Registered Land — SQE1 FLK2 Land Law

A house is registered in a man's sole name. His wife paid half the price. Nothing on the register mentions her share, and no restriction was ever entered. Without consulting her he sells, the buyer's solicitor pays the whole price to his solicitor, and the buyer is registered as proprietor. She was living in the house throughout. Is her interest gone? No.

And the thing that saves her is not the thing most people reach for. Change one fact, a single signature on a receipt, and she loses everything. This is Registered Land, governed by the Land Registration Act 2002. The register tells you almost everything, and the exception is where all the marks are. Keep the wife in mind. We are coming back for her.

Here is the route. The three principles the system rests on. What can be registered, and what forces a first registration. The three registers, and where to look for what. Then how an interest gets protected, and what happens to one that is not. Then overriding interests, which are the exception to all of it. Then overreaching, which defeats even those. And finally adverse possession.

Start with the point of the system. Registration creates a reliable record of who owns what land and what interests affect it. Once land is registered, the title is guaranteed by the state. The Land Registration Act 2002 replaced the 1925 Act, aiming to make the register a fuller reflection of the rights affecting land.

Three principles hold it together. The mirror principle: the register should reflect all the material facts about the title. The curtain principle: it draws a curtain over trusts, so a purchaser need not look behind it at beneficial interests. And the insurance principle: if you suffer loss from an error in the register, the state may compensate you, under Schedule 8.

What can be registered with its own title? Two estates. The freehold, the fee simple absolute in possession. And the leasehold, where the lease has more than 7 years to run when it is created. A lease of 7 years or less is not substantively registered at all.

First registration is compulsory when certain events happen, and s.4 of the 2002 Act lists them. The transfer of a qualifying freehold triggers it, and it does so whether the transfer is for valuable consideration, by way of gift, or under a court order. So does the grant of a lease of more than 7 years.

And there is a deadline with teeth. The application must be made within two months of the transfer, under s.6. Miss it and the transfer becomes void as regards the legal estate, under s.7, and the seller holds it on trust for the buyer.

Every registered title has three registers. The property register describes the land and records the rights it enjoys over other land. The proprietorship register names the proprietor, gives the class of title, and carries any restriction. The charges register records the burdens: mortgages, notices, restrictive covenants.

Try one. A house has the benefit of a right of way over the neighbour's drive. Which register? The property register, because that is where rights the land enjoys are recorded. Its charges register would show burdens on the house, not benefits.

Now dispositions. Under s.27, certain dealings with a registered estate are registrable dispositions, and a registrable disposition does not operate at law until the registration requirements are met. Grant an eight-year lease out of a registered freehold and hand over a deed, and you have no legal lease yet. The tenant holds an equitable one.

Which is vulnerable, and s.29 is why. A registrable disposition of a registered estate, made for valuable consideration and completed by registration, postpones any interest that is not protected on the register and is not overriding. The basic rule in s.28 is that priority otherwise goes by order of creation. Registration for value displaces that.

So how do you protect an interest? Since the 2002 Act there are exactly two methods. A notice and a restriction. Cautions and inhibitions, which existed under the 1925 Act, were both abolished.

They do different jobs, and the distinction is worth marks. A notice goes on the charges register and protects a third-party interest, so that it binds a subsequent purchaser. A restriction goes on the proprietorship register and limits how the proprietor may deal with the land. It is commonly used where the land is held on trust.

Which brings us to the exception that swallows much of the mirror principle. Overriding interests bind a purchaser though they are nowhere on the register. Schedule 1 lists those that override a first registration. Schedule 3 lists those that override a registered disposition, and it is the narrower list.

And within Schedule 3, one paragraph matters more than the rest. Paragraph 2: the interest of a person in actual occupation. No entry, no notice, nothing. Hold an interest in the land and be in actual occupation of it, and your interest can bind a purchaser who never knew you existed.

The case that established it is the one behind our cold open. A wife had a beneficial interest in the matrimonial home, registered in her husband's sole name. He mortgaged it without telling her. She was living there. The House of Lords held her interest bound the bank. Williams & Glyn's Bank v Boland, from 1981.

Actual occupation survives absence, and two cases mark the range. A wife was in hospital giving birth when her husband sold the home to a purchaser who knew about her. Her belongings were there and she meant to return. Still in actual occupation. Chhokar v Chhokar, from 1984.

And in a later case a woman with a beneficial interest was living in a residential care home when a lender took a charge. Her furniture stayed and she visited, meaning to return. Still in actual occupation. The Court of Appeal weighed the degree of permanence and continuity, the reason for the absence, and the intention to return.

But paragraph 2 has limits, and two matter. First, where inquiry was made of the occupier before the disposition and they failed to disclose the interest when they could reasonably have been expected to. Ask, get nothing, and you take free of it. Second, where the occupation would not have been obvious on a reasonably careful inspection.

And notice the second half of that second limb, because papers are built on it. It is not enough that the occupation was not obvious. The purchaser must also lack actual knowledge of the interest.

Now the doctrine that defeats all of it. Overreaching sweeps a beneficiary's interest off the land and into the purchase money. It works only if the statutory conditions are met. The one that matters: capital money must be paid to at least two trustees, or to a trust corporation. That is ss.2 and 27 of the Law of Property Act 1925.

Get that right and occupation is irrelevant. Parents-in-law had contributed to a house held by their daughter and son-in-law as joint legal owners. The couple mortgaged it. The parents were living there. Their interests were overreached anyway, because the money went to two trustees. City of London Building Society v Flegg, from 1988.

So look again at our wife. One legal owner. One solicitor receiving the whole price. Nothing overreached, because there was only one trustee to pay. Her interest survives in the land, and because she was living there it overrides the transfer. Two names on the title, both paid, and she would have had only a claim to money.

Last section: adverse possession, and the 2002 Act made this much harder. Under Schedule 6, a person in adverse possession of registered land for at least ten years, ending with the date of the application, may apply to be registered as proprietor. Note the verb. Ten years entitles you to apply, not to the land.

Here is the procedure. The registrar gives notice to the registered proprietor, who has 65 business days to respond. Do nothing, and the squatter is registered. Require the application to be dealt with under paragraph 5, and it is rejected. The exceptions are three: an estoppel, some other right to the land, or the boundary condition.

And rejection is not the end. Stay in adverse possession a further two years and the squatter may apply again, and is then entitled to be registered. The exception is where the proprietor has meanwhile evicted them or obtained judgment for possession. So an objection buys the owner two years and a duty to act.

What must the squatter prove? Two elements. Factual possession, a sufficient degree of exclusive physical custody and control, dealing with the land as an occupying owner might. And the intention to possess, an intention to exercise exclusive control on one's own behalf. The classic statement of both is Slade J's, in Powell v McFarlane, from 1977.

Both are judged objectively, from what the squatter did rather than what the squatter believed. In the leading modern case, farmers stayed on land after a grazing agreement expired, and farmed and fenced it. They admitted they would have paid for a new licence if asked. That did not defeat them. A squatter need not intend to own the land.

But permission destroys adversity, and it can be given unilaterally. An owner wrote to an occupier granting her a licence to stay rent-free for life. She never replied. From that letter her possession was no longer adverse. Eight adverse years followed by four permissive ones is not ten years of adverse possession.

One last thing, the insurance principle at work. Under Schedule 8, a person who suffers loss by reason of a mistake in the register, or by reason of rectification of it, may claim an indemnity from the registrar. It can be reduced where the claimant's own lack of care contributed to the loss.

A word on how SQE1 tests this. You will not be asked to recall case names or section numbers. You get a scenario, five answers, and one instruction: pick the best. Here that means working out which register an interest should be on, and what happens when it is on none of them. The names are memory pegs, nothing more.

If you keep only three. Williams & Glyn's Bank v Boland, where a beneficial interest plus actual occupation bound a bank that knew nothing about it. City of London Building Society v Flegg, where the same interest was swept away because the money went to two trustees. And Powell v McFarlane, for the two elements a squatter has to prove.

Four traps the examiners set. One: count the trustees before you look at who is living there. Actual occupation answers a purchaser who takes free of unprotected interests. It is no answer to overreaching. Two trustees paid, and the most visible occupier in the country loses their interest in the land.

Two: a restriction is not a priority device. A notice is what makes a third-party interest bind a purchaser. A restriction limits how the proprietor may deal with the land. Its absence leaves a buyer with no practical warning of a trust, but it cannot bring overreaching about.

Three: the inspection limb has a second half. It is not enough that the occupation would not have been obvious on a reasonably careful inspection. The purchaser must also lack actual knowledge. Read the facts for what the buyer was told, not only for what the buyer could see.

Four: ten years does not give a squatter the land. It gives them the right to apply, and the proprietor then gets notice and a chance to respond. And permission at any point stops the clock.

Quick check, and it is our couple. A house is registered in the sole name of a man. He and his wife each paid half the price and hold it on trust for themselves as tenants in common. Nothing on the register mentions her share and no restriction was entered. Without consulting her he sells. The buyer's solicitor pays the whole price to the man's solicitor. She was living there throughout.

Has the wife's beneficial interest been overreached? Three candidate answers. One: yes, because no restriction had been entered to alert the buyer to the trust. Two: no, because the price was paid to one trustee only, and overreaching needs two trustees or a trust corporation. Three: no, because the wife was living in the house when the sale completed. Pause here if you want a moment.

The answer is two. Overreaching sweeps the beneficiaries' interests off the land and into the purchase money, but only where the capital money is paid to at least two trustees or a trust corporation. Here it went to the man alone. Nothing was overreached, so her interest still subsists in the house, and her actual occupation makes it override the transfer.

Why the others fail. One, because the absence of a restriction removes the buyer's practical warning but cannot bring about overreaching. Three is the interesting one. It is right for the wrong reason: her occupation is what makes the surviving interest overriding, not the reason overreaching failed.

Five things to take away. One: mirror, curtain, insurance. The register reflects the title, hides the trust, and the state pays for its mistakes under Schedule 8. Two: only a freehold, or a lease with more than 7 years to run, is substantively registered.

Three: there are two ways to protect an interest and no others. A notice on the charges register, which makes it bind. A restriction on the proprietorship register, which limits dealing. Four: an interest neither protected nor overriding is postponed to a registered disposition made for value, under s.29.

Five: actual occupation under Schedule 3, paragraph 2 can bind a purchaser with no entry anywhere. But overreaching beats it whenever the money is paid to two trustees. That is what turned on a single signature for our wife. Next time, Unregistered Land.

Practise this topic with exam-style questions at sqe1prep.co.uk. This episode is for education and exam revision only, not legal advice, and we are not affiliated with or endorsed by the SRA or Kaplan.