There exist two types of title ownership viz. unregistered and registered. The system of unregistered title is being gradually phased out by a systematic process of registration wherein the ownership and other details including the benefit and burden on the land are recorded on the Land Registry, and a simultaneous record is created in the Index Map- a geographical map.
We shall see how the different types of estates and interests existing on the land shall be dealt with respect to registered and unregistered land. We shall also discuss the circumstances under which the interest and estates shall bind third parties like a buyer of land in a conveyancing process.
Unregistered Land
Here we discuss the legal estates and interest that bind the owners of unregistered land, with respect to the interest that is governed by the Land Charges Act 1972 and interests that are not governed by the Act.
Legal Estates and Interests:
All legal estate and interest shall automatically bind the land and every person who buys or receives in gift the unregistered land, shall hence take such an interest or estate. When the owner of such a freehold land decides to sell the property, the buyer also takes the property subject to such an easement. This rule is however subject to the exception that the interest is not governed by the Land Charges Act of 1972.
Other Interests:
With respect to all other interests, much depends on the fact that the individual has taken notice of the interest.
Interest Governed by the Land Charges Act 1972:
There are four types of lands where interests are governed under the Land Charges Act 1972:
- Class C (i): The legal mortgage is not protected by the lender’s possession of the title deed.
- Class C (iv): A contract that is created to sell the land or grant a lease.
- Class D (ii): A restrictive covenant that is entered on or after 1st of January, 1926.
- Class F: A civil partner of spouse’s right of occupation of the matrimonial home under the FLA rules.
Such interests that are governed under the Land Charges Act 1972 should be registered under the Central Land Charges Department. If the registration has been made by a third party, their right shall be binding on all persons and the registration itself is considered notice.
But if the interest is registrable and was not registered by your conveyancing solicitor, the effect of such an act would depend on the nature of the right. But generally it is believed that such an act would deem the right to be void against the buyer, even though the buyer may have knowledge of the third-party right.
But if the property has been given as a gift such unregistered interests do not become void as they are applicable only to the buyer of the property. Once a buyer has defeated such interest, a future donee will take the property free of interest.
Interests Not Governed by the Land Charges Act 1972:
Interests that are not governed by the Land Charges Act 1972, like beneficial interests under a trust of land, or a restrictive covenant established before 1926 shall bind the buyer unless he falls under the definition of being a bona fide purchaser of the legal estate without a notice. The notice can be:
- actual -where the buyer actually knew, or
- implied- wherein his solicitor has an actual or constructive knowledge, or
- Constructive – wherein he would have been in notice had he made reasonable enquiries.
Here again, interests that become void for lack of notice are applicable only to the buyer and not to a donee who takes the land with the interests. And once the buyer has defeated the interest, subsequent donees will take the land free of interest.
Also, beneficial interests under a trust of land can be overreached and will not be made binding on the buyer even if he has notice of it. This however, does not apply to equitable interests.
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