Limits of Land Registry
The Land Registry deals only with the legal ownership in land. It is possible for persons to have equitable rights in land, such as trust beneficiaries and other beneficial owners for whom the registered owner holds the property. See our chapters on trusts and equitable interests.
Generally, the legal owner may sell and the buyer may buy, without the need to concern himself with unregistered rights and interests. The interests of beneficiaries under trusts can be protected by registrations of notes on the folio. Cautions and inhibitions give notice or restrict transactions in relation to land so as to protect unregistered and unregistrable rights.
Certain categories of rights affect registered title, even though they are not registered. These include the rights of persons in actual occupation, easements acquired or in the course of acquisition by long use and leases with under 21 years to run.
This is for the pragmatic reason that it is usually not practically possible to register such rights. As with an unregistered title, a comprehensive inspection of the property should, therefore, be undertaken.
It is possible for a person who has acquired title by squatting, to apply to the Land Registry to be registered as the owner of an existing Land Registry title. Similarly, in respect of the Registry of Deeds title, it is possible to make an application for first registration in the Land Registry based on long possession.
It is also possible for a person to apply to the court or the Land Registry for an order confirming that he has acquired an easement. The court order or Land Registry decision may be registered.
Protecting Unregistered Rights
The rights of a beneficial owner under a trust cannot be directly registered. The Land Registry is only concerned with the legal ownership of land.
The rights of persons under a trust or similar rights must be protected indirectly by an inhibition or a caution. The effect is that the legal owner is either restricted in dealing with the property or notice must be given to the protected person so as to allow him to assert his rights.
Many equitable rights are personal rights that can be enforced personally against the trustees. Such rights are capable of being destroyed if the trustee transfers to somebody who does not have any notice of the trust. The trust can be protected by registration of a caution or an inhibition on the title.
It is in the nature of some equitable rights that they arise in circumstances that may be disputed. In such cases, the right or interest may require to be determined in court proceedings. If the relevant right has not been asserted and established or requires the consent of the registered owner, which is not forthcoming, a caution may be registered pending resolution.
If the caution relates to an interest in part of the registered title only, it must be separately identified. Evidence must be lodged by an affidavit showing that there is a presumptive or prima facie right that may be enforced against the registered owner.
A person who lodges a caution without reasonable cause may be obliged to pay compensation to a person who suffers a loss, typically the registered owner.
The process under a Caution
Where an application to deal with the land or discharge the caution is lodged, a warning is issued to the person who lodged the caution. If he does not respond, the caution will lapse and be deregistered. If he requests continuation or objects to the registration of an adverse dealing, he will need to furnish proof that steps have been taken generally by way of litigation) to assert a claim protected by the caution.
In the case of a transfer to a person who gives no value, such as a donee of a gift, judgment mortgagee, or vesting in a bankruptcy trustee, the caution will generally be left in place. A person who does not purchase and gives no consideration takes subject to any unregistered rights affecting the title.
Registration will be frozen until the cautioner proceeds to court to establish his right. If proceedings are not commenced within a reasonable time, the caution will be cancelled.
An inhibition is a restriction on transfer. It protects unregistrable and unregistered rights that may not mature for some period. It prevents dealing with the registered title or allows it subject to a condition, such as the consent of a third party. It is designed to protect longer-term rights which may not mature for some period.
The Land Registry rules provide for the entry of inhibitions. The application may be modified as may be appropriate to the circumstances.
Where registration is sought without the consent of the registered owner, the registrar investigates the position in respect of inhibitions. An inhibition may be entered on foot of an application by the registrar.
The registrar may make such inquiries as he sees fit. The registrar may refuse to enter an inhibition without a court order. A court-order inhibition requires variation by court order.
Registering an Inhibition
The terms of the inhibition will be tendered by the person who makes the application for the protection of the relevant right. It may restrict all dispositions or a certain class of dispositions only. It may require the consent of a particular person or an order of the registrar, in order to allow registration. It may be limited until proof that certain circumstances no longer apply is furnished.
Greater evidence is required to support an inhibition than a caution. In some cases, the position may be straightforward as the registered owner’s consent is available. In the absence of consent, the applicant must prove his right or interest.
If the Land Registry is satisfied that there is a prima facie case, it serves notice on the registered owner giving an opportunity to object. If he does not object, registration will proceed.
The classic example of an interest that may be protected, is the interest of beneficiaries under a trust. The inhibition would protect against transfer by a trustee registered owner. Such an inhibition will be usually entered with the consent of the registered owner.
An inhibition may protect the petitioner in bankruptcy in the period before adjudication and registration of an adjudication of bankruptcy. It may protect an Optionee.
Certain (general/exclusive) rights of residence may not be protected by an inhibition as they are a registrable burden. Others may be the subject of an inhibition.
Where there is a dispute in relation to title and there is a High Court or Circuit Court case pending, a Lis Pendens can be registered in the Judgments Section of the Central Office of the High Court. No court consent is required (unlike the position in many other jurisdictions).
Lis Pendens means “Litigation Pending”. Its purpose is to put on notice that there is a dispute in relation to the property. It must be re-registered every five years.
The Lis pendens must be registered in Land Registry if it relates to the registered title. It is an “S.69” burden, which requires registration.
Cancellation requires a court order vacating the Lis Pendens or the consent of the applicant. Registration without a valid basis would be an abuse of process.
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