Registered and Unregistered Land Problem Question Structure

Posted by Catherine Robinson on October 15, 2021

8-min read

The steps to follow for problem questions on both registered and unregistered land can be tricky to grasp. The fact that there are so many sections from statutes involved (as well as all sorts of proprietary interests you've probably never heard of) makes this topic difficult.

This blog post takes you through the steps to follow when working out which interests in a problem question will be binding on a purchaser. Before setting out the steps, a brief overview of the distinction between registered and unregistered land is given along with a few definitions of key terms.

These notes have been adapted from my full Land Law Revision Notes.

How to Get a First in Law

Why is there both registered and unregistered land?

Prior to the Law of Property Act 1925, all land was unregistered. This posed several difficulties to buying and transferring ownership of property. In particular, a potential purchaser of property (tongue twister) had to fully investigate the property themselves and any rights that third parties may have over the property.

Nowadays, unregistered property must be registered when it is transferred between different owners. You can voluntarily register your previously unregistered land if you choose, but you must do it when transferring property that isn't yet registered. Given that these rules have been in place for a long time now, almost all property is registered (about 90%).

What is registration of land?

Registering your property means informing the Land Registry of whether your property is subject to a number of legal rights, e.g. mortgages, leases, easements, etc. The Land Registry’s register is comprised of three sections:

The property register (describes the land, e.g. whether the title is freehold or leasehold);
The charges register (sets out any third party rights over the land); and
The proprietorship register (states who owns the land).

What’s the difference between estates and interests?

An estate in land grants the owner possession of the land. There are two types:

Freehold – you own the property for an unlimited period of time; and
Leasehold – you own the property for a specific period of time.

By contrast, an interest typically gives a right over land that belongs to someone else. Interests may be either legal or equitable. Leases, mortgages and easements are all capable of being legal interests according to the LPA 1925. Other interests, such as beneficial interests under a trust of land, freehold covenants, matrimonial home rights, and estate contracts can only be equitable according to s 1(3) LPA 1925.

How to answer a registered and unregistered land problem question

In any given problem question scenario on registered and unregistered land, the first step is to identify whether the land is registered or not. Usually, this will just be stated.

Having worked out whether the land is registered, you can then follow this structure:

Identify the various interests that the different parties have in the land.
Consider whether the formalities to establish them have been complied with.
State the effect of the interest (whether or not it would bind the purchaser).

The rules are different for registered versus unregistered land, so I have set out the types of interests and formalities for registered and unregistered land separately below.

Registered Land

There are three types of interest:

registrable dispositions under s 27 LRA 2002,
interests entered against the register, and
interests that override a registered disposition.

Let’s consider each of these three in turn:

(1) Registrable dispositions under s 27 LRA 2002

These are found in s 27 LRA 2002. S 27 only protects legal estates and interests. Examples include:

s 27(2)(a) – a transfer
s 27(2)(b) – lease of 7+ years
s 27(2)(d) – legal easements
s 27(2)(f) – legal charges

If these interest are not registered, then they will not operate in law under s 27, per s 27(1), BUT may be protected as either of the other two types of interest that we will look at next.

FYI – it is better to register interests (s 27) than enter against register (notice – see interest (2) below) as registered interests have priority, per s 30.

(2) Interests entered against the register

These are protected by notice or restriction:

Notice

All interests can be entered against the register by notice, apart from the exclusions under s 33:

an interest under a trust of land (e.g. paid part of purchase price)
covenants between landlord and tenant
leases for less than 3 years

Restriction

A common example of a restriction is a trust of land where only one person’s name is on the title. See sections 40-47.

(3) Interests that override a registered disposition

Sch 1 LRA 2002 is used for first registration, while sch 3 is for subsequent registration (usually sch 3 will be the relevant one in exam questions). Once an interest is registered by notice on the register, it is no longer treated as an overriding interest, even if subsequently deleted, per s 29(3).

Three of the most important overriding interests are: (a) short leases between 3 and 7 years; (b) legal easements and profits – but only ones which are not created by express grant or reservation and therefore fall under s 27(2)(d); these are excluded; and (c) actual occupation.

Two requirements must be fulfilled in order to establish actual occupation:

(i) The person in actual occupation must have a proprietary interest, per National Provincial Bank v Ainsworth.

Examples of proprietary interests include:

an estate contract (Webb v Pollmount Ltd)
a right arising under estoppel (Paddington Building Society v Mendelsohn)
a right to have a transaction set aside arising due to undue influence (Thompson v Foy)
a beneficial interest arising out of a trust (City of London Building Society v Flegg).

Some rights are also excluded under statute, such as rights of occupation under the Family Law Act 1996, right under the Access to Neighbouring Land Act 1992 and an original tenant’s right to an overriding lease under the Landlord and Tenant (Covenants) Act 1995.

(ii) The proprietary interest must belong to a person in actual occupation.

What is actual occupation?

There are several useful cases in which the courts have considered what counts as actual occupation. When considering these cases in your answers to problem questions, it's worth going through a few that have similar facts to the facts in the problem question scenario. There isn’t exactly a ‘right’ or ‘wrong’ answer as to whether someone is in actual occupation or not, as the courts have the discretion to make this decision based on a range of contextual factors. Therefore, as long as your conclusion is well-justified with reference to the case law, you can’t go too far wrong.

As Bogusz (2014) points out, the courts’ consideration of the ‘intentions and wishes’ of the person (per Mummery J in Link Lending v Bustard) gives the court a measure of discretion when dealing with complex factual scenarios rather than a concrete legal test.

Here are a few key cases on determining what counts as actual occupation:

Williams and Glyn’s Bank v Boland – ‘actual occupation’ should be given its ordinary meaning (physical presence in the property).
Thompson v Foy – the occupier needs to be in the property up until registration (obiter).
Abbey National Building Society v Cann – a caretaker or representative will suffice, per Lord Oliver (obiter). However, it was also stated that moving furniture and laying of carpets does not show actual occupation as these acts merely prepare the house for your occupation.
Malory Enterprises v Cheshire Homes – the extent that physical presence is required depends on situation. Here, a property used for storage was fenced off and the use of fencing showed actual occupation.
Link Lending v Bustard – the personal circumstances of a person must be taken into account. Here, the occupier was sectioned under section 3 of the Mental Health Act 1983, meaning that could not continuously live at her house. However, she did regularly visit the house under supervision. The Court of Appeal found that she was in actual occupation.

How does the court treat absences when considering actual occupation?

Link Lending v Bustard (see above).
Hoggett v Hoggett – question is whether there a continuing intention to occupy.
Chhokar v Chhokar – where are the majority of the possessions?

Must actual occupation be discoverable?

The actual occupation must have been discoverable from a ‘reasonably careful inspection’, per LRA 2002 schedule 3 paragraph 2 (c) and Lewison J in Thompson v Foy.

Can overriding interests be overreached?

Overriding interests can be overreached so long as the money is paid to two trustees. Compare these two cases:

City of London Building Society v Flegg – there were two trustees and therefore overreaching applied.
Williams and Glyn’s Bank v Boland – there was one trustee so overreaching did not apply.

If the interest cannot be overreached, the purchaser will take property subject to the interest.

Unregistered land

As mentioned, there are two types of interest: legal estates and interests OR equitable estates and interests. If the interest is legal, it will be found under s 1(1) LPA or s 1(2) LPA and therefore binds the world. If it is equitable, it will not be found in s 1(1) LPA or s 1(2) LPA. There are three ways that these equitable interests can be binding:

(1) Is it registrable under s 2 LCA 1972?

If it is listed under s 2, must be registered against the name of the owner of property. Issues:

Oak Co-operative Building Society v Blackburn – registered against name ‘Frank’ rather than ‘Francis’; court held in favour of person who registered charge as they had an informal relationship and she knew him as ‘Frank’. You can contrast this case with Diligent Finance v Alleyne where a wife missed out her husband’s middle name and the court held that she should have included it due to their close relationship.
Standard Property Investments v British Plastic Federation – name on conveyance/title deed must be their actual name.
Horrill v Cooper – if the government is responsible for the mix up, the government has to pay for any losses.

Effect of registration: s 198(1) LPA

If the interest is registered, it is binding on the purchaser. If not, the purchaser takes the property free of the charge.

EXCEPTION for charges in classes C(iv) or D (i)-(iii) (classes found under s 2 LCA 1972): if purchaser does not buy the legal estate for money or money’s worth, they will be bound by unregistered charges in classes C(iv) or D (this exception is written in s 4(6) LCA 1972).

Money/money’s worth does not mean the market value of the property, it just means consideration, per Midland Bank v Green.

(2) Overreaching

If an interest is not registrable under the LCA 1972, it may be overreached. Overreaching is the process by which equitable rights that exist under a trust of land are removed from the land and transferred to the money.

Conditions for overreaching – s 27(2) LPA 1925:

there must be a purchase; and
the money must be paid to two or more trustees.

Overreaching will not apply for rights excluded from overreaching under s 2(3) LPA 1925, e.g. easements, restrictive covenants.

(3) Notice

If the interest is not registrable under s 2 LCA 1972 and it cannot be overreached, the final option to consider is whether the doctrine of notice applies.

A bona fide purchaser of the legal estate for value (doesn’t have to be money) without notice has an ‘absolute, unqualified and unanswerable defence’ against an equitable right, per James LJ in Pilcher v Rawlins.

What is notice?

There are three types:

actual;
constructive – either registered equitable interest OR would have been discoverable by the reasonable and prudent purchaser during the course of an inspection of property, per Vaughan Williams LJ in Hunt v Luck; and
imputed notice – a purchaser has notice of any matters which his agent has notice of, as in Kingsnorth Finance v Tizard, where the mortgagee was bound by the knowledge of the surveyor.

If you found this article helpful, you might also be interested in my Land Law revision notes. Click here to see a sample.

Disclaimer:

The information provided in this blog post is based on the research I carried out for my law degree which I completed in 2020. I accept no responsibility for errors or omissions. Legal principles and interpretations may change over time, and the content presented here may not reflect the most current developments in UK contract law. This information is intended for general informational purposes only and should not be considered as legal advice or relied upon as a substitute for professional legal counsel. For the most up-to-date and accurate legal information or advice, it is advisable to consult with a qualified legal professional who is knowledgeable about the latest legal developments and can provide guidance specific to your situation.