Enforcement of interests

What determines whether a proprietary right over registered land binds a new owner?

The priority and enforcement rules in the Land Registration Act 2002.

What are the three main categories of estates and interests under the Land Registration Act 2002?

Registrable dispositions, interests protected by an entry on the register, and overriding interests.

Which provisions principally determine priority between interests in registered land?

Sections 28 and 29 of the Land Registration Act 2002.

What is the basic priority rule under section 28 of the Land Registration Act 2002?

An earlier interest takes priority over a later disposition.

In what type of transaction is section 28 especially relevant?

A disposition not made for valuable consideration, such as a gift or inheritance.

How does section 28 affect a donee who receives registered land?

The donee takes subject to earlier proprietary interests, whether or not those interests were protected on the register.

What is the exception to the basic priority rule under section 29 of the Land Registration Act 2002?

A registered disposition for valuable consideration takes priority over earlier interests unless those interests are protected on the register or override registration.

What kind of disposition engages section 29?

A disposition of a registered estate made for valuable consideration and completed by registration.

Which pre-existing rights remain binding on a purchaser under section 29?

Rights protected by an appropriate register entry and overriding interests.

What happens to an unprotected interest when registered land is sold to a purchaser for valuable consideration?

Section 29 postpones the interest, so it will not bind the purchaser.

Can an interest postponed under section 29 revive against a later donee?

Once the interest has been lost against the purchaser for value, it does not revive against someone later taking through that purchaser.

In the example where the original owner granted an unprotected interest and later gifted the land, who is bound by the interest?

The original owner and the friend who received the land as a gift are bound.

Why is the original owner bound by an interest they granted?

The original grantor is bound under the ordinary rules governing the creation of the right, often including contract.

Why is the friend who received the land as a gift bound by the unprotected interest?

The friend is a donee, so section 28 preserves the priority of the earlier interest.

Why is the later buyer for value not bound by the unprotected interest?

Section 29 gives the registered purchaser priority because the interest was neither protected nor overriding.

Why is the buyer’s daughter, who later inherits the land, also not bound?

The interest was already postponed when the buyer acquired the land and cannot revive against a successor.

What is a registrable disposition under section 27 of the Land Registration Act 2002?

A transaction that must be completed by registration before it takes effect at law.

What does section 27(1) provide about an unregistered registrable disposition?

It does not operate at law until the registration requirements have been completed.

What is meant by compulsory registration of a disposition?

The transaction must be registered to create or transfer the intended legal estate or interest.

What formal steps are generally required for a registrable disposition?

It must be created by deed and completed by registration.

What is the effect of valid registration of a registrable disposition?

The legal estate or interest is validly created and is enforceable through the register.

Which provision lists the principal registrable dispositions?

Section 27(2) of the Land Registration Act 2002.

Is a transfer of an existing registered freehold a registrable disposition?

A transfer of an existing freehold estate must be registered under section 27(2)(a).

Is a transfer of an existing registered leasehold a registrable disposition?

A transfer of an existing leasehold estate must be registered under section 27(2)(a).

What lease grants are registrable dispositions under section 27(2)(b)?

The grant of a new lease for a term exceeding seven years.

What type of easement is a registrable disposition under section 27(2)(d)?

An expressly granted or expressly reserved legal easement.

What steps are required to create an express legal easement over registered land?

It must be created by deed and then registered.

Where does a registered easement appear on the register?

It appears on the property register of the dominant land and the charges register of the burdened land.

Why does a registered legal easement bind a later purchaser for value?

It is protected on the register and therefore falls within section 29(2).

What landlord’s right is registrable under section 27(2)(e)?

A legal right of entry, including a right of forfeiture.

What mortgage transaction is registrable under section 27(2)(f)?

The grant of a legal mortgage or legal charge.

What steps are required to create a legal mortgage over registered land?

It must be created by deed and submitted for registration.

Where does a registered legal mortgage appear?

On the charges register of the mortgaged title.

What is the effect of failing to register a registrable legal mortgage?

It will not take effect as a legal mortgage.

How are most equitable interests over registered land protected?

By entry of a notice or, in appropriate cases, a restriction.

Does an equitable interest generally have to be registered to be validly created?

Creation may occur without registration, but enforceability against purchasers usually depends on protection through the register.

What is a notice under section 32 of the Land Registration Act 2002?

An entry in the charges register recording the burden of an interest affecting the registered estate.

What is the principal purpose of a notice?

To ensure that a valid interest binds later purchasers for value under section 29.

Where is a notice entered?

In the charges register of the burdened land.

Which interests are generally protected by notice?

Equitable proprietary interests intended to survive a change of ownership.

Does the entry of a notice prove that the underlying interest is valid?

A notice protects an interest if validly created, but does not itself establish its validity.

What information does a notice provide to a purchaser?

It alerts the purchaser that an asserted proprietary interest affects the land and may bind them.

Can a beneficiary’s interest under a trust of land be protected by notice?

Section 33 excludes trust interests from protection by notice.

What is the usual register entry for a restrictive covenant affecting registered freehold land?

A notice in the charges register.

How should an estate contract over registered land ordinarily be protected?

By entry of a notice.

Can an equitable mortgage be protected by notice?

An equitable mortgage, whether deliberately or inadvertently created, may be protected by notice.

How should an equitable easement be protected over registered land?

By entry of a notice in the charges register.

What types of easement may exist only in equity?

An easement granted for an uncertain term or a failed legal easement satisfying the relevant written formalities.

How should an equitable lease be protected over registered land?

By entry of a notice.

Can a legal lease of more than three years but not more than seven years be protected by notice?

Registration is optional, but a notice may be entered to protect it expressly.

What is a restriction under section 40 of the Land Registration Act 2002?

An entry in the proprietorship register regulating when a disposition may be registered.

Where is a restriction entered?

In the proprietorship register of the burdened title.

What is the purpose of a restriction?

It imposes conditions that must be satisfied before a disposition can be registered.

Is a restriction generally used to protect a trust beneficiary’s interest?

A restriction is the usual mechanism for safeguarding trust interests and ensuring overreaching requirements are met.

Does a restriction itself make the underlying interest binding on a purchaser?

It controls registration of dispositions but does not itself confer priority on the underlying interest.

Can a restriction prevent every future disposition of the land?

It may impose conditions but cannot absolutely prohibit all dispositions.

How may a restriction operate where the registered proprietor is bankrupt?

The trustee in bankruptcy may require that no disposition be registered without their consent.

How does a restriction affect the registered proprietor’s powers?

It limits the proprietor’s ability to register a sale, lease or charge unless specified conditions are met.

What is the role of a restriction relating to a trust of land?

It alerts buyers and lenders to the trust and helps ensure capital money is paid in a way that overreaches the beneficial interests.

What is overreaching?

The process by which equitable trust interests are detached from the land and transferred to the capital money paid on a sale or mortgage.

Which statutory provisions govern overreaching?

Sections 2 and 27 of the Law of Property Act 1925.

Does overreaching apply to both registered and unregistered land?

The same overreaching principles apply to trusts of registered and unregistered land.

To which interests does overreaching apply?

Equitable interests held under a trust of land.

Why must a purchaser consider overreaching where a trust of land exists?

Without overreaching, the purchaser may acquire the land subject to a beneficiary’s equitable interest.

What must a purchaser do to overreach trust interests?

Pay the capital money to at least two trustees or a trust corporation.

To whom should capital money not be paid for overreaching purposes?

It should not be paid directly to the beneficiaries in place of the trustees.

What happens to the beneficiary’s interest when capital money is paid to two trustees?

The interest transfers from the land to the sale or mortgage proceeds.

How does a restriction help secure overreaching?

It can prevent registration unless the purchaser pays the capital money to at least two trustees.

What should be done where there is only one legal owner and overreaching is required?

A second trustee may be appointed, sometimes a solicitor.

What happens where overreaching does not occur?

The beneficiary’s interest remains attached to the land.

How is the enforceability of a non-overreached trust interest then determined?

It depends on the ordinary priority rules, including whether the beneficiary has an overriding interest through actual occupation.

What is the position of a trust beneficiary who is not in actual occupation and whose interest was not overreached?

The interest remains valid against the trustees but will usually not bind a purchaser or lender for value.

What did City of London Building Society v Flegg establish about overreaching?

Payment of mortgage money to two trustees overreached the beneficiaries’ equitable interests even though they occupied the property.

What were the facts of City of London Building Society v Flegg?

The Fleggs contributed to the purchase price, while legal title was held by their daughter and son-in-law, who mortgaged the property without the Fleggs’ consent.

Why did the Fleggs have a beneficial interest?

Their contribution to the purchase price gave them an equitable interest under an implied trust.

Why did the Fleggs’ interest not bind the building society?

The mortgage advance was paid to two legal owners, so their interest was overreached.

What rights did the Fleggs retain after overreaching?

They retained rights against the trustees in the mortgage money rather than rights binding the land.

What did Williams & Glyn’s Bank v Boland establish?

A beneficial interest was not overreached where mortgage money was paid to only one trustee and therefore bound the bank as an overriding interest through actual occupation.

What were the facts of Williams & Glyn’s Bank v Boland?

The husband held sole legal title, while the wife had contributed substantially and occupied the property when he remortgaged it without her consent.

Why was the wife’s interest not overreached in Boland?

The bank paid the mortgage advance to only one trustee.

Why did the wife’s interest bind the bank in Boland?

Her non-overreached equitable interest was coupled with actual occupation.

What practical step should the bank have taken in Boland?

It should have required the appointment of a second trustee before advancing the money.

What is an overriding interest?

An interest that binds a purchaser for value despite not being entered on the register.

Why are overriding interests controversial?

They undermine the ideal that the register should provide a complete statement of rights affecting the land.

What function do overriding interests serve?

They protect certain rights whose holders cannot reasonably be expected to register them.

Where are the main overriding interests affecting a registered disposition listed?

Schedule 3 of the Land Registration Act 2002.

What interest is protected by paragraph 1 of Schedule 3?

A legal lease granted for a term of seven years or less.

What interest is protected by paragraph 2 of Schedule 3?

A qualifying proprietary interest held by a person in actual occupation, subject to statutory exceptions.

What interest is protected by paragraph 3 of Schedule 3?

Certain implied legal easements and profits à prendre.

How must a legal lease exceeding seven years be protected?

It is a registrable disposition under section 27(2)(b) and must be registered.

What happens when a lease exceeding seven years is registered?

A note of the lease appears on the freehold title and binds later owners.

Why are legal leases of seven years or less overriding?

Requiring substantive registration of the large number of short leases would be impractical.

Does paragraph 1 of Schedule 3 protect equitable leases?

Paragraph 1 applies to legal leases, not equitable leases.

How may a legal lease of more than three but no more than seven years additionally be protected?

A notice may be entered voluntarily in the charges register.

What two matters must normally be shown under paragraph 2 of Schedule 3?

A proprietary interest in the land and actual occupation of the land to which it relates.

What types of rights may qualify as interests in land under paragraph 2?

Trust interests, equitable leases and options to purchase may qualify.

Can a merely personal licence qualify under paragraph 2?

The right must be proprietary rather than merely personal.

What is the effect of paragraph 2 on a non-overreached trust interest?

It may make the interest binding on a purchaser or lender if the beneficiary is in actual occupation.

Why did the Law Commission retain actual-occupation overriding interests?

Informal equitable interests may arise without owners appreciating the need or ability to register them.

Does the Land Registration Act 2002 define actual occupation?

The statute contains no exhaustive definition.