Unregistered land & third-party rights

LL.03 — Unregistered Land & Third-Party Rights

Most land is now registered, but unregistered title still appears. Title is proved by an epitome of title built from a good root of title at least 15 years old (the statutory minimum period for investigating title was cut from 30 to 15 years by LPA 1969 s.23). On any dealing with unregistered land, first registration is now compulsory (LRA 2002 s.4) — so the system is shrinking, but you must know how third-party interests bind purchasers before that trigger.

The three regimes for binding a buyer

1. Legal interests — bind the world. Legal estates and most legal interests (e.g. a legal easement, legal mortgage) bind everyone automatically. No registration needed — the puisne mortgage is the exception (it is legal but still registrable; see below).

2. Registrable interests — the Land Charges Register (LCA 1972). Certain interests must be registered as land charges against the name of the estate owner (not the land). Key classes:

• C(i) puisne mortgage (legal mortgage not protected by deposit of title deeds — note: legal but still registrable);
• C(iv) estate contract (incl. options to purchase). A bare right of pre-emption is more doubtful — it does not create an interest in land until exercised (Pritchard v Briggs) — so do not assume every pre-emption is a registrable C(iv) charge;
• D(ii) restrictive covenant (made on or after 1 Jan 1926, between freeholders);
• D(iii) equitable easement (post-1925);
• Class F home rights (Family Law Act 1996).

Effect of registration = actual notice to all (LPA 1925 s.198). Effect of non-registration: VOID against a purchaser — but the void test differs by class. Under LCA 1972 s.4(6), a Class C(iv) or Class D charge is void against a purchaser of a legal estate for money or money's worth; under s.4(5)/(8), Class C(i)–(iii) and Class F are void against a purchaser of the land or of any interest in it for valuable consideration. Midland Bank v Green — a £500 sale to the wife defeated an unregistered option; bona fides and adequacy of value were irrelevant. Searching against the wrong name can still leave the buyer bound (Diligent Finance v Alleyne).

3. The doctrine of notice — the residual category. Equitable interests that are not registrable (chiefly beneficial interests under a trust that cannot be overreached, and pre-1926 restrictive covenants/equitable easements) bind unless the buyer is equity's darling: a bona fide purchaser of a legal estate for value without notice — actual, constructive, or imputed (LPA 1925 s.199). Kingsnorth Finance v Tizard — the buyer/lender must make reasonable inspection of the land and inquiry about occupiers.

Key distinctions to nail

• Overreaching still applies in unregistered land: pay capital money to two trustees or a trust corporation (LPA 1925 ss.2, 27) and beneficial interests detach to the proceeds — notice then irrelevant.
• Land charges register against the owner's name, not the title number (that's registered land).
• Don't confuse the LCA 1972 Land Charges Register with the LRA 2002 register — different systems, different mechanics.