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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(8) (9 July 2001) URL: http://www.bailii.org/ew/other/EWLC/2001/271(8).html Cite as: [2001] EWLC 271(8) |
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PART VIII OVERRIDING INTERESTS
INTRODUCTION
8.1 We have explained that one of the principal objectives of the Bill is to create a faster and simpler conveyancing system, electronically based, under which it is possible to investigate title to the land almost entirely on-line with the bare minimum of additional enquiries.[1] A major obstacle to achieving that goal is the existence of a category of interests in registered land that are not on the register but which will, nonetheless, bind any person who acquires an interest in the land.[2] These unregistered interests have been known as overriding interests since the enactment of the Land Registration Act 1925.[3] To achieve the objective mentioned at the beginning of this paragraph, the Bill seeks to minimise the circumstances in which new overriding interests can arise and also to provide mechanisms to ensure that existing overriding interests are brought on to the register wherever possible.
8.2 In this Part therefore, we explain the provisions of the Bill relating to overriding interests. We begin with an analysis of the nature of overriding interests.[4] Secondly, we examine the estates, rights and interests which, under the Bill, take effect as overriding interests and in what circumstances.[5] Thirdly, we explain how, as a result of the provisions of the Bill, the circumstances in which a proprietary right can exist as an overriding interest will be significantly reduced.[6] As regards this third point, it may assist readers if we summarise at the outset the main techniques that we have adopted to achieve this goal. This will enable them to understand better the approach that we have adopted in relation to individual categories of overriding interest.
(1) Subject to transitional arrangements, certain overriding interests are not replicated but are dealt with in some other way under the Bill.
(2) The scope of certain existing classes of overriding interests is substantially narrowed for the future.
(3) Some overriding interests will lose their overriding status after a period of 10 years, but those who have the benefit of such interests will be entitled to protect them on the register or the register of cautions without charge during that period.
(4) The introduction of electronic conveyancing will of itself reduce the circumstances in which overriding interests can arise. This is because the Bill makes specific provision by which dispositions of registered land may be required to be made in electronic form and to be registered simultaneously.[7] The consequence of that provision when it is brought into force will be that any express transfer or creation of an interest in registered land to which it applies will have to be registered in the appropriate manner. For the future, this is likely to be the most effective way of limiting the numbers of such interests.
THE NATURE OF OVERRIDING INTERESTS
(1) on first registration, when the estate is vested in the first registered proprietor subject to overriding interests but free from most other interests not entered on the register;[8] and
(2) where a registrable disposition for valuable consideration is completed by registration, when the disponee takes subject to overriding interests but free from most other unregistered interests.[9]
These two situations are intrinsically different. In general, first registration has no dispositionary effect because the first registered proprietor will already have the legal title vested in him or her.[10] Whether or not the first registered proprietor is bound by an interest that can be an overriding interest on first registration will have been determined prior to that date.[11] By contrast, where there is a registrable disposition for valuable consideration, the registration of that disposition is dispositionary and vests the legal title in the disponee. An issue of priority therefore arises at the time of the disposition and whether or not the disponee is bound by an interest has to be determined then. This distinction has an effect in some cases on the substantive requirements for what amounts to an overriding interest. For example, the rights of persons in actual occupation constitute an overriding interest both under the present law[12] and under the Bill.[13] However, whether a disponee has made enquiries of a person in actual occupation is irrelevant on first registration because the issue of whether or not the first registered proprietor is bound by the rights of such an occupier will already have been decided.[14] By contrast it is material in relation to a registered disposition to decide whether registration vests the legal title in the disponee free of the rights of the occupier or not.[15] If the disponee has made appropriate enquiries prior to the disposition, the occupier is, in effect, estopped from asserting his or her interest.
(1) first registration;[16] and
(2) registered dispositions.[17]
8.5 Overriding interests are interests which are not registered or protected on the register. Accordingly, they fall to be treated as unregistered land, except where the Bill provides otherwise.[18] It follows that they must be conveyed or disposed of as unregistered land. It also means that, for example, a contract to sell such an overriding interest that was a legal estate would be registrable as a land charge under the provisions of the Land Charges Act 1972,[19] a provision which obviously has no application to dealings with a registered estate. It should be noted that an interest may be overriding in relation to more than one registered estate that subsists simultaneously in the same parcel of land.[20]
UNREGISTERED INTERESTS WHICH MAY BE OVERRIDING: INTRODUCTION
8.6 It is the fact that overriding interests do not appear on the register, yet bind any person who acquires any interest in registered land, that makes them such an unsatisfactory feature of the system of registered conveyancing.[21] The existence of such rights means that inquiries as to title cannot be confined to a search of the register. We devoted a substantial part of the Consultative Document to a discussion of overriding interests and how their impact might be reduced without causing any disadvantage to those who have the benefit of them.[22] Our conclusion was that interests should only have overriding status where protection against buyers was needed, but where it was neither reasonable to expect nor sensible to require any entry on the register.[23] We suggested a number of strategies to ensure that the only overriding interests were those which met these criteria.[24] As we have explained above,[25] the introduction of electronic conveyancing will, of itself, substantially reduce the circumstances in which those criteria are met. As might be anticipated, our proposals attracted a good deal of interest and the responses were lively. However, for the most part they were supported. Where this was not so, or where better solutions were proposed, those contrary or better views have been adopted. In view of the extensive discussion of the issues in the Consultative Document, it is only necessary in the present Report to explain the provisions of the Bill and the thinking behind them.
8.7 We explain the categories of unregistered interests which, under the Bill, will override-
(1) first registration;[26] and
(2) registered dispositions.[27]
UNREGISTERED INTERESTS WHICH OVERRIDE FIRST REGISTRATION
Introduction
8.8 In Part III of this Report,[28] we explained that, under the Bill, when a person is registered as first registered proprietor, he or she takes the estate subject to certain interests, including "interests the burden of which is entered on the register" and "interests the burden of which is not so entered, but which fall within any of the paragraphs of Schedule 1".[29] Schedule 1 lists fourteen such overriding interests. There is also a fifteenth, under Clause 90,[30] which takes effect as if it were included in Schedule 1. We explain each of the fifteen overriding interests in turn.
Short leases
8.9 Under the Bill, a leasehold estate granted for a term not exceeding seven years from the date of the grant, overrides first registration.[31] The principle that short leases (which under the present legislation means leases granted for 21 years or less) should take effect as overriding interests is presently embodied in section 70(1)(k) of the Land Registration Act 1925. Such leases are granted and assigned as unregistered interests in accordance with the principles of unregistered conveyancing. The policy behind this class of overriding interest has been to keep the register free of such leases because of their short duration and the risk that they would clutter the register. The introduction of electronic conveyancing will, however, make it possible to register shorter leases very easily and to ensure that they are removed on expiry. As we have explained,[32] it is likely that, once it is possible to grant and assign leases electronically, the Lord Chancellor may, in exercise of his powers, already described,[33] seek views on a further reduction of the period of seven years that will initially apply under the Bill.[34]
8.10 There are, however, three situations in which a lease cannot be an overriding interest even if it is granted for seven years or less.[35] In each case, the grant of such a lease is required to be completed by the registration of the estate with its own title.[36] They are as follows-
(1) a reversionary lease granted to take effect in possession more than three months after the date of the grant of the lease;
(2) a lease granted out of an unregistered legal estate under the right to buy provisions of Part V of the Housing Act 1985;[37] and
(3) a lease granted by a private sector landlord out of an unregistered legal estate to a person who was formerly a secure tenant and has a preserved right to buy.[38] Only the first of these exceptions involves any change in the present law: the second and third already exist.[39] The reason for the first exception is, as we have explained, because reversionary leases may be very difficult to discover.[40]
PPP Leases
8.11 PPP leases will arise out of the arrangements for the future running of the London underground railway. Under the Greater London Authority Act 1999, provision is made for London Regional Transport, Transport for London or any of their subsidiaries to enter into public-private partnership agreements -"PPP agreements" -with a third party, for "the provision, construction, renewal, or improvement... of a railway or proposed railway" and for its maintenance.[41] The railways in question are the London underground network. The Act contains provisions that are intended to prevent the disposal of "key system assets" -those assets that are needed to run the railways.[42] Both the circumstances in which, and the persons to whom, such assets can be transferred, are severely limited.[43] The intention is that, when any such PPP agreement terminates, the assets that are required to run the particular railway line will be available to the relevant public authority, so that rail services are not disrupted. The 1999 Act makes provision for the grant of PPP leases of any real property that may be comprised in a PPP agreement.[44] These leases will include underground railway lines, stations and other installations. The normal rules that apply to protect tenants, such as the security of tenure given to business leases under Part II of the Landlord and Tenant Act 1954, are all disapplied, thereby ensuring that the land can be recovered as soon as any PPP lease determines.[45] It is envisaged that such leases will be granted for a period of 30 years.
8.12 The 1999 Act makes specific provision as to land registration and PPP leases.[46] The effect of these provisions is that PPP leases-
(1) do not trigger first registration when granted;[47]
(2) are not registrable dispositions but take effect as if they were;[48]
(3) take effect as overriding interests; and
(4) are incapable of substantive registration.[49]
Our present concern is with (3). The 1999 Act adds a new class of overriding interest by inserting a new section 70(1)(kk) into the Land Registration Act 1925 in respect of PPP leases.[50]
8.13 The reason for the overriding status of PPP leases is as follows. Such leases will be "key system assets" and, as such, will only be transferable within very narrow limits.[51] They are not, therefore, likely to be the subject of regular dealings. In practice, therefore, the principal justification for registering them would be to enable their existence and extent to be ascertained by any person dealing with land under which such lines and installations existed. However, that justification is outweighed by other factors. At present, some parts of the London underground railway network are registered, but other parts are not.
(1) As regards those parts of the network that are unregistered, there would be serious practical difficulties in preparing the necessary maps for the purposes of registration.[52] The amount of work and the difficulties and disputes to which the process of registering such leases would be likely to give rise would be wholly out of proportion to the benefits to be conferred from so doing.
(2) Even where a section of the network has been registered as a freehold estate, there could be considerable difficulties in identifying those parts that were to be leased. The patterns of registration will not coincide with the leasing arrangements.
(3) It would not be practicable to register leases to the extent that the freehold title is registered. Leases will inevitably include a mix of land that is registered and unregistered. In the interests of uniformity, it is simplest that all leases should be treated in the same way and no entries made in respect of them in the register.
For these reasons, and with some reluctance on the part of the Law Commission, the Bill therefore preserves the overriding status of PPP leases.[53] It should, however, be stressed that such leases are of a wholly exceptional character. As will be apparent from what has been said above,[54] one of the principal aims of the Bill is to eliminate overriding interests as far as is possible. The creation of new categories of overriding interest is at variance with that aim and can only be justified in the most extreme cases.
Interests of persons in actual occupation
8.14 The Bill provides that, subject to one exception, an interest belonging to a person in actual occupation, so far as relating to land of which he or she is in actual occupation, overrides first registration.[55] The exception is an interest under a settlement under the Settled Land Act 1925.[56] A person is only to be regarded as in actual occupation of land for these purposes if he or she, or his or her agent or employee, is physically present there.[57] As we explain below, this provision necessarily differs in a number of respects from the equivalent paragraph that applies in relation to registered dispositions.[58]
8.15 The comparable provision of the Land Registration Act 1925, the notorious and much-litigated section 70(1)(g), provides that-the rights of every person in actual occupation of the land or in receipt of the rents and profits thereof, save where enquiry is made of such person and the rights are not disclosed are to take effect as overriding interests. In the Consultative Document, we acknowledged that "any proposal which we may make in relation to this paragraph will be controversial because it is a provision that has both strong supporters and equally vocal detractors".[59] In fact, most of the proposals that we made were supported on consultation. Only those recommendations that are relevant to the overriding status of occupiers' rights on first registration are discussed here. Those that apply exclusively to registered dispositions are explained in that context.[60]
8.16 First, we recommended the retention of the overriding status of occupiers' rights[61] and this was supported by all but one of those who responded to the proposal.[62] As we have explained above,[63] this is duly reflected in the Bill. The thinking behind our recommendation was set out in the Consultative Document,[64] but as it was primarily concerned with interests that override registered dispositions rather than first registration, we explain it in that context.[65] However, even in relation to first registration, there is a case for protecting the rights of those who are in actual occupation. Such persons will often not have appreciated the need to take further steps to protect their rights against buyers by lodging a caution against first registration. This is particularly so in relation to informally created rights.[66]
8.17 Secondly, we recommended that, where there was a settlement for the purposes of the Settled Land Act 1925, the rights of a beneficiary who was in actual occupation should be capable of being an overriding interest[67] and not, as now, merely a minor interest.[68] This was the one recommendation that we made in relation to this paragraph that was not supported on consultation. Very few readers responded to the point, but of those who did, a majority opposed the proposal. As a result of the Trusts of Land and Appointment of Trustees Act 1996, it ceased to be possible to create new settlements under the Settled Land Act 1925 after 1996.[69] This is, therefore, an issue of rapidly diminishing importance. Settlements of registered land that were expressly created before 1997 should have been protected by the entry of the prescribed restrictions on the register.[70] It is, therefore, unlikely that any substantial hardship will be caused by the abandonment of this recommendation. Accordingly, the Bill retains the present exception by which a beneficiary under a settlement cannot protect his or her interest by virtue of his or her actual occupation of the settled land.[71]
8.18 Thirdly, we recommended the removal of overriding status for the rights of persons who were not in actual occupation but were in receipt of the rents and profits of the land.[72] This proposal was, as we anticipated, somewhat contentious, but was still supported by a substantial majority of those who responded to the point on consultation. It is duly reflected in the Bill, which confines the protection of this class of overriding interest to those in actual occupation.[73] It should be noted that the first registration of a leasehold estate in circumstances where the superior titles are not themselves registered and were not deduced to the registrar on that first registration, will be reflected in the class of title which the registrar gives to that leasehold estate.[74] Usually, the lease will be registered with good leasehold title.[75] This means that, in any subsequent dealings with that leasehold estate, any disponee will necessarily be alerted to the fact that there are one or more superior titles that are not registered.
8.19 Fourthly, we recommended that "where someone is in actual occupation of part of the land but they have rights over the whole of the land purchased, their rights protected by actual occupation should be confined to the part which they occupy".[76] This recommendation was accepted by all those who commented on it, with no objectors and, once again, it is reflected in the Bill.[77] We have more to say about this limitation on the rights of occupiers. However, as it arises in the context of overriding interests and registered dispositions, it is addressed there.[78]
8.20 There are three points about the provision in the Bill[79] that require explanation. First, it enables a person in actual occupation to protect an "interest" which that person had at the time of first registration. We explain elsewhere in this Report what constitutes an "interest" for these purposes.[80]
8.21 Secondly, the provision in the Bill does not replicate the words "save where enquiry is made of such person and the rights are not disclosed" that are found in section 70(1)(g) of the Land Registration Act 1925. This is because such words can have no relevance to overriding interests on first registration. As we have explained above,[81] the process of first registration normally has no effect on the priority of an overriding interest as against the first registered proprietor. There is, therefore, no occasion on which any inquiry of the occupier could be made and no issue of priority to which such an inquiry would be relevant.[82] For the same reason, there is no requirement that the person's occupation should be obvious on a reasonable inspection of the land, as there is under the Bill in relation to the rights of occupiers in relation to registered dispositions. [83]
8.22 Thirdly, the Bill provides some guidance as to the meaning of "actual occupation".[84] A person is only to be regarded as being in actual occupation of land if he or she, or his or her agent or employee, is physically present there. This reflects the way in which the concept of "actual occupation" under section 70(1)(g) of the Land Registration Act 1925 has been judicially interpreted. The requirement of physical presence means that a mere legal entitlement to occupy will not suffice.[85] Thus, a person who has merely contracted to take a lease or licence of a property, but has not yet entered into possession of it, will not be in actual occupation. Obviously, as under the present law, what constitutes physical presence will depend upon "the nature and state of the property in question".[86] Actual occupation does not require residence,[87] and the nature of the property may indeed be such that residence is impossible.[88] In the absence of residence, a person having an interest in the property may establish physical presence by his or her user of the premises.[89] The Bill confirms the view that the physical presence can be that of an agent or employee rather than of the person having the interest.[90]
Legal easements and profits à prendre
8.23 Under the Bill, a legal easement or profit à prendre may override first registration.[91] The provisions that presently govern the overriding status of easements and profits à prendre are found in section 70(1)(a) of the Land Registration Act 1925 and rule 258 of the Land Registration Rules 1925. In the Consultative Document, we described these provisions as being "amongst the most unsatisfactory" in the legislation that governs land registration.[92] We therefore made a substantial number of recommendations that were intended to limit the circumstances in which easements and profits à prendre could be overriding interests.[93] These were supported by a substantial majority of those who responded to them on consultation.
8.24 One of these recommendations is relevant to the overriding status of such rights on first registration, namely that it should no longer be possible for equitable easements to take effect as overriding interests.[94] Under the present law, equitable easements that are openly exercised and enjoyed by the dominant owner as appurtenant to his or her land can take effect as overriding interests.[95] That will not be so under the Bill. We explained in the Consultative Document[96] that-
(1) equitable easements[97] over unregistered land should be protected by registering them as Class D(iii) land charges under the Land Charges Act 1972;[98]
(2) if they are not so protected, they are not binding on a purchaser of a legal estate in the servient land for money or money's worth;[99] and
(3) the position of such easements should not be improved on first registration by elevating their status to overriding interests that would bind any person who thereafter acquired the registered estate (as would appear to be the case under the present law).
8.25 Although legal easements and profits à prendre can take effect as overriding interests on first registration, it is hoped that in future few will. As we explain more fully below,[100] the Bill contains rule-making powers to ensure that, so far as possible, overriding interests are disclosed to the registrar on first registration so that they can be entered on the register.[101] The Bill also contains provisions that substantially restrict the circumstances in which unregistered easements and profits à prendre can override registered dispositions. These are explained below. [102]
Customary and public rights
8.26 Both customary and public rights are to remain overriding interests under the Bill.[103] They are presently overriding interests by virtue of section 70(1)(a) of the Land Registration Act 1925. We recommended their retention in the Consultative Document[104] and our proposals were unanimously supported on consultation. Such rights are comparatively common and, when they come to light on an application for first registration, they will continue to be noted on the register as they are now.
8.27 In relation to customary rights, we explained that the term had two meanings, namely-
(1) rights which had their origins in tenure and which were abolished as part of the 1925 property reforms; and
(2) rights which were enjoyed by all or some of inhabitants of a particular locality, many of which still survive.[105]
The term "customary rights" in the Bill necessarily refers to the latter.
8.28 In the Consultative Document,[106] we noted that in Overseas Investment Services Ltd v Simcobuild Construction Ltd,[107] the Court of Appeal had accepted that, for the purposes of section 70(1)(a) of the Land Registration Act 1925, public rights were-
(1) those which were "exercisable by anyone, whether he owns land or not, merely by virtue of the general law";[108] and
(2) rights presently exercisable but not ones that might become exercisable in future.[109]
Although in the Consultative Document we proposed that the term "public rights" should be defined in the terms set out above, we have, on reflection, decided that it is unnecessary. The term is to have the meaning which the courts have now given it.[110]
Local land charges
8.29 A local land charge overrides first registration.[111] This replicates the effect of section 70(1)(i) of the Land Registration Act 1925 and implements proposals made in the Consultative Document.[112] The effect of local land charges is governed by the Local Land Charges Act 1975.[113] This Act makes provision-
(1) for the registration of local land charges by local authorities;[114]
(2) for local land charges to be binding even if not so registered;[115] and
(3) for compensation for any loss suffered by a person as a consequence of such non-registration.[116]
In other words, local land charges operate under a regime that is quite distinct from the system of land registration. The overriding status of local land charges recognises that they are governed by a parallel regime. It should be noted, however, that local land charge searches are being computerised, along with other local searches.[117] This development is taking place in tandem with the system of electronic conveyancing by which land can be transferred and rights in land created electronically.[118]
8.30 For reasons that we have explained in Part VII of this Report,[119] under the Bill,[120] as under the present law,[121] a local land charge that secures the payment of money cannot be realised unless it is registered as a registered charge.
Mines and minerals
Rights to coal
8.32 The Bill provides that an interest in any coal or coal mine, the rights attached to any such interest and certain other rights in relation to coal[122] all take effect as overriding interests on first registration.[123] As we explained in the Consultative Document,[124] the present provision -section 70(1)(m) of the Land Registration Act 1925 -was inserted by the Coal Industry Act 1994. The overriding status of rights in coal had previously been laid down in a series of statutes on the coal industry.[125] The reason for the overriding status was that it was, in practice, impossible for such rights to or in coal to be registered, given both their extent and complexity.[126] It would, for example, be virtually impossible to prepare the maps that would be required for registration and the cost of so doing would be out of proportion to any possible benefits that might be obtained. In the Consultative Document we recommended the retention of this category of overriding interest[127] and this was unanimously supported by those who responded to the point on consultation. In practice, in present or former coal mining areas, a coal mining search will commonly be made of the Coal Authority using a standard search form.[128] That is likely to provide detailed information about coal mining activities on the land, whether past, present or proposed. It is anticipated that it will be possible to conduct such searches on-line through the National Land Information Service.
Certain mineral rights where the title was registered before 1926
8.33 The reason for the overriding status of certain mineral rights in relation to land where the title was registered prior to 1926 lies in the provisions of the legislation then governing land registration.[129] We explained in the Consultative Document that-
(1) where land was registered before 1898, all mineral rights created before that date take effect as overriding interests because the existence of such rights was not usually recorded on the register; and
(2) where land was registered after 1897 but before 1926, any mineral rights created before the land was registered take effect as overriding interests for the same reason.[130]
Unfortunately, it is impossible to identify those titles to land that were registered prior to 1926. There is, therefore, little option but to retain the overriding status of such rights and we so recommended in the Consultative Document.[131] This proposal was supported by almost all of those who responded to the issue on consultation.
8.34 The Bill provides accordingly that-
(1) in the case of land the title to which was registered before 1898, the rights to mines and minerals (and incidental rights) created before 1898; and
(2) in the case of land the title to which was registered between 1898 and 1925 inclusive, rights to mines and minerals (and incidental rights) created before the date of registration of title;
take effect as overriding interests on first registration.[132]
Miscellaneous
Introduction
(1) they are of ancient origin;
(2) they are of an unusual character that a buyer would not normally expect to encounter;
(3) they can be very difficult to discover; and
(4) they may be exceptionally onerous.
8.36 The rights in question are-
(1) franchises;
(2) manorial rights;
(3) crown rents;
(4) certain rights in relation to embankments and sea walls; and
(5) what are commonly called "corn rents".[133]
8.37 Of these rights, (1) and (2) are the most commonly found and can be of considerable value for those who have the benefit of them. As regards the remainder, such rights do still exist but are rare or, in some cases, exceptionally rare. Because all of these five categories of rights still exist and are enforced, their overriding status cannot be abolished at once. In the Consultative Document we concluded that there was some risk -though perhaps not a very great one -that to do so might contravene the European Convention on Human Rights.[134]
8.38 As we explain more fully below, the retention of the overriding status of a number of these miscellaneous rights was the subject of adverse comment by a significant minority of those who responded to the relevant part of the Consultative Document.[135] In the light of these comments, we have concluded that they should be protected either on the register of cautions (where the land affected is not presently registered) or on the register of title (where the land is registered). Any intending buyer will be then made aware of them, and can decide whether to buy the land and if so, at what price. However, it is necessary to strike a fair balance between (i) the interests of buyers, and (ii) the interests of the persons having the benefit of such rights who have not had to take any steps to protect them hitherto. Therefore, as we explain below, the Bill makes provision by which-
(1) these rights will cease to have overriding status 10 years after the provisions of the Bill on overriding interests are brought into force; but
(2) those who have the benefit of such rights will be able to protect them-
(a) where the title to the land affected is not yet registered, by the entry of a caution against first registration; and
(b) where the title affected is registered, by an entry in the register; without charge during that 10-year period.[136]
(1) Although immediately prior to first registration the legal owner will be bound by such rights because each of them is a legal estate,[137] he or she will hold the estate free of such rights on first registration.[138]
(2) In that case the person having the benefit of the right will be able to seek rectification of the register against the first registered proprietor because the omission from the register is a mistake.[139] However, it may not be possible to obtain rectification of the register if the first registered proprietor is a proprietor who is in possession, because of the special protection given by the Bill to such persons.[140]
(3) If rectification is not sought, the right will be at risk as against any person who subsequently acquires the registered estate from the first registered proprietor because-
(a) where that disponee acquired the estate for valuable consideration, he or she will take it free of the unregistered right;[141] and
(b) where that disponee acquired the estate as a donee, it may not be possible for the person having the right to obtain rectification of the register if the disponee is a proprietor who is in possession, as explained in (2).
Franchises and manorial rights
8.40 The Bill provides that franchises and manorial rights can be overriding interests,[142] as indeed they are under section 70(1)(j) of the Land Registration Act 1925. In the Consultative Document, we recommended the retention of this category of overriding interests and this was supported by most of those who responded. However, we consider that it is reasonable that such rights should be protected on (and therefore apparent from) the register[143] for the following reasons-(1) Those who enjoy such rights tend to know that they have them. (2) Such rights can be very valuable and must therefore detract from the value of the land which is subject to them. (3) Many manorial rights are of a kind that could have been the subject of an express grant, such as a right to fish, shoot or take minerals. It is not apparent to us why their manorial origin should give them a special status when it comes to the issue of whether or not they should be registered. (4) Similarly, as we explain below,[144] franchises originate in a royal grant, actual or presumed. There is no reason why such rights should not be registered. For these reasons, we have concluded that the overriding status of franchises and manorial rights should be phased out over a period of 10 years.[145]
8.41 As regards manorial rights, we explained in the Consultative Document that-
(1) the meaning of "manorial rights" was a precise one: the rights in question were listed in some detail in paragraphs 5 and 6 of Schedule 12 of the Law of Property Act 1922,[146] provisions that have since been repealed;[147]
(2) such rights could no longer be created after 1925;[148] and
(3) on first registration, the existence of such rights is normally apparent from the deeds so that the burden of them is noted on the register in most cases.[149]
8.42 Franchises arise by royal grant (actual or, in cases of prescription, presumed).[150] Indeed it would still be open to the Crown to grant new franchises.[151] Under the Bill, it will be possible for a franchise holder to apply for the voluntary registration of the franchise with its own title.[152] The grant or reservation by the Crown of a new franchise out of unregistered land is not, however, to be a trigger for compulsory registration.[153] Many existing franchises are of ancient origin. They are analogous to customary rights and some -particularly franchises of market -are of some economic importance. So far as we are aware, the overriding status of franchises has not been a cause of particular difficulty. However, given the potential value of such rights, we consider that they should be protected on the register, whether by registering them with their own titles[154] or by the entry of a notice on the register of the title affected.[155]
Crown rents
8.43 At present "crown rents" take effect as overriding interests under section 70(1)(b) of the Land Registration Act 1925. In the Consultative Document, we explained that we had had some difficulty in ascertaining precisely what Crown rents might be. We concluded that they were-probably the rents payable on land held in ancient demesne, that is, land of the manor that belonged to the Crown at the time of the Norman Conquest and which was then granted by the Crown to a subject in return for the payment of a rent.[156] On the evidence then available to us, we considered that such rights had probably been obsolete for many years and that their overriding status should, therefore, be abolished.[157] Although this recommendation was supported by almost all of those who responded to the point on consultation, we received further evidence from the Crown Estate which has prompted us to reconsider the position. This may be summarised as follows.
(1) A "crown rent" might refer to-
(a) the rent payable to the Crown for freehold land in a manor of ancient demesne; or
(b) the rent reserved to the Crown under the grant of a freehold estate, whether or not that estate was situated in a manor of ancient demesne.
(2) As regards (b), there were many examples of such rents in conveyances of the foreshore made by the Board of Trade up to 1949.
(3) Even though the significance of such rents in monetary terms might not be substantial, the Crown could not say that they were obsolete, particularly as, in some cases, the Crown had sold on and was no longer the recipient of the rents.[158]
8.44 In the light of this, and with considerable reluctance, we have decided that crown rents should retain their overriding status for 10 years. The Bill therefore provides that a right to rent which was reserved to the Crown on the granting of any freehold estate (whether or not the right is still vested in the Crown), overrides first registration.[159]
Certain rights in respect of embankments and sea and river walls
8.45 Under section 70(1)(d) of the Land Registration Act 1925, liability in respect of embankments and sea and river walls is an overriding interest. In the Consultative Document, we explained the nature of this rather esoteric form of liability.[160] It is a liability falling on a person whose property fronts on the sea or a river that has arisen by prescription, grant, a covenant supported by a rentcharge, custom or tenure. We were satisfied that such liability still existed and we recommended that it should remain an overriding interest. That view was supported by most of those who responded and the Bill preserves the overriding status of a non-statutory right in respect of an embankment or sea or river wall.[161] However, once again, that overriding status will cease after 10 years.[162]
A right to payment in lieu of tithe
...payments in lieu of tithe, and charges or annuities payable for the redemption of tithe rentcharges.
We explained in the Consultative Document[163] that-
(1) there is in fact only one surviving class of right that now falls within this rubric, namely payments that are commonly called "corn rents";
(2) not all "corn rents" are within this class of overriding interest: it is only where there is a liability to make payments by any Act of Parliament other than one of the Tithe Acts, out of or charged upon any land in commutation of tithes;[164]
(3) the principal beneficiary of corn rents are the Church Commissioners, who no longer collect them because it is uneconomic to do so; and
(4) corn rents are payable to persons other than the Church Commissioners and although the sums involved are normally negligible, we discovered one case where the sums were substantial.
In the light of this we recommended the retention of liability to pay corn rent (in the sense explained in (2) above) as an overriding interest. Our recommendation was supported, but there was dissent and a strong view expressed for the abolition or phasing out of this class of overriding interest. In the light of this, "a right to payment in lieu of tithe" remains an overriding interest under the Bill,[165] but it joins the list of those that are to lose their overriding status after 10 years after the Bill is brought into force.[166]
UNREGISTERED INTERESTS WHICH OVERRIDE REGISTERED DISPOSITIONS
Introduction
8.47 As we explained in Part V of this Report, under Clauses 29 and 30, a registered disposition for valuable consideration of a registered estate or a registered charge takes subject to those overriding interests affecting the estate or charge that are listed in Schedule 3.[167] These overriding interests are, therefore, relevant to priority, because any disponee of registered land will take subject to them.
Categories of overriding interest that are the same as those that apply on first registration
8.48 As with unregistered interests which override first registration, there are 15 unregistered interests which override registered dispositions, all but one of which are listed in Schedule 3.[168] Of these 15, 12 are identical to those which override first registration, and nothing more need be said of them-
(1) a PPP lease;[169]
(2) a customary right;[170]
(3) a public right;[171]
(4) a local land charge;[172]
(5) certain rights to coal;[173]
(6) where title to land was registered before 1898, rights to mines and minerals created before 1898;[174]
(7) where title to land was registered between 1898 and 1925, rights to mines and minerals created before registration;[175]
(8) a franchise;[176]
(9) a manorial right;[177]
(10) a crown rent;[178]
(11) a non-statutory right in respect of an embankment or a river or sea wall;[179] and
(12) a corn rent.[180]
Of these, those mentioned in (8) -(12) are to lose their overriding status after 10 years.[181] This is explained more fully below. [182]
Categories of overriding interest that differ from those that apply on first registration
(1) short leases;
(2) interests of persons in actual occupation; and
(3) easements and profits à prendre.
We explain each of these in turn.
Short leases
8.50 Under the Bill, a leasehold estate granted for a term not exceeding seven years from the date of the grant, overrides a registered disposition,[183] just as it overrides first registration.[184] To this general principle there are eight exceptions. The first three are identical to those that apply in relation to first registration and have already been explained.[185] These are-
(1) a reversionary lease granted out of unregistered land to take effect in possession more than three months after the date of the grant of the lease;
(2) a lease granted out of an unregistered legal estate under the right to buy provisions of Part V of the Housing Act 1985; and
(3) a lease granted by a private sector landlord out of an unregistered legal estate to a person who was formerly a secure tenant and has a preserved right to buy.[186]
In these three cases, a lease granted out of an unregistered legal estate for a term of seven years or less is a disposition that is subject to the requirement of compulsory registration.[187] It is not, therefore, an overriding interest.
8.51 The five remaining exceptions[188] apply in respect of a lease granted by a proprietor of a registered estate or charge where that grant constituted a registrable disposition that was required to be completed by registration. Some leases which are granted out of a registered estate for a term of seven years or less are registrable dispositions and are not therefore overriding. These are-
(1) a reversionary lease granted to take effect in possession more than three months after the date of the grant of the lease;[189]
(2) a lease under which the right to possession is discontinuous;[190]
(3) a lease granted in pursuance of the right to buy provisions of Part V of the Housing Act 1985;[191]
(4) a lease granted by a private sector landlord to a person who was formerly a secure tenant and has a preserved right to buy;[192] and
(5) a lease of a franchise or a manor.[193]
8.52 The Bill contains straightforward transitional arrangements for leases that were granted for a term of more than 7 but not more than 21 years. They remain overriding interests.[194] Those who hold under such leases will not, therefore, be prejudiced by the reduction in the length of leases that do not require legislation. However, any assignment of such leases will trigger compulsory registration if the term has more than 7 years to run at the time of assignment.[195]
Interests of persons in actual occupation Introduction
8.53 As we have explained,[196] we recommended in the Consultative Document that the rights of persons in actual occupation should remain as a category of overriding interest. Our reasoning was as follows-
...it is unreasonable to expect all encumbrancers to register their rights, particularly where those rights arise informally, under (say) a constructive trust or by estoppel. The law pragmatically recognises that some rights can be created informally, and to require their registration would defeat the sound policy that underlies their recognition. Furthermore, when people occupy land they are often unlikely to appreciate the need to take the formal step of registering any rights that they have in it. They will probably regard their occupation as the only necessary protection. The retention of this category of overriding interest is justified... because this is a very clear case where protection against purchasers is needed but where it is "not reasonable to expect or not sensible to require any entry on the register".[197]
By contrast, it is in principle reasonable to expect that expressly created rights which are substantively registrable should be registered, and these should no longer enjoy the protection of this category of overriding interests. Although this goal will not be achieved at once, the introduction of electronic conveyancing will in time bring it about, because registration will become a necessary adjunct of the express creation of many rights.[198]
The general principle
8.54 An interest belonging at the time of the registered disposition to a person in actual occupation is an overriding interest, so far as it relates to land of which he or she is in actual occupation.[199] For these purposes, a person is to be regarded as in actual occupation of land if he or she, or his or her agent or employee, is physically present there.[200] As we have explained, this does no more than restate the present law.[201] To this general principle, there is one qualification and there are also four exceptions.
Qualification: Protection is restricted to the land in actual occupation
8.55 It will be noted that actual occupation only protects a person's interest so far as it relates to land of which he or she is in actual occupation. We have already explained that this limitation was one that was proposed in the Consultative Document and was supported by all those who responded to the point.[202] A person's actual occupation will not therefore protect his or her proprietary rights except in relation to the land that he or she actually occupies. So far as he or she has rights over other registered land, those rights will not be protected in the absence of an appropriate entry on the register.
8.56 At the time when we made the recommendation in the Consultative Document, it did no more than reflect the way in which section 70(1)(g) of the Land Registration Act 1925 had been interpreted by the Court of Appeal in Ashburn Anstalt v Arnold.[203] However, after the Consultative Document had been published, the Court of Appeal reconsidered the matter in Ferrishurst Ltd v Wallcite Ltd,[204] but without reference to the Consultative Document.[205] The Court declined to follow its earlier decision. In that case, Ferrishurst was in actual occupation of part of a registered leasehold title as an underlessee. It had an option to purchase the whole of the immediate leasehold title, but had not protected that option by a notice or caution on the register. It was held that this option was binding on a buyer of the leasehold title in respect of the whole title and not merely that part which Ferrishurst occupied.
8.57 This leads to a strange result. Under an ancient common law rule, a person in possession of unregistered land can protect some of his or her rights by virtue of that possession against a buyer.[206] This protection does not extend to rights which are registrable under the Land Charges Act 1972 but have not been so registered.[207] Nor has it ever been extended to protect any rights that the person might have over other land which was also acquired by a buyer. The effect of the Ferrishurst decision is that, in relation to land with registered title, "the burden on a purchaser to make inquiries is now heavier than before",[208] and considerably heavier than it is in relation to unregistered land. First, a person who is acquiring registered land other than with vacant possession (whether as purchaser or registered chargee) must ascertain who is in actual occupation of any part of the land that he or she is purchasing. Secondly, that buyer or chargee must then make inquiries as to the extent of the occupier's rights, in relation not only to the land occupied but also to the entirety of the title to be acquired or charged. Where there is (say) a series of leases or underleases, such inquiries may be complex and onerous. If the disponee fails to make what a court may subsequently consider to be adequate inquiries, he or she may be held bound by some undiscovered right.[209]
8.58 The decision in the Ferrishurst case runs counter to two of the principal objectives of the present Bill. The first is the creation of a faster and simpler electronically based conveyancing system, where title can be investigated almost entirely online with only the minimum of additional enquiries.[210] The second objective is to lay to rest the notion, on which the decision in Ferrishurst is premised,[211] that it is somehow unreasonable to expect those who have rights over registered land to register them.[212] Protection of rights by registration is not difficult to accomplish. The move to electronic conveyancing will make it still easier and, indeed, as we explain elsewhere, it will in time become impossible to create or transfer many interests in registered land without simultaneously registering them.[213] The Bill therefore reverses the Ferrishurst decision and does so in furtherance of these two objectives.[214]
Exception 1: No protection for settled land
8.59 The first exception to the general proposition stated in paragraph 8.54 is the same as that which applies on first registration, namely where the person has an interest under a settlement under the Settled Land Act 1925.[215] This involves no change in the law and has already been explained.[216]
Exception 2: Rights not disclosed on reasonable inquiry
8.60 The second exception is a reformulation of one that presently applies.[217] An interest of a person of whom inquiry was made before the disposition and who failed to disclose the right when he or she could reasonably have been expected to do so will not be protected under the general principle stated above in paragraph 8.54.[218] This exception operates in effect as a form of estoppel. Our proposal to retain this exception in the Consultative Document[219] was supported by all of those who responded to the point. We have explained above that this exception cannot apply on first registration but only where there is a registered disposition.[220] It is only where there is a registered disposition that any issue of priority arises and where there is any occasion to make inquiry.
Exception 3: Rights of persons whose occupation is not apparent
8.61 The third exception is new and it derives from a recommendation in the Consultative Document.[221] An interest-
(1) which belongs to a person whose occupation would not have been obvious on a reasonably careful inspection of the land at the time of the disposition; and
(2) of which the person to whom the disposition is made does not have actual knowledge at that time;
will not be protected as an overriding interest under the general principle stated above in paragraph 8.54.
8.62 There are a number points to note about the exception in paragraph 8.61(1). It has obvious similarities with the rule of conveyancing law that a seller of land must disclose to an intending buyer prior to contract all latent defects in title (those that are not apparent on a reasonable inspection of the land) and which are not known to the buyer.[222] Three points should be noted about this exception-
(1) For the purposes of the Bill, it is not the interest that has to be apparent (as is the case in relation to contracts for the sale of land), but the occupation of the person having the interest.[223]
(2) The test is not one of constructive notice of the occupation. It is the less demanding one (derived from the test applicable to intending buyers of land) that it should be obvious on a reasonably careful inspection of the land.[224]
(3) Even if a person's occupation is not apparent, the exception does not apply where a buyer has actual knowledge of that occupation.
The object of this exception is, therefore, to protect buyers and other registered disponees for valuable consideration in cases where the fact of occupation is neither subjectively known to them nor readily ascertainable. Once an intending buyer becomes aware of the occupation, he or she should make inquiry of the occupier because of the second exception mentioned above.[225] All of those who responded to the proposal in the Consultative Document that a person's actual occupation should be apparent supported it.[226]
Exception 4: Leases granted to take effect in possession more than three months after grant
8.63 The fourth exception is where a leasehold estate is granted to take effect in possession more than three months from the date of the grant and has not taken effect in possession at the time of the disposition. This exception is a necessary corollary of the provisions of the Bill that require the registration of reversionary leases that are to take effect in possession more than three months after their grant.[227] Such leases cannot be overriding interests under the provisions on short leases explained above.[228] This fourth exception will not often occur. It would only be relevant where-
(1) a reversionary lease had been granted to take effect in possession more than three months after the date of the grant but had not been registered; and
(2) the grantee was in actual occupation of the land to which the lease would relate, but at a time when the lease has necessarily not taken effect in possession.[229]
In those circumstances, the reversionary lease would not be binding on any person who acquired an interest in the land for valuable consideration under a registered disposition.
Transitional provisions
8.64 We have explained above, at paragraph 8.18, that the protection that is presently enjoyed by those who are not in actual occupation of land but are in receipt of the rents and profits of the land is not retained under the Bill. As will be apparent from the statement of the general proposition in paragraph 8.54, that change will apply as much where there is a registered disposition as it will on first registration. The Bill provides that an interest which, immediately before the coming into force of the Bill, was an overriding interest under section 70(1)(g) of the Land Registration Act 1925 by virtue of a person's receipt of rents and profits, continues to be so for the purposes of Schedule 3.[230] However, that interest will cease to be overriding for these purposes, if at any time thereafter the person having the interest ceases to be in receipt of the rents and profits.[231] If, for example, X holds the residue of an unregistered 99-year lease and, before the Bill came into force granted an underlease to Y, X would continue to have an overriding interest for the purposes of the Bill. If, however, Y's underlease determined and X then granted a new underlease to Z, X would at that point cease to have an overriding interest.
Legal easements and profits à prendre The problem
8.65 Some of the most far-reaching changes made by the Bill to the scope of overriding interests are in relation to easements and profits à prendre.[232] The concerns that we have attempted to address are as follows-
(1) It is in principle wrong that easements and profits that are expressly granted or reserved should take effect as overriding interests as at present they may.[233] Such a grant or reservation constitutes a registrable disposition and should therefore be completed by registration.[234]
(2) It is almost impossible to prove that an easement or profit once acquired has been abandoned. Mere non-user, even for many years, will not amount to abandonment.[235] Indeed this is part of a wider problem. Unless registered, it is often very difficult to discover the existence of easements and profits, particularly those that are either not used at all or only occasionally.[236]
As regards (2), a purchaser of registered land may be seriously disadvantaged given the wide range of easements and profits that can be overriding under the present law. [237]
8.66 Although each of those concerns was expressed in the Consultative Document, our ideas as to how to address them have developed considerably since its publication and the Bill reflects this development. The Bill limits the circumstances in which an easement or profit can be an overriding interest more than did our proposals in the Consultative Document.[238] Although, as we have explained, we have decided at this stage not to take forward the recommendations in the Consultative Document on prescription,[239] the Bill has been influenced by some of our thinking in the Consultative Document on prescription.[240] The policy that we have adopted reflects one of the principal aims of the Bill, already mentioned, which is to ensure that it is possible to investigate title to the land almost entirely on-line with the minimum of additional enquiries.[241]
Only legal easements and profits may be overriding interests
8.67 As regards the first of the concerns explained in paragraph 8.65, the Bill provides that only a legal easement or profit à prendre can be overriding in relation to a registered disposition.[242] Any easement or profit that is expressly granted or reserved out of registered land will be a registrable disposition.[243] It will not take effect at law until it is registered.[244] It follows that it can never be an overriding interest under Schedule 3. As a result of this provision-
(1) no easements or profits that are expressly created after the Bill is brought into force will be able to take effect as overriding interests;
(2) no equitable easements or profits, however created, will be capable of overriding a registered disposition;
(3) the only legal easements and profits that will be capable of being overriding interests are-
(a) those already in existence at the time when the Bill is brought into force that have not been registered;[245]
(b) those arising by prescription; and
(c) those arising by implied grant or reservation.[246]
Legal easements and profits that are not easily discoverable should not be overriding interests
8.68 However, to meet the second concern set out in paragraph 8.65, the Bill goes further by excluding certain categories of legal easements and profits from those that can be overriding. Under the Bill, the following legal easements and profits cannot be overriding interests unless they have either been registered under the Commons Registration Act 1965,[247] or have been exercised in the period of one year prior to the registered disposition in question,[248] namely-
(1) those that are not within the actual knowledge of the person to whom the disposition was made; and
(2) those that would not have been obvious on a reasonably careful inspection of the land over which the easement or profit is exercisable.[249]
(1) it is registered under the Commons Registration Act 1965;[250]
(2) he or she actually knows of it;
(3) it is patent: in other words, it is obvious on a reasonably careful inspection of the land over which the easement or profit is exercisable, so that no seller of land would be obliged to disclose it;[251] or
(4) it has been exercised within the period of one year before the disposition.
8.70 The fourth case is important and is intended to cover, in particular, the numerous "invisible" easements such as rights of drainage or the right to run a water supply pipe over a neighbour's land. These rights have often existed for many years, but because they were commonly not the subject of any express arrangement between the parties are not recorded on the register. The selection of any period will necessarily be arbitrary. However, we consider that a period of one year is not unreasonable.[252]
8.71 What we wish to encourage is the creation of a straightforward system of standard inquiries as to easements and profits which will prompt sellers to disclose what they can reasonably be expected to know. This in turn will ensure that such rights are then registered.[253] We anticipate that, prior to contract, a seller would be expected to disclose any unregistered easements or profits affecting his or her property of which he or she was aware, at least to the extent that they were not obvious on a reasonably careful inspection of the land. In particular, he or she would be asked to disclose any easements or profits that had been exercised in the year preceding the inquiry.[254] The result of such inquiries is likely to be that the buyer will have actual knowledge of any unregistered legal easements and profits long before the transaction is completed.
8.72 As regards those who have the benefit of easements or profits that are overriding interests, particularly where their exercise has been intermittent or indeed nonexistent for many years, the onus must be on them to register the rights or, where the title of the servient tenement is presently unregistered, to lodge a caution against its first registration. As we have indicated above, we do not consider that it is unreasonable to expect those who have rights over land to register them.[255] Nor, in the light of that, do we see why the risk of undiscoverable and unregistered rights should be imposed upon buyers of land.
Transitional arrangements
8.73 The Bill contains two significant transitional provisions.
(1) Where an easement or profit is an overriding interest at the time when the Bill comes into force, but would not be under the provisions of Schedule 3,[256] it will retain its overriding status. Those who have the benefit of such rights are not at risk of losing them, though for the future it is hoped that they will register them in any event.[257]
(2) For three years after the Bill is brought into force any legal easement or profit that is not registered will be an overriding interest.[258]
However, apart from those easements and profits that fall within (1), that overriding status will cease three years after the date on which the Bill is brought into force.[259] There will, therefore, be a period of three years' grace before the new arrangements take effect, except in relation to equitable easements and profits. Any equitable easements and profits created after the Bill is brought into force will need to be protected by registration. These transitional arrangements will, we believe, achieve a fair balance between the interests of buyers and encumbrancers.
REDUCING THE IMPACT OF OVERRIDING INTERESTS
Introduction
(1) One existing category of overriding interest will be abolished outright and another is to be dealt with in a different way.[260]
(2) Certain categories of overriding interests that will initially exist when the Bill is brought into force, will be abolished after 10 years.[261]
(3) There will be requirements to ensure that when overriding interests come to light they are, so far as possible, entered on the register.[262] In addition to these techniques, as we have explained above,[263] and will explain more fully below,[264] the introduction of electronic conveyancing will in itself reduce the scope of certain categories of overriding interest. This is because, in time, it will become impossible to create most rights expressly except by registering them simultaneously. This means (for example) that the interests that can be protected by virtue of a person's actual occupation will be significantly reduced.
Categories of overriding interests that are to be abolished
Introduction
(1) "liability to repair the chancel of any church" (section 70(1)(c) of the 1925 Act);
(2) "rights acquired or in course of being acquired under the Limitation Acts" (section 70(1)(f) of the 1925 Act); and
(3) "in the case of a possessory, qualified, or good leasehold title, all estates, rights, interests, and powers, excepted from the effect of registration" (section 70(1)(h) of the 1925 Act).
The first category is no longer enforceable. In a recent decision, the Court of Appeal has held that chancel repair liability contravenes the European Convention on Human Rights and is, therefore, unenforceable.[265] It is therefore unnecessary for us to say any more about this.[266] The second category is abolished by the Bill. The third category is dealt with in a different way under the Bill.
Squatters' rights
(1) there will still be cases where there is such an entitlement to be registered;[267] and
(2) there will be cases where a person had become entitled to be registered before the Bill is brought into force.
8.77 In the Consultative Document, we recommended that section 70(1)(f) of the Land Registration Act 1925 should not be replicated.[268] We noted that-
(1) a squatter who had acquired a right to be registered as proprietor had a proprietary right that he or she could protect by actual occupation; but
(2) as the law stood, once a squatter was entitled to be registered, his or her rights constituted an overriding interest even if he or she thereafter ceased to be in actual occupation.
If a squatter ceased to occupy the land after he or she had become entitled to be registered as proprietor,[269] the following events might occur. The registered proprietor might resume possession of the land and then sell it to a buyer before the squatter's right to be registered was itself barred by the registered proprietor's own adverse possession. The buyer would then be bound by the squatter's overriding interest even though he or she had bought the land from a registered proprietor in possession. The buyer would not be entitled to any indemnity should the register be rectified in favour of the squatter, because he or she would not have suffered loss by reason of the rectification, but because he or she was subject to the squatter's overriding interest.[270]
(1) on first registration, where he or she had extinguished the title of the person who is registered as first registered proprietor prior to the coming into force of the Bill;[271]
(2) in relation to any registered disposition, where he or she was entitled to be registered as proprietor of registered land prior to the coming into force of the Bill.[272]
These transitional provisions will provide a reasonable opportunity for any squatter who is no longer in actual occupation of the land which he or she claims, to register his or her rights.[273] Secondly, as we have explained in Part III of this Report, on first registration, the legal estate is vested in the first registered proprietor subject to interests acquired under the Limitation Act 1980 of which he or she has notice at the time of registration.[274] We consider that these provisions strike a fair balance between the vested rights of squatters and the need to protect innocent buyers who cannot discover the existence of those rights.
Rights excepted from the effect of registration
8.79 We explained in the Consultative Document that where land is registered with possessory, qualified or good leasehold title, we could not see why it was necessary to retain the overriding status of rights excluded from the effect of registration.[275] We there explained that-
On any disposition of property with such a title, the [Land Registration Act 1925] expressly provides that the transferee takes subject to these estates, rights and interests in any event.[276] They operate outside the register and it is unnecessary to confer upon them the status of overriding interests. Where the registrar amends the register to give effect to rights which are excluded from the effect of registration of land with a qualified or possessory title, this does not amount to "rectification" of the register, because it does not involve the correction of any error or omission. It follows that such an amendment to the register can never trigger the payment of an indemnity.[277]
(1) to protect the priority of an interest that appears from the register to be excepted from the effect of registration;[278] and
(2) for the court or registrar to alter the register to give effect to any estate, right or interest excepted from the effect of registration.[279]
Categories of overriding interests that are to be phased out
The principle of phasing out overriding status and the objections to it
8.81 In the Consultative Document, we considered whether certain rights should lose their overriding status.[280] Where such rights existed in significant numbers, we had reservations about so doing. Our reasons were two-fold. First, we had concerns as a matter of principle which we summarised as follows-
First, many such persons would not appreciate the need to register their rights (though this difficulty could be minimised by consultation and publicity). Secondly, in order to register their rights they would have to pay for legal advice and the costs of registration (though it may be possible to meet this objection in part by transitional provisions). Thirdly, failure to register carries with it the risk that the right might be lost. This would occur if the land affected by it was sold to a purchaser, who would necessarily take free of it as an unprotected minor interest. ...this might be regarded as tantamount to expropriation. Finally, experience of the workings of the one modern statute that has required the registration of existing property rights on a large scale -registration of rights of common under the Commons Registration Act 1965 -strongly suggests that it is an experiment not to be repeated.[281]
8.82 Secondly, the removal of overriding status without compensation carried with it some risk of contravening Article 1 of the First Protocol of the European Convention on Human Rights.[282] That Article provides-
1. Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
2. The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.
8.83 As we explained in the Consultative Document-Article 1 has been held by the European Court of Human Rights in Sporrong and Lönnroth v Sweden[283] to comprise three distinct rules. The first "enounces the principle of peaceful enjoyment of property". The second "covers deprivation of possessions and subjects it to certain conditions". The third "recognises that States are entitled, amongst other things, to control the use of property in accordance with the general interest, by enforcing such laws as they deem necessary for the purpose". The jurisprudence of the Court of Human Rights establishes that deprivation in the public interest without compensation "is treated as justifiable only in exceptional circumstances"[284] because it fails to meet the requirements of proportionality between the means employed and the aims that are sought to be realised. By contrast, in cases where the issue is one of control, "a right to compensation is not inherent",[285] though in some cases the necessary requirement of proportionality will not be met in the absence of such compensation.[286]
8.84 The cautious approach that we adopted in the Consultative Document towards the immediate abolition of the overriding status of certain rights was prompted by our uncertainty as to whether this would constitute a deprivation of rights of possession within Article 1 of the First Protocol or merely a control of them.[287]
The views expressed on consultation
8.85 It was clear from many of those who responded to the Consultative Document that they wished to see the abolition of a number of categories of overriding interests, given their troublesome nature. There was a strong feeling that, if it was not possible to do so immediately, we should at the very least consider the phasing out of these overriding interests over a period of years in the alternative. The reduction in the number of overriding interests would be a significant step towards a conveyancing environment in which title can be investigated on line with the minimum of additional inquiries.[288] We have therefore reconsidered the matter, having particular regard to the concerns listed above in paragraph 8.81 and the need to comply with the European Convention on Human Rights. In the light of this, the Bill makes provision to phase out five categories of overriding interests, in relation both to first registration and registered dispositions.[289]
The scheme adopted in the Bill
8.86 The essential features of this scheme are-
(1) the rights involved will remain overriding for 10 years;[290]
(2) those who have the benefit of such rights over unregistered land, which would, therefore, be overriding on first registration, will be able to lodge a caution against first registration without payment of any fee during that 10 year period;[291] and
(3) those who have the benefit of such rights over registered land, which would, therefore, be overriding on any registered disposition, will be able to register a notice in respect of such a right without payment of any fee during the 10 year period.[292]
8.87 We have given careful thought to the categories of overriding interests that should be phased out. In particular, we have had regard to our guiding principle that interests should only have overriding status where protection against buyers is needed, but where it is neither reasonable to expect nor sensible to require any entry on the register.[293]
(1) There are good reasons why some interests are overriding and where it is either not feasible or indeed positively undesirable to remove their overriding status. We include in this category-
(a) PPP leases;[294](b) local land charges;[295] and(c) mines and minerals.[296]
(2) There are other overriding interests the scope of which is significantly reduced by the Bill, either with immediate effect or over a period of time. In relation to these, overriding status is justifiable in its restricted form. We include in this category-
(a) short leases;[297](b) the interests of persons in actual occupation;[298] and(c) legal easements and profits.[299]
(3) There are two categories of overriding interests which it might be desirable to eliminate but where, in practice, there is a significant risk that nobody would see fit to register them within any period of grace. These are-
(a) customary rights;[300](b) public rights.[301]
(4) There are five miscellaneous overriding interests, whose shared characteristics have been described above at paragraph 8.35. All are relics from past times and are of an unusual character. Most of them can no longer be created. Those who have the benefit of such rights ought to be aware of them. These characteristics make them obvious and sensible candidates to be phased out. If such rights are to bind those who acquire registered land, they should be protected on the register. The rights in question are-
(a) a franchise;[302]
(b) a manorial right;[303]
(c) a crown rent;[304]
(d) a non-statutory right in respect of an embankment or a river or sea wall;[305] and
(e) a corn rent.[306]
Under the Bill, these five rights will cease to be overriding interests both in relation to first registration and on a registered disposition 10 years after the Bill is brought into force.[307]
Human rights
8.89 We are satisfied that our proposals will comply with the requirements of Article 1 of the First Protocol of the European Convention on Human Rights.[308] First, there can be little doubt that the phasing out of overriding status over a period of 10 years with a view to encouraging the registration of such rights instead constitutes a "control" and not a "deprivation" of property rights. The removal of overriding status has no effect per se on the rights themselves. Secondly, a requirement for securing the registration of such rights of an unusual character is obviously a legitimate aim for a state to pursue and is "in accordance with the general interest" as that Article requires. Indeed, the Court of Human Rights has recently reiterated the need for rules of domestic law to be "sufficiently accessible, precise and foreseeable" in the context of the protection of possessions.[309] Thirdly, what is proposed is undoubtedly proportionate in terms of the end desired and the means to achieve it. The period of 10 years is generous. It gives more than adequate time both to publicise the need to register such rights and for those who have the benefit of them to ensure that they are registered. Furthermore, no fee is to be charged for the entry of such rights on either the register or the cautions register.
Ensuring that overriding interests are protected on the register when they come to light
8.91 First, by Clause 71, there is a power to make provision by rules requiring a person who applies-
(1) for first registration[310] to provide to the registrar in specified circumstances specified information about overriding interests affecting the estate that fall within Schedule 1 and are of a kind specified in rules;[311] and
(2) to register a registrable disposition[312] to provide to the registrar in specified circumstances specified information about overriding interests affecting the estate that fall within Schedule 3 and are of a kind specified in rules.[313]
The purpose of these provisions is similar. In relation to both, the objective is to ensure that the applicant for registration discloses any overriding interests so that they can be entered on the register.[314] This is intended to ensure that such rights are, in consequence, registered. There will be cases where an applicant is aware of what might or might not be an overriding interest. The registrar will only wish to enter on the register such rights as are clear and undisputed.[315] The rules will therefore provide guidance as to when the buyer has to provide information and in relation to which overriding interests it is required. There will be no direct sanction for this obligation, at least when the Bill is first introduced. However, when electronic conveyancing becomes operative, those solicitors and licensed conveyancers who enter into network access agreements with the registrar are likely to be required to ensure compliance with this obligation under the network transaction rules.[316]
8.92 Clause 71 implements a recommendation that was made in the Consultative Document.[317] It was supported by three-fifths of those who responded to it. It was clear that those who were opposed to it feared that it would impose a much higher burden on solicitors and licensed conveyancers than will in fact be the case. As we have indicated, that will not be so and rules will provide guidance as to when disclosure must be made to the registrar.
(1) a lease that is granted for a term of 3 years or less from the date of the grant and is not required to be registered;[318]
(2) a PPP lease;[319] or
(3) any interest in any coal or coal mine and certain other rights in relation to coal.[320]
8.94 There are good reasons why these three categories of overriding interest cannot be noted on the register and the exceptions reflect the present law, except that the class of leases in respect of which a notice may not be entered is much narrower than at present for reasons that have been explained in Part VI of this Report.[321] Clause 37 replaces section 70(2), (3), (3A) and (4) of the Land Registration Act 1925, but it recasts the law in the manner proposed in the Consultative Document.[322]
8.95 Thirdly, once an overriding interest has been protected by the entry of a notice on the register, it can never again become an overriding interest, even if, say, the notice were removed in error from the register.[323] Any such error would be a matter for the payment of indemnity to any person who suffered loss as a result.[324]
Note 1 See above, para 1.5. [Back] Note 2 Cf Secretary of State for the Environment, Transport and the Regions v Baylis (Gloucester) Ltd (2000) 80 P & CR 324, 338, where Kim Lewison QC (sitting as a Deputy High Court Judge) said, “[i]t is not in doubt that the purpose of a system of land registration is to promote certainty of title. To achieve that objective it is necessary to keep to a minimum the number of matters which may defeat the title of a registered proprietor”. [Back] Note 3 See particularly Land Registration Act 1925, ss 3(xvi) and 70. The term was not found in the Land Transfer Act 1875. [Back] Note 4 See below, para 8.3. [Back] Note 5 See below, para 8.6. [Back] Note 6 See below, para 8.74. [Back] Note 7 Cl 93; below, paras 13.74 and following. [Back] Note 8 See Cls 11(4)(b); 12(4)(c); above, paras 3.45 and following. For the other unregistered interests to which the registered proprietor takes subject, see above, paras 3.45, 3.51. [Back] Note 9 See Cls 29(2)(a)(ii), 30(2)(a)(ii); above, para 5.11. For the other unregistered interests to which the registered disponee takes subject, see above, paras 5.11, 5.13. [Back] Note 10 For a case where it does, see Cls 11(4)(c); 12(4)(d); above, paras 3.45, 3.46, 3.50. [Back] Note 11 Where first registration is voluntary, the overriding interest may have arisen or been created after the first registered proprietor acquired the land, but before he or she applied for the registration of his or her title. Even where a disposition triggered compulsory first registration (under Cl 4; above, paras 3.22 and following ) the interests to which the disponee took subject will have been determined according to the rules of unregistered conveyancing applicable to that disposition. [Back] Note 12 See Land Registration Act 1925, s 70(1)(g). [Back] Note 13 See Schedules 1, para 2; 3, para 2. [Back] Note 14 See below, para 8.21. [Back] Note 15 See below, para 8.60. [Back] Note 18 As it does in relation to priorities: see above, paras 5.6; 5.15. [Back] Note 19 Section 2(4)(iv). [Back] Note 20 As, for example, where the land is subject to the burden of an easement acquired by prescription that is not noted on the register (and which is therefore an overriding interest), and both the freehold of that property and a 99-year lease of it are registered. [Back] Note 21 As we explained in the Consultative Document, “[b]ecause such rights subsist and operate outside the register, they are an inevitable source of tension within the land registration system”: Law Com No 254, para 4.1. [Back] Note 22 See Law Com No 254, Parts IV, V. [Back] Note 23 Law Com No 254, para 4.17. [Back] Note 24 See Law Com No 254, paras 4.23-4.39. [Back] Note 26 See below, para 8.8. [Back] Note 27 See below, para 8.47. [Back] Note 28 See above, para 3.45. [Back] Note 29 Cl 11(4)(a) and (b) respectively. [Back] Note 30 PPP leases relating to transport in London: see below, para 8.11. [Back] Note 31 Schedule 1, para 1. [Back] Note 33 See Cl 116(1); above, para 3.30. [Back] Note 34 The obvious period for registrable leases would be those exceeding 3 years, which are required to be made by deed: see Law of Property Act 1925, ss 52(1), (2)(d); 54(2). [Back] Note 35 Schedule 1, para 1. [Back] Note 36 See Clause 4(1)(d)-(f); above, paras 3.32-3.34. Where such a lease exists, a notice in respect of the burden of it should be entered on the register of the title out of which it has been granted, as and when that title itself comes to be registered. [Back] Note 37 For a secure tenant’s right to buy, see Housing Act 1985, s 118. The tenant is entitled to a lease if the landlord does not own the freehold, or if the dwelling-house is a flat. [Back] Note 38 For the preserved right to buy, see Housing Act 1985, ss 171A-171H. [Back] Note 39 See Housing Act 1985, ss 154(6), (7); 171G; Schedule 9A, para 3. It is obviously sensible to set out the exceptions on the face of the Land Registration Bill, where they are likely to be more accessible. [Back] Note 40 See above, para 3.32. [Back] Note 41 Greater London Authority Act 1999, s 210. [Back] Note 42 Ibid, ss 213, 214, 216. [Back] Note 45 Seeibid, s 218(4), (5). [Back] Note 46 Ibid, s 219. The section amends the Land Registration Act 1925. [Back] Note 47 See above, paras 3.13, 3.30. [Back] Note 48 See above, para 4.22. [Back] Note 49 See above, para 6.16. [Back] Note 50 Greater London Authority Act 1999, s 219(7)(a). This category of overriding interest had not been created at the time of the Consultative Document. [Back] Note 51 See above, para 8.11. [Back] Note 52 Compare rights to coal, below, para 8.32, where similar considerations apply. [Back] Note 54 See paras 8.1, 8.2. [Back] Note 55 Schedule 1, para 2(1). [Back] Note 56 Ibid, para 2(1). There are some additional exceptions under Cl 87(3). None of the following is capable of falling within Schedule 1, para 2: a pending land action, a writ or order affecting land issued or made by any court for the purpose of enforcing a judgment or recognisance, an order appointing a receiver or a sequestrator of land or a deed of arrangement. For these rights, see above, paras 6.59 and following. There is no authority of which we are aware as to whether any of these rights could be protected by actual occupation under the present law. However, given both the unusual nature of such rights and our objective of reducing the numbers of overriding interests, it seems in principle desirable that they should be protected in the appropriate way on the register. [Back] Note 57 Schedule 1, para 2(2). [Back] Note 58 See paras 8.54 and following. [Back] Note 59 Law Com No 254, para 5.56. [Back] Note 60 See below, paras 8.54 and following. [Back] Note 61 See Law Com No 254, paras 5.61, 5.62. [Back] Note 62 The dissentient was the Society of Public Teachers of Law. [Back] Note 64 Law Com No 254, para 5.61. [Back] Note 65 See below, para 8.53. [Back] Note 66 Where an occupier of unregistered land has an interest that can be protected by the entry of a land charge under the Land Charges Act 1972, it should be registered. He or she cannot protect that interest against a purchaser merely by virtue of his or her actual occupation of that land: see below, para 8.57. [Back] Note 67 Law Com No 254, para 5.63. [Back] Note 68 See Land Registration Act 1925, s 86(2). The rights of beneficiaries entitled under a trust of land can be protected as overriding interests under s 70(1)(g). [Back] Note 69 Trusts of Land and Appointment of Trustees Act 1996, s 2(1). This is subject to a very limited exception contained in s 2(2). [Back] Note 70 See Land Registration Rules 1925, rr 56-58. [Back] Note 71 See above, para 8.14. [Back] Note 72 Law Com No 254, paras 5.64-5.68. There were transitional recommendations in relation to existing overriding interests. These are not relevant to the position on first registration and are explained in the context of registered dispositions: see below, para 8.64. [Back] Note 73 See above, para 8.14. [Back] Note 74 See Cl 10; above, para 3.44. [Back] Note 75 For the effect of registration with good leasehold title, see Cl 12(6); above, para 3.51. [Back] Note 76 Law Com No 254, para 5.70. [Back] Note 77 See above, para 8.14. [Back] Note 78 See below, para 8.55. [Back] Note 79 That is, Schedule 1, para 2. [Back] Note 80 See Cl 129(3)(b); above, para 5.5. [Back] Note 82 This must be true in relation to Land Registration Act 1925, s 70(1)(g), but the point has never been articulated. [Back] Note 83 See below, para 8.61. [Back] Note 84 Schedule 1, para 2(2). [Back] Note 85 “…what is required is physical presence, not some entitlement at law”: Williams & Glyn’s Bank Ltd v Boland [1981] AC 487, 505, per Lord Wilberforce. [Back] Note 86 Lloyds Bank Plc v Rosset [1989] Ch 350, 377, per Nicholls LJ. [Back] Note 88 As in Kling v Keston Properties Ltd (1983) 49 P & CR 212 (garage). [Back] Note 89 Ibid, at 219. A person does not cease to be in actual occupation merely because he or she has been temporarily excluded, especially when that exclusion is wrongful: see Chhokar v Chhokar [1984] FLR 313. [Back] Note 90 SeeLloyds Bank Plc v Rosset, above. [Back] Note 91 Schedule 1, para 3. [Back] Note 92 Law Com No 254, para 5.2. [Back] Note 93 See Law Com 254, paras 5.2-5.24. [Back] Note 94 Ibid, para 5.18. [Back] Note 95 Celsteel Ltd v Alton House Holdings Ltd [1985] 1 WLR 204, 291-221; Thatcher v Douglas (1996) 146 NLJ 282. [Back] Note 96 Law Com No 254, para 5.18. [Back] Note 97 Which, for these purposes, includes equitable profitsà prendre. [Back] Note 98 Section 2(5)(iii). [Back] Note 99 Land Charges Act 1972, s 4(6). [Back] Note 100 See para 8.91. [Back] Note 102 See para 8.67. [Back] Note 103 Schedule 1, paras 4, 5 [Back] Note 104 See Law Com No 254, paras 5.25-5.31. [Back] Note 105 Law Com No 254, paras 5.26, 5.27. As we explained in para 5.26, the wording of Land Registration Act 1925, s 70(1)(a) could be read to mean only the first of these, though it should plainly include the second. [Back] Note 106 Law Com No 254, para 5.30. [Back] Note 107 (1995) 70 P & CR 322. [Back] Note 108 For this definition, see Megarry & Wade’s Law of Real Property (6th ed 2000), 18-064. [Back] Note 109 The trial judge, Judge Colyer QC, had taken a wider view, namely that public rights were rights of a public nature, and included not only present rights, but rights that would become exercisable in future. [Back] Note 110 The rights can be extensive and have been held to include a fee simple vested in a highway authority in respect of a dedicated highway: see Secretary of State for the Environment, Transport and the Regions v Baylis (Gloucester) Ltd (2000) 80 P & CR 324. [Back] Note 111 Schedule 1, para 6. [Back] Note 112 See Law Com No 254, paras 5.80-5.83. The proposals were supported by the great majority of those who responded. [Back] Note 113 What does and does not constitute a “local land charge” is defined by Local Land Charges Act 1975, ss 1, 2. [Back] Note 117 As part of the National Land Information Service. [Back] Note 118 See above, para 2.41. [Back] Note 119 See above, para 7.42. [Back] Note 121 See Land Registration Act 1925, s 70(1)(i). [Back] Note 122 Under the Coal Industry Act 1994, ss 38 (rights to withdraw support), 49 (rights to work coal in former copyhold land) and 51 (additional rights in relation to underground land). [Back] Note 123 Schedule 1, para 7. At present, the Land Registration Act 1925 defines this category of overriding interest by reference to the Coal Industry Act 1994. By contrast, the Bill defines it directly, with an appropriate consequential repeal in the Coal Industry Act 1994. [Back] Note 124 See Law Com No 254, para 5.98. [Back] Note 125 Ibid, para 5.97. [Back] Note 127 Ibid, para 5.98. [Back] Note 128 Law Society Search Form Con29M. [Back] Note 129 As we explained in the Consultative Document, para 5.95, n 233, “The Land Transfer Act 1862…, s 9, provided that unless mineral rights were expressly mentioned as being within the description of the land to be registered, they were not included. The Land Transfer Act 1875, s 18(4), provided that transfers of registered land were subject to any third party rights to mines and minerals as what would now be called overriding interests. The Land Transfer Act 1897, Schedule 1, amended s 18(4) of the 1875 Act. Only mineral rights created prior to the registration of the land or the commencement of the 1897 Act (on January 1, 1898) took effect as overriding interests”. [Back] Note 130 Law Com No 254, para 5.95. [Back] Note 131 Ibid, para 5.96. [Back] Note 132 Schedule 1, paras 8, 9. [Back] Note 133 See Land Registration Act 1925, s 70(1)(b)-(e), (j). [Back] Note 134 See Law Com No 254, paras 4.27-4.30. The Article of the Convention in issue is Article 1 of Protocol 1 (right to property). See below, para 8.82. [Back] Note 135 The greatest criticism was levelled at a category of overriding interests that has since become unenforceable as a result of judicial decision, namely chancel repair liability. See below, para 8.75. [Back] Note 136 See paras 8.81 and following; and Cl 115. [Back] Note 137 Cf Law of Property Act 1925, s 1(4). [Back] Note 138 This follows from Cl 11(4); above, para 3.45. [Back] Note 139 See Schedule 4, paras 2(1)(a), 5(a); below, paras 10.10, 10.19. [Back] Note 140 See Schedule 4, paras 3(2), 6(2); below, paras 10.13-10.17. [Back] Note 141 See Cl 29; above, para 5.6. [Back] Note 142 Schedule 1, paras 10, 11. [Back] Note 143 Cf, above, para 8.6. [Back] Note 144 See para 8.42. [Back] Note 145 See further, below, para 8.88. [Back] Note 146 In Law Com No 254, para 5.84, we summarised the main manorial rights as (1) the lord’s sporting rights; (2) the lord’s or tenant’s rights to mines or minerals; (3) the lord’s right to hold fairs and markets; (4) the tenant’s rights of common; and (5) the lord’s or tenant’s liability for the construction, maintenance and repair of dykes, ditches, canals and other works. [Back] Note 147 Because the provisions of the 1922 Act have been repealed, it has not been possible in the Bill to define “manorial rights” by reference to them. However, it may be taken that the list found in Schedule 12 of the 1922 Act is a comprehensive statement of these rights. [Back] Note 148 Law Com No 254, para 4.7. [Back] Note 149 Ibid, para 5.85. [Back] Note 150 Ibid, para 5.86. Cf above, para 3.19. [Back] Note 151 In this sense, franchises differ from manorial rights. [Back] Note 152 See Cl 3(1)(c); above, para 3.19. This would be so in relation to an existing franchise or on the grant or reservation of a new one. [Back] Note 153 Cf Cl 4(1); above, para 3.23. By contrast, the grant or reservation of a franchise out of registered land is a registrable disposition: see Cl 27(2)(d); above, para 4.24. [Back] Note 154 See Cl 3(1); above, para 3.19. [Back] Note 155 For notices, see above, paras 6.5 and following. [Back] Note 156 Law Com No 254, para 5.35. [Back] Note 157 Ibid, paras 5.35, 5.36. [Back] Note 158 We take the view that crown rents are “rentcharges” for the purposes of the Rentcharges Act 1977, s 1. As such, they will be phased out in 2037: see s 3. It has been suggested to us that this is not so and that crown rents are excluded from the Act because they fall within the exception in s 1(a) of the Act, “rent reserved by a lease or tenancy”. However, we consider that such words are intended to cover leases or non-feudal lease-like arrangements, such as tenancies at will. It is not a normal use of language to suggest that a tenancy includes a fee simple held of the Crown in feudal tenure. [Back] Note 159 Schedule 1, para 12. [Back] Note 160 Law Com No 254, paras 5.38-5.39. [Back] Note 161 Schedule 1, para 13. A statutory liability in respect of an embankment or sea wall cannot be an overriding interest. It is simply a liability under the general law. [Back] Note 162 Cl 115(1). See below, para 8.88. [Back] Note 163 See Law Com No 254, para 5.40. [Back] Note 164 Some corn rents are unrelated to tithes and are not, therefore, within Land Registration Act 1925, s 70(1)(e). [Back] Note 165 Schedule 1, para 14. [Back] Note 166 Cl 115(1). See below, para 8.88. [Back] Note 167 See above, para 5.11. [Back] Note 168 The one exception is PPP lease: see below (1). [Back] Note 169 Cl 90(5); cf above, para 8.11. [Back] Note 170 Schedule 3, para 4; cf above, para 8.26. [Back] Note 171 Schedule 3, para 5; cf above, para 8.26. [Back] Note 172 Schedule 3, para 6; cf above, para 8.29. [Back] Note 173 Schedule 3, para 7; cf above, para 8.32. [Back] Note 174 Schedule 3, para 8; cf above, para 8.33. [Back] Note 175 Schedule 3, para 9; cf above, para 8.33. [Back] Note 176 Schedule 3, para 10; cf above, para 8.40. [Back] Note 177 Schedule 3, para 11; cf above, para 8.40. [Back] Note 178 Schedule 3, para 12; cf above, para 8.43. [Back] Note 179 Schedule 3, para 13; cf above, para 8.45. [Back] Note 180 Schedule 3, para 14; cf above, para 8.46. [Back] Note 181 Cf above, para 8.38. [Back] Note 182 See paras 8.81 and following. [Back] Note 183 Schedule 3, para 1. [Back] Note 184 See above, para 8.9. [Back] Note 185 See above, para 8.10. [Back] Note 186 Schedule 3, para 1. [Back] Note 187 See Cl 4(1)(d)-(f) respectively. See above, paras 3.32-3.34. [Back] Note 188 Schedule 3, para 1. [Back] Note 189 Cl 27(2)(b)(ii); above, para 4.20. [Back] Note 190 Cl 27(2)(b)(iii); above, para 4.20. [Back] Note 191 Cl 27(2)(b)(iv); above, para 4.20. [Back] Note 192 Cl 27(2)(b)(v); above, para 4.20. [Back] Note 193 Cl 27(2)(c); above, para 4.23. [Back] Note 194 Schedule 12, para 12. [Back] Note 195 Cl 4(1)(a), (2)(b); above, para 3.24. [Back] Note 196 See above, para 8.16. [Back] Note 197 Law Com No 254, para 5.61. The quotation is from Law Com No 254, para 4.17. See above, para 8.6. [Back] Note 198 See Cl 91, below, paras 13.74 and following. [Back] Note 199 Schedule 3, para 2(1). Cf above, para 8.14. Under Cl 87(3), none of the following rights is capable of falling within Schedule 3, para 2: a pending land action, a writ or order affecting land issued or made by any court for the purpose of enforcing a judgment or recognisance, an order appointing a receiver or a sequestrator of land or a deed of arrangement. For the reasons for this, see above, para 8.14. For the rights in question and their protection, see above, paras 6.59 and following. [Back] Note 200 Schedule 3, para 2(2). [Back] Note 201 See above, para 8.22. [Back] Note 202 See above, para 8.19. [Back] Note 203 Ashburn Anstalt v Arnold [1989] Ch 1, 28, where Fox LJ, giving the judgment of the Court, commented that “[t]he overriding interest will relate to the land occupied but not anything further”. [Back] Note 204 [1999] Ch 355. [Back] Note 205 In his judgment (at pp 368, 369), Robert Walker LJ referred to the Law Commission’s Third Report on Land Registration (1987) Law Com No 158, para 2.55, but not to Law Com No 254, paras 5.70, 5.75. [Back] Note 206 See Megarry & Wade’s Law of Real Property (6th ed 2000), 5-019, 5-020. [Back] Note 207 See, eg, Midland Bank Trust Co Ltd v Green [1981] AC 513. Cf Megarry & Wade’s Law of Real Property (6th ed 2000), 5-121. [Back] Note 208 Ferrishurst Ltd v Wallcite Ltd [1999] Ch 355, 372, per Robert Walker LJ. [Back] Note 209 Cf below, para 8.60. [Back] Note 210 See above, paras 1.5, 8.1. [Back] Note 211 Cf [1999] Ch 355, 360H. [Back] Note 212 See above, para 1.9. [Back] Note 213 See below, paras 13.74 and following. [Back] Note 214 Cf [1999] Ch 355, 372A, B. [Back] Note 215 Schedule 3, para 2(1)(a). [Back] Note 216 See above, para 8.17. [Back] Note 217 Cf Land Registration Act 1925, s 70(1)(g), “...save where enquiry is made of such person and the rights are not disclosed”. [Back] Note 218 Schedule 3, para 2(1)(b). [Back] Note 219 See Law Com No 254, para 5.69. [Back] Note 220 See para 8.21. [Back] Note 221 See Law Com No 254, paras 5.71-5.73. Cf above, para 5.21. [Back] Note 222 See Megarry & Wade’s Law of Real Property (6th ed 2000), 12-068. [Back] Note 223 We stress this point because although it was made in the Consultative Document (see Law Com No 254, para 5.73), one correspondent took the view that we had confused the two issues. We had not. We had earlier explained that the authorities were in some disarray as to whether the occupation had to be apparent or not: see Law Com No 254, para 5.58. [Back] Note 224 See Megarry & Wade’s Law of Real Property (6th ed 2000), 12-068; Law Com No 254, para 5.72. [Back] Note 225 See para 8.60. [Back] Note 226 Some raised points or qualified their acceptance. We have given such points careful consideration. [Back] Note 227 See Cl 4(1)(d) (compulsory first registration); Cl 27(2)(b)(ii) (registrable dispositions); see above, paras 3.32, 4.20. [Back] Note 228 Schedule 3, para 1; above, paras 8.50(1), 8.51(1). [Back] Note 229 This might happen where the grantee was already occupying the land under a pre-existing lease, or as a licensee or a tenant at will. [Back] Note 230 Schedule 3, para 2(1)(C)(i), inserted by Schedule 12, para 8. [Back] Note 231 Schedule 3, para 2(1)(C)(ii). [Back] Note 232 Their impact is, however, softened by the transitional provisions of the Bill: see below, para 8.73. [Back] Note 233 See Law Com No 254, paras 5.6-5.9. [Back] Note 234 See Law Com No 254, para 5.14. [Back] Note 235 See Law Com No 254, para 5.21. [Back] Note 236 See Law Com No 254, para 5.22. The law of prescription, as it presently stands, can lead to the assertion of rights even though they have not been exercised for many years: see Law Com No 254, para 10.86 (criticism of the doctrine of lost modern grant). [Back] Note 237 There is no mechanism for the discharge or modification of easements and profits analogous to that which applies to restrictive covenants under Law of Property Act 1925, s 84. [Back] Note 238 For those proposals, see Law Com No 254, para 5.24. [Back] Note 239 See above, para 1.19. [Back] Note 240 For the treatment of prescription in the Consultative Document, see Law Com No 254, paras 10.79-10.94. [Back] Note 241 See above, para 8.1. [Back] Note 242 Schedule 3, para 3(1). [Back] Note 243 Cl 27(2)(d); above, para 4.25. [Back] Note 244 Cl 27(1). For the registration requirements applicable to easements and profits, see Schedule 2, para 7; above, para 4.26. [Back] Note 245 There are also transitional provisions that relate to any easements and profits that were overriding prior to the coming into force of the Bill: see below, para 8.73. [Back] Note 246 Implied grant includes easements and profits arising through the operation of Law of Property Act 1925, s 62: see Cl 27(7); above, para 4.25. [Back] Note 247 See Schedule 3, para 3(1). [Back] Note 248 Schedule 3, para 3(2). [Back] Note 249 Schedule 3, para 3(1). [Back] Note 250 Cf Cl 27(2)(d); above, para 4.25, where the interrelationship between this Bill and the Commons Registration Act 1965 is explained. [Back] Note 251 See Megarry & Wade’s Law of Real Property (6th ed 2000), 12-068. [Back] Note 252 For reasons that we explain in the next paragraph, the period is in practice likely to be longer than one year in most cases. The point has been made to us that some easements and profits might be seasonal in nature, as where a farmer uses a track for bringing in the harvest. Such seasonal activities will obviously not operate according to a strict calendar year. [Back] Note 253 See below, para 8.91. [Back] Note 254 As the inquiry will necessarily precede the registered disposition, there will normally be a period of more than one year before the disposition within which any easement must have been exercised. [Back] Note 255 See paras 1.9, 8.58. [Back] Note 256 That is, para 3. [Back] Note 257 Schedule 12, para 9. [Back] Note 258 In practice, this will protect easements and profits that arise within the three year period by prescription, or by implied grant or reservation. Easements and profits that are expressly granted or reserved after the Bill comes into force will only be equitable unless and until they are registered. [Back] Note 259 Schedule 12, para 10. [Back] Note 260 See below, para 8.75. [Back] Note 261 See below, para 8.81. [Back] Note 262 See below, para 8.90. [Back] Note 263 See above, para 8.2. [Back] Note 264 See below, paras 13.74 and following. [Back] Note 265 Aston Cantlow Parochial Church Council v Wallbank [2001] EWCA Civ 713; [2001] 21 EG 167 (CS); Morritt V-C, Robert Walker and Sedley LJJ. [Back] Note 266 Cf Law Com No 254, para 5.37. [Back] Note 267 See below, para 14.63. [Back] Note 268 Law Com No 254, paras 5.49-5.55. [Back] Note 269 See Land Registration Act 1925, s 75. [Back] Note 270 See Law Com No 254, paras 5.46, 5.47. [Back] Note 271 Schedule 12, para 7, inserting a para 15 into Schedule 1. [Back] Note 272 Schedule 12, para 11, inserting a para 15 into Schedule 3. [Back] Note 273 In the Consultative Document, we asked whether squatters who had become entitled to the land by reason of their adverse possession should be able to sue for damages in trespass a registered proprietor who sold the land in question: see Law Com No 254, para 5.53. We assumed that the squatter would have such an entitlement at common law. However, after examining such little analogous authority as there is, we are now rather less certain that that would be the case. In any event, the proposal was rejected by a majority of those who responded to the point on consultation. Accordingly, the Bill contains no provision. The matter will, therefore, be left for judicial determination in the event that it arises. [Back] Note 274 Cls 11(4)(c); 12(4)(d); above, paras 3.43-3.48. [Back] Note 275 For these gradations of title and their effect under the Bill, see Cls 9, 10, 11, 12; above, paras 3.42-3.44, 3.49-3.51. For the upgrading of such titles, see Cls 62, 63; below, paras 9.16-9.27. [Back] Note 276 Land Registration Act 1925, ss 20(2), (3); 23(2), (3), (4). [Back] Note 277 Law Com No 254, para 5.79. [Back] Note 278 Cls 29(2)(a)(iii); 30(2)(a)(iii); above, para 5.11. [Back] Note 279 Schedule 4, paras 2(1)(c), 5(c). There is no provision for the payment of indemnity in such a case. [Back] Note 280 Law Com No 254, paras 4.25-4.31. [Back] Note 281 Law Com No 254, para 4.26. [Back] Note 282 Law Com No 254, para 4.30. [Back] Note 283 (1982) 5 EHRR 35, 50, para 61. This analysis has been applied by the Court in all subsequent cases. [Back] Note 284 James v United Kingdom (1986) 8 EHRR 123, 147, para 54. [Back] Note 285 Banér v Sweden No 11763/85, 60 DR 128, 142 (1989) (a decision of the European Commission of Human Rights, not theCourt). [Back] Note 286 CfChassagnou v France, Nos 25088/94; 28331/95; 28443/95; 29 April 1999, especially at paras 80-85. [Back] Note 287 Cf Law Com No 254, para 4.30. [Back] Note 288 See above, para 8.1. [Back] Note 289 Cl 115. For the categories of overriding interests that are to be phased out, see below, para 8.88. [Back] Note 293 See above, para 8.6. [Back] Note 294 See above, para 8.11. [Back] Note 295 See above, para 8.29. [Back] Note 296 See above, para 8.31. [Back] Note 297 See above, paras 8.9, 8.50. [Back] Note 298 See above, paras 8.14, 8.54. [Back] Note 299 See above, paras 8.23, 8.65. [Back] Note 300 See above, para 8.26. [Back] Note 301 See above, para 8.26. [Back] Note 302 See above, para 8.40. [Back] Note 303 See above, para 8.40. [Back] Note 304 See above, para 8.43. [Back] Note 305 See above, para 8.45. [Back] Note 306 See above, para 8.46. [Back] Note 308 See above, para 8.82. [Back] Note 309 See Belvedere Alberghiera SRL v Italy No 31524/96; 30 May 2000, para 57; Carbonara and Ventura v Italy No 24638/94; 30 May 2000, para 64. [Back] Note 310 Under Chapter 1 of Part 1 of the Bill. [Back] Note 314 Unless the overriding interest is one that cannot be noted on the register. For these, see below, para 8.93. [Back] Note 315 See Law Com No 254, para 5.106. [Back] Note 316 Cf Schedule 5, para 5(2)(b). See below, para 13.52. [Back] Note 317 See Law Com No 254, paras 5.104-5.107. [Back] Note 319 See Cl 90(4). For PPP leases, see above, paras 8.11 and following. [Back] Note 320 See Cl 33(e). For these rights, see above, para 8.32. [Back] Note 321 See paras 6.10-6.12. [Back] Note 322 See Law Com No 254, paras 5.99-5.103, where the existing provisions are criticised. The proposals were supported by all save one of those who responded to them. [Back] Note 323 This is the effect of Cls 29(3) and 30(3). [Back] Note 324 See Schedule 8, para 1(1)(b); see below, para 10.32. [Back]
