The last days of unregistered land

The Land Registry has been around for more than 150 years, but compiling a comprehensive register of land ownership is not an overnight task. The register remains incomplete, but the proportion of registered land has increased massively in the 21st century. Having taken more than 140 years to register the first half of the country, only one seventh of the country now remains unregistered. Generations of property professionals have needed to understand both the registered and unregistered land systems, but the dwindling number of unregistered properties means they are now encountered far less frequently. This is inevitably leading to a loss of experience and expertise when it comes to unregistered land. Title When registered property is sold or leased, the title comprises a copy of the neatly-typed register and a title plan based on the Ordnance Survey. If the land is not registered, title must be deduced and investigated in the old-fashioned way. The undeniable thrill of playing with original deeds can quickly give way to the frustration of trying to decipher the beautiful but often illegible handwriting of a Dickensian clerk and establish how an unsatisfactory plan with few identifiable features relates to the much-changed modern day locality. It’s a detective job, regularly requiring the investigative skills of Sherlock Holmes! Unregistered title is typically deduced by way of an “epitome of title”, comprising copies of the title deeds going back to a “good root of title”. Obviously it would be impractical to expect title to be proved back to time immemorial, so in practice a good root of title is a document at least 15 years old that deals with the whole legal and beneficial interest in the property and contains nothing to cast doubt on the title. An arms’ length transfer for value is obviously the ideal candidate. The loss of expertise is leading to poor epitomes being produced. I recently received an epitome where the appointment of a new trustee was proffered as a good root of title. In the recent Privy Council case of Bannerman Town and others v Eleuthera Properties Ltd [2018] UKPC 27, even a transfer on sale was held to be insufficient where the omission of standard covenants for title in respect of part of the land suggested doubts over the seller’s title to that part. Another common modern defect concerns deceased owners. If any owner or co-owner since the good root of title has died, the epitome should contain proper evidence of death. Obtaining death certificates years after the event can be troublesome. Land charges With registered land, the title includes much more than the name of the owner. It will also include many other matters affecting the property, such as easements, restrictive covenants and mortgages. Unregistered land works differently. By definition, there is no title register on which to note these matters, although a caution against first registration of the land at the Land Registry offers limited protection. Legal interests such as easements and most mortgages do not require any registration, but should be revealed by the epitome of title. Equitable interests, including restrictive covenants and option agreements, only bind successor owners if they have been registered as land charges (not to be confused with local land charges, as revealed by a local search). Land charges are registered against names rather than properties, with the county being included to narrow down the results. Land charges searches are therefore required against the names of all owners revealed by the epitome of title. Ideally the seller should include them within the epitome, or a buyer’s solicitor may obtain their own. Either way, it is important that they include the correct name, the correct county (or counties, if the county changed during the relevant period) and cover the whole period of ownership. If the land charges search reveals entries, these need to be reconciled with the title deeds. If there are additional entries – perhaps because the relevant person owned multiple properties in the same county, or had a common name – then the seller’s solicitor should certify that these outstanding entries do not affect the subject property. We are seeing an increase in defective land charges searches. Furthermore, sellers’ solicitors are often too ready to certify land charges searches as not affecting. I recently had to query a certified search where it was clear, even from the brief property description on the search result, that the land charge did affect the property being sold. I also encountered further evidence of a lack of understanding of land charges searches, albeit in a slightly different context. My client’s neighbour was asserting that a restrictive covenant benefiting my client’s land should be removed from the neighbour’s registered title. The neighbour’s land was unregistered when the covenant was imposed and they alleged that the covenant had been lost on a subsequent conveyance of the unregistered title because it had not been protected by way of land charge. The neighbour’s solicitors’ “proof” was a clear land charges search, but against the name of the seller in the conveyance that had imposed the covenant on the buyer. Needless to say, a land charges search against the party who had given the covenant revealed that a land charge had been duly registered at the correct time. Completion A buyer of unregistered land becomes the legal owner immediately on completion. This contrasts with registered land, where legal title only vests in the buyer on registration; this has led to the “registration gap”, where the buyer may not be able to deal fully with their property in the period between completion and registration. Following completion, the buyer must apply for first registration of the land within two months. In doing so, the residual balance of unregistered land is further diminished. The end is in sight The Land Registry aims to complete the register by 2030. Creative means may be required to force the final recalcitrant properties over the line, but the end is definitely in sight for unregistered land. However, until then it remains crucial that lawyers, surveyors and other property professionals retain sufficient knowledge and expertise to deal with this increasingly rare beast. Other implications The consequences of land being unregistered are not limited to conveyancing procedure. Without a public register to consult, it can be impossible for a third party who wishes to contact the owner of unregistered land (perhaps with a view to negotiating its purchase) to establish who owns it, especially if the land is unoccupied. With registered land, ownership can usually be ascertained in a matter of minutes. More significantly, it is now much harder for squatters to claim ownership of registered land. Since 2003, adverse possession of registered land may be claimed after 10 years, but the owner will receive notice of the squatter’s application and will usually then have two years to evict the squatter. The historic rules are retained for unregistered land, so that 12 years’ adverse possession is required, but the owner is not afforded the same opportunity to recover possession following the squatter’s application. Exponential growth The Land Registry was established under the Land Registration Act 1862, to maintain a register of land ownership in England and Wales. Compulsory registration on transfer was introduced in several London boroughs in 1899/1900, but was not extended outside the capital until the Land Registration Act 1925. Following decades of incremental expansion, compulsory registration was rolled out nationwide in December 1990. By 2000, less than 40% of England and Wales had been registered. That has now increased to 86%, comprising 25m individual titles. The highest concentrations of registered land are generally to be found in the South East, with some parts of Kent and Surrey exceeding 97.5%. Rural areas – and Wales in particular – generally contain the largest volume of unregistered land. However, the area with the highest proportion of unregistered land includes Birmingham city centre, where a third of land remains to be registered. Bill Chandler is a professional support lawyer at Hill Dickinson LLP