Land Registration Act

(a) Rights that may be claimed over property and whether or not they will bind the purchaser - Registered Land

The Property was purchased by Helen some two years ago and therefore the Land Registration Act 2002 is applicable.

Section 29 of the LRA 2002 states that the buyer of a freehold estate is able to buy the land free from all encumbrances except for registered charges, interests protected by notices on the register of the estate and interests under Schedule 3 of the act that override the disposition but are not registered.

If Helen's title is leasehold, there may also be additional obligations specified on the lease, which do not appear on the register.

The LRA 2002 does not permit for any other entries than notices and restrictions to be entered on the register of the estate. Notices are defined under s 32(1) as:

'An entry in the register in the respect of the burden of an interest affecting a registered estate or charge'

A valid notice is protected against a purchaser for valuable consideration. Section 38 sets out the interests for which notice requires to be recorded and s 37 sets out notices that may be recorded and these are defined as those that would otherwise be overriding interests.

Restrictions are defined under s 40(1) of the LRA 2002 as:

'an entry in the register regulating the circumstances in which a disposition of a registered estate or charge may be the subject of an entry in the register.'

Interests which are protected by entries appearing on the register are further divided into Registrable dispositions and interests affecting a registered estate. The former are listed in s 27 of the LRA 2002 and must be completed by registration against the title they affect in order to be valid legal interests or estates. They must also be completed by registration in order to bind a purchaser of the affected land. These are listed under s 27 as transfers of freehold estates, legal easements, legal charges and legal leases for over seven years.

Helen's mortgage is legal and therefore is a registrable disposition. The lease is a five year lease, which, in order to be legal, must be for a term of years absolute and must have been created using the formalities under s 52(1) of the LPA 1925 and s 1 of the Law of Property (Miscellaneous Provisions) Act 1989. This lease was created by deed and is therefore legal. As the lease is for a term not exceeding seven years it is not a registrable disposition.

The non-trust interest of the restrictive covenant, not to use the shop for any other purpose than a newsagent, must be affected by notice in the charges register by the date of the registration of the buyer. In addition to this, the occupational rights under s 30 of the Family Law Act 1996, will also fall under this heading. If registration takes place by the date of purchase, the restrictive covenant will be binding on this third party.

Finally, for the lease to be binding on a purchaser, it must be an unregistered interest that overrides in accordance with Schedule 3 of the LRA 2002. The purchaser will be bound when the interest is in existence at the time of the transfer of title. In accordance with paragraph 1 a legal lease granted for a term not exceeding seven years will constitute an interest that overrides and is therefore binding on the purchaser.

(b) Unregistered Land

The Land Charges Acts of 1925 to 1972 created a system whereby certain estates and interests relating to unregistered land became registrable in a public register kept at the Central Land Charges Department (Plymouth). The enforceability of these interests against a purchaser depends upon whether or not they have been entered on the register. Registration should be done at the time the interest is created and, in order to bind a purchaser, the land charge must be registered by the date of completion of the sale to that purchaser. The purchaser is deemed to know about a registration whether or not the CLC Register has been checked. Section 4 of the LCA 1972 clearly states that failure to register a land charge by the date of completion of the purchase means that even if a purchaser actually knows of the existence of the interest, it will not be binding.

Interests capable of being land charges are listed under s 2 of the LCA 1972 and of the three interests that are under consideration in this case, a class D(ii) restrictive covenant, a class C(i) puisne mortgage, which is a legal mortgage that is not protected by deposit of title deeds with the mortgagee, and a class F non legal owning spouse, he will have a right to occupy the house in accordance with s 30 of the Family Law Act 1996. It is however unclear from the facts whether the legal mortgage with the Southern Counties Building Society is a puisne mortgage.

Unregistrable legal interests and estates that are created after 1926 are governed by the LPA 1925 and in accordance with s 1(2)(b), a legal lease will bind the world. As for the mortgage, where the lender has the title deeds, this interest will also bind the world.

(c) Registered Land - claims by Kevin as regards the sale of the property by the Southern Counties Building Society

(i) Matrimonial Rights of Occupation

It is clear that Kevin is a non legal owning spouse and he will have a right of occupation as this is an interest affecting a registered estate under s 30 of the Family Law Act 1996. In order for this to be binding, it must be protected by registration of a notice in the charges register to the property. This interest must also be registered prior to the date of registration by the Building Society in order for it to be binding in accordance with s 29 of the LRA 2002.

(ii) Matrimonial Rights for a financial interest in the property

S 37 of the Matrimonial Proceedings and Property Act 1970 (MPPA) states that a spouse who contributes money or money's worth to the improvement of property that belongs to the other spouse may claim a share, or increase their original share in that property. However, contributions must be substantial.

In addition, s 25(2)(f) of the Matrimonial Causes Act 1973, states that, in divorce proceedings:

The contributions which each of the partners has madeto the welfare of the family including any contributions by looking after the home or caring for the family.

(iii) Resulting Trust - Direct Contributions only

Direct contributions of money will give rise to a resulting trust and substantial contributions to the purchase price and/or the mortgage will suffice. The beneficial ownership will then be enjoyed in the proportion in which the purchase money has been provided .

(iv) Constructive Trust - Direct and Indirect Contributions

In order to constitute a constructive trust there must be express common intention and this is dependent on whether there is evidence of express discussion in which Kevin and Helen agreed to have a proprietary share in the property. The second requirement is that Kevin must have acted upon the express common intention to his detriment. Significant direct and indirect contributions will satisfy this requirement but contributions such as furniture and fittings are not adequate contributions.

It is clear that the legal, matrimonial remedy of the MPPA 1970 is far more superior than the equitable remedies as the carpets and furniture will be considered under this statute but only the direct contributions of the purchase price by Kevin and other substantial contributions would be considered under equity.

Bibliography

Legislation

Land Registration Act 2002

Land Registration Act 2002 (Commencement No 4) Order 2003, s 2

Land Charges Act 1972

Law of Property Act 1925

Case Law

Lloyds Bank plc v Rosset [1991] 1 AC 107

Abbey National Building Society v Cann [1991] 1 AC 56

Williams and Glyn's Bank Ltd v Boland [1981] AC 487

Hodgson v Marks [1971] Ch 892

Bernard v Josephs [1982] Ch 391

Burns v Burns [1984] Ch 317

Greasley v Cooke [1980] 1 WLR 1306

Bristol and West Building Society v Henning [1985] 1 WLR 778

Springette v Defoe (1993) 65 P & CR 1

Hunningford v Hobbs [1993] 1 FLR 736

Re Roger's Questions [1948] 1 All ER 328

Bull v Bull [1955] 1 QB 234

Text Books

MacKenzie. J.A and Philips. M, 2004, Textbook on Land Law, 10^th edition, Oxford University Press

Gray, K and Gray. S.F, 2005, Elements of Land Law, 4^th edition, Oxford University Press

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