The On The Land Registration Act

2389 WordsJan 5, 201510 Pages
The Land Registration Act (LRA) 1925 has drawn much flak over the years with regards to one of its most important provisions on overriding interests (OI). OI often goes unnoticed until it swoops up and takes priority over the rights of a future purchaser. These interests often come in the form of other occupiers in the property with a beneficial trust interest and, like in the case of Boland this leaves the mortgage lender in a tight spot when they discover the existence of these interests only after they initiate proceedings against the defaulting borrowers. Mortgage lenders have developed measures to regain their footing by applying the concept of overreaching to overcome the concealed nature of the beneficial trust interest. The Law…show more content…
Overriding interests The major problem with OI is that it is not reflected on the register and it sneaks surprise attacks on the purchaser and the mortgage lender. Lord Wilberforce distinguished legal estate interests which are registerable, and other equitable interests which are overridden by a registered transfer, singling out that the s.70 of the 1925 Act recognizes “an intermediate, or hybrid class” called overriding interests, that although not registered, legal dispositions are executed subject to them. In other words, the law appreciates that a class of people could potentially hold important interests in that land and thus offers them protection. There contains a list of OI in s.70 that could significantly impact a purchaser’s use and enjoyment of a property and would also be deemed problematic for anyone investigating the title, thus representing a sizable stumbling block to the objective of having a complete record of the title. Disproportionately empowering the overriding interest holder The beneficial trust interest of the people in actual occupation is a commonly encountered category of OI and one of the most litigated. Boland highlights the previously unanticipated danger that purchasers and mortgage lenders of a registered land vested in a sole trustee lay susceptible –that is the pre-existing proprietary interests under an implied trust that can be enforceable as an OI. The court held that the
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