Registration of title and protection of interests - Registration of title to land

Learning Outcomes

After studying this article, you will be able to explain the principles and aims of the Land Registration Act 2002, including the mirror, curtain, and insurance principles. You will be able to identify which estates and interests must be registered, understand the concept of overriding interests, and apply the rules for protecting and enforcing third-party rights in registered land. You will also be able to answer SQE1-style questions on registration and protection of interests.

SQE1 Syllabus

For SQE1, you are required to understand the registration of title to land and the protection of interests in registered land. Focus your revision on:

• the aims and principles of the Land Registration Act 2002 (LRA 2002)
• the meaning and effect of the mirror, curtain, and insurance principles
• which estates and interests must be registered and the consequences of non-registration
• the nature and categories of overriding interests
• how third-party rights are protected and enforced in registered land
• the practical implications of registration and overriding interests for purchasers and conveyancers

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.

1. Which of the following is an overriding interest under the Land Registration Act 2002?
   1. a registered charge
   2. a restrictive covenant protected by notice
   3. a legal lease for 5 years
   4. an estate contract
2. What is the effect of failing to register a registrable disposition of a legal estate in registered land?
   1. The disposition is void and the legal estate remains with the transferor
   2. The disposition is valid but only as an equitable interest
   3. The disposition is valid and binds all future purchasers
   4. The disposition is valid only if the parties had actual notice
3. Which principle states that the register should reflect all rights and interests affecting the land?
   1. Mirror principle
   2. Curtain principle
   3. Insurance principle
   4. Overreaching principle

4. True or false? A person in actual occupation with a beneficial interest under a trust will always have an overriding interest binding a purchaser, even if the purchase money is paid to two trustees.

Introduction

The Land Registration Act 2002 (LRA 2002) governs the registration of title to land in England and Wales. The Act aims to provide a clear, reliable, and accessible record of ownership and rights, making property transactions simpler and safer. For SQE1, you must understand the principles behind registration, which interests must be registered, the concept of overriding interests, and how third-party rights are protected and enforced in registered land.

The Principles of Land Registration

The LRA 2002 is built on three main principles: the mirror principle, the curtain principle, and the insurance principle. These principles guide the operation of the register and the protection of rights in land.

Key Term: mirror principle The register should accurately reflect the ownership of land and all rights and interests affecting it, so that anyone inspecting the register can see the true state of title.

Key Term: curtain principle Certain equitable interests, especially those behind trusts, are kept off the register and do not affect a purchaser, provided statutory requirements for overreaching are met.

Key Term: insurance principle The state guarantees the accuracy of the register and provides compensation (indemnity) for loss caused by mistakes or omissions in the register.

The Structure of the Register

The register for each title is divided into three parts:

• Property register: describes the land and notes any rights benefiting it.
• Proprietorship register: shows the name and address of the registered proprietor and any restrictions on their powers.
• Charges register: records burdens on the land, such as mortgages and certain third-party rights.

Registration of Title and Registrable Dispositions

Only certain legal estates can be registered as titles—freehold (fee simple absolute in possession) and leasehold (term of years absolute, usually over seven years). When a registrable disposition (such as a transfer, grant of a long lease, or legal charge) occurs, it must be completed by registration to take effect at law.

Key Term: registrable disposition A transaction involving registered land that must be registered to be effective at law, such as a transfer, grant of a lease over seven years, or a legal charge (mortgage).

If a registrable disposition is not registered, it does not operate at law. The legal estate remains with the transferor, and the transferee acquires only an equitable interest.

Worked Example 1.1

A sells his registered freehold to B. B pays the price and receives a signed transfer, but B does not register the transfer at HM Land Registry. Who holds the legal estate?

Answer: The legal estate remains with A until registration. B has only an equitable interest until the transfer is registered.

Protection of Third-Party Rights

Third-party rights in registered land are protected either by registration (as a notice or restriction) or, in some cases, as overriding interests.

Key Term: notice An entry in the charges register protecting a third-party interest (such as a restrictive covenant or option) so that it binds future purchasers.

Key Term: restriction An entry in the proprietorship register limiting the registered proprietor’s powers, often used to protect interests under a trust or to require consent for certain dispositions.

Overriding Interests

Some interests bind a purchaser even though they do not appear on the register. These are called overriding interests and are set out in Schedules 1 and 3 of the LRA 2002. The main categories are:

• Legal leases granted for seven years or less (Schedule 3, para 1)
• Interests of persons in actual occupation (Schedule 3, para 2)
• Certain legal easements and profits (Schedule 3, para 3)
• Some customary and public rights

Key Term: overriding interest An interest in registered land that binds a purchaser even though it is not entered on the register, such as a short legal lease or the rights of a person in actual occupation.

Worked Example 1.2

C buys a registered freehold from D. At completion, E is living in the property and claims a beneficial interest under a trust. The purchase money is paid to D and another trustee. Is E’s interest overriding?

Answer: No. If the purchase money is paid to two trustees, E’s beneficial interest is overreached and does not bind C, even if E is in actual occupation.

Exam Warning

Overriding interests are an exception to the mirror principle. For SQE1, remember that not all interests are on the register—always consider overriding interests when advising a purchaser.

Consequences of Non-Registration

If a registrable disposition is not registered, the transferee does not acquire the legal estate. Instead, they may have only an equitable interest, which is vulnerable to loss of priority if the land is sold to a purchaser for value who registers their interest.

Worked Example 1.3

F grants G a 10-year lease of registered land by deed, but G does not register the lease. What is the status of G’s interest?

Answer: G has only an equitable lease. The legal estate remains with F until registration.

Practical Implications for Purchasers and Conveyancers

Purchasers and their solicitors must:

• Inspect the register for entries affecting the land.
• Make enquiries and inspect the property to identify possible overriding interests (such as occupiers or unregistered easements).
• Ensure that all registrable dispositions are completed by registration.
• Advise clients about the risks of unregistered or overriding interests.

Revision Tip

Always check for signs of occupation or use by third parties when acting for a purchaser. Overriding interests are not always obvious from the register.

Key Point Checklist

This article has covered the following key knowledge points:

• The Land Registration Act 2002 governs the registration of title to land in England and Wales.
• The mirror, curtain, and insurance principles underpin the system of registered land.
• Only freehold and leasehold estates (over seven years) can be registered as titles.
• Registrable dispositions must be completed by registration to take effect at law.
• Third-party rights are protected by notice, restriction, or as overriding interests.
• Overriding interests bind purchasers even if not on the register—main categories include short legal leases, actual occupation, and certain legal easements.
• Failure to register a registrable disposition means the transferee acquires only an equitable interest.
• Purchasers and conveyancers must investigate both the register and the property for unregistered or overriding interests.

Key Terms and Concepts

• mirror principle
• curtain principle
• insurance principle
• registrable disposition
• notice
• restriction
• overriding interest