← The hardest concepts in United Kingdom law
In one breath
In England and Wales most land is registered, and a buyer is generally bound only by interests that the register shows or that the Land Registration Act 2002 says bind without registration. The most important hidden interest belongs to a person in actual occupation of the land, which can bind a buyer although the register is silent.
The picture
The hotel register and the guest in the room
A hotel keeps a register of bookings, and someone buying the hotel can rely on it for most purposes, since the register is meant to tell the whole story. But suppose a guest is actually sleeping in room twelve under an arrangement with the former owner that never reached the register. A careful buyer would knock on the door before completing. A buyer who does not may find that the guest has a right to stay.
Registered land works on the same bargain. The register is meant to mirror ownership, and a buyer takes subject to registered charges and entries. But some interests bind even though not entered. These include some short legal leases and the interest of a person in actual occupation (Schedule 3 to the 2002 Act). In Williams & Glyn’s Bank v Boland a wife with a beneficial share in the home, living there, bound a bank that took a mortgage from her husband. The interest must be proprietary and already existing when the disposition is made (Abbey National v Cann).
Where the picture stops working
A hotel has a front desk, whereas land registration is a statutory system full of exceptions. The occupier’s interest does not override if the occupier was asked and failed to disclose it, or if the occupation would not have been obvious on a reasonably careful inspection and the buyer did not know of the interest. And when a sale is made by two trustees of land, the beneficiaries’ interests are swept off the land and attach to the money (overreaching). Scotland and Northern Ireland have their own systems of land registration.
How it really works
- 1Check whether the land is registered and read the register: the property description, the ownership entry and the charges, with any notices or restrictions.
- 2Look for protected entries. A registered charge or a notice protects the holder’s interest against a buyer.
- 3For interests not on the register, look at the list of interests that override a disposition of registered land, such as some short leases and the interest of a person in actual occupation.
- 4For actual occupation, ask whether the occupier has a proprietary interest, such as a beneficial share under a trust, and was in actual occupation when the disposition was made (Boland; Cann).
- 5Check the exceptions, and ask whether overreaching applies: where two trustees sell or mortgage, the beneficiaries’ interests move from the land to the money (City of London Building Society v Flegg).
Why people get it wrong
- Assuming the register shows everything. Some interests bind a buyer although they are not on it.
- Treating any right against the seller as binding on a buyer. Only proprietary interests can override, not mere personal rights.
- Treating occupation as a name on the door. Actual occupation is a question of fact, and preparatory acts before the transaction may not be enough (Cann).
- Overlooking overreaching. When two trustees sell, even a beneficiary living in the house can lose the interest in the land.
A worked example
The facts are invented
Tamsin pays half the price of a house registered in the sole name of her partner, Ugo, on the understanding that they will share it. Ugo mortgages the house to a bank, and Tamsin lives there. The bank does not visit or ask. Tamsin has a proprietary interest and is in actual occupation, so her interest may override and bind the bank.
Change the facts: the house is registered in the names of Ugo and a second trustee, Vik, and the loan money is paid to both. Overreaching applies, and Tamsin’s interest moves from the house to the money. The bank takes the house free of it.
Try it
A buyer of registered land checks the register, finds no entry for any third party, and completes without visiting. An occupier with a share in the house was living there. Can the occupier’s interest bind the buyer?
Landmark authorities
Read the sources themselves; this list is a starting point.
- Williams & Glyn’s Bank Ltd v Boland, [1981] AC 487
- City of London Building Society v Flegg, [1988] AC 54
- Abbey National Building Society v Cann, [1991] 1 AC 56
- Land Registration Act, 2002, Schedule 3
Where to go next
Courses
Dictionary
More hard concepts in United Kingdom law
- Proprietary estoppel (Trusts and equity)
- Unjust enrichment (Restitution)
This page is an educational overview. It is not legal advice and not a substitute for the sources: the statute, the rule, the case itself. The United Kingdom has three legal systems: England and Wales, Scotland, and Northern Ireland. These pages mostly describe the law of England and Wales and say where Scots law differs when it clearly does; Northern Ireland law is often similar to English law but is not covered separately. Parliament is sovereign, but the devolved legislatures also make law within their powers. Each page states the usual formulation of the rule and names landmark decisions; check the primary sources before relying on any rule.