Introduction to Freehold Transactions — SQE1 practice question

A buyer completed the purchase of a flat for £375,000 three days ago. Her solicitor has submitted the executed transfer and the application to register her as proprietor, and HM Land Registry has acknowledged receipt but has not yet processed it. The buyer has looked at the register online, seen that it still names the seller as proprietor, and telephoned her solicitor in some alarm to ask whether the flat is hers.

Is the buyer the legal owner of the flat?

Option A. Incorrect answer. Yes, because legal title passed to her on completion and registration merely records what has already happened.
Option B. Incorrect answer. Yes, because the register is updated automatically on completion and the copy she looked at must be out of date.
Option C. Incorrect answer. No, and she has no interest of any kind in the flat until the registration is completed.
Option D. Correct answer. Not yet; legal title passes on registration, which takes effect from the date her application was received.Correct
Option E. Incorrect answer. Yes, because she has paid the price in full, and registration matters only to third parties dealing with the flat later.

Why

The correct answer is D. A transfer of registered land is a disposition required to be completed by registration, so it does not operate at law until the registration requirements are met (Land Registration Act 2002, s 27). Between completion and registration the buyer holds the equitable interest and the seller holds the legal estate on trust for her — the "registration gap". When the registrar completes the entry it takes effect from the time the application was received (s 74), so the buyer is protected against entries made in the meantime, and applications are in practice processed in weeks rather than days.

A is incorrect because it treats registration as a formality; for registered land it is constitutive of legal title, not merely evidential. B is incorrect because the register is not updated on completion; there is nothing automatic about it. C is incorrect because it goes too far the other way: the buyer is not yet the legal owner, but she is the beneficial owner from completion. E is incorrect because paying the price does not vest the legal estate, and the consequences of the gap are not confined to third parties.

Why