registration of encumbrances
Registration of *land charges affecting the rights of landowners. If registered, these charges are binding on third parties who acquire the land affected or any interest in it. If not registered, however, they will not bind most third parties and thus lose their effectiveness as interests in the land itself. A person contemplating buying or taking an interest (e.g. a mortgage) in land should therefore search the relevant registers to ensure that there are no charges registered that would influence him against proceeding. The registers are therefore always searched in any *conveyancing transaction by the purchaser or his solicitor. There are four relevant registers.
(1) Local land charges, arising in favour of a local authority from the exercise of its statutory powers, are recorded in a local land charges register maintained by the authority concerned in relation both to registered and unregistered titles. Examples include rights to the repayment of improvement grants, compulsory purchase and smoke control orders, and planning decisions affecting the development or use of premises. Local land charges do not appear in any national register.
(2) In the case of *unregistered land, registers are maintained by the *Land Charges Department of the following types of interest recorded against the names of persons owning land.
(a) Land charges, comprising Class A: certain statutory charges registered on the application of the chargee; Class B: similar charges registered automatically; Class C: (i) *puisne mortgages, (ii) *limited owners’ charges, (iii) *general equitable charges, and (iv) *estate contracts; Class D: (i) Inland Revenue charges for *inheritance tax, (ii) *restrictive covenants created after 1925 and affecting freehold land and (iii) equitable *easements created after 1925; Class E: annuities created before 1926 and registered after 1925; and Class F: spouses’ rights of occupation under the Matrimonial Homes Act 1983.
(b) *Pending actions relating to land or any interest in it, and petitions for *bankruptcy.
(c) Writs or orders of the court imposing a charge on, or appointing a receiver or sequestrator of, land, and all *bankruptcy orders.
(d) *Deeds of arrangement affecting land.
Land charges remain registered until discharged by the chargee or the court. Registration of pending actions, writs and orders, and deeds of arrangement must be renewed every five years.
(3) When the title to land is registered (see *land registration), encumbrances other than local land charges can be protected by registration of the appropriate entry in the charges register of the title at the Land Registry.
(4) A floating charge on the assets (including land) of a limited company and any other charge on a company’s land created before 1970 for securing money need only be registered at the Companies Registry, under the Companies Act 1985. A fixed charge on a company’s land created after 1969 should be registered both at the Companies Registry and the Land Charges Department (or charges register of the registered title as appropriate).
Although a chargee is protected by registration against all persons acquiring any interest in the land affected, the Law of Property Act 1969 provides that a purchaser is bound only by registered charges of which he knew or ought to have known when the contract was made. Thus if he discovers an undisclosed registered charge before completing the contract, he may rescind or pursue other contractual remedies against his vendor as the circumstances allow. If he completes the transaction, however, he will be bound by the charge.
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