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The Law
Commission
(LAW COM. No. 18)
TRANSFER OF LAND
REPORT ON
LAND CHARGES AFFECTING UNREGISTERED LAND
Laid before Parliament by the Lord High Chancellor
pursuant to section 3(2) of the Law Commissions Act 1965
~ ~~ ~
Ordered by The House of Commons to be printed
19th March 1969
L O N D O N
HER MAJESTY’S STATIONERY OFFICE
5s. 6d. net
The Law Commission was set up by section 1 of the Law Commissions
Act 1965 for the purpose of promoting the reform of the law. The Com-
missioners are-
The Honourable Mr. Justice Scarman, O.B.E., Chairman.
Mr. L. C. B. Gower.
Mr. Neil Lawson, Q.C.
Mr. N. S. Marsh, Q.C.
Mr. Andrew Martin, Q.C.
Mr. Arthur Stapleton Cotton is a special consultant to the Commission.
The Secretary of the Commission is Mr. J. M. Cartwright Sharp, and its
officesare at Lacon House, Theobald's Road, London, W.C. 1.
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THE LAW COMMISSION
Ztem ZX
Transfer of Land
REPORT ON
LAND CHARGES AFFECTING UNR-GBTBRED LAND
To the Right Honourable the Lord Gardiner,
the Lord High Chancellor of Great Britain
A. INTRODUCTION
1. Under Item IX of our First Programme we stated that consideration of the system of transferring unregistered land and expediting the procedure must
take into account, among other things, the Report of the Committee on Land
Charges (the Roxburgh Comittee).l We accordingly embarked on a study
of Land Charges and we now submit our Report on this subject. In doing
so, we think it necessary at the outset to explain the scope of the study
which we have undertaken and to define some of the terms which are used
in this Report. As the Report of the Roxburgh Committee is out of print,
and may not be readily available, the appropriate part is reprinted as
Appendix 11.'
2. Section 1 of the Land Charges Act 1925 requires the Chief Land Registrar
to keep at H.M. Land Registry the following registers :-
(a) a register of pending actions ;
(b) a register of annuities ;
(c) a register of writs and orders affecting land ;
(d) a register of deeds of arrangement affecting land ; and
(e) a register of land charges ;
and to keep an alphabetical index of all entries made in these registers. The registers and the alphabetical index are, in fact, kept at a separate part of the
Land Registry at Kidbrooke in South East London, which is properly called
the Land Charges Department of H.M. Land Registry but is commonly and
conveniently known as the Land Charges Registry. Entries in these registers
can effectively be made only in respect of land the title to which is not
registered under the Land Registration Acts 1925 to 1966.3 Where the title
to land is registered under those Acts entries are made on the register of title.
1 Cmd. 9825 (1956). 2 It will be seen that three questions were referred to the Roxburgh Committee but only 3 Special provisions apply as to bankruptcy.
the first two are relevant here.
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3. Certain land charges affecting unregistered land in any of the three
Ridings of Yorkshire are registrable in the Land Charges Department of the appropriate local deeds registry instead of the Land Charges Registry.’
4. The Land Charges Act 1925 also provides for registers of local land
charges to be kept by the proper officer of the local authority of the area in
which the land is situated. These registers originally dealt with a few
charges acquired by local authorities but their scope has since been enlarged
to include certain restrictions on the use of land and other matters which
may or may not concern local authorities. Although “land charge” is
defined in section 20 of the Land Charges Act 1925 to include a local land charge, local land charges are matters of a different character from
those dealt with in the five registers referred to in paragraph 2 above and
are subject to different rules. They differ in another important respect since they relate both to registered and unregistered land. We do not deal with them in this Report as they are the subject of a separate study and references herein to land charges do not include local land charges.
- The system of registration and searching under the Land Charges Act 1925, which we discuss in this Report, is basically the same for all the five
registers referred to in paragraph 2 above (and for the registers of land
charges maintained in Yorkshire). Of these five registers by far the largest is the register of land charges which contains entries of matters registrable
under section 10 of Ithe Land Charges Act 1925. It is also with regard to
land charges that the problems discussed in this Report principally arise both because they are more numerous and because many of them are likely to be effective for a longer period than the matters contained in the other
registers. We think, therefore, that it is convenient to deal with these
problems specifically in relation to land charges, but to bear in mind that
they can arise, in theory at any rate, in relation to any matters registrable
under the Land Charges Act 1925 except local land charges.
6. The scope of this Report, therefore, extends to all matters (other than
local land charges) which are registrable under the Land Charges Act 1925.
In the interests of brevity we use the following terms :-
“ the Act ” means the Land Charges Act 1925,
“the Land Charges Registry” mean’s the Land Charges Department
of H.M. Land Registry, and in relation to Yorkshire includes the
Land Charges Department of a local deeds registry, and “ Land Charges ” means primarily the matters registrable under section 10 of the Act, but, unless otherwise indicated, includes other matters registrable under the Act except local land charges.
7. The subject of Land Charges is fairly self-contained and for that reason
we have decided to put forward our proposals for changes in the law relating to them whilst other aspects of conveyancing are still under consideration. The extension of compulsory registration of title under the Land Registration
Act 1925 will reduce the importance of the Land Charges Registry ;^ but^ so
long as compulsory registration occurs only on the first conveyance on sale
of the freehold, or on the grant or first assignment of a long lease, after
4 Land Charges Act 1925, s. lO(6).
B. THE SYSTEM OF LAND CHARGE REGH$TRATIQN
Generally
11. As we have already mentioned, this Report is principally concerned with
those Land Charges which are reghtrable under section 10 of the Act.’
They relate only to unregistered land and represent encumbrances or obliga-
tions which may burden a piece of land or restrict the owner’s power of
dealing with it. They may, for example, be restrictive covenants, estate contracts (such as contracts to se11 or options to purchase) or certain
#mortgages. Some of these may be lasting burdens and of vital concern to a
prospective purchaser or mortgagee of the burdened land.
12. The broad scheme of the 1925 property legislation so far as it affects
Land Charges is that the person entitled to the benefit of such a charge should
be able to register it. Unless registered in the appropriate register the charge is thereafter void against a purchaser (including a lessee or^ mortgagee) if it is registered, a purchaser takes the land subject thereto since, by virtue
of section 198 of the Law of Property Act 1925 he is deemed to have notice
of it. The legislation contains provisions designed to enable a prospective purchaser to ascertain the contents of .the register by obtaining an oEcial search?
13. Land charges affecting unregistered land are registered in the Land
Charges Registry, not against the burdened land, but against the name of the
estate owner of (that land at the time when the charge was created?’ To
make a complete search in the Land Charges Registry, therefore, it is neces- sary to know the name of every person who has owned a legal estate in the relevant land since 1 January 1926l* when this legislation came into force.
14. Nevertheless, the terms of section 198 of the Law of Property Act 1925
are such that registration under the Land Charges Act is deemed to constitute actual notice of the registered matter .to all persons and for all purposes connected with the land affected. This provision applies even to those who
have not the information which would enable them to search the register.
7 Land Charges registrable under s. 10 of the Act are as follows:- Class A: charges imposed by certain statutes which are created upon the application’of Class B: charges imposed by certain statutes and created automatically by the statute; Class C: (i) puisne mortgages
some person;
(ii) limited owners’ charges (iii) general equitable charges (iv) estate contracts; Class D : (i) charges for death duties (ii) restrictive covenants and certain statutory restrictions (iii) equitable easements; Class E: annuities created before 1926; Class F: charges by virtue of the Matrimonial Homes Act 1967. 8 Ss. 13 and 20 of the Act. 9 S. 17 of the Act. He is also entitled to make a personal search (s. 16 of the Act) but 10 S. lO(2) of the Act. 11 In the case of Class A Land Charges the relevant date is 1 January 1889.
this does not give him the protection of an official search certificate.
A person who has registered a charge is thus given protection for his charge ; but the system can create difficulties for a purchaser.
15. The sale of unregistered land in most cases consists of .two stages. In
the first stage the parties negotiate the price and the other terms of the sale
and normally sign a contract under which the vendor agrees to sell the land free from encumbrances other than those which have been brought to the purchaser’s attention. (At this stage the purchaser usually knows nothing of the vendor’s title nor the names of any previous estate owners in the land).
In the second stage the vendor deduces his title over a period of years and
the purchaser investigates the title documents over that period before com-
pleting the transaction and paying the purchase price. In the course of
investigating the title he will discover the names of previous estate owners in
the land during that period and can search against them in the Land Charges
Registry ; but unless the vendor is willing and able to deduce a title back
to 1926, the purchaser ‘may not discover Ithe names of all the estate owners
against whom a Land Charge could have ’been registered. It would now
be rare for a vendor to deduce so long a title, for the minimum period pro-
vided by statute in the case of an open contract is 30 years and shorter titles
are sometimes accepted.12 The purchaser may, therefore, be prejudiced
in two respects. First, he may have to sign a contract without being able to
search for Land Charges registered against the vendor’s predecessors in title ; and secondly, even after a proper investigation of title, he may still fail to discover Land Charges registered against estate owners whose names do not appear from that investigation. These difficulties stem from the
basic defect of a system which provides for registration against names rather
than the land. The first of the difficulties is discussed in Part C of this
Report and the second in Parts D and E. Neither arises in relation to land
the title to which has been registered under the Land Registration Acts.
16. The recent case of Oak Co-operative Building Society v. Blackburnl
has focused attention on other weaknesses of a system based on registration
against names and in particular the difficulties which a person wishing to
make a search may encounter because his information as to an estate
owner’s name may not correspond with the way in which that name has been
shown in the registration of the Land Charge, with the result that his search
may not reveal it. The implications of this case are discussed in Part E of
this Report.
Possible Solutions
17. The existence of a fundamental defect in the system has led us to
consider whether it would be practicable to alter the whole basis of registra- tion of Land Charges, either by converting the “names ”^ register into a “ land ” register or by combining the registers of Land Charges and of Local Land Charges into a single register for each area, or possibly by providing ,that from a specified date Land Charges should become registrable against land either in a new Land Ch,arges Register or in the existing Registries of^ Local Land Charges, where the entries are already against land. 12 We have recommended that the statutory minimum period for commencement of title should be reduced to 15 years. (LAW COM. No. 9, para. 47(l)(a)). 13 [1968] Ch. 730.
*‘ names ” register but that thereafter those Land Charges (and possibly some of the other matters now registered against names at the Land Charges
Registry) should be subject to a different system. The choice would appear
to lie between registration in the appropriate register of Local Land Charges
and the setting up at the Land Charges Registry of a new system of registra-
tion against land. These suggestions do not, of course, solve the problem of
existing entries.
24. The expense and upheaval that would be involved in setting up a wholly
reconstituted Land Charges register for dealing only with future Land Charges
Jwould be considerable and would, in our opinion, rule out that possible
solution. The attraction of using the registers of Local Land Charges is
that they are already in existence and the creation of a new system would not
be required. Nevertheless, the registration of Land Charges in Local
Registers would cause considerable extensions in the size and scope of such
Registers with the consequent increase in the numbers of the staff and the
responsibilities cast upon them.
25. The extension of compulsory registration is an important factor in
deciding whether at this stage it is desirable to make any fundamental change in the Land Charges system. When the whole of England and Wales is
subject to compulsory registration of title, on every sale of unregistered land
another title will come on to the Land Register and in respect of that title
the Land Charges Registry will no longer be relevant. Moreover, as Land
Charges are mostly created at the time of a sale, their creation will increasingly coincide with the registration of the title affected.
26. If compulsory registration of title were unlikely to be extended, we
would be inclined to recommend using the Registers of Local Land Charges
for registration of Land Charges in the future. Their use in this way would
perhaps mean that solicitors acting for purchasers would have to make local
searches on two occasions in respect of each transaction as well as a search
at the Land Charges Registry. One would be made before exchange of
contracts and the other immediately before completion of the purchase. This would slightly add to the work and cost of conveyancing and there might be difficulty in ensuring that all the certificates relating to a particular
transaction were issued on the same day. There is also the point that the
structure of Local Government is under review and its ultimate shape could affect the Local Land Charges system. Despite these possible objections, we
feel that this alternative is one which has some merit. If it were to be
adopted it would be essential to ensure that local registrars had the means and facilities to enable the registration and search procedures to be carried out both speedily and efficiently throughout the country.
Conclusion
27. Our conclusion is that we are bound to accept, as did the Roxburgh
Committee, that it is not now possible to set up a wholly new Land Charges
system. They recommended a policy of pressing on as quickly as possible
with the extension of the system of compulsory registration of title until it
covers all England and Wales, and in that we wholeheartedly agree with
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them. The only al’ternative which commends itself to us is the possible
transfer of the function of registering Land Charges to Registrars of Local
Land Charges in respect of Land Charges created after a specified date.
That alternative offers only a partial solution to the problem because it has
no effect on existing entries. We think, nevertheless, that consideration
should be given to it if the present curtailment of the plan to extend the
compulsory registration system to the whole of England and Wales is likely
to be prolonged.
28. In the remainder of this Report certain specific matters are discussed on
the footing that the Land Charges system remains substantially in its present form.
C. LAND CHARGES DISCOVERED BETWEEN CONTRACT
AND COMPLETION
29. A vendor and a purchaser of land generally desire that a firm bargain
should be concluded at the earliest possible moment, subject to the purchaser’s
right to rescind if the vendor cannot show a sound, unencumbered title:’
As a result, under normal practice, the purchaser does not investigate the
vendor’s title before contract. It was not at first apparent that the 1925 property legislation necessitated any modification in that practice. It was
assumed that in spite of section 198 of the Law of Property Act 192518 a
purchaser would be able to rescind if a registered Land Charge were dis-
covered after contract. Doubt was, however, thrown on the position by dicta
in Re Forsey and Hollebone’s Contrmtlg to the effect that by virtue of
section 198 of the Law of Propedy Act 1925 a purchaser must be deemed
to have contracted with actual notice of the existence of matters registered
under the Act. According to Eve J., section 198 of the Law of Property
Act 1925 fixes a pushaser at the date of^ the contract with knowledge^ of
Land Charges (and Local Land Charges) by reason of their registration,
whether in fact he knows of them or not. If that is the law, then it
operates unfairly because a purchaser will not at the pre-contract stage
normally know the names of all the persons against whom a search should
be made. He may, therefore, h d himself bound to complete a purchase of land affected by Land Charges the existence of which he has not been
able to discover. To overcome the difficulties arising from the decision in
Re Forsey and Hollebone’s Contract, the Roxburgh Committee recom-
mended” that section 198 of the Law of Property Act 1925 should be
17 Subject to any disclosed defect of title. 18 “ (1) The registration of any instrument or matter under the provisions of the Land Charges Act, 1925, or any enactment which it replaces, in any register kept at the land registry or elsewhere, shall be deemed to constitute actual notice of such instrument or matter, and of the fact of such registration, to all persons and for all purposes connected with the land affected, as from the date of registration or other prescribed date and so long as the registration continues in force. (2) This section operates without prejudice to the provisions of this Act respecting the making of further advances by a mortgagee, and applies only to instruments and matters required or authorised to be registered under the Land Charges Act, 1925.” 19 [1927] 2 Ch. 379. 20 Cmd. 9825, para. 33.
33. The problem of Old Land Charges is caused by a defect in the law
which governs the registration of Land Charges and it does not arise in
regard to registered land. Its permanent cure depends on registering the
title to all the land in the country. Under the present system this will
not be achieved in the foreseeable future. As we have previously sug-
gested,% justice requires that provision should be made for compensation
to be paid in certain circumstances where a person suffers loss through the
existence of an Old Land Charge. The number^ of^ cases should,^ in^ our
opinion, be small. Since the risk of loss being so suffer4 stems from a
defective system established by Act of Parliament it is our view that such
compensation should come from public funds. We therefore recommend
the introduction of a statutory right to compensation on the lines discussed
in the next part of this Report.
E. COMPENSATION FOR LOSS OCCASIONED BY “OLD LAND
CHARGES”
34. The proposed introduction of a statutory right to compensation for
persons suffering loss through the emergence of Old Land Charges raises
a number of questions which are discussed in this part of our Report. The
questions are as follows:-
(a) Should there be any departure from the general rule that an Old
Land Charge which comes to light after completion should be binding
on the purchaser?
(b) In what circumstances should a purchaser who has suffered loss
be able to obtain cornpensation?
(c) How is the purchaser’s claim to compensation to be assessed?
(6) By whom should compensation be paid?
(e) Should the compensating authority have any right of recovery against
a vendor on the grounds of his failure to disclose an Old Land
Charge to the purchaser? (0 What can be done to facilitate the discovery of an Old Land Charge in future transactions?
Question (a) Should there be any departure from the general rule that an
Old Land Charge which comes to light after completion should be binding
on the purchaser?
35. In our view it is preferable to maintain the principle that registration
affords complete protection to the chargee, so that a chargee who has done all
that is required of him by the 1925 legislation^ is^ not deprived of^ his^ vested
rights. We therefore agree with the Roxburgh Committeeg5and with d e
Council of The Law that a Land Charge which has been properly
registered should in all cases bind the purchaser.
Question ( b ) In what circumstances should a purchaser who has suflered
loss be able to obtain compensation?
24 LAW COM. No. 9, para. 46(1). 25 Cmd. 9825, para. 4. 26 The Law Society’s Second Memorandum, para. 47 (b).
to compensation if he can satisfy the following requirements :-
We think that a purchaser who has suffered loss should be entitled
(i) that his purchase was completed after a specified date :
In preparing the draft clause which appeaxs in Appendix IZ7it
has been assumed that this date should be that on which any legisla-
tion based on our present proposals canes into force.
(ii) that he purchased without actual knowledge of -theLand Charge ;
The puruhaser should clearly not be entitled to compensation if
he aotually knew of the existence of the charge, nor should he be so
entitled if his solicitor or other agent had knowledge of it acquired
in the course of the transaction.
(iii) that the Land Charge was registered against the name of a person
who did not appear as an estate owner in the abstract of the title
which the purchaser was entitled to require or would have been
entitled to require mder an open contract, if the latter title is the
longer.
If the purchaser did flot know of the Land Charge and he could
not reasonably be expected to have discovered it by making searches
against the names of the estate owners shown in the abstract of title,
we think he should be entitled to compensation. Nevertheless, if
he accepts an inferior title to that which he was entitled by law he should not, in our view, be compensated for the adverse effect of
Land Charges which he might have discovered had he insisted on a
full title. It may sometimes be dficult to determine what title
the purchaser could have required had the property been acquired
under an open contract since the relevant documents or abstracts
may not be in the purchaser’s possession. This is, however, a
djl3iculty which exists at present and is one which will have to be
accepted in this context. If the 15-year title period is adopted
there should be less likelihood of purchasers being offered or having
to accept less than a full and satisfactory title.
37. Under an open contract for the grant or assignment of a lease or
underlease, the lessee or assignee is not entitled to call for the superior
reversionary titles% but he may nevertheless be bound by properly registered Land Charges affecting those titles. Whether the rule ‘that a lessee or assignee
is not entitled to call for the reversionary titles is right or not is a matter
which we will be considering at a later date, but it does not properly fall
within the scope of a report on Land Charges affecting unregistered land
since the rule also applies in relation to registered land. Any hardship there
may be has nothing to do with the system of registration of Land Charges
but flows from a general rule of long standing. We do not think,therefore,
that compensation should be payable under our present proposals to a lessee or assignee, who has been “caught ” by a Land Charge affecting a rever-
sionary title whioh he is not by law entitled to call for.
27 P. 28. 28 Law of Property Act 1925, s. 44(2), (3) and (4).
(^324515) A 6
in the vendor's possession. Moreover, the introduction, in the context of our
proposals, of an additional burden on a vendor might, we think, substantially
detract from our recommendationz9that the n m a l period for investigation
of title be reduced from 30 to 15 years-a recommendation that is intended
to save unnecessary work for vendors as well as purchasers. Compensation
should be available to meet loss which arises from a defect in the law. It
is not our intention to introduce any new principle which might affect the
liability of vendors.
41. On the other hand, if the purchaser would have had knowledge of
the Old Land Charge but for the fraud of any person, we see no reason
why the Crown should not be able to recover from that person?' We
accordingly recommend that in such circumstances, but in no other, the
Chief Land Registrar, on behalf of the Crown, should be able to recover
from the person who is guilty of the fraud the amount of any compen8ation
that has been paid to the purchaser.
Question (f) What can be done to facilitate the discovery of an Old Land
Charge in future transactions?
42. In order that a subsequent purchaser should not be " caught " by an
Old Land Charge in respwt of which compensation has been paid and to
avoid public funds again being put on risk, we think that there should be
some procedure for facilitating its discovery in future transactions. It may
be that the most satisfactory method would be to make a note in the
alphabetical index that would draw the attention of a searcher to the
existence of the Old Land Charge. We think, however, that the procedure
can best be worked out by the Chief Land Registrar and that the rules
should authorise him to make use of the alphabetical index for that purpose.
F. REGISTRATION AND SEARCH PROCEDURES
Discrepancies in estate owner's names and descriptions of land
43. Two recent cases31 have drawn particular attention to the hazards
which surround the operation of the registration and search procedures of
the Land Charges system and in particular the diaculties which may be
encountered by a person who wishes to make a search. His idomation
as to the name of the estate owner or the description of the relevant land
may not correspond with the way in which those particulars were shown
on the application for regisaration, with the result that his search may not
reveal a subsisting entry.
44. With regard to names, section lO(2) of the Act provides that a Land
Charge must be registered in the name of the estate owner whose estate
is intended to be affected. The Act and Rules, however, give no real
guidance as to what is meant by " name " in this context, though the f m s
of amlication for registration and for official search require the " Surname 29 LAW COM. No. 9, para. 47(1). 30 cf. s. 83(9) of the Land Registration Act 1925. 31 DU Sautoy v. Symes (^119671) - - Ch. 1146 and Oak Co-ouerative Buildinz Society v. Blackburn [1968] Ch. 730.
324515
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and Christian names” of the estate owner to be stated in relation to a
specified piece of land. As Russell L.J. pointed out in one of the recent
caseP “The real problem is, what is meant by the name or names of
the estate owner in this legislation?” For example, does registmtion have
to be in a person’s full names OT will it suffice if it is in some but not
all of his forenames in addintionto his surname? Are initials of some or
all of his forenames sufficient? Is it enough for a registration to be made
in a name by which a person is commonly known if that differs from his
“ correct ” name or .is a shortened version of it permissible? What, in fact,
really is a person’s “correct” name, bearing in mlind that many people
are known by names which differ from those on their birth certifioates?
45. These problems are well illustrated by the facts in Oak Co-operative
Building Society v. BZa~kburn~~ in which the wrrect names of the estate
owner were agreed to be Francis David Blackburn. By an exchange of
letters he had contracted to sell the relevant property to a purchaser, who
some time later registered a Land Charge of Class C(iv) in respect of that
property against the names Frank David Blackburn. These were the
names under which the estate owner carried on business. Some years later
a prospective mortgagee of the property made a search in respect of it
against the name of Francis Davis Blackburn, (the error in the second name
being apparently a clerical slip on the part of the mortgagee’s solicitor)
and the search produced, so far as relevant here, a clear certificate. The
questions for decision, therefore, were whether the incorrect registration was
valid and, if so, whether it should prevail against a person who had searched
in some version of the estate owner’s name other than that in which the
registration was effected. The Court of Appeal decided that on these facts
the registration was valid, although it would not have been effective against
a person who searched in vain against the correct names. They declined to lay down any rule as to what amounted to a sufficient registration but
reached their decision on general grounds as appears in the following
passage :-
“We take a broader view that so far as possible the system should
be made to work in favour of those who seek to make use of it in a
sensijble and practical way. If a proposing purchaser here had requested
a search in the correct full names he would have got a clean certificate
and a clear title under section 17(3) of the Land Charges Act, 1925, and
would have suffered no harm from the fact that the registration was not
in such names: and a person registering who is not in a position to
satisfy himself what are the correct full names runs that risk. But if
there be registration in what may be fairly described as a version of the
full names of the vendor, Albeit not a version which is bound to be
discovered on a search in the correct full names, we would not hold it a
nullity against someone who does not search at all, or who (as here)
searches in the wrong name.’’
46. It has been suggested that these difficulties would be removed if it were
expressly provided by statute that the correct name for the purpose of registration should be the name shown in the document under which the
32 Oak Co-operative Building Society v. Blackburn [1968] Ch. 730 at p. 741. 33 [1968] Ch.730.
- The Chief Land Registrar has told us that very few claims arising out of mistakes at the Registry have ever been made. Since 1959 the number of claims has been eight and payments were made in three cases. The problem
seems, therefore, to be a very small one and although the question of putting
the liability for mistakes at the Registry on a statutory footing may need to
be considered at some stage it does not seem to be one of any urgency. Moreover, it raises also the question of liability for mistakes in Local Land
Charges Registries which is outside the scope of our present study. Accord-
ingly, we do not propose in this Report to make any recommendation with regard to it.
G. UNREGISTERED LANIP CHARGES
51. The view has been expressed that one of the features contained in the
1925 property legislation which might be reconsidered is the rule which applies in relation to unregistered land that a registrable but‘ unregistered Land Charge is void against a purchaser even if he has actual notice of it.
It is said that this rule “is unreasonably severe and the inequitable result
outweighs the advantages on the score of simpli~ity.”~~
- Although the procedure for protecting land charges affecting registered land is somewhat different from the procedure under the Land Charges Act,
the effect is similar in that the general rule is that a purchaser of registered
land takes free from a land charge which could have, but has not, been protected in the appropriate manner under the Land Registration Acts and Rules. This general rule is, however, subject to an important qualification which in some cases substantially mitigates its apparent severity. The
qualification is that a purchaser of registered land takes subject to the rights
of persons in occupation d the land because they are overriding interests?’
Thus it has been held3*that the rights of a person entitled to the benefit of
a matter capable of protection as a land charge will, if that person is in
occupation, be good as against a purchaser, even though the necessary
procedural steps to protect it have not been taken.
- This difference between the law relating to registered and un- registered land is one of the matters which we are considering in the enquiry
which we are at present carrying out into the working of the Land Registra-
tion system in the context of conveyancing. We think, therefore, that it
would be premature to deal with it here.
H. TBME LIMITS ON lUGBTRA’E1ON
54. It has been suggested khat time limits on the effectiveness of a
regbtration of Land Charges registrable under section 10 of the Act, or on
some of them, should be imposed. Prima facie, this seems attractive, but
the practical daculty of providing effective machinery for re-registration,
36 See Megarry and Wade, The Law of Real Property, 3rd Ed., p. 1128. 37 Land Registration Act 1925, s. 70(l)(g). 38 Woolwich Equitable Building Society v. Marshall [1952] Ch. 1. (Agreement for tenancy). Bridges v. Mees [1957] Ch. 475. (Contract for sale). Webb v. Pollmount [1966] Ch. 584. (Option to purchase in a lease).
in appropriate oases, on the expiration of the time limit seems insuperable.
Chargees or their successors could not reasonably be expected to remember
expiration dates; nor could the solicitors who had acted for them. TD
be of much practical use, it would be necessary for re-registration to be
brought forward and be against the names of the appropriate estate owners
at the time of re-registration; but a ohargee might have no means of
knowing who they were. Fuvthermore, we h d it &cult to justify the
additional work and expense which would be entailed in the re-registration
of a still subsisting charge.
55. Estate contracts seemed a special case for consideration in this context
since they are often registered merely to provide temporary protection to a
purchaser or other interested party. In an attempt to find a suitable means
of separating regisbations of this kind from registrations of estate contracts
intended to be of long duration (e.g., purchasa of land by instalments,
options to purchase or to renew leases, and sales not yet completed by conveyance for some specific reason) we considered sub-dividing Class C(iv)
into short-term registrations at a reduced fee and perpetual registrations at
a higher one. But we concluded that unless the fee for the latter were
raised to a relatively exorbitant level, no use would be made of short-term
registration.
I. REMQVAL OF ENTRIES
Entries no longer effective
56. Although large numbers of cancellations of entries in the Land
Charges Registry do take place?’ there is no doubt that the registers contain
many entries of charges which are no longer effective. It has, therefore,
been suggested4’ that one possible way of reducing these dead entries
would be to provide an easier procedure for cancelling them. At present the normal procedure is for the application form to be signed by the person
entitled to the benefit of the charge (or if that person is a corporation,
sealed by it) and for the applicant’s solicitors to support the application
with a certificate. In some cases the applicant’s title must be proved, for
example, where he is not the lorigid chargee.“ The suggestion is that
this procedure should be supplemented by the following methods :-
(i) application on a form signed by the chargee’s solicitor, or
(ii) application on a form signed by the chargor’s solicitor supported
by adequate evidence of discharge, e.g., the document of discharge
or a statutory declaration.
57. The suggestion that the chargee’s solicitor could be authorised to sign
the application to cancel a Land Charge entry seems to us to raise no
di€liculty and we, accordingly, recommend its adoption in relation to any
39 There were 51,559 cancellations in 1967. (This figure includes pending actions, writs 4OThe Law Society’s Second Memorandum, paras. 55 to 57. The suggestion did not 41 Special provisions apply to the cancellation of a Class F Land Charge under the
and orders and deeds of arrangement cancelled pursuant to an application). apply to Class D(ii) Land Charges (restrictive covenants). Matrimonial Homes Act 1967. See s. 5 of that Act.
