] In other cases it may be made voluntarily, provided that the interest is one which may be registered. As a result of changes made by the Land Registration Act 1997,[2] there are now fee incentives to encourage voluntary first registration and it is intended that these will continue under the Bill.[3]
THE LEGAL SCOPE OF TITLE REGISTRATION AND THE EXTENT OF LAND THAT MAY BE REGISTERED UNDER IT
The legal scope of title registration
3.3 The Bill describes the scope of title registration in Clause 2.[4] First, Clause 2(a), reflects the fact that the Bill makes provision about the registration of title to the following unregistered legal estates:
(1) an estate in land;[5]
(2) a rentcharge;[6]
(3) a franchise;[7]
(4) a profit à prendre in gross;[8]
(5) any other interest or charge which subsists for the benefit of, or is a charge on, an interest the title to which is registered.[9]
It is these matters that are addressed in the first section of this Part.
3.4 Secondly, Clause 2(b) describes the provision that the Bill makes about the registration of title to legal estates that are created by a disposition of a legal estate the title to which is itself registered. This provision relates to registrable dispositions. These are considered in Part IV of this Report.[10]
The extent of land that may be registered
3.5 At present, the land which can be registered under the Land Registration Act 1925 is, in practice, determined by reference to local government administrative areas. This means the counties of England or Wales,[11] Greater London and the Isles of Scilly.[12] Although the seaward limit of a county (or administrative area) is generally the low water mark, there are tidal waters which are within the body of a county, as (for example) where there is an estuary. The county boundary is at the seaward limit of that estuary as determined by the Ordnance Survey.[13] The Bill applies (as now) to land covered by internal waters which are within the administrative area of England or Wales.[14] However, it extends the scope of the land that may be registered beyond those administrative areas and applies additionally to land covered by internal waters which are adjacent to England or Wales and which are specified for the purposes by order made by the Lord Chancellor.[15] This power to extend registration of title to land under adjacent internal waters was included following discussions with the Crown Estate. The Crown Estate would, in due course, wish to be able to register submarine land not only within the body of a county, but under waters on the landward side of the baselines, fixed in accordance with Article 4 of the Convention on the Territorial Sea of 1958. These baselines are employed for the purposes of defining the territorial limits of the United Kingdom. The reason why the Crown Estate wishes to be able to register such lands is to protect them against encroachments by adverse possessors who might (for example) construct pipelines or other works within internal waters but outside the body of a county.[16] At present, although HM Land Registry could presently resource the registration of submarine land within the body of a county it would be in difficulties if submarine land became registrable as far out as the baselines. However, as and when resources permit, it would, in principle, be willing to register submarine land within the baselines. In those circumstances, the power explained above, could be exercised.
VOLUNTARY FIRST REGISTRATION
Registrable estates
Who may apply for first registration?
3.6 Under the Land Registration Act 1925,[17] only legal estates may be registered with their own titles. Clause 3 of the Bill, which explains the circumstances in which a person may apply for the voluntary first registration of an unregistered legal estate, adheres to that principle but extends the range of such estates that may be registered. It should be noted that, at present, the Crown is unable to register the title to a substantial amount of land which it holds. This is the land that it holds in demesne as feudal lord paramount and not for any estate.[18] As we explain in Part XI of this Report, the Bill addresses this shortcoming and provides a mechanism by which the Crown may grant itself a fee simple in order to register that estate.[19]
3.7 A person may apply to the registrar to be registered as first registered proprietor of a legal estate in two situations. The first is where he or she is the legal owner of it. The second is where he or she is entitled to have the legal estate vested in him or her, as (for example) where the title is vested in a nominee for him or her.[20] However, a person who has contracted to buy land cannot apply for voluntary first registration under this provision.[21] This is because the contract will be completed by a conveyance, and that conveyance will be subject to the requirements of compulsory registration that are explained below.[22] As we have explained above, the fees payable on voluntary first registration are lower than they are on compulsory first registration.[23]
3.8 It should be noted that first registration arises from an application. As we explain in Part XVI of this Report,[24] the Bill confers a right for anyone to object to an application,[25] though it is a right that must not be exercised without reasonable cause.[26] Where an objection cannot be disposed of by agreement and is not groundless, the registrar must refer the matter to the Adjudicator for resolution.[27]
Which legal estates may be registered with their own titles?
A FEE SIMPLE ABSOLUTE IN POSSESSION
3.9 The first legal estate that may be registered with its own title is, as now,[28] a fee simple absolute in possession.[29]
CERTAIN LEASES
3.11 First, a lease granted for a term of years under which the tenant's right to possession is discontinuous, is registrable, however many (or few) years are unexpired at the time of the application for registration. This provision is new. Although discontinuous leases are not very common, they are sometimes used for time-share arrangements under which (for example) the tenant is entitled to occupy premises for a specified number of weeks every year for a certain number of years.[30]
3.12 Secondly, where a mortgage has been created by demise or sub-demise, the mortgage term is never registrable, provided that there is a subsisting right of redemption.[31] This replicates the present law.[32] It would make no sense to register a mortgage term where the estate charged was an unregistered freehold or leasehold and the mortgage might still be redeemed.
3.13 Thirdly, subject to what is said in paragraphs 3.11 and 3.12 above, a legal lease which has more than seven years unexpired at the time of the application may be registered.[33] It sometimes happens that a person holds under one lease but has been granted another lease to take effect on or shortly after the first. Under the present law, it is possible to add together the terms of the lease in possession and the reversionary lease in determining whether the lease is of a sufficient length to be registrable.[34] The Bill makes similar provision. Provided that the reversionary lease is to take effect in possession on, or within one month of, the end of the lease in possession, the terms may be added together. If, taken together, the terms exceed seven years, the lease is registrable.[35]
3.14 The power to register a lease with more than seven years unexpired involves a significant change to the present law. At present, only a lease with more than 21 years to run may be registered voluntarily.[36] In the Consultative Document, we sought views on whether there should be a reduction in the length of leases that were registrable, but without making any recommendations as such.[37] There was in fact no clear consensus from the answers of those who responded to the point, though there was support for having a power to reduce the length of registrable leases at a later date if, after consultation, there was support for such a change.[38] This is the only point of significance where we have decided to go against the views expressed on consultation. Our reasons for doing so, which follow from certain policy decisions as to the future of title registration that we have set out in Part II of this Report,[39] can be summarised as follows.
3.15 It is absurd to continue to maintain two distinct and already very different systems of conveyancing, the registered and the unregistered. These two systems will diverge still further not only as a result of the introduction of electronic conveyancing,[40] but also because of the other reforms that this Bill will bring about. In principle, as we have recommended in Part II, we should move to a system of total registration as soon as is reasonably practicable.[41]
3.17 As we mentioned above,[42] there was support on consultation for the recommendation in the Consultative Document, that the Bill should confer a power, exercisable by statutory instrument, to reduce the length of lease that was capable of being registered voluntarily.[43] The Bill implements that proposal,[44] and confers power on the Lord Chancellor to reduce the term by order after prior consultation.[45] It is likely that, when electronic conveyancing is fully operative, the period will be reduced to include all leases that have to be made by deed: in other words, those granted for more than three years.[46] The move to electronic conveyancing should make it possible to register such short leases and ensure that they are removed when they have terminated. This will virtually eliminate the need to have recourse to unregistered conveyancing for the future.[47]
RENTCHARGES
3.18 The third legal estate that may be registered is a rentcharge. A rentcharge will be a legal estate if it is perpetual or granted for a term of years.[48] Subject to certain exceptions, the Rentcharges Act 1977 prevents the creation of any new rentcharges after 21 August 1977.[49] Most existing rentcharges will be extinguished in 2037. The only ones remaining are those permitted by the 1977 Act,[50] of which "estate rentcharges" are the most important.[51] These are created to enable the enforcement of positive covenants and to secure the payment of service charges. Under the Bill, it will continue to be possible to register rentcharges voluntarily provided that it is perpetual or granted for a term of years with more than seven years unexpired.[52]
FRANCHISES
3.19 The fourth legal estate that may be registered is a franchise. A franchise, which is an incorporeal hereditament, is "a royal privilege or branch of the royal prerogative subsisting in the hands of a subject, by grant from the King".[53] It may be acquired by royal grant or by prescription. The franchises that tend to be encountered nowadays include those to hold a market or fair, or to take tolls.[54] At present, the only way in which a franchise may be protected on the register is if the land subject to it is itself registered, when a notice or caution may be entered against that registered title. A franchise cannot be independently registered with its own title, even though it could be a very valuable right.[55] In the Consultative Document, we sought views as to whether franchises should be capable of being registered voluntarily with their own titles, without making any recommendation on the issue.[56] Nearly three-fifths of those who responded to the point considered that there should be a power to register franchises. The Bill accordingly provides that a franchise may be registered with its own title if it is held for an interest equivalent to a fee simple absolute in possession or a term of years absolute with more than seven years unexpired.[57]
PROFITS À PRENDRE IN GROSS
3.20 The fifth legal estate that may be registered with its own title is a profit à prendre in gross. Like franchises, profits à prendre are incorporeal hereditaments. Many exist for the benefit of other land in the same way as easements. However, unlike easements, some profits can exist in gross. In other words, they can exist independently, in their own right, and do not have to benefit a dominant tenement. The profits that can exist in gross include the profits of pasture, piscary,[58] and of hunting and shooting game. Such rights are fairly common and can be very valuable. They are often sold and leased. At present, such profits in gross, like franchises, cannot be registered with their own titles,[59] but can only be protected by an appropriate entry against the title of the estate affected by them if that estate is registered. In the Consultative Document, we asked whether it should be possible for profits à prendre to be registered voluntarily with their own titles.[60] As with our inquiry on franchises, we made no recommendation one way or the other. Again, there was support for such a power of registration from nearly 60 per cent of those who responded to the question.[61] The Bill therefore makes similar provision for profits à prendre as it does for franchises. It permits a profit à prendre to be registered with its own title if it is held for an interest equivalent to a fee simple absolute in possession or a term of years absolute with more than seven years unexpired.[62]
Manors no longer to be registrable
3.21 At present a manor -that is the lordship of the manor -is registrable with its own title.[63] In the Consultative Document, we drew attention to the fact that manors are wholly incorporeal and impose no burden on the land within the manor.[64] Because the registration of manors gives rise to many practical difficulties at HM Land Registry but offers few, if any, advantages in return, we recommended that manors should cease to be registrable.[65] This proposal was accepted by 90 per cent of those who responded to the point. Accordingly, the Bill contains no power to register a manor. It also contains a power for the registrar to remove the title of a manor from the register on the application of the registered proprietor of that manor.[66]
COMPULSORY REGISTRATION
Introduction
3.22 As we have explained above,[67] the Land Registration Act 1997 substantially extended the range of dispositions of unregistered land that will trigger compulsory registration of title.[68] Given these recent changes, the Bill largely replicates the present law as set out in sections 123 and 123A of the Land Registration Act 1925. What follows is, therefore, no more than a summary of the provisions of the Bill, with comment only where the Bill changes the law.
Events that trigger the compulsory registration of title
Introduction
3.23 The events that trigger the requirement of compulsory registration under the Bill are set out in the following paragraphs.[69] As now, these provisions do not apply to mines and minerals that are held apart from the surface.[70] In the Consultative Document we explained the peculiar difficulties that, largely for historical reasons, apply in relation to the registration of mineral rights and why we felt unable to address these at this stage.[71] Under the present law, the requirements of compulsory registration do not apply to either an incorporeal hereditament (such as a franchise or a profit à prendre)[72] or to "corporeal hereditaments which are part of a manor and included in the sale of the manor as such".[73] Neither of these exceptions is replicated in the Bill. Although the grant or transfer of incorporeal hereditaments would not fall within any of the triggers to compulsory registration under the Bill,[74] many transfers of manorial land would do so. In the Consultative Document we explained the reason for this exception of manorial lands to the extent that we understood it,[75] and we recommended that it be abrogated.[76] There were not many responses to the point, but over four-fifths of them agreed with the recommendation.
Transfers
TRANSFER OF A QUALIFYING ESTATE
3.24 Where there is a transfer of a "qualifying estate" -that is, of either a legal freehold estate in land or a legal lease which has more than seven years to run[77]-the requirement of compulsory registration applies if the transfer was made:
(1) for valuable or other consideration;
(2) by way of gift;
(3) in pursuance of an order of any court; or
(4) by means of an assent (including a vesting assent).[78]
The significant change here from the present legislation is that compulsory registration will apply to leases granted for more than seven years, instead of for more than 21 years, as now. The reasons for this have been explained above, in the context of voluntary first registration.[79] There is a power for the Lord Chancellor, after consultation, to reduce the period of seven years by order.[80]
3.25 The following transfers are not within the provisions in paragraph 3.24:
(1) a transfer by operation of law (as where a deceased's property vests in his or her executors);[81]
(2) the assignment of a mortgage term (in other words, where there is a mortgage by demise or sub-demise, and the mortgagee assigns the mortgage by transferring the mortgage term);[82] and
(3) the assignment or surrender of a lease to the immediate reversion where the term is to merge in that reversion (because the estate transferred disappears).[83]
3.26 If an estate transferred has a negative value it is still to be regarded as having been transferred for valuable consideration.[84] The typical case in which this might happen is where there is an assignment of a lease under which the rent exceeds what would be the market rental for the property, perhaps because of the operation of a rent review clause or due to onerous repairing obligations.
3.27 The Bill clarifies what constitutes a "gift" for the purposes of paragraph 3.24, above.
(1) A transfer by way of gift will include a transfer by a settlor which constitutes a trust under which the settlor does not retain the whole of the beneficial interest.[85] Thus, if S transfers unregistered land to T1 and T2, to hold on a trust of land for S for life, thereafter to U absolutely, that transfer will trigger compulsory registration. However, a transfer by S to T1 and T2 to hold on trust for her as her nominee will not trigger compulsory registration.
(2) A transfer by way of gift will also include the situation where a beneficiary becomes absolutely entitled to unregistered land that is held on trust for him or her, and he or she requires the trustees to convey the legal estate to him or her.[86] Thus, if T1 and T2 hold unregistered land on trust for A for life, thereafter for B absolutely, and A dies, so that the trustees hold the land on trust for B absolutely, a transfer of that land by T1 and T2 to B will trigger compulsory registration. However, this will not be the case where, on the constitution of the trust, the trustees held the land on trust for the settlor absolutely, and subsequently the land is transferred either to the settlor or to the person entitled to the interest (as, for example, under the settlor's will or intestacy).[87]
The exception in each case reflects the fact that the creation of a nomineeship by a landowner does not involve any element of gift.
TRANSFERS TO WHICH SECTION 171A OF THE HOUSING ACT 1985 APPLIES
3.28 As under the present law, if there is a transfer of an unregistered legal estate in land in circumstances in which section 171A of the Housing Act 1985 applies, that transfer is subject to the requirement of compulsory registration even if it would not otherwise be.[88]
Grants
LEASES GRANTED FOR A TERM OF MORE THAN SEVEN YEARS FROM THE DATE OF GRANT
3.30 The first situation is where a lease[89] is granted for a term of more than seven years from the date of the grant, and the grant is made:
(1) for valuable or other consideration;
(2) by way of gift; or
(3) in pursuance of an order of any court.[90]
Once again, there is a very significant change to the present law here, namely the reduction of the length of leases that are subject to the requirement of compulsory first registration from those granted for more than 21 years to those granted for more than seven years.[91] We have explained the reasons for this in the context of voluntary first registration.[92] One of the main and intended effects is to bring most business leases on to the register in future.[93] There is a power for the Lord Chancellor, after consultation, to reduce still further the period of seven years by order.[94]
3.31 If a lease granted has a negative value, it is still to be regarded as having been granted for valuable consideration.[95] The comments above as to when a transfer will be regarded as a gift (and so subject to compulsory registration) apply equally to a grant of a lease by way of a gift.[96]
REVERSIONARY LEASES
3.32 The Bill introduces a new category of leases that are registrable, namely any lease granted for a term of whatever length, which takes effect in possession after a period of more than three months beginning with the date of the grant.[97] The reason for this new category is to avoid a conveyancing trap that such reversionary leases may create under the present law.[98] At present, where a lease has been granted for a period of 21 years or less, but has not yet taken effect in possession, it cannot be registered with its own title nor protected by the entry of a notice on the title of the reversion.[99] Any buyer of the land affected may not be able to discover the existence of the lease because the tenant will not be in possession. By making reversionary leases registrable, these problems are overcome.[100] In this regard, the Bill gives effect to a recommendation in the Consultative Document that was unanimously supported by those who responded to it.[101]
GRANT OF A RIGHT TO BUY LEASE UNDER PART V OF THE HOUSING ACT 1985
3.33 The Bill replicates the present provision[102] by which the grant of a "right to buy" lease under Part V is subject to the requirement of compulsory registration, regardless of whether the lease would otherwise be registrable because of its length.[103]
GRANT OF A LEASE TO WHICH SECTION 171A OF THE HOUSING ACT 1985 APPLIES
3.34 If there is the grant of a lease out of an unregistered legal estate in land in circumstances in which section 171A of the Housing Act 1985 applies, that grant is subject to the requirement of compulsory registration even if it would not otherwise be.[104] Once again, this replicates the effect of the present law.[105]
Protected first legal mortgages
3.35 Compulsory registration is also triggered by the creation of a protected first legal mortgage of either a legal freehold estate in land or a legal lease which has more than seven years to run.[106] A legal mortgage is protected for these purposes if it takes effect on creation as a mortgage to be protected by the deposit of documents relating to the mortgage estate.[107] A first legal mortgage is one which, on its creation, ranks in priority ahead of other mortgages affecting the mortgaged estate.[108] This provision differs from the present law in that it applies to mortgages of a leasehold estate with more than seven years to run, rather than more than 21 years as at present.
Crown grants out of demesne land
3.36 We explain in Part XI of this Report that:
(1) at present, when the Crown makes a grant of a freehold estate out of demesne land,[109] that grant is subject to the requirement of compulsory registration under section 123 of the Land Registration Act 1925;
(2) such a grant does not fall within the wording of the provisions of the Bill on compulsory registration that we have explained above;[110] but
(3) special provision is made for such grants to be subject to compulsory registration.[111]
The power to extend the triggers to compulsory registration
3.37 Clause 5 of the Bill empowers the Lord Chancellor, by order, to add new events to those that presently trigger compulsory registration.[112] This is similar to a power that exists under the present law. [113] However, under the Bill, it is provided that the Lord Chancellor may only exercise this power after consultation.[114] Under the Bill, an event that might be added to the list of those that trigger compulsory registration would have to be an event relating to an unregistered interest that is an interest of any of the following kinds:
(1) an estate in land;
(2) a rentcharge;
(3) a franchise; and
(4) a profit à prendre in gross.[115]
The only event that would otherwise fall within this list but is expressly excluded, is to require a mortgagee to register his or her interest.[116] It would be pointless to require the registration of a charge over land if the title to the estate affected remained unregistered.
The effect of failure to register
The duty to register
3.38 There is a duty to apply for registration of the registrable estate within the period of registration if the requirement of compulsory registration applies.[117] That duty applies as follows:
(1) where compulsory registration is triggered by a protected legal mortgage,[118] the mortgagor must apply for the registration of the estate charged by the mortgage;[119] and
(2) in every other case, the transferee or grantee must apply for the registration of the estate transferred or granted.[120]
As regards (1), there is (as now) a power by rules to make provision enabling the mortgagee to require the registration of the estate charged by the mortgage to be registered, whether or not the mortgagor consents.[121]
3.39 The period of registration is two months, beginning with the date on which the relevant event occurs.[122] It may, however, be a longer period if, on application to the registrar by any interested person, the registrar is satisfied that there is a good reason for such a longer period as he may specify by order.[123]
The effect of non-compliance with the duty to register
3.40 The effect of non-compliance with the requirement of registration is as follows:
(1) where the event is a transfer, the transfer becomes void and the transferor holds the legal estate on a bare trust for the transferee;[124] and
(2) where the event is the grant of a lease or the creation of a protected mortgage, the grant or creation is void and takes effect instead as a contract made for valuable consideration to grant or create the lease or mortgage concerned.[125]
If a transfer, a grant of a lease or the creation of a mortgage has become void under these provisions, and the registrar then makes an order extending the period in which an application for registration can be made,[126] the disposition is treated as never having become void.[127]
3.41 If it is necessary to repeat a disposition because it became void under the provisions mentioned in paragraph 3.40, the transferee, grantee or martgagor is liable to the transferor, grantor or mortgagee for all the proper costs of and incidental to the repeated disposition.[128] He or she is also liable to indemnify the transferor, grantor or mortgagee in respect of any other liability reasonably incurred by him or her because of the failure to comply with the requirement of registration.[129]
THE EFFECT OF FIRST REGISTRATION
Classes of title
Introduction
3.42 The Bill replicates the principle of the Land Registration Act 1925, that there are different classes of title with which an applicant may be registered. The effect of first registration continues to depend upon that class of title. We explain in Part IX the circumstances in which the class of title may or must be upgraded.[130]
Freehold titles
3.43 Under the Bill, where a person applies to be registered as proprietor of a freehold estate, he or she may (as now) be registered with an absolute, qualified or possessory title.[131] The Bill does not change the substance of what amounts to an absolute, qualified or possessory title.
(1) A person may be registered with absolute title if the registrar considers that his or her title is such as a willing buyer could properly be advised by a competent professional adviser to accept.[132] Even if the title is defective in some way, the registrar may still register the applicant with an absolute title if he considers that the defect will not cause the holding under the title to be disturbed.[133] Almost all freehold titles are, in practice, absolute.
(2) A person may, however, be registered merely with qualified title, if the registrar considers that the applicant's title can only be established for a limited period, or subject to certain reservations that are such that the title is not a good holding title.[134] Qualified title is extremely rare, but it might be appropriate where, for example, the transfer to the applicant had been in breach of trust.
(3) Possessory title is only appropriate where the applicant is either in actual possession, or in receipt of the rents and profits and there is no other class of title with which he or she may be registered.[135] In practice, the registrar tends to register land with a possessory title where the basis of the applicant's title is his or her adverse possession, or where the applicant cannot prove his or her title, usually because the title deeds have been lost or destroyed.
Leasehold titles
3.44 A person who applies to be registered as proprietor of a leasehold estate may be registered as proprietor with an absolute, good leasehold, qualified or possessory title.[136] Again, the Bill does not change the substance of the present law.
(1) A person may be registered with absolute title if the registrar:
(a) considers that his or her title is such as a willing buyer could properly be advised by a competent professional adviser to accept; and
(b) approves the lessor's title to grant the lease.[137]
Absolute title is appropriate, therefore, only where the superior title is either registered with absolute title or, if unregistered, has been deduced to the registrar's satisfaction. The registrar may register an applicant with absolute title even where his or her title is defective, if he considers that the defect will not cause the holding under it to be challenged.[138]
(2) The applicant may be registered with good leasehold title if the registrar considers that his or her title is such as a willing buyer could properly be advised by a competent professional adviser to accept.[139] Good leasehold will be appropriate where the superior title is neither registered nor deduced. The registrar may register an applicant with good leasehold title even if the title is open to objection, if he considers that the defect will not cause the holding under it to be challenged.[140]
(3) A person may be registered with qualified title, if the registrar considers that either the applicant's title or the lessor's title to the reversion can only be established for a limited period, or subject to certain reservations that are such that the title is not a good holding title.[141]
(4) The circumstances in which an applicant for the registration of a leasehold title may be registered with a possessory title are the same as those that apply in relation to a freehold title.[142]
The effect of first registration Freehold title
REGISTRATION WITH ABSOLUTE TITLE
3.45 The effects of first registration under the Bill are not identical with the present law. Registration of title is concerned with both the benefits conferred on the registered proprietor and the burdens subject to which he or she takes the title. On the "credit side", where a person is registered as the first registered proprietor of a freehold estate, it vests the legal estate in him or her together with all the interests subsisting for the benefit of the estate (such as easements).[143] On the "debit side", first registration vests the estate in the proprietor subject only to the interests affecting the estate at the time of registration that are set out below.[144] Those interests are as follows.
(1) Interests which are the subject of an entry in the register in relation to the estate. As this provision applies only to first registrations under the Bill, the entries in question will be registered charges,[145] notices and restrictions.[146] Cautions and inhibitions are prospectively abolished under the Bill.[147]
(2) Unregistered interests which fall within any of the paragraphs of Schedule 1. The interests which override first registration are explained in detail in Part VIII of this Report.[148] (3) Interests acquired under the Limitation Act 1980 of which the proprietor has notice. This is new and is explained in paragraphs 3.46 and 3.47.
3.46 The matter listed in paragraph 3.45 (3) above, has been included primarily to meet the following factual situation.[149] A squatter, A, takes adverse possession of certain unregistered land belonging to B. After 12 years' adverse possession, A extinguishes B's title and becomes herself the owner of the land.[150] A then abandons the land and B resumes possession of it. At some stage before B has been back in possession of the land for 12 years,[151] he sells the land to C. B sells as paper owner in accordance with the title deeds whereas the reality is quite different: the true owner is A. That sale triggers compulsory first registration and C applies to be registered. As we explain in Part VIII of this Report,[152] subject to transitional provisions to protect vested rights, the rights of a squatter will not constitute an overriding interest under the Bill as at present they do.[153] As a result of the matter listed in paragraph 3.45(3), C will take the land free of A's rights unless, at the time of registration, he had notice of them.
3.47 It may be helpful to explain the implications of whether or not C has notice of A's rights. It is relevant to the issue of whether A can seek to have the register altered under the provisions that we explain in Part X of this Report.[154]
(1) If C does not have notice of A's rights, A will not be able to seek alteration of the register because C is not bound by her rights and there is, therefore, no mistake in the register that requires rectification.
(2) By contrast, if C does have notice of A's interest, C is bound by her rights and she will be able to seek alteration of the register. The register is inaccurate and should therefore be altered to give effect to her rights by registering her as proprietor in place of C.[155]
For these purposes, notice will have its usual meaning and will include matters that the first registered proprietor ought to have discovered from reasonable inspections and inquiries, as well as matters that he or she actually knows.[156]
3.48 If the registered proprietor is not entitled to the estate for his or her own benefit (or not solely for his or her benefit) then as between him or herself and the persons beneficially entitled to the estate, the estate is vested in him or her subject to such of the interests of which he or she has notice.[157] The sort of case that this is intended to cover is where the first registered proprietor holds the land on trust, whether or not he or she is also one of the beneficiaries under that trust.
QUALIFIED TITLE
3.49 Registration of a freeholder with qualified title has the same effect as registration with absolute title, except that it does not affect the enforcement of any estate, right or interest which appears from the register to be excepted from the effect of registration.[158]
POSSESSORY TITLE
(1) is adverse to or in derogation of the proprietor's title; and
(2) is either subsisting at the time of first registration or is capable of arising.[159]
Leasehold title
(1) Where registration is with an absolute title, it has the same effect as the registration of a freeholder with an absolute title,[160] except that the estate is vested in the leaseholder subject to implied and express covenants, obligations and liabilities incident to the estate.[161] The burden of covenants and other obligations contained in leases that create proprietary rights, such as the landlord's right of re-entry for breach of covenant or restrictive covenants relating to the premises leased are not set out as such on the register.[162] As a lease is referred to in the register, it forms part of the register. Furthermore, any person dealing with leasehold property will inspect the lease.
(2) Registration of a lease with a good leasehold title has the same effect as its registration with an absolute title, except that it does not affect the enforcement of any estate, right or interest affecting, or in derogation of, the title of the lessor to grant the lease.[163]
(3) Registration of a lease with qualified or possessory title has the same effect as registration with absolute title but subject to the exceptions and qualifications that have been explained in relation to qualified and possessory freehold titles.[164]
Miscellaneous rule-making powers
3.52 The Bill confers on the Lord Chancellor certain miscellaneous rule-making powers relating to first registration.[165] First, rules may make provision in relation to the registration of dependent estates.[166] These rules are intended to cover the following cases.
(1) The first is where, on or subsequent to first registration, a registered proprietor has, or is granted, the benefit of a legal estate, such as an easement or a profit à prendre, over unregistered land. The rules may make provision as to the entry on the register of the benefit of such an estate.[167]
(2) The second is where:
(a) on first registration, the land is already subject to a legal mortgage; or
(b) subsequent to first registration, a charge is created that does not have to be registered to have effect at law, as is the case in relation to certain local land charges.[168]
Rules may make provision for the registration of the mortgagee as the proprietor of a registered charge. [169]
3.53 Secondly, there is a power to make rules relating to what might be described as the mechanics of first registration.[170] These may make provision about the following matters:
(1) the making of applications for first registration (whether registration is voluntary or compulsory);
(2) the functions of the registrar following the making of an application in relation to matters such as the examination of title and the entries to be made where he approves the title; and
(3) the effect of any entries made by the registrar in pursuance of such an application.
CAUTIONS AGAINST FIRST REGISTRATION AND THE CAUTIONS REGISTER
The nature of cautions against first registration under the present law
3.54 Cautions against first registration provide a means by which a person with an interest in unregistered land can be informed of an application for first registration of the title to an estate in that land.[171] Under the present law, any person having or claiming to have an interest in unregistered land of a kind that entitles him or her to object to a disposition being made without his or her consent, may apply to lodge a caution with the registrar.[172] In practice, in relation to the circumstances when the applicant's consent is required, this provision has been very liberally interpreted by the registrar and almost any person interested in the unregistered land can in fact apply to lodge such a caution.[173] Once a caution against first registration has been entered,[174] no registration of the estate affected will be made until notice has been served on the cautioner and he or she has had an opportunity to appear before the registrar and oppose the application for first registration.[175] There is no mechanism for "warning off" cautions against first registration.[176] The cautioner will only be required to defend his or her caution when an application for first registration is made.[177] Cautions against first registration are recorded on the index map[178] and may be discovered by an official search of that map.[179]
3.55 In the Consultative Document, we proposed that cautions against first registration should be retained, but should be rationalised.[180] We recommended that:
(1) any person having an interest in unregistered land should be able to lodge a caution against first registration (thereby codifying present practice);
(2) the landowner or other person having a legal estate in the land affected should be able to challenge a caution at any time after it had been lodged and not merely when an application for first registration is made; and
(3) cautions against first registration should continue to be recorded on the index map.
Our recommendations were unanimously supported by those who responded to them. We have in fact modified one of these recommendations in the course of the preparation of the Bill for the reasons that we explain below.[181]
Cautions against first registration under the Bill
The right to lodge a caution
(1) a person who claims to be the owner of a legal estate that is:
(a) an estate in land;[182]
(b) a rentcharge;
(c) a franchise; or
(d) a profit à prendre in gross; which relates to the land to which the caution relates; or
(2) a person who claims to be entitled to an interest183 affecting any of the legal estates mentioned in (1).[183]
This provision gives effect to the recommendation mentioned above in paragraph 3.55(1). There are special provisions applicable to cautions against the first registration of the Crown's demesne land, and these are explained in Part XI of this Report.[184]
3.57 Some examples may be given of the operation of this provision:
(1) a tenant under a lease could lodge a caution against the first registration of the title of the reversionary freehold estate;
(2) a person having the benefit of an option or a charging order in relation to a freehold estate might lodge a caution against the first registration of that estate;[185] and
(3) a person who claimed to be a beneficiary under (say) a resulting or constructive trust could lodge a caution against the first registration of the estate in which he or she claimed to be beneficially interested.
3.58 There is a significant exception to the principle set out in paragraph 3.56 that is new to the Bill.[186] Subject to the transitional arrangements mentioned below, a caution against first registration may not be lodged by:
(1) the owner of a freehold estate in land in respect of that estate; or
(2) the owner of a lease granted for a term of which more than seven years are unexpired in respect of that estate.[187]
The reason for this exclusion is that cautions against first registration are not intended to provide a substitute for first registration. If, therefore, a person has an unregistered legal estate that is registrable, he or she should register it. This is in accordance with our ultimate goal of total registration.[188] This prohibition on lodging cautions against first registration will not, however, apply for two years after the provisions on first registration are brought into force.[189]
3.59 The right to lodge a caution is exercisable by application to the registrar.[190] The form, content, and manner of application will be determined by rules made under the general rule-making power concerning applications that is explained in Part IX of this Report.[191] Furthermore, anyone may object to the application and, if the objection is not groundless and cannot be disposed of by agreement, the registrar must refer the matter for determination to the Adjudicator.[192] In fact, as we explain below, the person who is most likely to object to the lodgement of a caution against first registration -the owner of the legal estate to which it relates-is given a specific right to apply for cancellation of the caution in any event.[193] A person may not exercise his or her right to lodge a caution without reasonable cause.[194] A breach of this statutory duty will be actionable by any person who suffers damage in consequence of it.[195] The cautioner has a right to withdraw a caution against first registration by application to the registrar.[196]
The effect of a caution against first registration
3.60 Where a caution against first registration has been lodged, the registrar must notify the cautioner[197] of any application for first registration and of his right to object to it.[198] The period within which the cautioner may object to the application will be such as is specified by rules.[199] The registrar cannot determine the application for first registration until the end of that period, unless before that time, the cautioner has either exercised his or her right to object to the application[200] or given the registrar notice that he or she does not intend to do so.[201] Where the cautioner objects, the matter must be referred to the Adjudicator for determination unless the registrar is satisfied that the objection is groundless, or the matter can be determined by agreement.[202] If the cautioner does not object to the application for first registration, the registrar will proceed to determine it in the usual way.
3.61 The Bill makes provision by which an agent for the applicant for first registration may give notice of the application to the cautioner and for this notice to be treated as having been given by the registrar.[203] The purpose of this provision is to enable a solicitor or licensed conveyancer who is acting for an applicant for first registration to give notice at the time that the application is made. This will help to expedite the conveyancing process because it will not be necessary to wait for the registrar to serve notice on the cautioner. Such a notice will only be regarded as having been given by the registrar if it was given by a person who is of a description provided by rules (which is likely to include solicitors and licensed conveyancers) and the notice is given in such circumstances as rules may provide.[204] This means that rules can define (for example) the time at which the notice must be served, having regard to the purpose of the power.
3.62 The effect of a caution against first registration is limited. It merely gives the cautioner a right to be notified of an application for first registration so that he or she can object to that application. It has no effect on the validity or priority of any interest that the cautioner may have in the legal estate to which the caution relates.[205]
Cancellation of cautions
3.63 The Bill creates a procedure whereby the owner of a legal estate to which a caution relates, and persons of such other description as rules may provide,[206] may apply to the registrar for the cancellation of a caution against first registration.[207] Where such an application is made, the registrar will be required to serve notice on the cautioner of:
(1) the application; and
(2) the fact that, if he or she does not exercise his or her right to object to the application before the end of such period as rules may provide, the registrar must cancel the caution.[208]
This is one of just two cases under the Bill where the general right for any person to object to an application[209] does not apply. Only the cautioner may do so.[210] If the cautioner does object, the matter must be referred to the Adjudicator for determination in the usual way, unless it can be resolved by agreement or the registrar is satisfied that the objection is groundless.[211]
3.64 Where the owner of a legal estate[212] has consented to the lodging of the caution,[213] he or she would not normally be able to apply for the cancellation of the caution under the procedure explained in paragraph 3.63.[214] However, even in such a case where the owner had consented, there might be circumstances in which it was appropriate for him or her to seek the cancellation of a caution, and these would be specified in rules.[215] An obvious case would be where the interest protected by the caution had terminated.[216]
The cautions register
3.65 Under the Bill, cautions against first registration will continue be recorded on the index map.[217] However, the Bill also requires the registrar to create a register of cautions against first registration.[218] How the register is kept will be a matter for rules.[219] These are likely to make provision about:
(1) the information to be kept in the register;
(2) the form in which information included in the register is to be kept; and
(3) the arrangement of that information.[220]
At present, details of cautions against first registration are kept on a "caution title", which records the following matters:
(a) the name and up to three separate addresses for service of the cautioner;
(b) the name and address of the solicitors or licensed conveyancers, if any, who lodged the application;
(c) the estate against which the caution has been registered, including in the case of a leasehold estate particulars of the lease in question;
(d) an extract from the statutory declaration in support of the caution showing the nature of the cautioner's interest in the estate subject to the caution. It is anticipated that the cautions register will contain similar information. It is intended that it will be kept in dematerialised form.
3.66 The Bill makes provision for the alteration of the register in similar ways to those that apply to the register of title.[221] These provisions are explained in Part X of this Report.[222] There is also a right to indemnity where a person suffers loss by reason of a mistake in the cautions register which is also explained in Part X.[223]
Ü Þ
Note 1 Section 1 substituted a new Land Registration Act 1925, s 123 and inserted a new s 123A. [Back] Note 2 See Land Registration Act 1925, s 145(3) (substituted by Land Registration Act 1997, s 3). See Land Registration Fees Order 2001 (2001 SI No 1179), art 2(5). Fees for voluntary first registration are 25% lower than those applicable to compulsory first registration. [Back] Note 3 The fee-making powers under the Bill are couched in more general terms that will permit this, but do not have an explicit provision equivalent to Land Registration Act 1925, s 145(3): see Cl 101; below, para 15.9 [Back] Note 4 The provision is merely descriptive. It simply highlights the fact that the Bill makes provision for the matters it describes. [Back] Note 5 That is, a fee simple absolute in possession or a term of years absolute: see Law of Property Act 1925, s 1(1). [Back] Note 6 Seeibid, s 1(2)(b). [Back] Note 7 Seeibid, s 1(2)(a). [Back] Note 9 This will include the benefit of a legal easement or a profit appendant or appurtenant, a legal right of re-entry and charge by way of legal mortgage. [Back] Note 10 See below, para 4.12. [Back] Note 11 As defined by the Local Government Act 1972. [Back] Note 12 Cf the definitions of “England” and “Wales” respectively in Interpretation Act 1978, Schedule 1. [Back] Note 13 We received some fascinating evidence as to how the seaward limit of an estuary was determined. It was not quite as scientific as we had imagined that it would be. [Back] Note 15 Cl 127(b). Such an order is to be made by statutory instrument, subject to annulment in pursuance of a resolution of either House of Parliament: Cl 125(4). [Back] Note 16 For the provisions of the Bill on adverse possession, see Part XIV of this Report. [Back] Note 18 See below, para 11.5. [Back] Note 19 Cl 79; below, para 11.11. [Back] Note 20 Cl 3(2). The Bill makes no change in the law as to who may apply to be registered: see Land Registration Act 1925, ss 4, 8(1). [Back] Note 21 Cl 3(6). This replicates the effect of the present law: see Land Registration Act 1925, ss 4(b), 8(1)(b).
2 [Back] Note 24 See below, para 16.6. [Back] Note 27 Cl 73(6), (7); below, paras 16.6, 16.7. For the office of Adjudicator, see below, para 16.3. [Back] Note 28 See Land Registration Act 1925, ss 2, 4. [Back] Note 30 See, eg, Cottage Holiday Associates Ltd v Customs and Excise Commissioners [1983] QB 735. As Woolf J pointed out in that case, other methods were commonly used to give effect to time-share arrangements, such as the grant of “licences or holiday certificates coupled with memberships of a proprietary club”, or the use of trusts:ibid, at p 739. Although it is not material in the context of voluntary first registration, it should be noted that the length of a discontinuous lease is apparently determined by aggregating the periods that the tenant is entitled to occupy the premises and not by reference to the commencement and termination dates during which the property was to be made available:ibid, at p 740. This point is material in the context of compulsory first registration because, as we explain below, under the Bill, leases granted for a term of more than seven years are required to be registered: see Cl 4(1)(c); below, para 3.30. [Back] Note 31 Cl 3(5). Mortgages by demise or sub-demise are in practice obsolete. Cf below, para 7.3 [Back] Note 32 See Land Registration Act 1925, s 8(1). [Back] Note 33 Cl 3(1)(a), (3). No application for registration under Cl 3 may be made in respect of a PPP lease (which relates to transport in London) under Greater London Authority Act 1999: see Cl 90(1). For PPP leases, see below, para 8.11. [Back] Note 34 See Land Registration Rules 1925, r 47. [Back] Note 36 Land Registration Act 1925, s 8(1). [Back] Note 37 See Law Com No 254, para 3.10. [Back] Note 38 See below, para 3.17. [Back] Note 39 See above, paras 2.6, 2.9. [Back] Note 40 Which will apply only to registered land. [Back] Note 41 See above, para 2.13. [Back] Note 43 See Law Com No 254, paras 3.14, 3.15. [Back] Note 45 Cl 116(3). Any such order is to be made by statutory instrument that is subject to annulment in pursuance of a resolution of either House of Parliament: Cl 125(4). [Back] Note 46 See Law of Property Act 1925, ss 52, 54(2). [Back] Note 47 There are likely to be few dealings with leases granted for three years or less, and such as there are, will almost certainly be straightforward. [Back] Note 48 Law of Property Act 1925, s 1(2)(b). [Back] Note 49 Rentcharges Act 1977, s 2. [Back] Note 50 Seeibid, s 2(3). [Back] Note 51 Seeibid, s 2(3)(c), (4), (5). [Back] Note 52 Cl 3(1)(b), (3). [Back] Note 53 Spook Erection Ltd v Secretary of State for the Environment [1989] QB 300, 305, per Nourse LJ, referring to Joseph Chitty, A Treatise on the Law of the Prerogatives of the Crown (1820), p 119. In fact Chitty’s definition can be traced back to 2Blackstone’s Commentaries, p 37, which, in turn is derived from still earlier sources. [Back] Note 54 See, eg, Sevenoaks District Council v Pattullo & Vinson Ltd [1984] Ch 211 (franchise of market). Where the Crown granted a franchise of treasure trove, that franchise is now for treasure under Treasure Act 1996, ss 4, 5. The concept of “treasure” under the 1996 Act is wider than “treasure trove” at common law: seeibid, ss 1, 2. [Back] Note 55 Franchises are undoubtedly bought and sold. CfSevenoaks District Council v Pattullo & Vinson Ltd, above. [Back] Note 56 See Law Com No 254, paras 3.17-3.19. [Back] Note 57 Cl 3(1)(c), (3). Cf Law of Property Act 1925, s 1(2)(a). [Back] Note 58 Fishing rights. [Back] Note 59 Cf Land Registration Rules 1925, r 257. [Back] Note 60 See Law Com No 254, paras 3.17-3.19. [Back] Note 61 Those who supported registration were, on the whole, those bodies and practitioners who encountered such rights most often, and for whom the inability to register the title was a practical problem, such as CLA, Farrer & Co and Holborn Law Society. [Back] Note 62 Cl 3(1)(d), (3). Cf Law of Property Act 1925, s 1(2)(a). [Back] Note 63 Land Registration Rules 1925, rr 50, 51. [Back] Note 64 Law Com No 254, para 3.20. [Back] Note 65 Ibid, drawing an analogy with advowsons, which ceased to be registrable as a result of Patronage (Benefices) Measure 1986, s 6(2). [Back] Note 68 The Land Registration Act 1997 implemented the joint recommendations of the Law Commission and HM Land Registry in Transfer of Land: Land Registration (1995) Law Com No 235. [Back] Note 69 The Bill refers to “events” which trigger compulsory registration, whereas Land Registration Act 1925, s 123, is couched in terms of “dispositions”. “Events” is obviously wider in its ambit than “dispositions”, and this may be significant for the future: cf below, para 3.37. [Back] Note 70 Cl 4(9). Cf Land Registration Act 1925, s 123(3)(b). [Back] Note 71 See Law Com No 254, paras 3.13-3.15. [Back] Note 72 Land Registration Act 1925, s 123(3)(a). [Back] Note 73 Ibid, s 123(3)(c). [Back] Note 74 But see the power to extend the triggers that is explained below, para 3.37. [Back] Note 75 See Law Com No 254, para 3.22. [Back] Note 76 Ibid, para 3.23. [Back] Note 78 Cl 4(1)(a)(i). For the meaning of a vesting assent, see Cl 4(9); Settled Land Act 1925, s 117(1)(xxxi). [Back] Note 79 See paras 3.14-3.16. [Back] Note 80 Cl 116(1)(b), (3). Any such order is to be made by statutory instrument that is subject to annulment in pursuance of a resolution of either House of Parliament: Cl 125(4). Cf above, para 3.17. [Back] Note 88 Cl 4(1)(b). Cf Housing Act 1985, Schedule 9A, para 2(1) (which the Bill repeals: see Schedule 13). A transfer falls within s 171A, where a person ceases to be a secure tenant of a dwelling-house because his or her landlord disposes of an interest in that house to a private sector landlord. The tenant’s right to buy under Part 5 of the 1985 Act is preserved in such circumstances: cf Housing Act 1985, s 171B. [Back] Note 89 Other than (i) the grant of a mortgage term (that is, where there is a mortgage by demise or sub-demise): Cl 4(5); or (ii) a PPP lease: see Cl 90(2). For PPP leases, see below, para 8.11. [Back] Note 91 Cf above, para 3.24. [Back] Note 92 See above, paras 3.14-3.16. [Back] Note 93 See above, para 3.16. [Back] Note 94 Cl 116(1)(b), (3). Any such order is to be made by statutory instrument that is subject to annulment in pursuance of a resolution of either House of Parliament: Cl 125(4). Cf above, paras 3.17, 3.24. [Back] Note 95 Cl 4(6). Cf above, para 3.26 (transfer of an estate for negative value). [Back] Note 96 See Cl 4(7); above, para 3.27. [Back] Note 97 Cl 4(1)(d). Cf below, para 8.10. [Back] Note 98 Cf Brickdale and Stewart-Wallace’s The Land Registration Act, 1925 (4th ed 1939), pp 193, 194, commenting on Land Registration Act 1925, s 70(1)(k). [Back] Note 99 See Land Registration Act 1925, ss 19(2), 22(2), 48(1). Such leases take effect as overriding interests underibid, s 70(1)(k). [Back] Note 100 It is, in practice, normal for leases to be granted to take effect in possession a short time after they are created, and these cause no significant conveyancing difficulties so far as we are aware. That is why the requirement of compulsory registration does not apply to leases granted to take effect within three months, if they are not otherwise registrable. There is a problem in relation to leases that take effect in possession at some more distant date. [Back] Note 101 See Law Com No 254, paras 5.91, 5.94. [Back] Note 102 Presently found in Housing Act 1985, s 154, the relevant parts of which the Bill repeals in Schedule 13. [Back] Note 104 Cl 4(1)(f). See above, para 3.28. [Back] Note 105 See Housing Act 1985, Schedule 9A, para 2(1) (which the Bill therefore repeals: see Schedule 13). [Back] Note 106 Cl 4(1)(g), (2). [Back] Note 109 That is, the land which it holds as feudal lord paramount and in which it has no estate. [Back] Note 110 See paras 3.24 and following. [Back] Note 111 See Cl 80; below, para 11.14. [Back] Note 112 Cl 5(1)(a). He may also make such consequential amendments of any legislation as he thinks fit: Cl 5(1)(b). The power is exercisable by statutory instrument that is subject to annulment in pursuance of the resolution of either House of Parliament: Cl 125(2), (4). [Back] Note 113 See Land Registration Act 1925, s 123(4), (5). [Back] Note 114 Cl 5(4). Although this is not stated explicitly in Land Registration Act 1925, s 123(4), (5), the power to extend the triggers would not in practice be exercised without extensive prior consultation. [Back] Note 117 Cl 6(1). Cf Land Registration Act 1925, s 123A(2). [Back] Note 118 See above, para 3.35. [Back] Note 121 Cl 6(6). Cf Land Registration Act 1925, s 123A(10)(b); Land Registration Rules 1925, r 19(2). [Back] Note 123 Cl 6(4), (5). As regards any dealings made by a person entitled to be registered as proprietor, see below, para 17.9(1). [Back] Note 124 Cl 7(1), (2)(a). Where the transfer is of a fee simple, the possibility of reverter to which Cl 7(1) gives rise is disregarded for the purposes of determining whether a fee simple is a fee simple absolute: Cl 7(4). This avoids any possibility that Cl 7(1) might have the unintended effect of converting any unregistered fee simple into a determinable fee simple so that it was merely equitable. [Back] Note 126 Under Cl 6(5). [Back] Note 130 See below, paras 9.17 and following. [Back] Note 133 Cl 9(3). In practice therefore, the registrar will register a title with an absolute title if the title is a good title (one that can be forced on an unwilling buyer under open contract) or a good holding title (technically a bad title, but the holding under which is unlikely to be challenged). He may register the applicant with an absolute title even if his or her title is doubtful (one that he or she cannot prove to be good). [Back] Note 142 Cl 10(6); see above, para 3.43 (3). [Back] Note 144 Cl 11(4). The relevant time must, of course, be the time of registration. As we have explained in this Part, first registration may be voluntary and so not triggered by any disposition of the land. [Back] Note 145 For registered charges, see Part VII of this Report. [Back] Note 146 For notices and restrictions, see below, Part VI of this Report. [Back] Note 147 See below, paras 6.3, 6.32. [Back] Note 148 See below, paras 8.8 and following. [Back] Note 149 Cf Law Com No 254, para 5.47, where we discussed the analogous position in relation to dispositions of registered land, and see below, para 8.77. [Back] Note 150 See Limitation Act 1980, ss 15, 17. [Back] Note 151 So that A is still the legal owner of the land. [Back] Note 152 See below, paras 8.76 and following. [Back] Note 153 See Land Registration Act 1925, s 70(1)(j). [Back] Note 154 See below, paras 10.6 and following. [Back] Note 155 As C was bound by A’s rights, the alteration to the register will not be rectification of the register for the purposes of the Bill. As we explain at para 10.6 below, rectification is the correction of a mistake that prejudicially affects the title of the registered proprietor: see Schedule 4, para 1. The change does not prejudicially affect C’s title and he will not, therefore, have any claim to indemnity. [Back] Note 156 Cf Law of Property Act 1925, s 199(1)(ii)(a). Under the Bill, where a person is required to have actual knowledge of some matter before he or she can be bound by a right, this is made explicit: see, eg, Schedule 3, paras 2(1)(c)(ii); 3(1)(a). [Back] Note 157 Cl 11(5). Cf Land Registration Act 1925, s 5(c). [Back] Note 160 See above, paras 3.45-3.48. [Back] Note 161 Cl 12(3), (4). Cf Land Registration Act 1925, s 9(a). [Back] Note 162 The Bill specifically prohibits the entry of a notice in respect of a restrictive covenant in a lease: see Cl 33(c); below, para 6.13. [Back] Note 164 Cl 12(7), (8). See above, paras 3.49-3.50. [Back] Note 165 In each case, the rules will be land registration rules, made by the Lord Chancellor, and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 168 See below, para 7.42. [Back] Note 171 See Law Com No 254, paras 6.24-6.27. [Back] Note 172 Land Registration Act 1925, s 53(1). [Back] Note 173 See Ruoff & Roper, Registered Conveyancing, 13-04. [Back] Note 174 See Land Registration Rules 1925, r 64, as to the form of cautions against first registration. The registrar prepares a record, under a distinguishing number, of the details of the caution and of the statutory declaration that must be lodged in support of it, and a plan showing the extent of the land affected by the caution:ibid, r 64(4). [Back] Note 175 Land Registration Act 1925, s 53(3). In practice, there may not be a hearing. Cf Land Registration Rules 1925, r 299(2) (which gives the registrar authority to determine a question in dispute without an oral hearing). [Back] Note 176 As there is at present in relation to cautions against dealings. Cautions against dealings are prospectively abolished under the Bill: see below, para 6.3. [Back] Note 177 See Ruoff & Roper, Registered Conveyancing, 13-07. [Back] Note 178 Land Registration Rules 1925, r 8. [Back] Note 179 See Land Registration (Open Register) Rules 1991, r 9. [Back] Note 180 See Law Com No 254, paras 6.62-6.64. [Back] Note 181 See para 3.58. [Back] Note 182 That is, a fee simple absolute in possession or a term of years absolute: Law of Property Act 1925, s 1(1). [Back] Note 183 See Cl 15(1), (2). [Back] Note 184 See below, paras 11.17 and following. [Back] Note 185 Both options and charging orders in relation to unregistered land are registrable as land charges under the Land Charges Act 1972. However, a person having the benefit of such a right might wish to lodge a caution either in addition to or instead of the registration of a land charge. The extension of the triggers to compulsory registration by the Land Registration Act 1997 has made cautions against first registration an effective method of protecting interests in unregistered land, even though, as we explain below (see para 3.62), a caution against first registration does not confer any priority on the cautioner’s interest. [Back] Note 186 It was not the subject of consultation in Law Com No 254 [Back] Note 187 This states the effect of Cl 15(3). There is a power to reduce the period of 7 years under Cl 116(1)(c). This power and the reasons for it have been explained above: see para 3.17. [Back] Note 188 See above, paras 2.9, 2.13. [Back] Note 189 Schedule 12, para 14(1). For the special provisions applicable to cautions against first registration lodged by the Crown in respect of demesne land and the reasons for them, see below, para 11.18. [Back] Note 191 See Schedule 10, para 6; below, para 9.77. [Back] Note 192 Cl 73(1), (6), (7); below, para 16.6. For the office of Adjudicator, see below, para 16.3. [Back] Note 193 See para 3.63. [Back] Note 195 Cl 77(2). Cf below, paras 6.28, 6.55, 16.6. [Back] Note 197 Which means not only the person who lodged the caution, but also his or her personal representative: Cl 22. [Back] Note 199 Cl 16(2). The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 200 Under Cl 73(1); see below, para 16.6. [Back] Note 202 Cl 73(6), (7); below, para 16.6. [Back] Note 204 Cl 16(4)(a), (b). The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). There is a power for rules to make provision about the form, content and service of notice under the Bill: Schedule 10, para 5. [Back] Note 205 Cl 16(3). But the mere fact that the cautioner has to be notified and can object to the first registration is, nonetheless, a very useful form of protection. In respect of some rights that cannot be protected by the registration of a land charge, as where a person claims to have an interest under a trust, it may be the only effective way of ensuring that his or her rights are properly protected on first registration by the entry of a restriction. [Back] Note 206 This is likely to include persons with an interest in the land affected, such as a mortgagee or a receiver. [Back] Note 208 Cl 18(3), (4). [Back] Note 209 Under Cl 73(1); below, para 16.6. [Back] Note 210 See Cl 73(2); below, para 16.6. [Back] Note 211 Cl 73(6), (7); below, para 16.6. [Back] Note 212 Or any person who derives title from him or her by operation of law, such as a trustee in bankruptcy or an executor. [Back] Note 213 In such manner as rules may provide. The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 214 Cl 18(2). This is in accordance with a recommendation in Law Com No 254, para 6.64, which was supported by all those who responded to it. [Back] Note 215 Cl 18(2). The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 216 As where A, a freeholder, granted B an option to purchase her land that was exercisable for a period of five years and A agreed that B should lodge a caution against first registration in respect of that option. A would be entitled to apply for the cancellation of the caution after five years notwithstanding her consent. [Back] Note 217 See Cl 68(1)(c); below, para 9.55. The index map contains the title number of any caution in the cautions register. [Back] Note 219 Cl 19(2). The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 220 Cf Cl 1 (register of title); considered below, para 9.3. [Back]
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