Land Registration Act 2002: Impact On Ownership And Registration Process

Application of Land Registration Act 2002

Discuss about the Land Law for Journal of Development Effectiveness.

The law relating to the land is important in nature and a clear provision regarding the registration of land requires efficient of law governing the ownership of the land. The impact of land registration on the business and economy is quite great and World Bank has suggested maintaining an efficient and transparent function for the business and the markets. Land Registration Act 2002 was introduced along with certain bodies that represent the law commission, land registry and the department of Lord Chancellor. The main purpose of the Act is to ensure that a title over the land should be established by registration. Certain changes have been observed in this Act and an attempt has been observed to resolve the loopholes of the previous Land Registration Act 1925 through this Act. According to Neil Cobb and Lorna Fox (2008), Land Registration Act 2002 has curtailed law regarding the acquisition of title and certain changes can be observed regarding many provisions of land acquisition under the LRA 2002. The changes include right regarding the adverse possession and rights regarding lease and mortgage. In this report, an attempt has been taken to discuss whether the Land Act 2002 has able to make a balance between its function of taking care of the needs of a purchaser and needs of an interest holder on the land that is being purchased. The matter related to the adverse possession has also discussed here. 

The Land Registration Act 2002 was enacted as a response of the Law Commission Report 271. With the development of electronic media, the legal interpreters have decided to make the process of conveyancing in electronic way. The main object of Law Commission Report 271 was based on this fact. The main intention of the jurisprudential bodies is to bring an unprecedented conveyancing revolution in a short span of time. The law was enacted with HM land registry that deals with registration of land and property ownership. It is regarded as largest property database in Europe. It guarantees certain titles regarding the title to registered estates and records the ownership rights on freehold property. In modern world, land is regarded as one of the main economic assets and it is therefore necessary to enact certain specific land reform regulation so that the rights of the owners and the interest holders can be protected. The legal provision helps to make a safe transfer of land. The core intention of the Land Registration Act 2002 is to facilitate the e-conveyancing process. The problem regarding registration gap can be traced out and eliminated through the e-conveyancing process. The land registration system is three folded. In the first instance, it details the ownership and interest over the land. This provision helps the purchaser to identify the real owner of the property and nature and limitation over the land has also been identified by the purchaser. Secondly, hidden interest over the land has been detected and e-conveyancing helps to make a clear picture regarding the nature and interest of the purchased land. Further, if any defect occurs from the registration process and the purchaser incurs loss from that, the state government will take all the responsibilities regarding the same. Similar provision has been observed in the case of Kingston v Thames Water Developments. However, the Act has been criticized for its ruthless action. All the provisions of the Act are mandatory in nature and in case of any failure; penal provisions will be applied on the offender. According to this Act, if the third party interest over the land is not secured, the purchaser can get the land free of burden. In addition to this, an explicit framework has been made to legalize the rights of the squatters in case of adverse possession. According to the provision of adverse possession, the rights over the land create if anyone is enjoying the land for a term of twelve years at a stretch and without any legal obligation. The paper owners of a land are restrained to enjoy their land and oust the people who were living on that land practically. The Land Registration Act 2002 has made all the systems of land registration in electronic way where the rights of the purchasers can be established in a more fruitful way.

Balance between needs of purchaser and interest holder

There were certain loopholes in the “paper registration” process and the new law (LRA 2002) has been enacted to remove all these registration-generated problems by securing the interest of the purchasers. Further, attempt regarding find out the nature and character of the land helps the real owner to establish their claim over the land. All these principles help to maintain a transparent process in the land registration system. A prospective purchaser has two fundamental concerns such as to decide rights of the vendor regarding sell the property and third party rights over the property. Further, a distinction between the registered and unregistered land should be made. From the general point of view, possession is the main thing in unregistered land and registration is the main fact in registered land. Every owner wants their rights to be protected and the equitable interest of the beneficiaries is to be converted into money in case of purchasing of Trust property. This provision has been provided under section 2 of the Law of Property Act 1925. Certain facilities have also been provided to the buyer to find out whether any encumbrances or third party interest has been laid down over the property or not. According to section 198(1) of the Law of Property Act 1925, when a land is registered, the purchaser is bound to pay all the charges. However, this charging section will not be imposed if the interest of the purchaser has not been registered [section 199(1) (i)]. This provision has been established in Midland Bank Trust Co Ltd v Green. However, in case of any dispute, the purchaser could claim for damage under section 198(1) of the Law of Property Act 1925. Further, all the rights laid down under the purchased property have mentioned it in Worthington v Morgan (1849) that a purchaser is bound. Further, the HM land registry has given certain rights to the purchaser to make claim against any disputed property. In addition, a registration process helps to identify all the hidden interest of the land and rights of the third parties have been imposed and traced out. Therefore, registration protects the purchasers from being bound by the undiscoverable third party rights. Protection against overriding interest has also been introduced and in Celsteel Ltd v Alton House Holdings Ltd, it was held that certain equitable interest could be overriding interest.    

It has been observed that the Land Registration Act 1925 was, to certain extent, make the process of registration of the land complex and failed to present a clear picture regarding the character of the land. Therefore, a necessity of amendment was cropped up and the e-conveyancing system has been generalized. The new Act restricts the register to take bribe for registration of the land and specify the price of the land in systematic manner. Further, certain changes have been made through the Act in the field of lease, adverse possession and land transfer provisions. The application provisions of the Act were strict and this motivates the individual to register their land so that the proper title on the land can be identified. All these things help to create a society where transfer of freehold estate can be mitigated. According to section 11 of the LRA 2002, there are three types of title such as absolute title, possessory freehold title and qualified freehold property. It has been mentioned under section 27 of the Act, the process of disposition will not be completed until all the requirements fulfilled. Therefore, it can be stated that the new Act has created certain obligation on the real owner of a property with an intention to establish a fair process in case of registration. In previous matter, it can be observed that corruption took place during the registration process and no notice should have to serve to the register and to the property holder. In case of adverse possession, the land occupied by the squatters can be obtained without making the real owner of the land inform about the continuity period. However, under this Act of 2002, certain notices are to be sent to the real owner of the property to make them know that the practical possessor has occupied the land for last twelve years and there is a possibility of claiming the rights regarding adverse possession by them. This tendency has able to secure the rights and interest of the real owner of the land. Further, it is observed that the Act 2002 notifies the purchaser of a land regarding any hidden interest in their proposed land. This is a general notice to aware the purchaser regarding all the interests.

The definition and process of notice has been given under section 32 and section 33 of the Land registration Act 2002. Further, according to section 34 of the Act, an equitable interest, a freehold restrictive covenant and equitable leases are protected by notice. Certain remedies are there to protect the interest of both the purchasers and interest holders of the land. It has been stated that if the purchaser has to bear any losses due to the disputed registration process, the affected party will get all the remedies from the state government and further, the owner of the land has to disclose all the documents and information to prove his interest over the land. It has been mentioned that until the landowner could not show his interest, the land could not be registered. After the completion of the registration process, if any party thinks that certain mishap happens, any of the party can make a claim by challenging the registration deed. The process of registration becomes more reliable, easy and time consuming in nature.  

Certain rights have been ensured for the registered proprietor and a registration can be completed if all the documents have been disclosed and all the statements made on behalf of the parties are accurate. The power of the owners has been discussed under section 23 of the Act and the application of such power has been mentioned under section 24 of the Act. This Act empowers the owner to make any disposition entitled by the law and certain rights have been given to the owner so that they can impose certain price for the land. According to section 26 of the Act, the validity of the disposition is unchallengeable and the registered proprietors get the same right as the owner of a property.

However, there are certain ambiguities present in the application of Land Registration Act 2002. In John Patrick Murphy v Lambeth London Borough Council, the court has decided that rectification is necessary in case of ambiguous demise clauses. In this case, certain ambiguities have been observed regarding schedule 4 of Land Registration Act 2002. According to the provisions of this schedule, the court and registrar has all the power to alter the land register in case of any mistake regarding the same. However, according to paragraph 3 of the schedule, it has been written that the rectification can be done only after obtaining consent from the registered proprietor. In case the registered proprietor does not possessed the land, court has to take a close vigil over the matter to see whether any exceptional circumstances present there or not. Further, it has been observed that the registrar can be prevented from making any rectification against any irregularities made in the owner’s land if tenants have taken into the possession on the land. According to this case “person is entitled to an indemnity from the Registrar under Schedule 8 of the Land Registration Act 2002 for any loss suffered by reason of (among other things) rectification of the Register or a mistake in an official search, official copy or a copy document kept by the Registrar which is referred to in the Register”. According to Gardener (2014), the process of alteration and rectification has not been defined carefully. The conflict of purpose regarding the provision of the section has been established in the Fitzwilliam v Richall Holdings Services Ltd, where it has been observed that the Act has failed to explain adequate system for transferring a land. A materialistic difference between the provisions and intention regarding the Act has been observed in case of Malory Enterprises Ltd v Cheshire Homes (UK) Ltd. 

Adverse possession is a special term under the land law where certain rights have been imposed on people over a property where they are not the real owner. According to the general provision of the land law, if a person enjoys a property for a term of twelve years or more, he possesses certain rights over the same and the real owner of the land could not oust the person. The right accrued by the person is legal in nature and this is termed as adverse possession. Generally, a person who is the absolute owner of a property has all the rights to recover his possession. However, adverse possession is an exception to this rule. Certain rules have been mentioned under the Land Registration Act 2002 regarding adverse possession. According to the provisions of this Act, in case of claim for adverse possession, the intending party should have to prove his factual possession over the land. Further, certain changes have been made regarding the provision of adverse possession in the Land Registration Act 2002. Before the enactment of LRA 2002, the squatter could get the possession over the land after the completion of the twelve years and nothing was required. However, under the new system, they have to send a notice to the land registry office and another notice will be served to the registered proprietor. This Act has given a chance to the original owner to defend their position so that they can recover their possession over the property. The main reason regarding the same is that the Act wants to secure the owners from the illegal interventions made by the advertent squatters. Further, a chance will be given to the landowner to show their good title over the land. According to the provision of law, a tenant should not get the title over the land on the fact that they are enjoying the possession for more than twelve years and therefore, certain facilities will be provided to the original landowner. The primary intention of the Law Commission was to prevent the adverse squatters from getting a property only based on the fact that the real owner of the property has failed to take proper supervision over the property.

The mentality of the Law Commission on the adverse possession reflects the efficiency and morality of the doctrine. According to the provisions of this Act 2002, a statement has been made regarding the fact that the intention of the squatters should be analyzed. The moral ground of the Act regarding adverse possession includes desert-labor theory, personhood and modern utilitarianism. Further, the good faith and bad faith of the squatters are required to be analyzed. The nature of land ownership is regarded as beneficial ownership. The Act wants to maintain a reasonable balance. However, Land Registration Act 2002 has established certain rights regarding the matter of adverse possession. In J.A. Pye (Oxford) Ltd v Graham (2000), it has been observed that the land owners will get much protection against the claim of adverse possessor and such rights could be claimed in case of unregistered property also. Serving notification to the real owner after making the claim is a reasonable step against the squatters. Further, the main aim of the Act is to facilitate the process of e-conveyancing and in that case, it can be stated that the Act has proved to be loyal and successful. The necessity of the e-conveyancing has been established and it is observed that the Act has fulfilled this objective to certain extent. All the pre-decision regarding the property and registration have established and balance in between certain sections of the land laws has been made. An attempt has been made to make a balance regarding the rights of the purchaser and interest holder by this Act.

Conclusion:

From the overall study of the Land Registration Act 2002, it can be stated that the registration process regarding the land has been improvised by the Act. Further, it is to be stated that certain rights of the purchaser and beneficial owners have also been established by this Act. A successful attempt has been made regarding the e-conveyancing process. Balance in between the rights of the purchasers and the third party interest has been made by this Act. Gaps in between the transfer and registration has been identified and resolved by the e-conveyancing process. Certain loopholes have been pointed out regarding the system. However, the strict process of the Act has motivated the purchasers to get their land registered. Further, the benefits of the registration of land had secured the interest of the purchaser. This Act 2002 has also secured the interest of the real owner regarding adverse possession. Therefore, it can be stated that the Land Registration Act 2002 has able to make a balance between the power of purchasers and interest holder in respect of the land to certain extent.

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