Экзамен зачет учебный год 2023 / ELC, Land Registration

8.16First, we recommended the retention of the overriding status of occupiers’ rights61 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

8.17Secondly, 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 interest67 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

61See Law Com No 254, paras 5.61, 5.62.

62The dissentient was the Society of Public Teachers of Law.

63See para 8.14.

64Law Com No 254, para 5.61.

65See below, para 8.53.

66Where 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.

67Law Com No 254, para 5.63.

68See 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).

69Trusts of Land and Appointment of Trustees Act 1996, s 2(1). This is subject to a very limited exception contained in s 2(2).

70See Land Registration Rules 1925, rr 56¾58.

71See above, para 8.14.

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8.18Thirdly, 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.

8.19Fourthly, 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

8.20There are three points about the provision in the Bill79 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

8.21Secondly, 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.

72Law Com No 254, paras 5.64¾5.68. 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.

73See above, para 8.14.

74See Cl 10; above, para 3.44.

75For the effect of registration with good leasehold title, see Cl 12(6); above, para 3.51.

76Law Com No 254, para 5.70.

77See above, para 8.14.

78See below, para 8.55.

79That is, Schedule 1, para 2.

80See Cl 129(3)(b); above, para 5.5.

81See para 8.3.

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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

8.22Thirdly, 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

8.23Under 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

82This must be true in relation to Land Registration Act 1925, s 70(1)(g), but the point has never been articulated.

83See below, para 8.61.

84Schedule 1, para 2(2).

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.

86Lloyds Bank Plc v Rosset [1989] Ch 350, 377, per Nicholls LJ.

87Ibid.

88As in Kling v Keston Properties Ltd (1983) 49 P & CR 212 (garage).

89Ibid, 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.

90See Lloyds Bank Plc v Rosset, above.

91Schedule 1, para 3.

92Law Com No 254, para 5.2.

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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.

8.24One 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 Document96 that¾

(1)equitable easements97 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).

8.25Although 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

93See Law Com 254, paras 5.2¾5.24.

94Ibid, para 5.18.

95Celsteel Ltd v Alton House Holdings Ltd [1985] 1 WLR 204, 291¾221; Thatcher v Douglas

(1996) 146 NLJ 282.

96Law Com No 254, para 5.18.

97Which, for these purposes, includes equitable profits à prendre.

98Section 2(5)(iii).

99Land Charges Act 1972, s 4(6).

100See para 8.91.

101See Cl 71(a).

102See para 8.67.

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Customary and public rights

8.26Both 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 Document104 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.

8.27In relation to customary rights, we explained that the term had two meanings, namely¾

(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.

8.28In 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 were¾

(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,

103Schedule 1, paras 4, 5.

104See Law Com No 254, paras 5.25¾5.31.

105Law 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.

106Law Com No 254, para 5.30.

107(1995) 70 P & CR 322.

108For this definition, see Megarry & Wade’s Law of Real Property (6th ed 2000), 18-064.

109The 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.

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decided that it is unnecessary. The term is to have the meaning which the courts have now given it.110

Local land charges

8.29A 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 provision¾

(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

8.30For 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.

110The 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.

111Schedule 1, para 6.

112See Law Com No 254, paras 5.80¾5.83. The proposals were supported by the great majority of those who responded.

113What does and does not constitute a “local land charge” is defined by Local Land Charges Act 1975, ss 1, 2.

114Ibid, ss 3¾5.

115Ibid, s 10.

116Ibid.

117As part of the National Land Information Service.

118See above, para 2.41.

119See above, para 7.42.

120Cl 55.

121See Land Registration Act 1925, s 70(1)(i).

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Mines and minerals

8.31The Bill preserves the overriding status of certain mineral rights that is presently found in section 70(1)(l) and (m) of the Land Registration Act 1925. These relate respectively to mineral rights in relation to land, the title to which was registered before 1926, and to interests and rights in coal.

Rights to coal

8.32The 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 coal122 all take effect as overriding interests on first registration.123 As we explained in the Consultative Document,124 the present provision ¾ section 70(1)(m) of the Land Registration

Act 1925 ¾ 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 interest127 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

8.33The 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 that¾

122Under 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).

123Schedule 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.

124See Law Com No 254, para 5.98.

125Ibid, para 5.97.

126Ibid.

127Ibid, para 5.98.

128Law Society Search Form Con29M.

129As 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

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(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.

8.34The Bill provides accordingly that¾

(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

8.35The Bill groups together five categories of overriding interests under the heading of “miscellaneous”. All the rights in question take effect as overriding interests on first registration under the present law. What links them is that¾

(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

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”.

130Law Com No 254, para 5.95.

131Ibid, para 5.96.

132Schedule 1, paras 8, 9.

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(4)they may be exceptionally onerous.

8.36The rights in question are¾

(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

8.37Of 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 ¾ though perhaps not a very great one ¾ that to do so might contravene the European Convention on Human Rights.134

8.38As 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 which¾

(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 them¾

(a)where the title to the land affected is not yet registered, by the entry of a caution against first registration; and

133See Land Registration Act 1925, s 70(1)(b)¾(e), (j).

134See Law Com No 254, paras 4.27¾4.30. The Article of the Convention in issue is Article 1 of Protocol 1 (right to property). See below, para 8.82.

135The 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.

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(b)where the title affected is registered, by an entry in the register; without charge during that 10-year period.136

8.39In the context of interests that override first registration, if no caution against first registration is entered against the title prior to first registration the position after the 10-year period will be as follows.

(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 because¾

(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

8.40The 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

136See paras 8.81 and following; and Cl 115.

137Cf Law of Property Act 1925, s 1(4).

138This follows from Cl 11(4); above, para 3.45.

139See Schedule 4, paras 2(1)(a), 5(a); below, paras 10.10, 10.19.

140See Schedule 4, paras 3(2), 6(2); below, paras 10.13¾10.17.

141See Cl 29; above, para 5.6.

142Schedule 1, paras 10, 11.

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