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Land | Ownership

Third Party Rights: Overview

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Third Party Rights: Overview

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Registered titles

  • proprietary rights: interest in land / capable binding third parties / some require registration to protect right
  • third party rights / over registered land / Land Registration Act 2002 s.29: purchaser for valuable consideration registered freehold title subject to: entries on register & unregistered interests which override registered disposition
  • 4 categories third party interests: registrable dispositions / interests affecting a registered estate / equitable interests under trust / overriding interests

Registrable dispositions

  • same as estates & interests capable of existing after 1925: fee simple absolute in possession / legal lease for 7+ yrs
  • must be registered / separate title number / otherwise equitable interest affecting a registered estate
  • s.27(1) LRA 2002: dispositions required completed by registration / no legal effect until registered / pending registration equitable interest
  • s.27(2)(a) LRA 2002: transfer of already registered title / sale of registered freehold estate / buyer on proprietorship register
  • s.27(2)(b) LRA 2002: leases / new register if title opened to record tenant owns lease / lease as burden in charges register of landlord's title
  • s.27(2)(e) LRA 2002: easements / benefit registered on title of land benefitting from right / burden entered on charges register of title burdened by right
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Third Party Rights: Overview

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Interests affecting a registered estate

  • general rule: notice in charges register of title protects interests / binding
  • interests protected: restrictive covenants between freehold owners / equitable easements / estate contracts / home rights under Family Law Act 1996 / exceptions: equitable interests under trusts / leases -3yrs / restrictive covenants between landlord & tenant
  • if entitled to register restriction: prevents registration of transactions unless restriction complied with
  • equitable interests under trusts: restriction on register warns / not binding if buyer overreaches
  • s.29 LRA 2002: owner of interest / fails to protect interest by registration
  • s.29(1): if purchase of registered title for value (registrable disposition for valuable consideration) / completed by registration / right under s.29(2)(a) not binding / if land acquired as gift (not for value) donee bound by interest even if not protected by notice in charges register
  • s.29(2)(a): priority of an interest is protected if : (i) registered charge or subject of notice in the register / (ii) falls within Sch.3 / (iii) appears from the register to be excepted from the effect of registration / s.29(2)(b): disposition of leasehold estate if burden of interest is incident to estate
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Third Party Rights: Overview

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Overriding interests

  • general rule: third party interest must be registered to be binding (registration principle)
  • overriding interests exception to mirror principle: unregistered interests which override registered dispositions & are binding
  • 2 types: ones bind on first registration of title (Sch.1 LRA 2002) / ones bind already registered title (Sch.3 LRA 2002)
  • Sch.3 p.1 LRA 2002: protects leases / term not exceeding 7 yrs
  • Sch.3 p.2 LRA 2002: protects interest person in actual occupation: recognised interest in land (equitable interests under trusts & options to purchase) / occupation obvious on reasonable inspection or buyer knew of interest / buyer ake free if asks & occupier unreasonably fails to disclose
  • actual occupation / overriding interest / s.70(1)(g) LRA 1925 now Sch.3 p.2 LRA 2002 (Williams & Glyn's Bank v Boland)
  • s.31(10) FLA 1996: home rights under FLA / not protected under Sch.3 p.2 LRA 2002
  • overreaching / party take free of Sch.3 p.2 LRA 2002 right / overreaching operates to detach beneficial interest from land to proceeds of sale (so no interest capable of being overriding interest) (London Building Society v Flegg)
  • Sch.3 p.3 LRA 2002: protects easements: if created by implied grant reservation deed or prescription / not if expressly created by deed (registrable dispositions) / not equitable easements (interests affecting a registered estate)
  • easements created after 13 October 2003 must satisfy 1 of: buyer registered title knew of existence / interest obvious on reasonably careful inspection of land / easement used in yr prior to sale
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Third Party Rights: Overview

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Occupation rights

  • decisions s.70(1)(g) LRA 1925 relevant to Sch.3 p.2 LRA 2002 / date of disposition relevant date (Thompson v Foy)
  • 'actual occupation' ordinary meaning / 'actual' physical presence necessary (Williams & Glyn's Bank v Boland)
  • presence of employees (builders) may be sufficient to establish actual occupation (Lloyds Bank v Rosset)
  • relevant date actual occupation - completion of transaction not registration / sending furniture not actual occupation (preparatory steps) / not necessarily personal presence of person claiming to occupy / employee can occupy on behalf of employer (Abbey National v Cann)
  • actual occupation by licensee (not representative occupier) insufficient for actual occupation by licensor / licensee in actual occupation in own right but not gain overriding interest unless holds proprietary right in land / presence of licensor's furniture insufficient (Strand Securities v Caswell)
  • actual occupation / derelict & uninhabitable land / minimal acts of use (erection of fence) (Malory Enterprises v Cheshire Homes)
  • continuous & uninterrupted physical presence not necessary / regular & repeated absence not necessarily negate presence (Kingsnorth Finance v Tizard)
  • minor children not capable of actual occupation / children are shadows of occupation of parent (Hypo Mortgage Services v Robinson)
  • parking of car on land not amount to actual occupation (Epps v Esso)
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