The System of Land Registration - Paper Example

Introduction

According to Davys (2015, p.3), Land Law came into existence when humans, driven by the need for agriculture, started developing an affinity for owning places. Common Law regards land as the soil on the surface, the rocks and minerals beneath and the space above it, which makes it three-dimensional space. Land has over time metamorphosed from what was initially just a place to call home into an investment, a community resource and a cushion against inflation. Transfer of property from one party to another, whether through a sale, lease or forfeiture as a result of defaulting on a loan requires intricate covenants that outline every detail (CILEx Law School 2016, p.14-15). Initially, the transfer of land was in the presence of legal minds like surveyors or conveyancers followed by the signing and exchange of an official document called Deeds. The deed transferred both interests and benefits enjoyed as a result of owning the land, unless the original owner has sufficient reason to limit these benefits. Section 62 of the Law of Property Act 1925 attaches additional developments including accessories, hedges, watercourses, privileges, rights, and advantages enjoyed at the time of conveyance (Legislation.gov.uk 1925). Interests in the land have to be well articulated too, for instance, details of attached fixtures in cases where the property is security for a mortgage. The old system (Unregistered Conveyancing) which thrived on exchange of title deeds was time consuming, cumbersome and costly, necessitating discussions for an efficient approach (Legal Information Institute 2018).

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

Capitalism, population growth, and urbanization have occasioned reforms that incorporate current interests and equip the law with technological abilities. The most significant was the Land Registration Act 2002, which came into being to help improve conveyancing, ensure efficient and affordable transfer of land as well as protect interests of third parties (LawTeacher 2013). Registered Conveyancing provides state-backed proof of ownership and eases future sales or transfers (www.gov.uk 2018). The last 50 years have seen legislation that designated the whole of England and Wales as a compulsory registration area. Occurrences like selling or leasing can now only be possible through official registration at the HM Land Registry, an independent body that came into being under LRA 2002. The existence of this information offers landowners State protection from adverse possession or land fraud as well as make conveyancing easier and more affordable. The LRA 2002 encourages owners of unregistered land to do voluntary registration rather than wait for trigger events (Legislation.gov.uk 2002). According to Telfer (2018), the government had registered over 85% of land in England and Wales by April 2018, with the target being complete registration by 2030.

The Principles of Land Registration

Land registration in England and Wales hinges on three fundamental principles, one of them being the mirror principle. Davys (2015, p.256) posits that the register should mirror intricate details regarding the land so that anyone with interest can pinpoint the actual owner by going through the registry. They include ownership details, nature of ownership, limitations and other parties who may be of interest to the property. The second is the curtain principle which states that land interests under trusts which have no potential to bind a purchaser should not be included in the register to provide space for more precise details. Sections 2 and 27 of the LPA 1925 provide that as long as an interested buyer can pay the purchase price of the said property to the trust corporation or trustees, the current beneficiaries lose their rights to the property (Legislation.gov.uk 1925). An existing rider indicates that if the buyer performs the transaction with only one of the trustees, beneficial interests remain attached. It derives the name from the fact that individual interests in the land ought to be behind a 'curtain' in the form of trust. The explanation is that an individual interested in purchasing registered land should be more concerned with the title details and not bound by existing beneficial interests. The statutory provision thus ensures that beneficial interests are kept behind a virtual curtain, giving freedom to the purchaser.

The third is the guarantee (also called insurance) principle which states that an individual acquiring registered land is entitled to depend on accurate details as they appear in the land register, therefore indemnified in the event of a loss due to the registry error (Davys 2015, p.256). Schedule 4 of the LRA 2002 delves into rectification of errors and removal of extra entries that have potential to affect the title's proprietorship (Legislation.gov.uk, 2002). It, in essence, exists to cushion landowners from loss of their property as a result of inaccuracies or unwarranted errors in the register. The Baxter versus Mannion case of 22nd February 2011, 1 WLR 1594 is a milestone case that set precedence on correction of registry errors (Ccpl.landecon.cam.ac.uk 2011). Mr. Thomas Francis Mannion bought a piece of land in 1996 and registered it in his name. For a period, Mr. Steven John Baxter kept horses on the said field; however, it was not continuous use as stipulated in Schedule 6 of the LRA 2002 (Legislation.gov.uk 2002). In August of 2005, Mr. Baxter, armed with a statutory declaration, applied for a possessory title to the land. After careful examination of the application, the Registry notified Mannion that if he so wished, he was to counter the claim at the Chief Land Registrar 65 working days from the date of the notice. Mannion's response however delayed until the elapse of the grace period. By the time he responded, his complaint was late, which meant that Baxter had been erroneously granted a possessory title to the land. The courts learned that Baxter had not sufficiently made use of the property for the requisite period to warrant adverse possession. While spelling out the verdict, Jacob LJ spelled out that from Schedule 4 of the LRA 2002, there existed no sufficient reason to limit correction of an error during documentation of the application. The Registry expunged Baxter's possessory details and granted ownership back to Mannion. The insurance principle, therefore, comes into play to ensure due compensation of such victim who is prone to losses as a result of registry errors.

Case Study: Property Number 5 Sunnybank Road

According to Davys (2015, p.258), the Land Registry should be made aware of any transfer of registered land through the relevant forms and payment of stipulated fees; otherwise, Section 27 of the LRA 2002 declares the transaction void. Mr. Costas, the owner of property number 5 Sunnybank Road, holds a deeds title, which in essence means the land is owned through unregistered conveyancing and not registered as he believes. Such a deal cannot successfully go through until Ms. Chang, through ABC Surveyors, apply for fresh registration under the new system. The first step is a search to ascertain that the property is indeed not registered. The search brings out ownership details as well as boundaries. The next step is making a Land Charges Department application to get information on the history of all previous owners since 1925. The request for first registration is through Form FR1, found at district registry offices in different parts of the country or downloaded from the registry website (https://www.gov.uk/government/publications/first-application-registration-fr1). Two copies of the list of documents form are then filled together with details of Stamp Duty Tax, subsisting lease and charges, land transaction tax and any existing title documents, then submitted physically or online (www.gov.uk 2018). Applicants should endeavor to visit the Land Registry website and calculate the registration fee before submitting their papers as the charge is dependent on the value of the property. Land Registry staff examine the details on the unregistered title to ascertain validity, after which a new record is created to reflect the registered ownership and a new title issued.

The Land Register

As part of the pre-contractual inquiry process, Ms. Chang has been given an Official Copy of the Register by Mr. Costas. The first section is the Property Register, which describes the piece of the land regarding class and the title number, date of registration and any rights it has. Essentially, all land in England and Wales is the Crown's, with individuals only holding interest (Davys 2015, p.43). However, the Law of Property Act 1925 S 1(1) duly recognizes two forms of land ownership for individual holders: freehold and leasehold (Legislation.gov.uk 1925). If the land is freehold as Mr. Costas informed Ms. Chang, it will show the type of title as Absolute, a guarantee that the title is devoid of attachments and liens, and has proof against ownership disputes (US Legal 2016). Freehold ownership means that there is an indefinite period to the individual holding the title, which mostly translates to bequeathing to another individual through a will of intestacy (Davys 2015, p.39-40). Theoretically, under common law, a freehold owner has rights to sell, bequeath, mortgage or lease the property (Land Registry Documents 2015). It is only other interests in the land that could bind such an owner for instance mortgage restrictions or restrictive covenants on the said property (Davys 2015, p.41). Such an individual holds an absolute title which exempts him or her from the obligation to pay annual ground fees. There, however, exist some limitations to freehold land ownership, for instance, a freeholder has no right to stop aircrafts flying over his property as much as space above is considered his. In the cases where the property borders on riparian land, the owner is under obligation to not obstruct, divert or pollute the watercourse. It also means accepting instances of flooding that may be occasioned by unwarranted downstream flow (Morris 2015). Legislation by the Town and Country Planning Act 1947 prohibits the owner from killing protected species of animals as well as observing building regulations during construction (Legislation.gov.uk 1947).

If the property were leasehold, the register would outline details of the parties involved and duration of the lease (Ramsay 2018). Leasehold ownership is an agreement where a landowner transfers the rights of possession or occupancy to a third party but retains ownership. In the lease agreement, the lessor (also called landlord) shifts ownership to the lessee (tenant) for some years with the deal that the lessee makes regular payments towards the same. The freeholder, who could be the government, an institution or individual, assumes ownership of the said property upon expiry of the lease period. This relationship between an original lessor and the original lessee is called Privity of Contract (University College of Estate Management 2016, p.3). Sections 11 to14 of the Landlord and Tenant Act 1985 pin the duty of repairs and upgrades as well as the supply of water and electricity on the property owner (Legislation.gov.uk, 1985). In the event of the death of one of the two parties during the lease period, the property is passed on to their representatives. In instances where the landlord is declared bankrupt and the property put under a trustee/liquidator, Chapter 5 of the Insolvency Act 1986 allows the new owner to cancel the rights earlier stipulated in the original Privity of Contract (Legislation.gov.uk 1986).

Depending on the terms of the lease, the tenant could have the right to sublease the property (with permission from the landlord) to a third party. The conditions for subleasing should always provide for a period at...