Evaluating the Effectiveness of the Land Registration

Introduction

The Land Registry, as well as the Law Commission enacted the Land Registration Act (LRA) 2002, after countless times of consultation, and even evaluation. Significantly, these two bodies did not amend the draft bill when the act was being passed through the parliament and it poses as a work of principle, and also clarity. In an attempt of ensuring that several substantive principles bestowed in land registration were brought forth to date and clearly expressed, it is significant to note that the LRA 2002 was as well designed with the primary objective of facilitating e-conveyancing, refers to the holding and also transferring of estates, as well as interests in land electronically. In this regard, it is evident that the objective is virtually paper-free, although it has not been achieved, owing to the fact that the LRA 2002 has over the years, not been triggered yet. However, the structure of the LRA 2002 ensures that e-conveyancing can only work, in an instance where technological, as well as legal issues have significantly been solved. Based on this sense, it is clear that it is transaction driven and thus, its primary aim is ensuring quick, efficient and also inexpensive estate transfers are held and also, interests in lands are ensured effectively, which includes the interests of third parties (the proprietary rights of others who are involved in the registered estate) are protected efficiently. This paper purposes to determine the extent to which the aim of the LRA 2002 has been achieved.

Policies implemented to the substantive law

In furthering the primary aim in a practical way, it is clear that 2002 Act purposes to implement significant policies towards the enhancement of substantive law. In this regard, the

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1. Bogusz, B. (2002). Bringing Land Registration into the Twenty-First Century. The Land Registration Act 2002. The Modern Law Review, 65(4), 556-567
2. Dixon, M, Modern Land Law (11th ed), Routledge, 2018; pp.28-29

first is ensuring that many land estates are registered. Notably, the second is ensuring that many third part rights have been recorded in the title register of estates, affected by those rights. In line with this, the policy stresses that failure in protecting rights by registration may imply that the interest ceases to affect the estate at the time of sale. Third is minimizing the number, and also the impacts of third party proprietary rights, which could be effective against a new land title holder even without having to be registered (unregistered interests that override). Notably, this will purposely ensure that the register is in a position of ensuring a clearer picture of a land’s legal state. Fourth is under e-conveyancing, which is providing that the effective transfer of land and also creation of proprietary land rights cannot occur when there is no simultaneous e-register entry.

Fundamental principles of registered land

There are three significant principles, underlying the registered land system, against which are used in judging the reality bestowed in the LRA 2002. However, to a given extent, these principles are a restatement of what had been noted previously, which is that land registration is concerned with easy, safe, as well as efficient land transfer, and also appropriate protection of rights bestowed in a land. In this regard, the three significant principles include the mirror principle, the insurance principle and the curtain principle.

The mirror principle

The mirror principle brings forth the opinion that the register ought to reflect on the totality of rights, as well as interests that concern the title of a registered land. Therefore, register inspection ought to reveal the owner’s identity, the nature of the ownership, limitations attached to his ownership, as well as the rights that other individuals have over the given land, which are adverse to the owner. This then implies that in an instance where the register

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3. ibid

purposes to reflect all the characters of the land in question, then any purchaser and all the third parties involved are assured that they are entirely protected. In this regard, the purchaser becomes aware of whatever he is buying, and on the other hand, the person having interest in the land also is aware that he is bound to be protected. Notably, the mirror principle fails to fully operate in the registered land system under the 2002 Act, especially in England and Wales, owing to other rights affecting land, which bind transferees, even those that are not registered (unregistered overriding interests), as provided in schedule 1 and 3 of the LRA 2002, which compromise the ‘mirror’ integrity, as concerns the legal status of any land.

However, instead of becoming too critical, it is vital to put into consideration, the fact that unregistered interests that override are not a mistake. Notably, the LRA 2002 Act particularly has the desire of making the register a complete ‘mirror.’ However, it is notably impractical or rather, undesirable, making absolutely everything to be under express registration. Factually, title registration is not aimed to replace physical land inspection by the purchaser as a way of determining whether there exists nay adverse rights over a given land. In this regard, the imperatives bestowed in the LRA Act purposes on ensuring that land is registered even for rights, which are unregistered under the 2002 Act, it ensures that they can be discovered by normal land inspection. In this regard, the land purchaser ought to inspect the land register and thus, be able to discover all that need to be known, thereby, making the primary aim of the Act to be successful. As such, it is evident that although the image that the register reflects under the 2002 Act is seen to be imperfect, it is worth noting that the imperfection cannot cause diligence loss to the purchaser. This is owing to the fact that title

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4. ibid
5. Cobb, N., & Fox, L. (2007). Living outside the system? The (im) morality of urban squatting after the Land Registration Act 2002. Legal Studies, 27(2), 236-260.

registration makes easy, the path of the purchaser, not to be involved in the process of conveyancing.

The curtain principle

The curtain principle brings forth the idea that some equitable interests connected to land ought to be hidden (behind the curtain), based on a special type of trust. In this regard, in an instance where someone desires to buy a registered land, which has been subjected to a trust, then the buyer should only be concerned with the title of a land, in which trustees hold and thus, reflected in the title register. This then implies that he is not supposed to look behind the curtain or even worry about other equitable ownership rights, which many be existing, reason being that such rights may be overreached when observations are laid on proper formalities. Notably, LRA 2002 Act does not purpose to alter the overreaching fundamentals and as such, does not resolve the problems arising in an instance where overreaching fails to occur, (for instance, when the buyer is bent on looking behind the curtain) as the 2002 Act provides that a buyer who is not able to overreach can only be bound through equitable interests, which is discoverable, based on the assumption that physical inspection has been done to the land. Notably, the 2002 Act provides a confirmation, however; that legal land owners (trustee) have all powers just as the absolute owners, and this is subject only when their powers have been restricted, based on title registration, as provided in the 23rd section of the 2002 Act. Evidently, this supports the overreaching mechanism, especially when there is a minimum requirement of two owners. Moreover, it is notable that widespread usage of restriction, in an instance where there is only one land title owner, with more owners in equity encourages overreaching as it ensures that the purchaser is alerted, for the fact that there is equitable



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6. ibid
7. Dixon, M. (2003). The reform of property law and the Land Registration Act 2002: A risk assessment. Conveyancer and Property Lawyer, 136-156
8. ibid

interests and thus, alerted, based on the requirement to overreach (or rather, seek consent of the equitable owner) prior to purchasing.

The insurance principle

The insurance principle brings forth the opinion that in an instance where title has been registered duly, the state guarantees it, and as such, the statutory indemnity system supports it, for any purchaser suffering loss, owing to the conclusive nature of the particular register. In this regard, the state insures against any form of inaccuracies or even mistakes made in the register. Notably, the LRA 2002 denotes that any registration system, guaranteeing title effectively needs to provide a compensation system for those suffering because of the system application. A land titles register, one who is absolutely conclusive for almost all purposes is thus, obligated to generate cases where loss has been caused to other innocent parties, owing to the manner in which the system works. It has been proven to be difficult overestimating the importance bestowed in the insurance principle. Not necessarily is it that people suffering losses are compensation, the reality is that there are few indemnity payment, owing to the few serious instances where loss has been caused because of the registration system, but instead, the existence of a provision of indemnity fives significant confidence to those that use the registration system and thus encourages for it to be relied on.

Overriding interests

Unregistered overriding interests are the rights that someone has in another person’s land. Based on the stipulation in the LRA 2002, these interests act against a registered proprietor or can even act against a person who has become a registered proprietor, based on title transfer.

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9. ibid
10. Lees, E. (2013). Title by Registration: Rectification, Indemnity and Mistake and the Land Registration Act 2002. The Modern Law Review, 76(1), 62-82.
11. ibid

The 2002 Act reduces the range, as well as scope of overriding interests, based on schedule 1 and 3 and as such, it ensures that a potential land buyer is bound only by the unregistered interests, which based on practical reasons or policy, should be effective against a buyer without having to be entered on a register, and only when the buyer has a realistic opportunity of discovering the existence of any interest in the land through physical inspect or making significant enquiries from the transferor. Moreover, in regards to protecting the buyer, the LRA 2002 Act encourages an applicant of a registered title to disclose any overriding interests to the register, in order to be recorded. Overall, it is notable that overriding interest do account for various rights, which affect registered land and their significance are derived from the fact that they are prioritized even without having to be registered.

Interested protected by land registration

The LRA 1925 Act categorizes the rights that someone has over another person’s registered land as minor interests. However, under LRA 2002 Act, there is no category referred to as minor interests and stresses that such a terminology ought to be terminated. Notably, the 2002 Act employs the logics that were derived from the 1925 Act, and stresses that there is third party interests ought to be out down on the register against the burden of the estate and as such, failure in making such kind of an entry implies that the property right stands to lose its priority against that of a registered proprietor, unless in an instance where the right falls under the stipulations of schedule 1 and 3, it then should be regarded as an overriding interest. LRA 2002 denotes that unless a property right is considered a registerable estate or a registerable share, or an overriding interest, it ought to be on the title register, to preserve its effectiveness against a buyer. As such, rights that fall within this category are referred to as interests,

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12. ibid
13. ibid

protected by registration and they include third party rights. 2002 Act requires that more rights are registered and as such, under section 71, it provides for a disclosure duty, in an instance where a registration applicant is required to disclose all overriding interests affecting the land.

Conclusion

Overall, it is indeed worthy indicating that the primary aim of the LRA 2002 has been achieved. This is based on the stipulations of the LRA 2002, which stress on its aim in LRA 1925 and counter some facts, which tend to differ with the aim. Overall, the aim have been achieved, whilst putting into consideration, the stipulations of the 2002 Act, under the fundamental principles of registered land, the overriding interests, and the interested protected by land registration

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Bibliography

Statutes

Land Registration Act 1925

Land Registration Act 2002

Books/journals

Bogusz, B. (2002). Bringing Land Registration into the Twenty-First Century. The Land Registration Act 2002. The Modern Law Review, 65(4), 556-567.

Cobb, N., & Fox, L. (2007). Living outside the system? The (im) morality of urban squatting after the Land Registration Act 2002. Legal Studies, 27(2), 236-260.

Dixon, M, Modern Land Law (11th ed), Routledge, 2018; pp.28-29

Dixon, M. (2003). The reform of property law and the Land Registration Act 2002: A risk assessment. Conveyancer and Property Lawyer, 136-156.

Dixon, M. (2009). Priorities under the Land Registration Act 2002. LQR, 125, 401-408.

Lees, E. (2013). Title by Registration: Rectification, Indemnity and Mistake and the Land Registration Act 2002. The Modern Law Review, 76(1), 62-82.