Land Law - Registered Land Part 2

Even under the Land Registration Act 2002 there are some unregistered interests that can override disposition. This appears to operate against the underlying principle of the registered land system but allows for certain social interests to be protected by the law. The only way for these interests to be discovered is by an inspection of the land.

According to Schedule 3 of the LRA02 the main overriding interests are legal leases of less than 7 years; local land charges; certain legal easements/land charges; proprietary interests of those in actual occupation.

The basic formulation is that a proprietary interest plus actual occupation will create an overriding interest in the absence of an inquiry.

There are a number of interests including:
Legal lease/tenancy; Ashburn Anstalt v Arnold [1989]
Equitable lease/tenancy; Grace Rymer Investments Ltd. v Waite [1958]
Beneficial interest under a bare trust; Hodgson v Marks [1971]
Beneficial interest under some other trust of land; Williams & Glyn’s Bank v Boland [1981]
ss. 115-6 LRA02

For the inquiry this has to originally come from the the potential buyer but the occupier then has a responsibility to answer fully as a failure to do so means that the overriding interest is lost.

Actual occupation can vary depending on the premises (Lloyds Bank v Rosset [1989]) and more than one person can be in actual occupation (Lloyd v Dugdale [2002]).

According to Sch. 3, para. 2(c)(ii) LRA02 the occupation must be “obvious on a reasonably careful inspection of the land at the time of disposition”. However this does not prevent the occupation being vicarious through an agent or relative (Strand Securities v Caswell [1965]) and it can even be symbolic by looking at recent construction or furniture (Chhokar v Chhokar [1984).

The occupation should be continuous and beyond a "mere fleeting presence" (Abbey National Building Society v Cann [1991]). Some sort of temporary absence is allowed but there must be evidence of continued residence alongside an intention to return (Kling v Keston Properties Ltd [1983]).

There can be no actual occupation of an easement (Celsteel Ltd v Alton House Holdings Ltd [1985]) and children cannot be in actual occupation (Hypo-Mortgage Services Ltd v Robinson [1997]). Use of a corporate veil is also forbidden (Stockholm Finance v Garden Holdings [1995]).

The main issue in this area is surrounding trust interests as overriding interests with the decision in Williams & Glyn’s Bank v Boland [1981] being that in the absence of an inquiry, a beneficial owner in actual occupation behind an implied trust of land has an interest binding those who deal with the sole registered proprietor of that land.

This principle has been eroded over the years though and a disposition by two or more trustees can overreach (City of London Building Society v Flegg [1988]). Furthermore where a beneficiary has knowledge that the owner was selling the property they may be estopped from overriding the buyer (Ulster Bank Ltd v Shanks [1982]). Acquisition mortgage transactions are also excluded (Abbey National Building Society v Cann [1991]).

However even where there is an overriding interest a buyer can apply for a court-ordered sale of the property.