Once the lease is registered, the freehold title shall be referenced on the leasehold title and vice versa. Such a cross-referencing is done so that, it makes it easy for the tenant to trace his owner, should such a need arise. Also, because of the existence of the leasehold title on the freehold title, any subsequent buyer shall have knowledge of the existence of the lease.
Classes of Title:
Titles can be classified according to the quality of the unregistered title that is provided during the first registration. This is determined by the Registrar when an application for registration of interest in the title is made for the first time. It is generally considered that there are four classes of titles:
Absolute Title:
A majority of titles are classified as ‘absolute’ or titles that are as near perfect as can be. Such a class of title is generally given to a freehold interest or a leasehold interest. Although, the person who is vested with the legal estate has all the appurtenant rights, he is subject to:
- Any entries on the register,
- Any unregistered interests as per Schs 1 or 3 of the LRA 2002,
- Third-party interests when the property in question is under the benefit of trust and the trustee has notice of the interests,
- Express and implied covenants and obligations on a leasehold property.
The Registrar also has the power to overlook minor defects and grant an absolute title, thereby causing the title to be cured in effect. Once a person’s interest in a land has been registered, the State guarantees his title. It may also in certain circumstances offer compensation if defect has been observed in the title. But, such a guarantee is subject to the easements and covenants associated with the land, and may sometimes render the land unsuitable for the buyer. Besides, the Land Registry may also make entries that are not guaranteed by the State. This is done by using the word ‘expressed’. The register may state that a certain deed may be ‘expressed’ to have effect. Thus, it can be seen here that although a person has absolute title to the land, it does not indicate that the title is perfect.
Possessory Title:
Although possessory titles do not account for more than 1% of all registered titles in the country, one can frequently encounter instances where title is claimed under this class. They are often associated with freehold or leasehold property. Possessory title is given subject to the condition that there may be adverse interests at the time when the title was first registered. This is given when the applicant is in possession of the land but has lost his title deeds or is applying under the Limitation Act 1980. Although the title is given subject to an adverse interest, the effect of such a registration is the same as registration of absolute title. Also, after a stipulated period, the title can be upgraded to absolute.
Qualified Title:
If the Registrar on application for registration, identifies a defect that he deems to be beyond his good judgment to overlook, can pass a title under this class. Although the registration has the same effect as absolute title, the State’s guarantee on the title does not include the defect. Titles under this class are very rare, and are awarded when upon application for first registration; it is found that a transaction in breach of trust has taken place with respect to that title. In such a situation, the title owner shall take interest subject to the interests of the beneficiaries under the trust. As with other classes, a qualified title can be given to freehold or leasehold property.
Good Leasehold Property:
This class is applicable only to leasehold properties and given in instances where the Registrar is satisfied that the title to the leasehold interest is sound. But, he does not have access to the title of the revisionary interest (an interest where the original owner regains complete ownership to the property on occurrence of a subsequent condition), and hence cannot give guarantee on the title against the defect, or to even guarantee that the title owner has the right to give the property on lease.
Such a title is given when the freehold land is itself registered as less than absolute and the applicant has not submitted evidence of title to the freehold reversion when making the application or when the freehold reversion is unregistered. This class of title is not considered as unsatisfactory and hence it is sometimes difficult to sell or mortgage.
sizePhoto courtesy: roger4336
