Learning Outcomes
After reading this article, you will be able to explain the main principles of the Land Registration Act 2002 as they relate to the protection of interests in registered land. You will be able to distinguish between legal, equitable, overriding, and registrable interests, and identify the correct mechanisms for protecting third-party rights using notices and restrictions. You will also be able to apply these rules to SQE1-style scenarios and avoid common pitfalls.
SQE1 Syllabus
For SQE1, you are required to understand how interests in registered land are protected and how the registration system affects the enforceability of third-party rights. As you revise, focus on:
- the main principles of the land registration system (mirror, curtain, insurance)
- the classification of interests in registered land (legal, equitable, overriding, registrable)
- how to protect interests using notices and restrictions
- the effect of overriding interests and the importance of actual occupation
- the practical steps required to ensure an interest is binding on a purchaser.
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
- What is the main purpose of a notice on the register of title?
- Which interests can override registration and bind a purchaser even if not entered on the register?
- What is the effect of a restriction in the proprietorship register?
- How can a beneficiary under a trust ensure their interest is protected on a sale of registered land?
Introduction
The Land Registration Act 2002 (LRA 2002) sets out the system for registering title to land in England and Wales. It also establishes how third-party interests are protected and how purchasers can be sure of the title they acquire. Understanding the classification of interests and the correct methods for protecting them is essential for SQE1.
The registration system is built on three key principles:
Key Term: mirror principle
The register should reflect all legal rights and interests affecting the land, so a purchaser can rely on it as a complete record.Key Term: curtain principle
Certain equitable interests are kept "behind the curtain" and do not appear on the register, so purchasers need not investigate them.Key Term: insurance principle
If someone suffers loss due to an error or omission in the register, the state provides compensation.
Classification of Interests in Registered Land
Interests in registered land are divided into several categories, each with different rules for protection and enforceability.
Key Term: legal interest
A right in land recognized by law that is enforceable against the world if properly created and, where required, registered.Key Term: equitable interest
A right in land recognized by equity, often arising from trusts or contracts, which may require special steps to be protected.Key Term: overriding interest
An interest that binds a purchaser even if not entered on the register, such as certain short leases, rights of persons in actual occupation, and some easements.Key Term: notice
An entry in the charges register of the title, protecting a third-party interest so it is binding on future purchasers.Key Term: restriction
An entry in the proprietorship register limiting the ability of the registered proprietor to deal with the land unless certain conditions are met.
Protecting Interests: Notices and Restrictions
Most third-party interests must be protected by registration to ensure they bind a purchaser.
Notices
A notice is used to protect most interests (e.g., equitable easements, restrictive covenants, options to purchase) by entering them in the charges register.
- Agreed notice: Entered with the proprietor's consent or where the registrar is satisfied as to the interest.
- Unilateral notice: Entered by a person claiming an interest, without the proprietor's consent, but subject to challenge.
If a notice is not entered, the interest may be lost on a sale to a purchaser for value.
Restrictions
A restriction is used to control dispositions of the land. It is commonly used to protect the interests of beneficiaries under a trust.
- A restriction may require that no disposition is registered without the consent of a named person or unless certain conditions are met.
- This ensures that, for example, sale proceeds are paid to at least two trustees, allowing overreaching of beneficial interests.
Overriding Interests
Some interests bind a purchaser even if not entered on the register.
- Short legal leases: Leases granted for seven years or less override registration.
- Rights of persons in actual occupation: If a person with a proprietary interest is in actual occupation at the time of disposition, their interest may override.
- Certain easements and profits: Some implied or prescriptive easements override if they are known to the purchaser, obvious on inspection, or exercised in the previous year.
Key Term: actual occupation
Physical presence on the land, which may give rise to an overriding interest if coupled with a proprietary right.
Worked Example 1.1
Scenario:
Liam is the registered proprietor of a house. His partner, Mia, contributed to the purchase price but is not named on the register. She lives in the property. Liam sells the house to a purchaser, who inspects the property but does not ask about other occupiers. Is Mia's interest protected?
Answer: Mia may have a beneficial interest under a trust and is in actual occupation. If the purchaser failed to make proper enquiries, Mia's interest may override and bind the purchaser as an overriding interest.
Worked Example 1.2
Scenario:
Sophie holds property on trust for herself and her brother, Tom. A restriction is entered in the proprietorship register requiring that no disposition is registered without the consent of both trustees. Sophie tries to sell the property alone. What is the effect?
Answer: The restriction prevents registration of the sale unless the condition is met. This protects Tom's interest and ensures that overreaching can only occur if the sale proceeds are paid to at least two trustees.
Worked Example 1.3
Scenario:
A developer grants an option to purchase land to a buyer. The buyer fails to enter a notice on the register. The developer sells the land to a third party for value. Is the option binding?
Answer: No. Without a notice, the option is not protected and will be lost on a sale to a purchaser for value. The third party takes free of the option.
Exam Warning
If an interest is capable of protection by notice but is not registered, it will not bind a purchaser for value—even if the purchaser knows about it. Always check if registration is required.
Revision Tip
Always distinguish between interests that must be protected by notice, those that require a restriction, and those that may override. Use the register and physical inspection together.
Key Point Checklist
This article has covered the following key knowledge points:
- The Land Registration Act 2002 is based on the mirror, curtain, and insurance principles.
- Interests in registered land are classified as legal, equitable, overriding, or registrable.
- Most third-party interests must be protected by entering a notice in the charges register.
- Restrictions are used to control dispositions and protect beneficiaries under trusts.
- Overriding interests, such as short leases and rights of persons in actual occupation, may bind a purchaser even if not registered.
- Failure to register a notice may mean the interest is lost on a sale to a purchaser for value.
- Physical inspection and proper enquiries are essential to discover overriding interests.
Key Terms and Concepts
- mirror principle
- curtain principle
- insurance principle
- legal interest
- equitable interest
- overriding interest
- notice
- restriction
- actual occupation
