Chapter 3 Map and thinking points: Unregistered land

Unregistered Land
Land Law: unregistered land diagram/map

The above diagram/map comprises four plots of land; title to all of whom is unregistered. Consider the following scenarios and the implications of each in this unregistered land context:

  1. The original owners of Bramble House and The cottage entered into a restrictive covenant under which the owners of The Cottage agreed that The Cottage would only be used for residential purposes and not to run a business from the land. Both Bramble House and The Cottage have since been sold to new owners and the new owners of The Cottage want to convert the land into a casino. The restrictive covenant was never registered but the new owners of Bramble House want to enforce it.
  2. The owners of Bramble House have just sold Ye Olde Shoppe to local buyers. As if from nowhere, Sid, has come forward to argue that he has an equitable interest in Ye Olde Shoppe that is now binding on the new owners. Sid argues he contributed to the original purchase of Ye Olde Shoppe and that his interest is enforceable against the new owners.                                     
  3. The new owners of the Cottage granted to Dina, a friend, an option to purchase Rose Lodge which is a separate plot of land is behind The Cottage. This option was not registered and now the owners of The Cottage regret ever having granted the option and, so, to deceive Dina, gifted Rose Lodge quickly to an acquaintance. Dina wants to enforce the option but the owners of The Cottage refuse to accept it is enforceable against them.

  1. In unregistered land, a restrictive covenant can be registered as a Class D(ii) Land Charge under the LCA 1972, s2. If registered, registration would constitute actual notice (s198 of the LPA 1925) would thus the covenant would be binding on anyone purchasing the land (including the new owners of The Cottage). However, this covenant was not registered. What is the effect of this? We look to s4(6) of the LCA 1927 which tells us that unregistered Class D(ii) land charge will be void against a purchaser of a legal estate for money or money’s worth. Assuming, the owner owners of The Cottage purchased the land for a financial sum, the covenant is therefore unenforceable and they can run a casino.
  2. Sid’s equitable, contribution-based interest cannot be registered as a Land Charge under the LCA 1972. If the new owners of the land paid purchase monies to two or more trustees (which we might assume they did), then any equitable interest Sid may have had will have been overreached (ss2(2) and 27 LPA 1925). If overreaching has not taken place, we fall back on the doctrine of notice and must ask if the new owners of Ye Olde Shoppe are ‘Equity’s Darling’. This will involve considering if they are bona fide purchasers of the legal estate in Ye Olde Shoppe for value without notice of Sid’s interest. The issue here may be whether they had constructive notice of Sid’s interest (there is no evidence of actual or imputed notice). Ought they to have known? What might visits to the land have revealed? If they are fixed with constructive notice, the new owners will be bound by Sid’s interest. If not, they will take the land free of his interest.
  3. An option to purchase is an estate contract that can be registered as a Class C(iv) Land Charge under the LCA 1972. Registration has not taken place. The effect of non-registration for Class C(iv) Land Charges (estate contracts) is again governed by s4(6) of the LCA 1972. This means that the option will be void against a purchaser of a legal estate for money or money’s worth. Assuming, from the facts, that the new owner of Rose Lodge was not a purchaser of the land (we are told the land was ‘gifted’ to an acquaintance), then the test in s4(6) is not satisfied, the option is not void and is therefore enforceable.

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