overriding interest

this page Overriding interest is an English land law concept. The general rule in registered conveyancing is that all interests and rights over a piece of land have to be written on the register entry for that land. Otherwise, when anyone buys that piece of land, the interests will not apply to the purchaser, and the rights will be lost. Overriding interests are the exception to this general rule. Overriding interests need not be registered to bind any new owner. Ed The House of Commons, House of Lords and tasked Royal Commission preparing the Law of Property Acts (1925) agreed that for many classes of interest it would be unreasonable to expect certain interests to be registered, in which legislation they were termed overriding interests. Their list was reformed and simplified under legislation of 2002 in staggered reforms between that year and 2013. Such interests principally include: Tenancies/leases of less than seven years Rights of people in actual occupation, perhaps unaware of their legal rights. Public rights of way, as it was not clear who should be made to register them. Rights to support from adjoining buildings or structures Rights to light (to particular apertures) Under the 2002 legislation the position of: Rights for the historic parish church to claim for chancel repairs has weakened, unless registered, to be valid against land owners as at 12 October 2013 and not subsequent owners according to the Church of England the body with the right enforce the rights. The existence of overriding interests is a standard question in a transaction — it must be confirmed, denied or 'not known' under the standard property information form used across England and Wales.Nonetheless a right to light on the land or neighbouring land and clear, well-trodden paths across a garden or smallholding for example would be considered constructive knowledge under the deemed inspection of the property under Standard Condition 3.1.2(b) of Standard Conditions of Sale, present in accordance with the principle of caveat emptor                   Background and present safeguardsEdit Overriding interests are restricted to those in Land Registration Act 2002 Schedules 1 and 3 replacing section 70 of the Land Registration Act 1925. Case law based on LPA 1925 directly equivalent provisions may still be cited in the event of disputes under the stare decisis doctrine of legal precedent.[4][5] Short-term leases (tenancies/leases of less than seven years) were excluded because to include them would entail large workloads of registration and on the basis of continuing a fluid rental and subletting market, where break clauses can be specified at will, restricted to a minimum one month's notice in the residential setting by the Landlord and Tenant Act 1985.[6] In a leading case, Williams & Glyn Bank v Boland, a wife successfully claimed an overriding interest in a property her husband had mortgaged to support a failing business. Although she did not have a legal (titular) interest in the property, she had made substantial contributions to the purchase and was in actual occupation of the property, her overriding interest was upheld when the bank tried to take possession.[7] There has been some academic debate over the effect on overriding interests of the Human Rights Act 1998. If a purchaser were to buy property, only to find themselves subject to numerous restrictive or expensive obligations about which the seller did know and not and could not have been expected to have known, it is uncertain whether they could seek damages from an encumbering public or quasi-public body under Article 8 of the European Convention on Human Rights referred to in that Act. In any event principles of misrepresentation apply in personam (against the person, rather than to bind the property) which may instead be bound by prescriptive easements. Section 8.4 of the standard seller's Law Society Property Information Form invites the seller to confirm or deny the known examples of these interests, excluding leases which are dealt with by way of the contract for sale and purchase.[1] Dealing with leases/tenancies is Standard Condition of Sale 3.3 on the part of the seller and the default special condition on its reverse that the property is sold with vacant possession.[8].                     Overriding Interests in Registered Land S.29(2)(a)(ii) Land Registration Act 2002 gives priority to overriding interests even though they are not protected on the register. The categories of overriding interests are set out in Sch 3 of the Act which replaced the overriding interests which existed under s.70 Land Registration Act 1925. Overriding interest include leases under 7 years, legal easements and profits a prendres, public rights of way, local land charges, mines and minerals, franchises, manorial rights, a right to rent reserved to the Crown, non statutory rights in respect of an embankment or sea or river wall, right to payment in lieu of a tithe, a right in respect to the repair of a church. In addition, under Para 2 Sch 3, any interest belonging to a person in actual occupation. Overriding interests under para 2 of Sch 3 Para 2 Sch 3 replaced s.70(1)(g) of the Land Registration Act 1925. S.70 (1)(g) was subject to much litigation which remains relevant when considering Para 2. To enjoy overriding status there must be an interest in land, the interest must not be overreached, there must be actual occupation at the relevant time. Interest in land (1)To have overriding status, the interest must be a proprietary interest: National Provincial Bank v Ainsworth [1965] AC 1175 Case summary (2)Personal rights such as a licence do not confer overriding status Strand Securities v Caswell [1965] Ch 958 Case summary (3)Not overreached Overreaching operates to transfer the rights from the land to the proceeds of sale. There is therefore no longer any interest in land capable of being protected by actual occupation. This position was stated in: City of London Building Society v Flegg Case summary Overriding interests will therefore be highly relevant where there is a sole legal proprietor so that capital moneys are not paid to two trustees: Williams & Glyn's Bank v Boland [1981] AC 487 Case summary HSBC Bank v Dyche [2009] EWHC 2954 Case summary (4)Actual occupation Under Para 2 of Sch 3 an interest may become overriding in two situations: 1. Where the person claiming the interest is in actual occupation and that occupation would be obvious on a reasonable inspection or 2. Where the person claiming the interest is in actual occupation and the person to whom the disposition is made has actual knowledge of the interest In both situations actual occupation is required. There is no statutory definition of the term actual occupation. Case law concerning actual occupation under s.70(1)(g) Land Registration Act 1925 can be used to help determine the meaning, however, LRA 2002 introduced a new feature of obvious occupation. Actual occupation is an issue of fact to be determined by circumstances of individual cases: Williams & Glyn's Bank v Boland [1981] AC 487 Case summary (4a)Actual occupation requires some degree of permanence and continuity: Abbey National Building Society v Cann [1991] 1 AC 56 Case summary (4b)The degree of physical presence required will depend on the nature of the land: Lloyds Bank v Rosset [1989] Ch 350 Case summary Epps v Esso Petroleum [1973] 1 WLR 1071 Case summary (4c)Obiter statements suggest that occupation by a representative may be sufficient: Abbey National Building Society v Cann [1991] 1 AC 56 Case summary Lloyds Bank v Rosset [1989] Ch 350 Case summary Strand Securities v Caswell [1965] Ch 958 Case summary (4d)There is no requirement that the occupation must be inconsistent with the title of the vendor (Wife as a shadow of husband's occupation) see: Bird v Syme- Thomson [1991] 1 WLR 440 Case summary Hodgson v Marks [1971] Ch 892 Case summary Caunce v Caunce [1969] 1 WLR 286 Williams & Glyn's Bank v Boland [1981] AC 487 Case summary (4e)Although the shadow theory may be relevant with regards children: Hypo-Mortgage Services v Robinson [1997] 2 FLR 71 (4f)Temporary lapses in occupation A person receiving long term compulsory residential medical care may still be regarded as in actual occupation: Link Lending v Bustard [2010] EWCA Civ 424 Shorter stays in hospital may also be so regarded: Chhokar v Chhokar [1984] FLR 313 Whilst occupation of part of the land was sufficient under s.70(1)(g): Wallcite v Ferishurst [1999] Ch 355 This is no longer possible under the wording of Para 2 Sch 3 Relevant time of occupation Abbey National Building Society v Cann [1991] 1 AC 56 established that the relevant time for actual occupation under s.70(1)(g) was the date of completion of the transaction rather than the date of registration thereby avoiding the potential problem of later occupation occurring during the 'registration gap' which the purchaser had no way of protecting themselves. However, the wording of Sch 3 para 2 has cast doubt on whether this is still the position: Thompson v Foy [2009] EWHC 1076 Obvious occupation Thomas v Clydesdale Bank [2010] EWHC 2755 (5)Failure to disclose rights Hodgson v Marks [1971] Ch 892 Case summary Winkworth v Edward Baron Developments [1986] 1 WLR 1512 (6)Actual knowledge: Chhokar v Chhokar [1984] FLR 313