Land Law: Unregistered Land

Unregistered Land

What is Unregistered Land?

Unregistered land is land whose freehold or leasehold title has not been registered on the Land Register pursuant to the Land Registration Act 2002. Other non-title rights might be registered in some fashion, but the title is not. This means that if the owner wants to sell the land, they will need to prove their title using a document such as a deed. Unregistered land falls under a different regime to registered land when it comes to priority.

The sale of land, and the grant of many kinds of leases, triggers a requirement to register the land. As such, if unregistered land is sold, the new owner is required to register it under the provisions of the Land Registration Act 2002.

Which Rights Bind Unregistered Land?

Legal Interests

Legal interests in unregistered land automatically bind the landowner and all of their successors-in-title. Earlier rights trump later rights. This is true regardless of how the later rightsholder acquired the title (including adverse possession!) and regardless of whether they were aware of the right or not.

The only exception to this is a puisne mortgage. This is a mortgage where the documents of title for the land have not been deposited with the lender. This is normally done where there is already a mortgage over the land and the earlier lender still has the title documents. This only binds future landowners if it is registered as a Class C(i) land charge on the Land Charges Register under the provisions of the Land Charges Act 1972, s.2(4)(i).

Equity: The Three Categories

Equitable interests in unregistered land fall into three categories:

Interests Which Must be Registered

Certain equitable interests can only bind purchasers of the land if they are registered as a land charge on the Land Charges Register. Otherwise, the interest is void against the purchaser even if they know about it. The doctrine of notice does not apply to these interests.

Interests Which Overreach

Some interests cannot be registered because they are subject to overreaching. This works the same way that it does for registered land. The doctrine of notice only applies to these interests if they are not overreached.

Interests Which Cannot be Registered or Overreached

Some interests cannot be registered nor overreached. These will bind the purchaser if the doctrine of notice applies.

Equity: Registrable Interests
What must be registered?

Registrable interests include equitable leases, easements, mortgages, restrictive covenants, and estate contracts. These need to be registered as charges under ss.2-3(1) of the Land Charges Act 1972 against ‘the name of the estate owner whose estate is intended to be affected’.

What is the effect of registration?

A correctly filed charge counts as ‘actual notice’ to the world and in relation to all purchases concerning the land: s.198(1). This is true even if the purchaser was unaware of the charge, and even if the interest was not discoverable (e.g. the buyer did not know all the relevant names to search on the register): White v Bijou Mansions [1938] Ch 351).

What if the interest is not registered?

Any registrable interest which is not registered is not binding on relevant purchasers. For equitable leases and mortgages, the purchaser must have provided valuable consideration: ss.4 and 7. For equitable estate contracts, easements and restrictive covenants, they must have provided ‘moneys worth’. This is true even if the purchaser is aware of the right: Midland Bank v Green [1981] 2 WLR 28. It remains binding on the parties that made it, however.

What if the successor-in-title is not a relevant purchaser?

If the successor-in-title is not a relevant purchaser (for example if the land was gifted to them), then they are bound by any registrable interests even if they are not yet registered. The charge will also be binding on any purchaser who is estopped from denying the charge’s validity due to proprietary estoppel: Taylors Fashions Ltd v Liverpool Victoria Trustees Ltd [1982] QB 133. Earlier rights trump later rights.

A purchaser who wants to check whether the land is encumbered must therefore search the Land Charges Register under the names of all previous legal freehold and leasehold owners in the land. Since they are normally only able to do this after they have contracted to buy the land (only then can they access the title deeds), s.24(1) of the Law of Property Act 1969 allows a buyer to exit a contract if they did not have notice of the charge prior to contracting.

Not all registered interests will bind the purchaser, however. This is because when the purchaser makes a proper search of the Land Charges Register, they are issued an official search certificate. This search certificate is treated as conclusive even if a charge has erroneously been left off (so that charge will not bind the purchaser): Land Charges Act 1972, s.10(4).

This does not apply if the search was defective. This might be the case, for example, where the purchaser does not follow the description of the land given in the title documents or did not search for the relevant name (even if they were unaware of that name): Horrill v Cooper (1998) 78 P&CR 336.

Equity: Overreachable Interests

The main examples of equitable interests which can be overreached are beneficial ownership under a trust and (probably) interests arising due to estoppel: Mortgage Express v Lambert [2016] EWCA Civ 555; ER Ives Investment Ltd v High [1967] 2 QB 379. These rights cannot be registered as a land charge.

A purchaser of land will take the land free of these interests so long as the requirements for overreaching are met. The rules are the same as for registered land. If they are not, then the purchaser is only bound if the requirements for the doctrine of notice are met (see below).

Equity: Interests which are Neither Registrable nor Overreachable

There are few interests which cannot be registered or overreached. They include:

  • Equitable mortgages where the mortgagee has the title deeds;
  • Certain restrictive covenants, charges and easements created before 1926 (s.2(5)(ii)-(iii) and s.4(7));
  • Restrictive covenants between a lessor and lessee, over land which is not subject to the lease (s.2(5)(ii)) (the priority of interests in land subject to a lease is determined by the separate regime of leasehold covenants);
  • Landlords’ rights of re-entry and tenant’s rights to remove ‘tenant’s fixtures’;
  • Charging orders.
Equity: The Doctrine of Notice

Later rights over land encumbered by interests which are not registrable and not overreached are normally bound by those earlier rights. However, certain kinds of purchaser are not bound by such rights provided they do not have actual, constructive or imputed notice of the right.

They must be bona fides

The purchaser must act in good faith.

They must have purchased the legal estate

The purchaser must have bought the legal freehold, leasehold or a charge by way of legal mortgage.

They must have bought the land for value

The purchaser must have provided valuable consideration. This must be more than nominal, but need not be adequate: Midland Bank v Green [1981] AC 517.

  • Actual notice means actual knowledge of the right: s.199(1)(ii)(a).
  • Constructive notice is where the right was discoverable on reasonable inquiries which the purchaser did not make: s.199(1)(ii)(a). To make reasonable inquiries, the purchaser must visit the property and make inquiries of any occupants: Hunt v Luck [1902] 1 Ch 428. They should avoid pre-arranged visits which might enable the landowner to hide evidence of occupation: Kingsnorth Finance v Tizard [1986] 1 WLR 783.
  • Imputed notice is where the purchaser’s agent has actual or constructive notice of the right: Law of Property Act 1925, s.199(1)(ii)(b).

If a good faith purchaser of a legal estate for value does not have any of these forms of notice, then they are not bound by the interest.