The Land Registration Act 1925 and the Land Registration Act 2002 - Case Study Example

Land Law The question raises the following legal issues; legal adverse possession, and overriding interests as provided for under both the Land Registration Act 1925 and the Land Registration Act 2002. It is important to mention that once property has been purchased according to the legal formalities and rules, the purchaser is recognised as a legal owner of the property. But the law has recognised the rights of squatters to take over the property if the owner does not assert ownership over a long period of time under the limitation Act 1980. It can be said that land is treated differently from other valuables to be ignored.. For that reason, the law recognises the rights of others to take over the property especially if they treated it as their own for a long period of time. They can claim it for themselves. Squatters are strictly trespassers until they satisfy the conditions required to claim the title. “No action shall be brought by any person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him, or it first accrued to some person through whom he claims, to that person.”1 That means that once 12 years have elapsed the squatter can argue that he now has rights in the property because has treated it as if it were his own for over 12 years and the paper title owner has not objected. In RB Policies at Lloyd’s v Butler2,the court held that those who go to sleep on their claims should not be assisted by the courts in recovering their property. The squatter must prove that at all times he had the intention to treat the land as his own. Slade J stated:”….the intention, in one’s own name and on one’s own behalf, to exclude the world at large, including the owner with the paper title…..so far is reasonably practicable and so far as the processes of the law will allow,”3 It should be noted that any conduct that indicates a clear intention to possess will be enough. In number of cases the evidence establishing an intention to possess will be the same as the evidence that establishes factual possession. A typical example, is putting up fences and locking of gates. In Buckinghamshire County Council v Moran,4 the fact that the squatter had put up fencing and a gate and had then locked the gate was sufficient for the claimant to show an intention of possession. The court was also persuaded by the evidence that the squatter had started to cultivate the land, putting in bulbs and rose bushes. In Lambeth LBC v Blackburn,5 it stated that if a squatter changes the locks of the property there is clear evidence that he intends to treat it as his own and to exclude the paper title owner from the land. Occupation of the land with the permission of the owner or under some lawful right is not adverse. Where occupation is under a licence or even a lease, that is not adverse to the owner and the time in occupation cannot be used as evidence of adverse possession. It may be possible however, to argue that the terms of the original licence were different from the rights that seeks to be exercised. In Pyne(Oxford)Ltd v Graham,6 Pyne owned a number of fields adjoining a farm owned by Graham. At first the Grams used the fields under a written licence given by Pyne in 1984. The Grahams requested that those licences be extended in 1986 but the request was not answered. The Grahams continued to use the land from 1986 until 1997 when Mr Graham registered a caution against the property based on his rights under adverse possession. Pyne challenged this, arguing that the Grahams had not gained rights under adverse possession. The case was decided in the Grahams’ favour by the High court but the judgment was reversed by the court of Appeal. The House of Lords upheld the decision of Neuberger J in the High court that the Grahams had established rights over the land. It should be noted that some acts may be equivocal meaning that they can be referable to an intention to possess and equally they could be evidence of enjoyment with no thought about a future intention to possess. If adverse possession is successful on unregistered land, the paper title owner is prevented from suing and his title is effectively extinguished. Any rights in existence against the title will continue to be effective as the squatter will not be a bona fide purchaser for value of the land. As for Registered land the acquiring of rights is not automatic for the squatter. Before the 2002 Act the paper title owner was deemed to hold the estate on trust for the squatter once time had run against him. Under the Act the law is different as the registered owner does not lose title simply because some one takes possession of the land for a fixed period of time. “….no period of limitation under section 15 of the limitation Act 1980….shall run against any person, other than a chargee, in relation to an estate in land or rent charge the title to which is registered.”7The squatter can only successfully obtain rights where he successfully applies to the registrar for registration. But this process is carried out only after the paper owner has been notified and has a chance to register any objections to the registration. Where issues of overriding interests arise, the legal position is very clear. Overriding interests are interests which are binding on the registered proprietor despite not being on the register. Typical examples of overriding interests includes certain rights of occupation, easements, and possible the rights of squatters. The most important group of all were rights of a person in actual occupation of property, under s 70(1)(g). In Williams & Glyn’s Bank v Boland,8 a husband purchased property together and had registered title. They both made contributions but it was registered in the husband’s sole name. The husband held the legal estate on trust for himself and his wife in equal shares. The husband later mortgaged the property to Williams & Glyn’s Bank by way of legal mortgage. He could do this without consulting the wife because she did not have an interest in the legal estate. He defaulted on the repayments and Williams & Glyn’s Bank sought possession of the property. The issue was whether they were subject to Mrs Boland’s interest. She had the right to register the equitable interest as a minor interest but she had failed to do so. She was in occupation of the property and was found to have an overriding interest under s70(1)(g) of the 1925 Act. Her husband was the sole trustee so her rights were not transferred to the property but were rights in the land and were good even against a legal mortgage. What was however, unease about the decision was that her rights were capable of registration but she still had an overriding interest. Which meant that she was protected in two ways. She could register but if she failed to do so she could also claim an overriding interest. Usually the system would only accord one type of protection. In a more recent case involving Malory Enterprises v Cheshire Homes(UK),9 Malory was the registered proprietor of land. As Malory had remained in actual occupation by virtue of storage of goods, the changing of locks on the land and fencing of the property, the court of Appeal held that he had an overriding interest which was binding on Cheshire Homes. Arden LJ stated in Malory:” What constitutes actual occupation of property depends on the nature and state of the property in question, and the judge adopted that approach. If a site is uninhabitable, as the rear land was, residence is not required, but there must be some physical presence, with some degree of permanence and continuity……” If this area of law gave the courts problems, why did the 2002 Act return overriding interests? Bray, J10 argues that the reasons why the overriding interests were returned are as follows: “1.overriding interests provide a means of accommodation rights which can be created informally and where it is unrealistic to register at the time of creation, for example rights of persons in actual occupation. 2.some rights are either pointless or inconvenient to register. The law commission specifically mentioned leases and also rights in coal. 3.there are some rights which are otherwise protected and it would therefore be unrealistic to expect them to be registered. An example of such rights would be local land charges which are registered at a local land charges Register.” The Law commission on the retention of overriding interests says: “The way in which the law on overriding interests has developed over the last seventy two years has demonstrated that overriding interests are by no means only ‘minor liabilities’….Most overriding interests do appear to have one shared characteristic, however, that is related to the orthodox explanation of them,……it is unreasonable to expect the person who has the benefit of the right to register it as a means of securing its protection.”11 The Land Registration Act 2002 does however distinguish between overriding rights which come within schedule 1, that is interests which override a first disposition, and schedule 3, on interests which override registered disposition. Under schedule 1, when any person becomes the first registered proprietor of a freehold estate in land on first registration, they take the legal estate subject to certain interests. “The estate is vested in the proprietor subject only to the following interests affecting the estate at the time of registration- (a)interests which are the subject of an entry in the register in relation to the estate, (b)Unregistered interests which fall within any of the paragraphs of schedule 1, and (c)Interests acquired under the Limitation Act 1980(c.58) of which the proprietor has notice.”12 It is also important to note that some of the rights have been affected by the 2002 Act, for-instance a requirement that when an overriding interest is discovered it will be entered on the Register, and any person applying for registration now has a duty to disclose any overriding interests known to him. “ A person applying for registration under chapter1 of part 2 must provide to the registrar such information as the rules may provide about any interests affecting the estate to which the application relates which- (i)falls within any of the paragraphs of schedule 1, and (ii)is of a description specified by the rules.”13 Alice may be advised that there are is a fifty-fifty chance to succeed as a squatter having been tendering George’s land for a considerable period of time. But she should be warned that the court may actually take the view that her presence on the land was basically for personal enjoyment. This may be evidenced from her letter to George to seek permission to use the land,which never got a reply. Occupation of the land with the permission of the owner is not adverse. Alice should also be advised that under proprietary estoppel she may prove that some kind of representation or assurance was made which encouraged her to believe that she would acquire rights over the land. Mere silence from the deceased(George) may be sufficient. The silence here could have meant acceptance, after all, Henry used the same piece of land before it was sold to Alice. In Ramsden v Dyson,14Lord Cranworth referred to the silence of a landowner in the light of someone building on their land. He suggested that equity would intervene if someone silently allows another to build on his land and does not interfere to prevent that. The courts are however, careful not to allow mere silence to be legally significant unless it can be clearly linked to an acceptance or endorsement of rights in property. There seems to be an endorsement here considering that Henry used the property before Alice bought it. The most important point here is that there must be some encouragement from the owner of the property. If the claimant simply moves on to the land and starts to build then the court would never hold that he has rights in the property. This is referred to as a legitimate expectation of rights and, even if it is reasonable, the claimant must be encouraged in his belief before the courts will hold his rights. In this case, George’s silence may be argued as an encouragement. In conclusion, it can be submitted, that Alice may have a chance to succeed in having her rights in actual occupation. The Malory case sets the principle involved in actual occupation cases as governed by both the Land Registration Act 1925 and 2002. Word count: 2,139 Bibliography Bell, C.C(2003), Land Law, 4th ed, Old Bailey Press, London. Chapelle, D(2008), Land Law, 8th ed, Pearson, London. Chappelle, D(2004), Land Law, 6th ed, Pearson, London. Gray, K, & Gray, S.F(2009), Land Law, Core Text Series, OUP, Oxford. Luther, P, & Moran, A(2009), Core Statutes on Property law, Palgrave, Sussex . Statutes Land Registration Act 1925 Land Registration Act 2002 Limitation Act 1980 Trusts of Land & Appointment of trustees Act 1996 Law of Property(Miscellaneous Provisions)Act 1989 Read More