Essay On Overriding Interests In Land Registration Act.

Land Registration for the 21^st Century: A conveyancing revolution, Law Com 271, para 1.5 (2001).

The register should be a complete and accurate reflection of the state of title of the land at any given time, so that it is possible to investigate title to land on line, with the absolute minimum of additional enquiries and inspections.

Evaluate the extent to which overriding interests defeat the purpose of registered land.

Details

The land registration Act of UK provides the provision of the overriding interest. Overriding interest enables the person to make aclaim on the property without being entering into the title on the land. The present has a detailed assessment of the impact of the overriding interest which defeats the main objective of the registered landhasalso been discussed in an appropriate manner.

“The overriding interest in the land registration act generally described as “the crack in the mirror of the title” as they always considered as a defect in the registered title system”. Interests whichoverride a registered disposition are interests which provide power to an individual to take a registered disposition.

The other person without entering into the registered title on the land can make an assertion on the land, this is known as overriding interest by which they can claim the rights on the land without getting any title on the land. Further according to the section 29(2) (a)(ii) of the land registration act, although the person is protected under the register the person who has override interest have the priority on the land.

Schedule 1 of the land registration act 2002, contained that by the first registration on the land the purchaser is automatically getting the right on the land even if the registry or the title deed is not given or reversed on that land. Further,schedule 3 of the land registered act contained that the subsequent purchaser of the land can claim the rights on the land even if the existing register has a title on the land. Therefore in several cases in which overriding interest may lead to an adverse impact on the property transaction.

As per the provision of Para 2 of Schedule 3 which is related to the overriding interest of the land who has the actual possession on the land. This Para states that for the attainmentof the benefit of the overriding interest, there must be the real interest, along with the possession of the land by the person. Moreover, same was concluded by the court in case of law National Provisional Bank Ltd V Ainsworth (1965) AC 1175.

Further, in the case of Abbey national building society v Cann (1991) AC 56, held that as per the section 70(1)(g), date of completion of the transaction was considered as the applicable time for the actual occupation instead date of registration.

Overriding interest consist of lease for the term period of seven years or less than seven years, legal easement, rights which are not provided under any law in respect of the sea or wall of river, right related with the repair and maintenance of the church, mines and minerals, local land charge, public right way and along with many other rights.

Impact of Overriding Interests on Property Transactions

However, due to the unregistered system in the Land Registration Act make the significant burden on the purchaser with respect to the inspection of the title deed and the doctrine of notice. Because of the overriding interest, the purchaser cannot be able to identify the person who has the interest in the land by the normal inquiry and inspection of the register. Along with this the overriding interest also makes the significant impact on the rights of the purchaser because of the importance isgiving to the person who has the interest without being entering the name into the registered deed. Therefore the overriding interest significantly defeats the purpose of the land registration act. Since the main objective of the land registration act is to evaluate the ownership, possession and the rights of the land and also provide the poof of the title, facilitate the transaction of sale and purchase of the land and also prevent the illegal disposal of the land.On the other hand, the government put the efforts into making the balance between the interest of the purchaser and the occupant. The government has recognized that it is necessary to execute the definite similar needs to acquire of the registered land. Therefore techniques, application and concentration have changed.

In the land registration act 2002, the scope and range of the overriding interest got reduced in schedule 1 as well as in the schedule 3.In this case of  Kling v Keston Properties Ltd, can be referred.

“Overreaching drives to relocate the rights from the land to the proceeds of sale. Thus, any interest in land capable does not continue to be protected by actual occupation”. The statement was provided by judge in case of City of London Building Society v Flegg.

Moreover in the case of Hodgson V Marks, as per the section 70(1) (g), actual occupation must be the apparent occupation, but after the land registration act 2002 this is considered as the invalid due to the implementation of the equitable principle of constructive notice of the rights of person in occupation.Further, it has been evaluated that the criteria of the overriding interest related with the actual occupation are based on the condition, the purchase or the seller will take no risk.

“In order to have overriding status, it is necessary that interest must be a proprietary interest”. The same was concluded in decision of National Provincial Bank v Ainsworth [1965] AC 1175. By considering the social and legal requirement, overriding interests are reasonably acceptable since it leads to the give the priority on the land to the person who did not have the registered title or the title deed on his/her name. For instance, it would be appropriate to state that the overriding status of customary and public rights are required to be preserved for the important community advantage which is attained through it, and it would be “argumentative” to expect the beneficiaries of specified rights to register them adjacent to the burdened land.

Balancing the Interests of Buyers and Occupants

Moreover as per the schedule 3 of the land registration act 2002, third party purchaser automatically bind by the overriding interest although the third party cannot determine the person who has the overriding interest on the land by inspecting the register of title or in fact that the third party purchaserdoes not actually know about the existence of overridinginterest on the land. On the registered land, the pressure is built on the purchaser to identify whether, on the land, any person has overriding interest.  In case of Buckinghamshire County Council v Moran it has been cited that“In case a person claims or utilizes a land by license of owner as well as through paper title than same cannot be treated as adverse possession against the owner of paper title.”Through the enquiry or physically investigation the purchaser of the land has to identify the overriding interest before the acquiring land. Therefore the burden diminishes the absolute certainty which is the main objective of all the registered system.

However, the approach of the overriding interest sometimes leads to pressure under the land registration act. Earlier, the duty to make the donation to the repair related with the chancel church create the overriding interest, however from the October 2013, the purchaser will be bind on the chancel repair liability only if the liability is registered with the title for that land. Due to this, it has been analysed that the land registration act is proficient of supposing receivers of overriding interest to safeguard theirinterest by way of registration. Moreover, the same concept should be applicable in case of franchises and rights related to the mines and minerals in land registered before 1898;however, now it became very old.  “Factual possession represents significant degree of physical control. Thus, the owner of the land and individual intruding for land cannot be in possession of the land at same time. Moreover, attempting for factual possession can be stated as   that alleged processor has been dealing with land in question”.All the rights should be registered under the land registration act otherwise overriding interest is defeated.

Conclusion

On the basis of the above analysis, it has been seen that overriding interest provide the several benefits to the person even if the title of the land is not registered on his/her name. Although in some cases overridinginterest is beneficial for the community, however sometimes it may lead to a negative impact on the person who has the title of the land. Further, it is very difficult for the person who is purchasing the land, identifying the person who possesses the overriding interest in the land. Due to this difficulty, the government impose the various requirements through which the purchaser enable to evaluate the overriding interest on the land. The government also try to make the balance between the interest of the land and occupier of the land.

Reduction of the Scope of Overriding Interests in the Land Registration Act 2002

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