The Land Registration Act 2002 received Royal Assent on 26 February and over the coming months new rules will be drafted to bring its provisions into effect. The Act, which is the outcome of several years' joint work by the Law Commission and the Land Registry, has been described as potentially more far-reaching than the great property reforms effected by the 1925 legislation.
The Act paves the way for the introduction of electronic conveyancing to replace the traditional paper-based procedure as we discussed in a previous edition (although this will not happen for a few years) and replaces all existing legislation relating to land registration with the aim of exploiting the potential of an electronic system and eliminating defects in the present law. There are also several significant changes to property law in general.
An important change is introduction of a new system in relation to adverse possession for registered land, which we detailed in our last edition. The effect of this new regime will make registered land virtually squatter-proof and clients owning unregistered properties are advised to consider applying to the Land Registry for voluntary registration to take advantage of this.
The number of dispositions and interests capable of registration is increased with the aim of providing as complete a picture on the register as possible. Matters capable of registration will now include:
- all leases of 7 years or more (currently 21 years)
- leases of any length granted to take effect in possession more than 3 months after the date of grant
- local land charges
- some overriding interests e.g. rights of occupation
- easements acquired by implied grant or prescription
- profits a prendre e.g. fishing and shooting rights
- land owned directly by the Crown (demesne land) which includes most of the foreshore
- franchises e.g. the right to hold a fair or market
Of the above, the compulsory requirement to register leases of 7 years or more is likely to have the biggest impact in practice and in time it is probable that there will be compulsory registration of leases of 3 years and over. Dealings with leases are the most common type of property transaction and this new requirement has attracted criticism, as it will inevitably involve more bureaucracy and increased costs. However, the Government's view is that the advantage of a more transparent system will outweigh the extra work and expense.
In line with the Act's objective that the Register should show a full picture of any registered title, the number of overriding interests, to which property is subject to, will be reduced and some are to lose their overriding status after 10 years. For the first time, overriding interests are to be treated differently on first registration and on subsequent dealings.
The Act clarifies the protection of third party interests over registered land and cautions and inhibitions are to be abolished, although existing ones will remain on the title. Notices and restrictions will be either "Agreed" (i.e. entered with the registered proprietor's consent) or "Unilateral" (i.e. entered without consent). Unilateral notices will take the place of cautions. The registered proprietor will be informed by the Land Registry of the registration of such a notice and can then apply to have it removed.
Restrictions will be used in similar circumstances as at present, but will also be used in cases of insolvency and other situations where an inhibition is currently used.
The Act will allow increased rights of access to the documents relating to a registered title, so far as the Land Registry has the information, and will permit inspection of leases and charges.
Other general changes include the creation of a new independent adjudicator for the Land Registry whose function will be to determine contested applications. Decisions of the adjudicator may be appealed through the Courts.
Full implementation of the Act and development of an electronic conveyancing system were included among the aims in the Land Registry's 10-year plan published on 28 May this year. This will bring about a new age for all involved with property, but there is still much work to be done to create new systems and rules before this can be achieved.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
