The general principle of registration is that the effect of registration of a disposition at Land Registry is to postpone to the interest created under that disposition any interest not protected by an entry on the register, so that unregistered interests cannot bind the disponee or its successors, and cannot therefore be registered. The exception to this rule is overriding interests, which if they exist are binding notwithstanding that they are not on the title. There are limited, specific types of overriding interests as are set out in Schedule 1 and Schedule 3 of the Land Registration Act 2002.
The most important of these are set out below:
Leases for a term of 7 years or less - leases of more than 7 years are required to be registered at Land Registry and they will not bind a purchaser or mortgagee of a title unless they are. There is no such requirement for leases of 7 years or less. The disponee must have actual knowledge of the of the existence of the lease. it is important to note here that if a conveyancer has knowledge then their client is deemed to have that knowledge even if the fact was not actually disclosed to their client.
Interests of persons in actual occupation - the mere fact of being in occupation of a property does not in itself give rise to an overriding interest, however if the occupier does have a proprietary interest it will be overriding, and therefore binding, if they are in occupation;
Easements and profits a prendre - an easement is a right for a landowner to access another parcel of land (the parcel are usually adjacent but they do not have to be). This might be a right of way or a right to use services crossing over or under the land, or perhaps a right to park). A profit a prendre (which translates roughly as "take profits") is similar to an easement, though much less common. It is a right to access the land for the purpose of taking things, such as harvesting fruit, fishing, hunting etc. For both easements and profits, the use must be apparent on a reasonable inspection. That does mean the person with the benefit must be "caught in the act" however. Circumstantial evidence, such as a worn track through a field suggesting repeated pedestrian or vehicular traffic may be enough. Furthermore the easement or profit need not be exercised with any great regularity - it will depend on the nature of it, for example it may only be used seasonably, or only for specific purposes that arise only rarely. If there is no evidence of its existence however, and if a purchaser is not told about it, they will take free and will not be bound;
Local land charges - a local land charge (i.e. a charge that would be revealed in the LLC1 part of a local authority search) has priority to the same extent as if it were on the register of title and a purchaser (or mortgagee) will be bound by it whether or not a local authority search is carried out. A sale by a mortgagee under a power of sale will not overreach a local land charge that was already on the local land charge register before the mortgage completed;
Manorial rights - manorial rights (or "manorial incidents") are ancient rights attached to the Lord of the Manor. The land would have been "copyhold", a type of ownership where the tenant held form the Lord of the Manor. The title would be subject to the Lord's rights to hunt, fish, play sports etc and the mines and minerals would be reserved to the Lord. After copyhold was abolished the rights continued and have overriding status, however see the section below on loss of overriding status for certain interests after 12 October 2013.
Chancel repair liability - certain properties have attached to them an obligation to contribute toward the repair cost of the chancel of the parish church. All of England and Wales is divided up into parishes (though not all have a church these days). This ancient obligation came to the fore as a result of the case of Aston Cantlow and Wilmcote with Billesley Parochial Church Council v Wallbank and Another [2003]. Aston Cantlow parish church initially issued the Wallbanks with a bill of £100,000 for repairs. They challenged that and lost, resulting in a final bill of £350,000 with legal costs. there have been no similar cases since, although homeowners may have been issued with bill that they have simply paid. Following the Wallbank case, two things became commonplace. First, basic chancel liability searches. These were not property specific but established if a property was in a risk parish. Second, indemnity insurers (who also sometimes provided the searches) started to offer insurance polices against the risk of a claim against a homeowner. The policies were cheap at around £15 but lots were sold. As with manorial rights, a deadline was set in the Land Registration Act 2002 to register the rights or lose them.
Loss of Overriding Status for Certain Interests after 12 October 2013
In a bid to limit the number of binding interests that were not on the register, s117 of the Land Registration Act 2002 set a deadline of 10 years from commencement of the Act to either register certain interests against the affected titles by way of a unilateral notice or else lose the ability to enforce them. The Act commenced on 13th October 2003, so the deadline was 12th October 2013. the interests affected were:
- Franchises;
- Manorial rights;
- Rights to rents reserved to the Crown;
- Non-statutory rights n respect to embankments or sea or river walls;
- Tithe rent charges;
- Chancel repair liabilities
In fact though, beneficiaries remained able to register until there had been a disposition for value so a sale or mortgage) which completed after 12th October 2013 and was registered. That means there are still some titles which may be subject to these overriding interests, but there are fewer every day. If a title has been disposed of for value and registered after 12th October 2013, so that the chancel repair liability is no longer an overriding interest (and assuming it is not registered) then new indemnity policies are no longer required and existing policies have no more value.
Duty to Disclose Overriding Interests
When applying for registration of a disposition, or on first registration, the applicant has a duty to disclose to HMLR any interests of which he has actual knowledge. There is no obligation to carry out any special investigation. For registered land, form DI should be used. for unregistered land panel 11 of the FR1 should be completed.
