The system of land registration in England and Wales is governed primarily by the Land Registration Act 2002 (LRA 2002). The purpose of registration is to create a transparent, reliable, and accessible record of who owns what land and what interests affect it. When land is registered, the title is guaranteed by the state. The vast majority of land in England and Wales is now registered, and first registration is compulsory on most dealings with unregistered land.
The modern system of land registration began with the Land Registration Act 1925, which established a system of compulsory registration in stages across England and Wales. The LRA 2002 replaced the 1925 Act and represents the most significant reform of land registration since its introduction. The 2002 Act aimed to make the register a more complete and accurate reflection of the rights affecting land, and to reduce the scope for unregistered interests to cause problems for purchasers.
The Land Registration Act 2002 governs the registration of title to land in England and Wales. It sets out the estates that can be registered, the content of the register, how interests are protected, the effect of first registration, and the rules on adverse possession. Key provisions are found in sections 11, 27-33, and Schedules 1, 3, and 6.
The mirror principle means that the register should reflect (like a mirror) all the material facts about the title to the land. It should show who the owner is, what estate they hold, and what interests affect the land. If an interest is properly protected on the register, a purchaser is bound by it. If an interest is not on the register, the purchaser generally takes free of it. The aim is that the register is the definitive record of title.
The curtain principle means that the register conceals (draws a curtain over) trusts of land. A purchaser does not need to investigate behind the register to discover the beneficial interests under a trust. The register shows the legal owner, and that is sufficient for the purchaser. The beneficial interests are overreached (transferred to the trustees of the trust) when capital money is paid to at least two trustees. This simplifies conveyancing by allowing purchasers to deal with the registered proprietor without investigating the trust.
The insurance principle means that if a person suffers a loss as a result of an error or omission in the register, or as a result of the registration of a void disposition, they may be entitled to compensation from the state. This is set out in Schedule 8 of the LRA 2002. The state effectively underwrites the accuracy of the register. This gives purchasers confidence that the register can be relied upon.
Mirror: the register reflects all rights. Curtain: the register hides trusts. Insurance: the state compensates for errors. Together, these principles mean the purchaser can rely on the register without needing to investigate further (except for overriding interests, which are discussed later).
Under the LRA 2002, certain estates can be registered with their own title. This is called substantive registration. The two main estates that can be substantively registered are: (1) the fee simple absolute in possession (freehold), and (2) the term of years absolute (leasehold) where the lease has more than seven years to run when it is created. Leases of seven years or less are not substantively registered but may still be noted on the register.
First registration is compulsory when certain events occur. Under the Land Registration Act 2002, compulsory registration is triggered by: (1) a transfer of a freehold estate, (2) the grant of a lease of more than seven years, (3) the assignment of a lease with more than seven years to run, (4) the first conveyance of a freehold following the coming into force of the 1925 Act, and (5) certain other dispositions. Failure to register does not invalidate the disposition, but it prevents the purchaser from completing their title.
Every registered title has three registers: the property register, the proprietorship register, and the charges register. Together, these three registers provide a complete picture of the legal ownership and the burdens affecting the land. When a purchaser inspects the register, they should examine all three registers to understand the full extent of the title.
The property register describes the land or lease. It contains a description of the property (usually by reference to a filed plan), any rights that the registered proprietor enjoys over other land (e.g. a right of way), and any class of title (absolute, possessory, qualified, or good leasehold). For leasehold titles, it also sets out the terms of the lease. The property register tells you what the registered proprietor owns.
The proprietorship register identifies the registered proprietor (the person or people who own the estate). It specifies the nature of the estate (e.g. freehold or leasehold) and the class of title. It also records any restrictions that limit the ability of the proprietor to deal with the land. Most importantly, it may contain a restriction under s.27 LRA 2002 (Form A or Form B restrictions) that prevents a sole proprietor from being registered as the sole proprietor of a fee simple unless a restriction is entered.
The charges register records all charges (mortgages), notices of adverse interests, and other burdens that affect the land. This includes registered mortgages, restrictive covenants (as notices), easements that have been protected by notice, and any other interests that have been protected on the register. The charges register is the key register for a purchaser to inspect, because it reveals the third-party rights that bind the land.
| Register | Purpose | Key Contents |
|---|---|---|
| Property Register | Describes the land | Description of property, rights enjoyed, class of title |
| Proprietorship Register | Identifies the owner | Name of proprietor, nature of estate, restrictions |
| Charges Register | Records burdens | Mortgages, notices of interests, restrictive covenants |
Not every interest in land can be registered with its own title. Many equitable interests (such as beneficial interests under a trust of land, or restrictive covenants) are not estates capable of substantive registration. The LRA 2002 provides mechanisms to protect these interests on the register of the title to the land. The method of protection determines whether the interest will bind a purchaser.
The LRA 2002 divides interests into three categories for the purpose of protection: (1) interests that are overriding -- they bind a purchaser regardless of whether they appear on the register, (2) interests that are protected by notice or restriction on the register -- they bind a purchaser who has actual notice, and (3) unprotected interests -- they do not bind a purchaser. Understanding which category an interest falls into is essential for SQE1.
A person whose interest is not protected on the register and is not an overriding interest does not have priority over a registered disposition. If an interest is neither on the register nor overriding, it is extinguished by the disposition and the purchaser takes free of it.
If an interest is not protected on the register and does not fall within the overriding interests categories, the interest is lost when a registered disposition takes place. The registered proprietor takes free of that interest. This is a harsh result for the interest holder, which is why it is so important to ensure that interests are properly protected on the register. The burden is on the interest holder to take steps to protect their interest.
If you are advising a client who has an interest in land that they wish to protect, you must ensure it is properly protected on the register. Failure to do so may mean the interest is lost if the registered proprietor sells the land. This is a common pitfall in practice and in exam questions.
Where a person is registered as the proprietor of a registered estate, any interest protected on the register by a notice or restriction has priority over any other estate or interest that is not so protected, subject to the order of registration of the competing interests and to any rules about priority of notices.
An interest that is not an estate capable of substantive registration can be protected on the register by entering a notice. The most common example is an easement or a restrictive covenant. A notice is entered on the charges register of the title to the land affected. Once entered, the notice binds any subsequent purchaser of that land. Any person with a sufficient interest can apply for a notice to be entered.
A restriction is an entry on the proprietorship register that limits the ability of the registered proprietor to deal with the land. Restrictions are commonly used to protect interests under a trust of land. A Form A restriction prevents a sole proprietor from being registered as the sole proprietor of a fee simple, ensuring that the trust is not overlooked. A Form B restriction prevents a sole trustee from dealing with the land without the consent of another trustee or the court.
An inhibition is the most serious form of protection. It prevents any disposition from being registered. Inhibitions are rare and are typically entered by the Registrar to prevent fraud or where there is a dispute about ownership. An inhibition effectively freezes the register and prevents any dealings with the land until the inhibition is removed.
| Method | Location on Register | Purpose | Examples |
|---|---|---|---|
| Notice | Charges register | Protects third-party interests | Easements, restrictive covenants, leases under 7 years |
| Restriction | Proprietorship register | Limits proprietor's ability to deal | Form A (trusts), Form B (sole trustee) |
| Inhibition | Any register | Freezes dealings with land | Fraud prevention, disputed title |
Overriding interests are interests that bind a purchaser of registered land even though they are not protected on the register. They are an exception to the mirror principle. The rationale is that certain interests are so closely connected with the land that they should bind regardless of registration. The LRA 2002 significantly reduced the number of overriding interests compared with the 1925 Act.
Schedule 1 sets out the interests that override first registration (i.e. when unregistered land is registered for the first time). These include: rights of persons in actual occupation (para 2), leases for a term not exceeding seven years (para 3), easements and profits a prendre (para 4), and other interests listed in the Schedule. The key difference between Sch 1 and Sch 3 is that Sch 1 applies on first registration while Sch 3 applies on registered dispositions.
| Paragraph | Interest | Notes |
|---|---|---|
| Sch 1, para 2 | Rights of persons in actual occupation | Must be actual occupation, not merely paper rights |
| Sch 1, para 3 | Leases not exceeding 7 years | Must take effect in possession and not be excluded |
| Sch 1, para 4 | Easements and profits a prendre | Must be legal easements at the time of first registration |
| Sch 1, para 5 | Customary rights | Rights arising from local custom |
| Sch 1, para 6 | Section 9(3) rights (courtyard houses) | Rights under pre-1926 conveyances |
| Sch 1, para 7 | Franchises and manorial rights | Rare but possible |
| Sch 1, para 8 | Beneficial interests under a trust | Only if the disposition is a gift |
| Sch 1, para 9 | Certain rights under LCA 1972 | Land charges that bind on first registration |
Schedule 3 sets out the interests that override a registered disposition (i.e. when already-registered land is transferred or charged). These are narrower than Sch 1. The most important category is rights of persons in actual occupation (Sch 3, para 2), which was also the most important overriding interest under the 1925 Act. The LRA 2002 reduced the number of Sch 3 interests compared with the old Sch 3 of the 1925 Act.
| Paragraph | Interest | Notes |
|---|---|---|
| Sch 3, para 1 | Interests which are the subject of a notice on the register | These already appear on the register |
| Sch 3, para 2 | Rights of persons in actual occupation | Most important; discussed in detail below |
| Sch 3, para 3 | Easements and profits | Only if not excluded from the register |
| Sch 3, para 4 | Customary and public rights | Rights of common and public rights of way |
| Sch 3, para 5 | Local land charges | Registered under the Local Land Charges Act 1975 |
| Sch 3, para 6 | Statutory rights under other legislation | Various statutory rights |
This is the single most important overriding interest for the SQE. An interest belonging to a person in actual occupation of the land will override a registered disposition, provided the occupation is apparent on a reasonably careful inspection of the land. The LRA 2002 added the "reasonably careful inspection" requirement, which was not present in the 1925 Act. This narrows the scope of the overriding interest compared with the old law.
An interest belonging at the time of the disposition to a person in actual occupation of the land or of property of which the land or property forms part, so far as the interest is not protected under Schedule 1 or noted on the register, and is not an interest which is the subject of a request under section 25(2) (notice of adverse interests).
Mrs Boland had a beneficial interest in the matrimonial home. She was in actual occupation of the property when her husband mortgaged it to the bank without her knowledge. The House of Lords held that her interest, as a person in actual occupation, was binding on the bank even though it was not registered. This case established that actual occupation is a question of fact, not law, and that the physical presence of the occupier is sufficient.
This case confirmed that the question of whether a person is in actual occupation is a question of fact. The Court of Appeal held that a person does not need to occupy the property continuously to be in actual occupation. The nature and quality of the occupation, and the relationship between the occupier and the registered proprietor, are relevant. Temporary absence does not necessarily break actual occupation.
A person who is temporarily absent from the property may still be in actual occupation if they have a continuing intention to return and their absence is of a relatively short duration. The court assesses the facts of each case. The purpose of the occupation must be connected with the interest claimed. A landlord inspecting their property for a few hours does not count as actual occupation.
Under the LRA 2002, Sch 3, para 2, a purchaser is not bound by an interest of a person in actual occupation if the occupation would not have been apparent on a reasonably careful inspection of the land at the time of the disposition. This was a new requirement added by the 2002 Act. It limits the scope of the overriding interest and provides more protection for purchasers.
Where the land is a dwelling house and the interest belongs to a person who is in actual occupation, the interest does not override if the registered disposition is for valuable consideration and the purchaser has no actual notice of the interest. This is a significant restriction on the overriding interest in the context of residential property. However, the "reasonably careful inspection" requirement still applies in other cases.
Under s.29 LRA 2002, an interest that is protected on the register by notice or restriction has priority over an interest that is not so protected. Where two interests are both protected on the register, priority is determined by the order in which they were entered (first in time, first in right). Overriding interests generally have priority over registered interests, subject to the specific rules in Schedules 1 and 3.
Adverse possession (sometimes called "squatters' rights") allows a person who has occupied land without the owner's permission for a sufficient period to acquire title to that land. The LRA 2002 introduced a new regime for adverse possession of registered land under Schedule 6. This replaced the old common law rules that applied under the Limitation Act 1980. The new regime makes it much harder for a squatter to acquire registered land.
Under Sch 6, para 1, a person who has been in adverse possession of registered land for at least 10 years may apply to be registered as the proprietor. The 10-year period is calculated from the date on which the adverse possession began. The applicant must show that they have been in factual possession of the land, with the intention to possess (animus possidendi), without the owner's consent.
When the squatter applies to be registered, the Registrar must serve notice on the registered proprietor (Sch 6, para 4). The registered proprietor then has two options: (1) they can object to the application, in which case the squatter's application is rejected unless certain conditions are met, or (2) they can take no action, in which case the squatter may be registered after a further two years (the "shadow" period).
The registered proprietor can reject the squatter's application on any of three grounds under Sch 6, para 5: (1) the squatter does not meet the 10-year possession requirement, (2) the land is held on trust for the registered proprietor and the squatter is one of the beneficiaries (e.g. a tenant in common), or (3) the squatter has the benefit of a licence or lease from the proprietor. If the proprietor successfully objects, the squatter's application is rejected.
If the registered proprietor objects to the application, the squatter does not immediately lose all rights. Under Sch 6, para 7, the squatter becomes a "registered possessor" and is given a further two-year period. During this time, the squatter can continue to occupy the land. If the registered proprietor does not take steps to evict the squatter during those two years, the squatter can make a second application and will then be registered as proprietor.
If the registered proprietor does not respond to the notice within 65 business days, the squatter can apply again. If the proprietor takes no action for a further two years after the first application, the squatter will be registered as proprietor. This means that even if the proprietor ignores the process, the squatter can eventually gain title. The two-year "shadow" period gives the proprietor a second chance to act.
This case confirmed that adverse possession requires both factual possession and the intention to possess. The court held that the squatter must show an intention to possess the land to the exclusion of all others, including the true owner. The intention to possess is judged objectively from the squatter's actions, not their subjective belief. Regular maintenance and use of the land can be evidence of both factual possession and intention to possess.
If a person is registered as the proprietor of a legal estate, the registration has the effect of vesting that estate in the proprietor together with all rights and privileges which the proprietor would have if the proprietor had been registered at the time of the disposition. The registered proprietor is no longer liable for any interests that are not protected on the register and that are not overriding interests.
First registration has several important effects: (1) the legal estate is vested in the registered proprietor by operation of law, (2) the proprietor's title is indefeasible except in limited circumstances (fraud, mistake), (3) interests that are not protected on the register and are not overriding are extinguished, (4) the state guarantees the title through the insurance principle. First registration effectively draws a line in the sand -- after registration, the register is the authoritative record of title.
The indemnity provisions in Schedule 8 of the LRA 2002 give effect to the insurance principle. If a person suffers loss as a result of: (1) a mistake in the register, (2) the rectification of the register, (3) the registration of a void or voidable disposition, or (4) a failure by the Registrar to perform a duty, they may be entitled to compensation from the Chief Land Registrar. The purpose is to maintain confidence in the register.
The Registrar may refuse or reduce an indemnity payment if the applicant caused or contributed to the loss, or if the applicant failed to take reasonable steps to protect their own interests. Indemnity is also not available for losses that are purely commercial in nature (e.g. a fall in property value). The purpose of the indemnity is to compensate for the loss of a legal right, not to compensate for commercial disappointment.