Bringing Land Registration into the Twenty-First Century.

The Land Registration Act 2002

Author(s): Barbara Bogusz
Source: The Modern Law Review, Vol. 65, No. 4 (Jul., 2002), pp. 556-567
Published by: Wiley on behalf of the Modern Law Review
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LEGISLATION
intotheTwenty-First
Land Registration
Bringing
- The Land Registration
Act 2002
Century
Barbara Bogusz*
Introduction
in Englandand Wales is embarking
on a newvoyage.Reforms
Land registration
Land
Act
2002l
the
2002) seek to transport
(LRA
Registration
proposedby
advanced
into
a
new
era, and remedythe
technologically
conveyancing
withthe Land Registration
Act 1925 (LRA 1925)
deficienciesand limitations
The objectiveof theAct,whichwillrepeal
and subsequent
amendinglegislation.
accurateand comprehensive
the LRA 1925, is to create a trulytransparent
documententitled'Land
Register.The Act has its originsin the consultative
in
for
the
Century'published 1998,2whichprovideda
Twenty-First
Registration
debatein thisarea. The joint Law Commissionand Land
forumforstimulated
to
withtheBill, endeavoured
Reportof 20013publishedsimultaneously
Registry
ofthechangesintroduced
assistin dissemination
by theBill,reviewedthecurrent
fromthe1998Consultative
Document.
legalpositionandindicatedthedepartures
The purposeof this note is to considersome of the key changesthatare
inEnglandandWales,
introduced
bythenewActtothesystemoflandregistration
law and practice.Some
and theimpactthechangeswill have on conveyancing
ofoverriding
interests
or
forexample,reducing
thenumber
aspectsofthereforms,
first
over
duration
are
for
leases
seven
particularly
compulsory registration
years
will undoubtedly
welcome.These developments
help to simplify
conveyancing
and
and protectthirdpartyrights.Otherchanges,such as the introduction
of electronicconveyancing
leave a numberof
(e-conveyancing),
development
unanswered
to implementation
andregulation.
Thiswillrequire
questionsrelating
further
anda significant
secondary
legislation
changeinpracticeamongstsolicitors
to all property
beforethefullbenefitof e-conveyancing
can be brought
buyers.
The introduction
ofe-conveyancing
in theLRA 2002 continues
a populartheme
The
witnessedin muchof thelegislationintroduced
by theLabourGovernment.
on
the
of
the
has
demonstrated
a
Government,
state,
focusing
concept modernising
the benefitsof Information
keen interestin bringing
Technologyto the public
servicesandtheprocessofgovernment
andadministration
moregenerally.4
In this
commitment
to use newtechnology,
theGovernment
is seekingto meettheneeds
of bothcitizensand business,and not trailbehindtechnological
developments
being used in manyotherEuropeanUnion (EU) countries.The LRA 2002 in
thistechnology
intoconveyancing
law andpractice,whichis
seekingto introduce
*

Facultyof Law, Universityof Leicester.

1
2
3
4

556

The Bill receivedRoyal Assenton 26 February2002.

Law Cor No 254.
Law Cor No 271.
CM 4310 WhitePaper 'ModernisingGovernment'.
:: The ModernLaw ReviewLimited2002 (MLR 65:4, July).Publishedby BlackwellPublishers.
108 CowleyRoad,OxfordOX4 IJFand 350 Main Street,Malden,MA 02148, USA.

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The Land RegistrationAct 2002

July2002]

oftenregardedas outdatedand rootedin medievalconcepts,is an attempt

to reto ensureitscompatibility
withthecommercial
worldof the
shapeconveyancing
century.
twenty-first

The Land RegistrationAct 2002 in context

fundamental
reform
as a resultof the 1925 legislation.
Land law underwent
This
and the limitedstatutory
amendment
was viewedas extensivebut evolutionary
has stoodthetestoftime.TheLRA
thatthelegislation
sincethenhas demonstrated
andpracticesthathaddevelopedovercenturies
1925incorporated
manyprinciples
if cumbersome,
and developeda comprehensive,
for
systemof land registration
a concerted
effort
to deal withthe
Englandand Wales. The LRA 2002 represents
in the1925legislation
andalso seekstomovelandlaw
deficiencies
stillremaining
in whichall registered
and createthenecessaryframework
forward
conveyancing
can be conductedelectronically.
betweentheLaw Commission
collaboration
Followingtheoutcomeof lengthy
whichled to thepublication
ofa jointreportandthelaying
andtheLand Registry
the Land Registration
Act has now become law.
of a Bill beforeParliament,5
thelegislationseeksto be compatiblewith,and reflect,
the
Thoughevolutionary,
of thegeneralpublicand theimportant
role which
advancesin theexpectations
The Law Commission
has in moderncommerceandgovernment.
newtechnology
and Land Registryin theirjoint 2001 reportconcludedthat'the publicrightly
seeks a moreexpeditiousand muchless stressful
systemof dealingwithland'.6
haveperhapsbecomethenormas Information
has
Theseexpectations
Technology
of
with
the
amount
information
made
in
readily
particularly
gained popularity,
accessible and also thatthe Interet is now used by manyas a mediumfor
a varietyof goods and services.The Government,
by pavingtheway
purchasing
to thefinalfrontier.
nowseeksto extend'on-line'purchasing
fore-conveyancing,
Land law, traditionally
regardedby manylawyersas archivalworkand form
filling,will be broughtin to the technologicalrevolutionof the twenty-first
century.
in thelandlaw regime
The LRA 2002 is in manyrespectsa logicaldevelopment
has been
of all transactions
of England and Wales. Since 1990 registration
that
still
remains
amount
of
land
the
unregistered.
reducing
thereby
compulsory,
was notthenormdidnotmeet
at a timewhenregistration
The LRA 1925,drafted
theneedsofa conveyancing
obligatory
systemwhichhas developedintorequiring
the Law Commission
transactions.
of all conveyancing
Therefore,
registration
concludedthatthe principlescontainedwithinthe LRA 1925 were deemedas
to all thosepersonswhohadacquiredor
anda lackofclarity
uncertainty
providing
in land.
wereseekingto acquirean interest

Substantiveobjectivesof the Act

of
to theregistration
a numberof keychangesrelating
The LRA 2002 introduces
land. The motivationbehind these changes is to promotecertaintywithin
The Bill was introducedin theHouse of Lords on 21 June2001 withtheFirstReadingtakingplace on
8 November2001.
6 Law Cor No 254 para 1.4.

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557

[Vol. 65

The Modern Law Review

transactions
forbuyer,sellerandthoseindividuals
whomaypossess
conveyancing
one of numerousthirdpartyrights.The overarching
conceptof the 'mirror
in theproperty
principle',thattheLand Registerreflectaccuratelyall interests
remainsa fundamental
one to thesystemof registered
concerned,
conveyancing
and is strengthened
by thenewActin severalways.
The promotionof the mirrorprincipleis vital if the Act is to achieve the
fundamental
a systemof e-conveyancing.
To enablean
objectiveof establishing
effective
systemofelectronic
dealingin land,theRegistermustbe a completeand
accuratereflection
ofthestateoftitlein thelandat anygiventime.Without
thisit
will not be possibleto investigate
titleon-linewithan absoluteminimumof
additionalinquiriesor physicalinspectionsof the property.
The LRA 2002 is
therefore
in
this
sense
and
a
marks
fromone ofthe
revolutionary
majordeparture

traditionalpractices of propertydealing. The maxim caveat emptor or 'buyer

beware'is an important
oflandlaw. Itplacesan onuson thepurchaser
to
principle
the
and
ask
of
the
with
physically
inspect property
questions
purchaser
regardto
theoccupationrightsof othersor of anyotherthirdpartyrightsin theproperty.
Thisoccursdespitethefactthatthelandis registered.
Itis difficult
toconceivethat
will not wish to inspectthe property,
but in circumstances
prudentpurchasers
wheretheycannot,it places a heavyresponsibility
on solicitorsto ensurethat
is accurately
information
has occurred.It
compiledand thata physicalinspection
that
before
solicitor
will
in
he or
seems,therefore,
any
participate e-conveyancing,
she mustensurethattheyhave sufficient
insurance
professional
indemnity.

Overridinginterests
One significant
steptowardsachievingthemirror
principlehas been thephasing
outor completeremovalofa number
ofoverriding
interests
bytheAct.The move
towardse-conveyancing,
willundoubtedly
facilitate
theelimination
of overriding
interests.
This is because the Law Commissionenvisagesthatthe majorityof
interestsin land will only be capable of being createdwhen simultaneously
Such interest
will therefore
neverbe capable of beingoverriding
as
registered.7
fortheirprotection
and enforcement.
theywillrelyuponregistration
These un-registrable
thattheydo not require
rights,deemed so important8
andwhichhaveto datebeengivenstatutory
undermine
the
registration
protection,
The veryfactthatan individual
has a rightwhich
conceptofthe'mirror
principle'.
cannotbe discoveredby inspecting
theLand Registercan createproblemsfora
has
who,
purchaser
thoughprudent, been misinformed
by the vendoras to the
of
other
on
the
who
have
presence
persons
property may
acquiredthird
partyrights.9
The Law Commissionrecognisedthatoverriding
interests
are somewhatof a
to individualswho are
double-edgedswordand do provideimportant
protection
oftenin a vulnerable
theLaw CommissionandLand
position.In theirjointreport
notedthat:
Registry
7 ibidpara2.27.
8

558

For exampleLord Denningin StrandSecuritiesv Caswell [1965] Ch 958 at 979 spoke of thepurpose

oftheoverriding
ins 70(1)(g)LRA 1925as beingto 'protect
interest
thepersoninactualoccupation
of landfromhavinghisrights
lostin thewelterofregistration'.
Sucha person,
he continued,
may
butwillnonetheless
be protected.
'simplystaythereanddo nothing'

This was the case in Williams & Glvnn's Bank v Boland [1979] Ch 312 where the husband

misinformed
thebankas tohiswife'soccupation
oftheproperty,
whichledtoheroverriding
interest
unders 70(1)(g) LRA 1925beingbinding
on theBank.
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July2002]

The Land RegistrationAct 2002

interests
a significant
to one of themainobjectives
of the
Overriding
present
impediment
thattheRegister
shouldbe as complete
a record
ofthetitleas itcanbe,withthe
Bill,namely
resultthatthetitlecan be investigated
on-line.l?
entirely
Yet in the nextparagraphthe Report states:
The guidingprinciple
on whichit [theBill] proceedsis thatinterests
shouldbe overriding
to expectthemto be protected
on theRegister.l
onlywhereit is unreasonable
The Act seeks to achieve a balance thatreflectsthe needs of the parties in such
circumstances.The legislationwill continueto protectthose rights,which,if not
affordedthe statusof an overridinginterest,could lead to theloss of a home or the
perpetrationof a fraud. Most significantly,the new Act continues to protect
overridinginterestsif thereis actual occupationby theclaimant.This means thata
plaintiffin the Williams& Glynn'sBank v Boland12position,who is unawareof a
spouse or partnersre-mortgagingof the property,would continue to be given
protectionunderthe new Act. This protectionis verywelcome.
Claimants who are in actual occupation will be able to establish an overriding
interestonly if theyhave an interestwhich is eithera beneficial interestunder a
trustor if theinterestarose informally(forexample, an equityarisingby estoppel).
This limitationof the typeof interestscapable of formingthe subject matterof an
overridinginterestproved to be a controversialissue in debate at the Grand
Committeestage withinthe House of Lords. In the Grand CommitteeBaroness
Buscombe moved amendmentsto extend the categories of beneficiariesthatare
definedby the Bill.13The amendmentswere intendedto bringthe Bill in to line
with Law Commission recommendations.In a previous debate,14 Baroness
Buscombe raised the situationof a widow who acquired a life interestunder a
strictsettlementin the formermatrimonialhome underthe will of her husband.In
such circumstancesthe widow would only be entitledto protectionif in actual
occupationand thepropertywere subject to a trustforsale. If the 'magic formula'
of the trustforsale is omittedfromthe will, thenthe widow will not be entitledto
any protectionin such circumstances.
The Government'sview was thattherewould be comparativelyfew people in
this position and thereforeextendingthe categories of interestto cover a strict
settlementwould not be justified. Lord Bassam speaking on behalf of the
Governmentconcluded that there was no evidence that the Bill would lead to
hardship.'5Though the Government'sview may be trueit will be of littlecomfort
to the individualswho lose theirrightsto remainin the propertymerelybecause
the will was drawnup informallyor withoutprofessionaladvice and excluded the
creationof a trustforsale.

forleases
Compulsoryfirstregistration
Tenants will be among the firstto be affectedby the Act. A lease which is fora
durationof seven years or more will now be subject to compulsoryregistration
withits own individualtitle.This is a substantialchange fromthe 1925 legislation
10
11
12
13
14
15

Law Com No 271, para 2.24.

ibid para 2.25.
[1979] Ch 312.
HL Deb 8 November2001 cc 314-9.
HL Deb 30 October2001 c 1324.
HL Deb 30 October2001 c 1326.

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559

[Vol. 65

The Modern Law Review

whichonlyrequiredleasesofgreater
thantwenty-one
The
yearstobe registered.16
reasonforthischangeis a practicalone.In the2001 surveyoftheBritishProperty
itwas foundthattheaveragelease lengthhas
Federation's
AnnualLease Review17
continued
to falland is nowjustover10 years.Hencethemostcommonproperty
in Englandand Wales is now mostunlikelyto be recordedon the
transaction
ofthestateof
Registerthatis due to become"a completeand accuratereflection
thetitleof thelandat anygiventime".
Leases whichare grantedfora termof less thansevenyearswill continueto
in thesame way thatsection70(1)(k) of theLRA
interests
operateas overriding
for
1925currently
leases
undertwenty-one
provides
years.The policybehindshort
leases beingoverriding
interests
is to keep theRegisterfreeof suchshortleases
becauseof theriskthattheymayclutter
theRegister.Withtheintroduction
of eitwillbe possibletoregister
shortleaseswithno apparent
conveyancing,
difficulty
and ensurethattheyare subsequently
removedfromthe Registerupon expiry.
onceelectronic
is a reality,
itmaybe possibleto register
Furthermore,
registration
leases fora shorter
durationthansevenyears,as theirremovalshouldno longer
proveto be a problem.
Thereis one questionthatremainsfollowing
thischangeand thatrelatesto the
of
leases
which
are
for
a
term
of
three
position
yearsorless.Section33 oftheLRA
2001 excludessuch leases frombeing registered
as a noticeon the Register.
interest.
a lease
Therefore
However,sucha lease can stilloperateas an overriding
over threeyears,but less thansevenyears,in durationmaybe enteredon the
The Act seeksto encouragethis,butit will notyetbe compulsory.19
Register.18
The primaryreason for this encouragement
is to place less relianceon the
interest
fortheprotection
oflease,butrather
to ensurethattheRegister
overriding
is as detailedandcomprehensive
as possible.Thisagainis intended
to ensurethat
interestsare placed on the Registerwhichis fullytransparent
and therefore
facilitateeasier e-conveyancing
If this
throughthe removalof such interests.
to
be
the
Act
the
Lord
Chancellor
the
to
enable
the
successful,
proves
gives
power
toreducetheperiodforcompulsory
further
to
three
Registrar
registration
up
years.
The policybehindtheseprovisions
withintheActis toplace less ofan emphasis
on overriding
interests
and limitthemto only thosesituationswheretheyare
Wherealternative
meansofprotection
are available,suchas
absolutely
necessary.
thesearetobe encouraged.
However,forleaseslessthanthreeyearsit
registration,
will be impossibleforthemto be protected
otherthanby an overriding
interest,
a
of
leases
which
can
leaving proportion
onlybe discoverablethrough
inquiry.
a lease fora periodof less thanthreeyearsis notrequiredby thelaw of
Further,
contractto be createdby deed. Any requirement
of registration
of such leases
wouldundoubtedly
introduce
newinflexibilities
intotheregistration
arrangements
andplace additional
costsandburdenson a purchaser.
It is unlikely
thatthepower
for compulsoryregistration
could be reducedbelow the three-year
threshold.
the
alternative
is
forthepracticeoforallycreatedleasestobe limited
Perhaps only
and wherever
possibleforleases to be createdfora longerperiod.This practice
of e-conveyancing
are to be fullyrealised.
maybe desirableifthebenefits

16 s 8 LRA 1925. However,leases forless thattwenty-one

yearscould be overridinginterestsunders
70(1)(k) if coupled withactual occupation.
17 Available at <http://www.bpf.propertymall.com/publications/>
18 s 37 LRA 2002.
19 ibid.

560

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The Land RegistrationAct 2002

July2002]

Third party rights

The Act will protectpurchasers
and maketitleto registered
landmoresecureby
of
the
This
the
will
also enhancethe
simplifying operation
Register.
change
to thirdpartieswhohave an interest
afforded
overregistered
land.The
protection
cautionsandinhibitions
havingbeendispensedwith,
majorchangecomesthrough
of noticesand restrictions.
Underthe 1925
and replacedwitha redefinition
on thethirdparty,rather
it gave the
legislationa cautiondid notconfera priority
of
with
or
to
receive
notice
the
affected
estate
right
dealings
registered
chargeand
to raiseobjections.The LRA 2002 no longerprovidesforsuchnewcautionsto be
butexistingcautionswillremainin theRegisterbyvirtueoftransitional
registered
1 and 2(3) of Schedule12.
provisionsthatare containedin paragraphs
Notices will be used to protectencumbrances
over registered
land thatare
intendedto bind thirdparties,for example a lease, easementor restrictive
in whicha
will be used to regulatethe circumstances
covenant.Restrictions
land is to be registered.
Undersection34 of the Act a
dealingwithregistered
capable of beingthe subject
personclaimingto have the benefitof an interest
foran
matterof a noticemay,subjectto theformalrules,applyto theRegistrar
or
notice
in
of
the
Section
of
an
unilateral
interest.
34(3)(a) to
agreed
respect
entry
in whichtheRegistrar
an
(c) setsoutthecircumstances
mayapprove application
(a) and (b) are cases wherethe
by a thirdpartyforan agreednotice.Sub-sections
has actuallyconsentedto entryof the notice.
relevantregisteredproprietor
Whereassub-paragraph
(c) coversthe positionwherethe applicanthas to the
had
forexample,thattheregistered
satisfaction
established,
proprietor
Registrar's
the
consent
In
circumstances
him
an
easement.
such
registered
proprietors
granted
is notrequiredforregistration.
noticeson theRegister.These
The Act also providesfortheentryof unilateral
to a third
as
a
are particularly
large
degreeof protection
important theyprovide
fora schemeof
theseprovisionsis providing
party.Once again,theAct through
forsuchthirdpartyrightswhilstseekingto minimisetherelianceon
registration
protection.Unilateralnotices can only be removedby the
non-registrable
beneficiaryor by anotherpersonwho has applied to the Registrarand the
A registered
thatremovalis justified.20
is satisfied
proprietor
maymove
Registrar
willbe notified
and
thebeneficiary
andin suchcircumstances
tocancelthenotice21
his
does
not
exercise
If
the
to
an
rightto
beneficiary
given opportunity object.
Act
to
balance
both
the
notice.22
The
tries
must
cancel
then
the
Registrar
object
rather
than
of
the
the
medium
but
does
so
interests
Register,
by
through
competing
interest.
such as overriding
mechanisms
otherinformal
Clearlytheseprovisions
eto facilitate
whichis intended
fallwithintheprimary
objectiveofthelegislation
of the Register.These
and transparency
certainty
by promoting
conveyancing
provisionsrecognisethatthis can only be achievedif the Registernot only
all interests
in land,butalso providesfortheirremoval.
reflects
accurately

20
21
22

s 35(3) LRA 2002.

s 36(1) LRA 2002.
s 36(3) LRA 2002.

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561

The ModernLaw Review

[Vol. 65

Adversepossession
The law on adverse possession does not readilyfitwithina systemof compulsory
land registration.23
As the law currentlystands a squatter will be in adverse
of
land
if
he can extinguishthe owner's titleto thatland aftertwelve
possession
years, the period within which actions for the recovery of the land must
commence.24If the proprietorfails to take any such action withinthe twelve year
period, he will hold the land on trustfor the squatterwho may apply to be the
registeredproprietorof a new estate,wherethe registeredland is a freehold,or as
proprietorof the registeredestate where the estate is leasehold.
The Law Commission described adverse possession as 'an embodimentof the
policy that defendantsshould be protectedfromstale claims and thatclaimants
shouldnot sleep on theirrights'.25Though thechanges whichare introducedby the
Act to the law on adverse possession cannotbe consideredas being radical when
consideredwithinthe overall contextof the changes which are introducedto the
conveyancing process, they will make claims by squatters more difficultto
substantiate.There are two reasons forthe inclusion of these changes withinthe
Act. Firstly,it is perceivedthatit has become too easy fora squatterto acquire title
to theland. The twelve yearlimitationperiod,thoughnot an inconsiderableperiod
of timedoes notdefeatall claims foradversepossession. Secondly,it is difficultto
justifythe continuationof the principlein relationto registeredland. As the Law
Commissionstatedin its 1998 Report'where titleis registered,thebasis fortitleis
ratherthanpossession'.26
primarilythe factof registration
The essence of the new scheme is thata squatterwill be able to apply to be a
registeredproprietorafter 10 years adverse possession.27 However, once any
application is lodged the registeredproprietorwill be notifiedof the application
and will, in themajorityof cases, be given theopportunity
to object to it. If such an
is
then
the
will
objection lodged,
application
automaticallyfail.28This, however,
will notbe theconclusion of thematter.The proprietorwill stillneed to take steps
to regainpossession of the propertyand evict the squatteror otherwiseregularise
his position within two years. If the squatter continues to remain in adverse
possession aftertwo years,he will be entitledto be registeredas the proprietor.29
Though it is difficultto forecastwithabsolutelycertainty,it appears thata claim
for adverse possession will rarelysucceed under the new statutoryregime. It is
hard to conceive thata registeredproprietorwill object to a claim afterten years,
but thenfail to take any action to regainpossession of theland withinthenexttwo
years.
The legislationundoubtedlymarksa shiftin balance in favourof the proprietor.
It has been viewed as merelyredressingthebalance whichto date has favouredthe
This is a welcome developmentbothmorallyand legally. From a moral
squatter.30
perspectiveadverse possession has been difficultto justifyon the groundsthat
23
24
25
26
27
28
29
30

562

For a discussionof thispointsee thejudgmentof NeubergerJ in J A Pye (Oxford)HoldingsLtd v

Graham [2000] Ch 676. ss 15 and 17 LimitationAct 1980.
Law Com No 271, para 2.71. For furtherdiscussion and detail of why the doctrineof adverse
possessionactuallyexistssee para 2.71-2.73 of the report.
Law Com No 254, para 10.11.
s 96 LRA 2002.
s 98(1) LRA 2002.
s 98(4) LRA 2002.
Lovells PropertyNewsletter,September2001.
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The Land RegistrationAct 2002

July2002]

ownershipof land should be based on more thanmerelyfactualpossession foran

arbitraryperiod and that the squatter has the necessary animus possidendi
(intentionto possess).31In Powell v McFarlane Slade J saw factualpossession as
being determinedby referenceto the 'natureof the land and the mannerin which
the land is commonlyused or enjoyed'.32The case law has continuallyviewed the
erectionof fencingor any act of enclosure of the land33as being sufficientfor
adverse possession. This is a difficultconcept to accept, that minor acts which
neitherimprove the land nor require any significantexpenditure,are deemed
sufficientto acquire an estate in the land. The changes introducedby LRA 2002,
affordingthe owner the opportunityto object to a claim for adverse possession,
even if such acts of enclosurehave occurred,is undoubtedlywelcome.
From a legal perspective,the Act reflectsthe truepositionthatthe basis of title
to registeredland is the fact of registrationand is not based (as is the case in
unregisteredland) on the concept of possession. The Act intendsto ensure an
accurate registerand restricting
adverse possession in thisway is necessaryto the
achieve this. Adverse possession is thereforedifficultto validate in the way it
perhapswas in 1925. Argumentsjustifyingadverse possession such as preventing
theneglectof land or thattherewas a social need forwiderland ownershipare not
so relevanttoday in a propertyowning democracy.Land ownershipis not limited
to a small proportionof the population,who, as was progressivelybecoming the
case, did not have the resourcesto maintainthe quality and value of theirland.
Adverse possession had a role to play when feudal landownerscould no longer
manage the estatestheyowned and when therewas a need forsome formof land
redistribution.
Adverse possession withthisegalitariandimensionis difficultto justify,at least
in its present form,within a jurisdiction where land prices are high and the
commercialmarketin land is particularlybuoyant.The concept of alienabilityof
land, whichwentto theheartof 1925 legislation,is verymuch a realitytoday.The
economic realityof land being an importantcommercialcommodity,thatis freely
and widelytraded,makes adversepossession appear to be a veryoutdatedconcept.
In this sense the LRA 2002 has verymuch lived up to the objectives of the Law
Commission's ConsultationDocument of 1998 and as faras adverse possession is
concerned,broughtland registrationin to the twenty-first
century.

The introduction
of e-conveyancing
The joint Law Commission and Land Registryconsultationdocument of 2001
statesthatthatthe primaryobjective of the Bill is to 'create a frameworkin which
it will be possible to transferand create interestsin registeredland by electronic
means'.34The reportnoted thatthe essential featureof electronicconveyancingis
thatit will requirea comprehensiveand currentsystemof land registration.35
The
substantiveland law changes outlinedabove are intendedto provide the structure
forthisto be achieved. One further
impactof e-conveyancingwill be the removal
For a discussionof whatamountsto the animuspossidendisee Powell v McFarlane (1997) 38 P &
CR 452 at 470 per Slade J.
32 ibid at 471.
33 See forexampleSeddon v Smith(1877) 36 LT 168 at 169 per Cockbur CJwho statedthat'Enclosure
is the strongestpossible evidence of adversepossession.'
34 Law Cor No 271, para 1.10.
35 ibid.
31

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The ModernLaw Review

[Vol. 65

of the 'registrationgap' betweentransferand registrationof title.This eliminates

the issues raised by the defendantin AbbeyNational v Cann36wherethe plaintiff
claimed an overridinginterestthat had priorityover the mortgage.Mrs Cann's
actual occupation began beforethe mortgagewas registeredand cruciallybefore
the purchaseof the propertywas completed.37This was rejectedby the House of
Lords as givingrise to an overridinginterestand theirLordship's decided thatthe
mortgagehad priorityfromthe momentof creation and not fromthe point of
registration.With the introductionof e-conveyancingsuch confusion should be
of themortgagetaking
eliminatedand theregistration
gap 'filled' withregistration
place immediatelyupon completion. Though important,all these amendments
outlinedare only half the picture.In additionto these substantivedevelopments,
changes in bothpracticeand procedureto the traditionalrules of land transferwill
be requiredif e-conveyancingis to functionefficiently.
The frameworkof the electronicsystemwill be based on the abolition of the
documentsto be in writingand signed,
numerouslegal rulesrequiringland transfer
so faras thisis necessaryto facilitatetheuse of an electronicsystem.Section 53 of
theLaw of PropertyAct 1925 and section2 of theLaw of Property(Miscellaneous
Provisions)Act 1989 impose strictrequirementsin respectof contractsforthe sale
or dispositionof any interestin land. All such contractsmustbe made in writing
and mustbe signed by or on behalf of the partiesto the agreement.
Clearly in a systemof e-conveyancingthis will no longer be appropriate.The
Act deals with this to some extentthroughsection 91. This provision does not
disapply the formalstatutoryor common law requirementsrelatingto deeds and
documents but ratherdeems compliance with them. Therefore,the electronic
documentis treatedas being in writingand whereappropriatewill be treatedas a
deed. Though a significantdevelopment,section 91 is merelya preparatorystep
towards creating an efficientsystem of e-conveyancing.Issues relatingto the
of documentsand in particulartheuse of the 'digitalsignature'raise
authentication
the need for an efficientcomputersystembeing developed for attachingdigital
the success of these reforms
signaturesto the relevantdocuments.Furthermore,
will also be largelydependentupon the securityand reliabilityof e-conveyancing.
In the world of e-commerce generally, security fears are currentlydelaying
advances in this new legal electronicera, and it remainsto be seen whetherthe
digital signaturewill be put to greateruse more generallyonce the systemof econveyancingis up and running.38
The developmentand introduction
of such a computernetworkis not dealt with
in any significantdetail by theAct. It is anticipatedthatsubordinatelegislationwill
the detailed technical,practicaland legal arrangements
set out further
concerning
this. Under s.8 Electronic CommunicationsAct 2000, the Lord Chancellor has
been given the power to disapply - by means of secondary legislation - any
statutory
regulationthatrequiresa transactionto be carriedout in a specificway.
For example, this would include the requirementthat a sale of land must be in
writingand signed by all parties,or the need fortransferof land to be by way of a
deed. Limited progresshas already been achieved on introducingthe necessary
secondary legislation and a draft order has been published, with the Lord
36 [1991] 1 AC 56.
37 The vendormerelylettinghermove in some of herpossessionsearly.
38 The issue of securityforelectronicsignatureis currently
causingsome concernforsolicitorswho are
questioningitsviability.See L. Moloney 'Writingnotyeton thewall fordigitalsignatures'The Times
12 March2002 p. 28; Gerrard,M. 'E-asy as Houses' The Law SocietyGazetteApril 19 2001 available
>.
at < http://www.lawgazette.co.uk/features/mainfeaturearticleframe.asp?ArticleID=37

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The Land RegistrationAct 2002

July2002]

Chancellor's departmenttaking responsibilityfor the consultationprocess that

accompanied publicationof the draftorder.
The Law of Property(Electronic Communications) Order was published in
March 2001 for a consultationprocess that is being co-ordinatedby the Lord
Chancellor's department.39
The purpose of the draftorderis to remove the legal
obstacles that may prevent the use of electronic forms of communicationin
relationto dealings with land. Those obstacles are the formalrequirementsthat
apply to mostdispositionsof land and to contractsforthe sale or otherdispositions
of land. These formalrequirementsare of differentkinds. First, it is normally
necessaryto use signedwritingto createor dispose of any interestin land, whether
legal or equitable.40Secondly, most conveyances of a legal estate in land have to
be made notonly in writingbut also by deed.41Thirdly,mostcontractsforthe sale
or otherdispositionof land can only be made by signed writingand must meet
certainotherconditions.42It is necessary to ensure, therefore,that these formal
requirementsare no longera bar to those conveyancingtransactionswhich could
be conductedin electronicform.43At the same time,it is also necessaryto ensure
thatthe securityof titleto registeredland, which HM Land Registryguarantees
under the provisions of the Land RegistrationAct 1925,44is not compromised
throughthe move to e-conveyancing.
There are no plans to extend electronic conveyancing to dealings with
unregisteredland except in relationto (i) dispositionsof unregisteredland which
of title,and (ii) contractsto make a disposition
triggercompulsoryfirstregistration
of unregisteredland. There are two solid reasons for this. Firstly,there are
concernsrelatingto themethodof secure storageof electronicinstruments
dealing
with unregisteredland. Secondly thereseems littlepracticalpoint in making the
necessarylegislativechanges given the factthatunregisteredconveyancinghas at
best a very limited future.The position today is that most dispositions of
of title.45
unregisteredland now triggercompulsoryfirstregistration
Though the consultation process has concluded the Lord Chancellor's
Departmentis yet to publish the final conclusions. The order,if and when it is
implemented,will be importantfortwo reasons. First,it will providethe practical
frameworkforlawyerswho will use e-conveyancing.Secondly, and perhapsmost
theorderwill change irrevocablytheoperationof land law in England
importantly,
and Wales. The antiquatedsystemof manual formfillingwill be swept aside in
39
40
41

42

43

44
45

See < http://www.lcd.gov.uk/consult/general/e-conv.htm

> forfurther
information
on theconsultation
process.
Law of PropertyAct 1925, s 53(1)(a). See also n 44 below.
Law of PropertyAct 1925, s 52(1). A deed mustmake it clear on itsface thatit is a deed and mustbe
validlyexecuted:see Law of Property(MiscellaneousProvisions)Act 1989, s 1(2). The requirements
for execution vary according to the person or body making the deed. However some formof
subscriptionis required,as is deliveryof the deed.
Law of Property(MiscellaneousProvisions)Act 1989, s2. The orderwill inserta new section2A into
theLaw of Property(MiscellaneousProvisions)Act 1989. This sectionlays down how a contractfor
thesale or otherdispositionof eitherregisteredor unregistered
land is to be made in electronicform.
It containsprovisionsthatare intendedto ensurethatsuch a contracthas exactlythe same effectas
one made on paper.
The draftorderwill legalise electronictransfersby introducinga new section 144A thatenables
certaindispositionsto be effectedelectronicallywhen they would otherwisehave to be made in
writingor by deed. It providesthat,by meetingtherequirements
specifiedin thesection,thepartiesto
an electronicdocumentare takento have compliedwiththerequirements
fora written
documentor a
deed thatare laid down in otherstatutes.
See s 83 (as substituted
by the Land RegistrationAct 1997).
See Land RegistrationAct 1925, ss 123, 123A.

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[Vol. 65

The ModernLaw Review

favour of electronic forms,therebycreating a more dynamic market in land

which is notjust limitedto these shores.The new legislationis therefore
transfers
importantin the wider European context by providing a frameworkfor the
developmentof an internalmarketin land across the European Union where the
move towardse-conveyancingis also gatheringpace.

in a European context
E-conveyancing
The provisionsrelatingto e-conveyancingwill, forthefirsttime,make thetransfer
of land in England and Wales subjectto provisionscontainedwithintwo European
Directives. The Directive on Electronic Commerce46 and the Directive on
Electronic Signatures47have both been incorporatedinto domestic law through
of theseDirectives
theElectronicCommunicationsAct 2000. The implementation
to purchasers
will have a knock-oneffectof improvingaccess to land information
market.
internal
the
within
Currently,European propertymarketsare
anywhere
access to on-line informationmay
such
national.
Providing
predominantly
facilitatelending institutionsto operate beyond national boundaries and fostera
European marketin mortgageservices. Further,increased competitionbetween
internationallenders could lead to more competitivemortgagerates for the EU
citizen.High speed cross-bordereuro payments,throughreal timemoneytransfers
are already a reality,directlyas a resultof an agreementbetween the European
CentralBank and the Bank of England. The creationof a real internalmarketin
land would give an added dimensionto the free movementof capital withinthe
InternalMarket.
The European Union has identifiedthe importanceof electroniccommercefor
the internalmarketas a growtharea. In its Directiveon ElectronicCommercethe
EU promotes the development of a legal frameworkfor informationsociety
services,thuseliminatinginternalfrontiers
allowingthefreemovementof services
This
Directive
and establishment.
togetherwith the Directive on Electronic
indirect
has
had
an
impact on the issue of electronicconveyancingof
Signatures
The
Electronic
CommunicationsAct 2000, implementingthese
land.
registered
two Directives,containsprovisionswhich will remove limitationson storingdata
in formatsotherthanon paper,so facilitatingthe use of electroniccommunication
and electronicstorageof data forconveyancingpurposes.48The initialmotivation
for this is reflected in the primary objective of the Act, where electronic
conveyancingwould facilitatethe maintenanceof the Register as reflectingan
accuratestateof the titleof the land in any given period,therebyallowing on-line
inspectionsby lawyersin any Member State.
As part of the process towards achieving this objective, the Land Registryis
currentlyinvolved in a European Commission fundedprogrammeentitled'The
European Land InformationService'.49 The purpose of this project is twofold.
Firstlyit examines methodsfor improvingaccess to, and expanding the use of,
46
47
48
49

566

Directive2000/31/ECof theEuropeanParliamentand of theCouncil of 8 June2000 on certainlegal

societyservices,in particularelectroniccommerce,in theInternalMarket.OJ
aspectsof information
L 2000/178 1, 16.
Directive 1999/93/ECof the European Parliamentand of the Council of 13 December 1999 on a
forelectronicsignatures.OJ L 2000/13 12, 20.
Communityframework
s 8 ElectronicCommunicationsAct 2000.
about this pilot projectcan be foundon the Land Registrywebsiteat <http://
Furtherinformation
1&pubid=LRP03/02>.
www.landreg.gov.uk/pressoffice/default.asp?fl=
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The Land RegistrationAct 2002

July2002]

withintheInternal
Market.Secondly,theprogramme
is
publicsectorinformation
how
information
can
such
be
utilised
more
the
increased
evaluating
widelythrough
ofthedigitalcontent
market.
The Land Registry
ofEnglandandWales
dynamism
in
with
the
bodies
several
other
EU
MemberStates50and
equivalent
together
areparticipating
in theprogramme.
Thispilotprogramme
AccessionStates51
is an
to improving
accesstoproperty
international
The
stepforward
important
registers.
endeavourto findcommonprinciplesforcollectingand
projectwill additionally
relatedinformation,
suchas agreedprinciples
foraccess to data,
storing
property
framework.
and a commonlegal and regulatory
However,thoughan exciting
formal
conclusions
are
several
clearly
yearsawayfrombeinga reality.
project,any

Conclusions
of the LRA 2002 will undoubtedly
revolutionise
land law and
The enactment
law and practice.The Act is merelythefirst,thoughperhapsthe
conveyancing
couldwitnessthe
mostimportant
processwhichultimately
part,ofa modernisation
in
law
and
of
an
internal
market
land
related
mortgageservices
development
of manyarchaicprinciples
thereform
withintheEuropeanUnion.Furthermore,
in theGovernment's
demonstrates
and procedures
objecprogression
underlying
structure.
The LRA 2002
the stateand its administrative
tive of modernising
in a co-ordinated
and
tacklesthedeficienciesin the systemof land registration
manner.This is to be applauded,and nothingless wouldbe expected
structured
fromlegislationthathas its roots in two detailedreportsand a very wide
consultation
process.
of e-conveyancing,
The centralpurposeof thenew Act beingtheintroduction
The particular
of
meansthisactsas a hubforall otherdevelopments.
importance
all
the
substantive
the mirrorprincipleto registered
underpins
e-conveyancing
amendments.Yet the Act does not appear to have provideda clear and
Thereis stilla
forthe operationof e-conveyancing.
framework
comprehensive
are already
need for additionalsecondarylegislation,and some practitioners
and theformat
which
of electronicsignatures
voicingconcernsoverthesecurity
on-linesearcheswill take.52These can be explained,partlyat least,as an initial
reluctancearisingout of a stepin to theunknown.However,theymustalso be
regardedas legitimateconcernsof the professionwho will be chargedwith
mustlistento
thisnew system.The LordChancellor'sDepartment
implementing
withinwhich ewhen devisingthe regulatoryframework
the practitioners
whichtheLaw Commission
operatesif thisis to bringthebenefits
conveyancing
have identified.
and Land Registry

50
51
52

These includeAustria,Finland,The Netherlandsand Sweden.

for its
Currentlyonly Lithuaniabut Poland is also embarkingon a programmeof computerisation
systemof land registration.
See n 38 above.

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567