As explained at the beginning of the last chapter, the 1925 legislation provided for the extension of a system of registered conveyancing. The registered system, whilst primarily directed at the mechanics of holding and dealing with land, incidentally made some important changes in the enforceability, and thereby in the nature, of various rights. In particular, under the registered system, the question whether a right is legal or equitable is usually less important than the question whether it is on the register or off the register.
The concept was brilliant in its simplicity; you have a national register of titles, in which you record every title to land and its corresponding incumbrances; an intending purchaser then inspects the register and takes the title as registered. If a right is on the register, the purchaser takes subject to it; if a right is off the register, he takes free of it. In practice, things are not quite as simple as that. In the first place, some rights which are on the register may be overreachable. The purchaser may take free of those rights – despite the fact that they are on the register – by paying his money to at least two trustees or a trust corporation. In the second place, some rights which are off the register may nevertheless bind the purchaser. It was found necessary to compromise the fundamental principle of registration by creating a limited class of overriding interests – so called because they override the title as officially recorded – which bind the purchaser, despite the fact that they are not recorded on the register.
One of the main reasons why compromise was necessary is that the registered system exists, and was intended to exist, alongside the old, unregistered system. Conversion from the old system to the new was intended to be a gradual affair, so that it was, and still is, quite possible that some houses in a street are covered by the registered system but other houses in that same street are still covered by the old unregistered system. The registered system was therefore designed in such a way as to achieve results which are similar to the results which would have been achieved under the old unregistered system, whilst simplifying and improving the mechanisms for achieving those results.
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The process of conversion has taken longer than expected. The registered system has been common in the London area ever since 1925, but it did not begin to become widespread in the provinces until the mid 1960s. It was made universal in 1990, in the sense that thereafter, it became compulsory to register an unregistered title to land anywhere in England or Wales upon the occasion of the next sale. Then, in 1997, it was made compulsory to register an unregistered title not only on the occasion of the next sale, but also on the occasion of the next gift or mortgage. To be more precise, after 1997, the obligation to register an unregistered title arises upon completion of a relevant transfer of the legal fee simple absolute in possession, or upon the grant of a lease for more than 21 years, or upon completion of a relevant transfer of a leasehold when the lease still has more than 21 years to run, or upon the completion of a first legal mortgage of the fee simple or of a lease with more than 21 years to run.
In consequence, the registered system is now the norm. It is estimated that well over 80% of all titles have now been registered. But it follows that, even today, a significant amount of land is still held, and may for one last time be dealt with, under the old, unregistered system.
(1)
CONCEPTS
The system of registered conveyancing is based on the following concepts.
(a)
Registration of title
The registered system is based on the Land Registration Act (LRA) 1925. For that reason, the system is commonly referred to as registered land, but that might mislead. What is registered is not the land itself, but the various
titles to the land. The point may be simply illustrated. Suppose there are
three people interested in the same piece of land: a freeholder, a headlessee and an underlessee. To talk of ‘registered land’ might imply that, if any title to the land is registered, then all titles to that land must be registered. But that is not so. The conditional obligation to register applies to each title independently. Each title is the subject of a separate registration. Each estate owner gets a separate title number and a separate title certificate. If the headlease has changed hands recently, then the headleasehold title
THEREGISTEREDSYSTEM
will probably be registered. If the freehold has not changed hands for many years, then it may still be unregistered. It can easily happen, therefore, that one title to a piece of land is registered whilst another title to the same piece of land remains unregistered for the time being.
(b)
The mirror principle
The land register provides an accurate and authoritative statement of the title. It reflects the information which would, under the old system, have been discovered from an examination of the title deeds.
It is commonly said that the land register ‘reflects the title’, but that can be misleading. The register reflects the documentary title only. There are many rights and obligations which never appeared in the title deeds under the old system and which are not, therefore, transcribed onto the register under the modern system. For examples, see overriding interests, below, p 78.
Some critics seize on the point that the land register does not reflect the totality of the title, and complain that the mirror is cracked. But, as explained above, it was a deliberate policy of the 1925 legislators that the modern system and the old system should operate side by side. Therefore, it was desirable that, despite their different forms and procedures, the substance of the two systems should, as far as possible, be the same. The title certificate in the registered system merely replaces the title deeds in the old unregistered system.
If the legislators had been able to begin with a completely clean sheet, they might have done things differently. Even then, the concept of an absolutely comprehensive register is probably unattainable. It is impossible to register some rights (for example, squatter’s rights). It is impracticable to register others (for example, local land charges – see Chapter 8 – and short tenancies). And the corollary of insisting that all rights must be registered is that failure to register defeats the right. That is all very well for the commercially astute, but what of the deserving but blissfully ignorant?
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(c)
Statutory magic
The estate owner owns the title as registered. The Land Registry has power to rectify the register, but it may not normally rectify so as to prejudice a registered proprietor in possession, in the absence of fraud, culpable negligence or some other special factor.
One consequence of the proposition that the estate owner owns the title as registered is that the Land Registry can cure defects of title. It is not uncommon – especially in unregistered conveyancing – to find a technical snag on the title; experience suggests that the title is actually a perfectly sound one, but there is some flaw in the documentary evidence of it – perhaps a missing signature, perhaps a long lost document. In registering a title, the Land Registry may, if they think the title offered is a good holding title, ignore any technical blemishes so that the title as registered is actually better than the title originally offered to the Land Registry.
Another consequence of the proposition is that a registered fee simple absolute is, in concept, even stronger than an unregistered fee simple absolute, for the registered proprietor may be deprived of his title only in accordance with the statutory scheme.
(d)
State guarantee
The title as registered is backed by a State guarantee. If a defect subsequently comes to light, the Land Registry must either rectify the register and compensate the registered proprietor for the degradation of his title, or else it must affirm the title as registered and compensate the adverse claimant.
(e)
Registered dealings
Once a title has been registered, then any subsequent disposition must be done through the Land Registry if it is to create a legal estate or interest. The registered proprietor is specifically empowered to transfer his title to the land or part of the land; he may grant out of it a lease, or an easement (perpetual or for a term of years), or a rentcharge (perpetual or for a term of years); he may also mortgage his title by creating a registered charge on it. Any such disposition must take place ‘on the register’ in the sense that the transferee does not acquire a legal estate or interest until the disposition
is registered at the Land Registry. Pending registration, he acquires an equitable right only. The one exception is a short lease (21 years or less). Such leases are not registrable interests, and the lessee takes his legal estate at once.
The registered proprietor may also create any other right or interest in the land which he might have created had the land been unregistered. But these other dealings take place ‘off the register’, in the sense that their validity does not depend upon the intervention of the Land Registry. Any dealing off the register generates what the LRA calls a ‘minor interest’, which takes effect as an equitable interest and is vulnerable to a purchaser for value unless protected in some way, as explained below.
(2)
GRADES OF TITLE
The land register reflects the quality of the title shown. There are four grades of title. The best is title absolute, which indicates that there are no significant defects at all.
The proprietor may be registered with title absolute whether he is the freeholder or a leaseholder, but to get an absolute leasehold title, the applicant must demonstrate not only that he has a good title to the term of years created by the lease, but also that the lease was validly granted in the first place. In other words, he has to prove the freehold title down to the granting of the lease in order to demonstrate that the grantor had power to grant it. If he cannot do that, then the leaseholder will be registered with the second grade of title: good leasehold. That means that, assuming that the lease was validly granted, then the proprietor’s title is guaranteed; but the State guarantee does not cover the possibility that the lease was invalid. A good leasehold can be upgraded to title absolute if the validity of the lease is subsequently proved.
The third grade of title is a qualified title. This is accorded, as its name implies, where there is a significant doubt about or defect on the title. The title certificate will say something like: ‘All estates rights and interests subsisting or capable of arising under the deed dated … are excepted from the effect of this registration.’ The qualification will be removed after a number of years if no adverse claims are in fact made.
The fourth grade of title is possessory title. That applies where the proprietor has an inadequate paper title or none at all. The Land Registry gives no guarantee against any rights prior to the registration but, as with
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a qualified title, a possessory title will be upgraded after a period of time if no adverse claimants in fact appear.
(3)
FORM OF TITLE
The authoritative version of the title is the one registered at the Land Registry. The Registry, however, issues a title certificate in respect of each registered title. Where there is no mortgage, the title certificate is called a Land Certificate and is issued to the registered proprietor. Where there is a mortgage, the Land Certificate is withdrawn and a Charge Certificate is issued to the mortgagee (lender) instead. A Charge Certificate is, in substance, the Land Certificate with a copy of the mortgage deed bound in. The title certificate is an authoritative statement of the title as it existed at the date of issue of the certificate, but there is always the possibility that the register has been amended since the date of issue.
In any event, up to date office copies of the title may be obtained at any time upon payment of the prescribed fee. (‘Office copies’ means official copies, made by the Land Registry and bearing the official stamp; photocopies made in a solicitor’s own office are not authoritative.)
The title certificate itself contains copies of the filed plan and of the
register entries. The filed plan is a plan of the registered land, based on a
large scale Ordnance Survey map. The register entries consist of three sections. The first is the property register, which describes the land by reference to the filed plan, and states whether the land is held for a freehold or leasehold estate (and in the latter event it gives details of the lease). Secondly, the proprietorship register indicates the grade of the registered title (title absolute, good leasehold, or as the case may be) and gives the name and address of the registered proprietor. It also indicates any restrictions there may be upon the proprietor’s powers of disposition. For example, if the registered proprietors are trustees, there is likely to be a restriction that no disposition is to be registered unless the capital money is paid to at least two trustees or a trust corporation. The third part of the register entries is the charges register, which lists the incumbrances to which the land is subject. Into this part of the register go details of any mortgages, leases, restrictive covenants and so forth.