The great thing about being a tax lawyer is that I have to have a good grasp of many varied areas of law. Consequently I get to dabble in proper property law (as opposed to property tax) and came across this interesting update by TLT Solicitors
Landowners: Do you have rights that need to be protected?
Updated March 2013
At midnight on 12 October 2013, certain interests in land (known as overriding interests) will lose their status as overriding interests, and will need to be protected.
What are overriding interests?
Overriding interests are interests in land that are not registered, but which will continue to affect the land following a sale.
The Land Registration Act 2002 aimed to make the register “a complete and accurate reflection of the state of the title of the land at any given time, so that it is possible to investigate title to land online, with the absolute minimum of additional inquiries and inspections.”
To this end, certain interests will lose their overriding status at midnight on 12 October 2013. These interests (set out below) are relics of past times and the view of the Law Commission was that, if they are to bind purchasers, they should be shown on the title.
Overriding interests that will be phased out in October 2013:
- Franchises (e.g. the franchise to hold a market)
- Manorial rights – although it has not been possible to create them since 1925, they are still quite common. Examples are sporting rights, and rights to minerals.
- Crown rents (obsolete)
- Non-statutory liability for embankments or river or sea walls – there is no evidence of any surviving liabilities
- Corn rents (uncommon)
- Chancel repair liability – still fairly common and insurance is generally taken out where there is a risk that a property will be subject to this liability.
What should you do if you have the benefit of any of the above interests?
If you have the benefit of an overriding interest that will lose its overriding status on 12 October, what you do depends upon whether the land is registered or unregistered.
If the land is unregistered, you are entitled to lodge a caution against first registration of the land affected.
If the land is registered, you are entitled to lodge a notice in the register.
Before 13 October 2013, these interests can be protected free of charge; after that date it is probable that a fee will be payable.
What will happen if you do not protect your interest?
The overriding status will remain until either the land is registered or the land affected by the interest is disposed of.
By way of example:
A property is subject to chancel repair liability.
Up until 12 October 2013, this is an overriding interest and will bind a purchaser, whether or not they have notice of it. Prior to purchasing a property, it is normal to carry out a search to ascertain whether the property is likely to be affected by chancel repair liability and, if so, take out appropriate insurance against the liability being enforced.
From 13 October 2013, chancel repair liability will lose its overriding status. However, this does not mean that the property will automatically be free of the liability from 13 October.
If the property is unregistered, unless a caution has been registered against first registration, a purchaser will take the property free of the chancel repair liability. The chancel repair liability will also be lost on a voluntary first registration of the property.
Similarly, if the property is registered, unless a notice has been entered on the register, a purchaser will take the property free of the chancel repair liability.
If you have the benefit of an overriding interest:
- To avoid losing the benefit of an overriding interest, the best course of action is to protect it before 12 October 2013.
- The interest can still be protected after 12 October, but you need to do this before a disposition for valuable consideration of the affected land takes place (or it is registered, in the case of unregistered land).
If you are the owner of land that is subject to an overriding interest:
- If the overriding interest is not protected before 13 October 2013 it will not automatically stop affecting your land on 13 October.
- However, a purchaser for valuable consideration will take the land free of the overriding interest.
- The overriding interest will also be lost by a voluntary first registration of unregistered land.
Contributor: Alexandra Holsgrove Jones
This publication is intended for general guidance and represents our understanding of the relevant law and practice as at March 2013. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.
TLT LLP is a limited liability partnership registered in England & Wales number OC 308658 whose registered office is at One Redcliff Street, Bristol BS1 6TP England. A list of members (all of whom are solicitors or lawyers) can be inspected by visiting the People section of this website. TLT LLP is authorised and regulated by the Solicitors Regulation Authority under number 406297.
I like TLT (they instruct me so I declare a bias). You can access their page here: TLT Solicitors – Landowners: Do you have rights that need to be protected?.