Guidance

Practice guide 15: overriding interests and their disclosure

Updated 26 June 2017

Applies to England and Wales

Please note that HM Land Registry’s practice guides are aimed primarily at solicitors and other conveyancers. They often deal with complex matters and use legal terms.

1. Introduction

This guide explains HM Land Registry’s approach to overriding interests which applicants must disclose on registrable dispositions of the registered estate, and on first registration. It gives details of the effect of the Land Registration Act 2002 and the Land Registration Rules 2003 on overriding interests, and sets out the procedures you need to follow in disclosing these interests.

2. Overriding interests

Overriding interests are interests to which a registered title is subject, even though they do not appear in the register. They are binding both on the registered proprietor and on a person who acquires an interest in the property.

They have always been a feature of the registration system, though the term itself was first introduced in the Land Registration Act 1925.

2.1 Effect of the Land Registration Act 2002 on overriding interests

One of the aims of the Land Registration Act 2002 is to reduce the number of overriding interests and to replace as many as possible of them with register entries. This is in keeping with its overall objective of making the register as complete a record of title as possible.

It does this by:

• reducing the scope of some overriding interests
• providing for the eventual abolition of others
• requiring people applying for registration to provide information about unregistered interests, so that notice can be entered in the register in respect of them
• providing that, once an interest has been the subject of a notice in the register, it loses its overriding status forever, even if the register entry is cancelled

In addition the Land Registration Act 2002 distinguishes, for the first time, between interests that override first registration and those that override subsequent registrable dispositions.

It, therefore, contains two separate lists of interests with overriding status.

Schedule 1 lists those that override first registration (they do so by virtue of sections 11(4) or 12(4) of the Land Registration Act 2002). Schedule 3 lists those that override registered dispositions (they do so by virtue of sections 29(2) or 30(2) of the Land Registration Act 2002). Schedule 12 contains important transitional provisions.

Background information on the types of overriding interest mentioned in the Land Registration Act 2002 are given in Overriding interests in more detail. Details of those which must be disclosed by applicants are in Disclosable overriding interests.

3. Reducing the number of overriding interests

The Land Registration Act 2002 contains a number of mechanisms by which overriding interests will be brought into the register. These include:

• designating certain interests that were to lose their overriding status - this happened at midnight on 12 October 2013 (section 117 of the Land Registration Act 2002)
• a general power for HM Land Registry (subject to service of notice) (rule 89 of the Land Registration Rules 2003) to note overriding interests that come to, or are brought to, our attention (section 37 of the Land Registration Act 2002). This might include, for example, noting the burden of a legal easement on a registered title, or making a building estate subject to an interest disclosed on an application relating to a single plot
• the duty of applicants to disclose overriding interests affecting the land. See Disclosable overriding interests

4. Disclosable overriding interests

4.1 When to disclose an overriding interest

You must disclose overriding interests when making an application for first registration or for registration of a registrable disposition of the registered estate.

You must disclose any such interest (unless it is an interest of a kind mentioned in Interests not to be disclosed) that is within the actual knowledge of the person applying for registration. There is no need to carry out any special investigation, although you might need to explain to your client what interests should be disclosed.

4.2 Interests not to be disclosed

Do not disclose interests of the kinds mentioned in sections 33 and 90(4) of the Land Registration Act 2002, and in rules 28(2) and 57(2) of the Land Registration Rules 2003. These are:

• an interest under a trust of land
• an interest under a settlement under the Settled Land Act 1925
• a lease granted for a term of three years or less, unless it is of a kind that has to be registered
• a Public – Private Partnership (PPP) lease. PPP Leases are made overriding interests by section 90 of the Land Registration Act 2002. They are leases of parts of the London Transport railway system granted under public-private partnership agreements
• an interest capable of being registered under the Commons Registration Act 1965
• an interest in any coal or coal mine
• a local land charge
• a public right
• a lease with less than one year to run
• a restrictive covenant between lessor and lessee so far as relating to the demised premises
• any interest apparent from the deeds and documents accompanying an application for first registration
• a lease granted under the terms of a relevant social housing tenancy (see sections 4(5A) and 132(1) of the Land Registration Act 2002, as amended by section 157(3) of the Localism Act 2011)

Registrable dispositions are not overriding interests and should not be disclosed.

4.3 How to disclose an interest to HM Land Registry

4.3.1 Dispositions of registered estates

Disclosable overriding interests are referred to in panel 11 of form AP1. You should complete this panel on any application to register a registrable disposition, where there are overriding interests to disclose.

If there are interests to disclose, you must lodge an additional form, form DI (rules 28 and 57 of the Land Registration Rules 2003).

You must also lodge documentary evidence (rule 57(4) of the Land Registration Rules 2003) of the interest where such evidence exists. A certified copy of the document will usually be sufficient.

4.3.2 First registrations

You should complete panel 11 of form FR1, where there are overriding interests to disclose. However, you only need to disclose interests on form DI if they are not apparent from an examination of the title deeds and documents (rule 28(2)(b) of the Land Registration Rules 2003).

For example, you will not need to complete a form DI for a lease having overriding status if a certified copy of the lease is enclosed with the title deeds.

However, you will need to disclose on form DI interests for which no documentary evidence exists, such as a right acquired by prescription or a customary right.

5. Overriding interests in more detail

5.1 Short leases

Leases of land (as opposed to leases of rentcharges, profits, franchises, manors or easements) that do not have to be registered are overriding interests (this is the effect of Schedule 1, paragraph 1 and Schedule 3, paragraph 1 of the Land Registration Act 2002. See also section 90(5) of the Land Registration Act 2002). This means most, but not all, leases granted for a term of seven years or less. The registration requirements are slightly different for leases out of registered (section 27(2)(b) of the Land Registration Act 2002) and unregistered (section 4(1)(d), (e) and (f) of the Land Registration Act 2002) titles, see practice guide 25: leases - when to register for more details.

Under section 70(1)(k) of the Land Registration Act 1925, any lease granted for a term of 21 years or less was an overriding interest. Any such lease existing on 13 October 2003 will continue to have overriding status, until it is noted in the register (Schedule 12, paragraph 12 of the Land Registration Act 2002).

5.2 Interests of persons in actual occupation

This item is more narrowly defined than its equivalent in section 70(1)(g) of the Land Registration Act 1925, and there are different provisions for first registrations and for dispositions of registered land (Schedule 1, paragraph 2 and Schedule 3, paragraph 2 of the Land Registration Act 2002 respectively).

• the basic provision protects “an interest belonging to a person in actual occupation, so far as relating to land of which he is in actual occupation”
• note that, if a person only occupies part of the land, the interest only has overriding status for that part. This is a new provision
• in the case of dispositions only, an interest is not protected if inquiry was made of the person claiming it before the disposition took place, and they failed to disclose it when they could reasonably have been expected to do so (Schedule 3, paragraph 2(b) of the Land Registration Act 2002). Unlike the present law, this exception does not apply on first registration
• in the case of dispositions only, an interest is not protected if it is not obvious, on a reasonably careful inspection of the land, that the person claiming it is occupying the land. This is a new provision. It does not apply on first registration, and it does not apply if the person taking the disposition actually knows about the claimant’s interest (Schedule 3, paragraph 2(c) of the Land Registration Act 2002)
• interests belonging to persons receiving rents and profits, but not actually occupying the land, are no longer protected. There is a transitional provision which gives limited protection against dispositions, but not against first registration, to any such interests that exist when Land Registration Act 2002 comes into force (Schedule 12, paragraph 8 of the Land Registration Act 2002)

Certain kinds of interest can never be overriding interests under this heading. They are:

• an interest under a settlement under the Settled Land Act 1925 (Schedule 1, paragraph 2 and Schedule 3, paragraph 2(a) of the Land Registration Act 2002). However, an interest under a trust of land can have overriding status, if it otherwise qualifies
• a pending land action, a writ or order affecting land issued or made by a court for the purpose of enforcing a judgment or recognisance, an order appointing a receiver or sequestrator, or a deed of arrangement (section 87(3) of the Land Registration Act 2002)
• a spouse or civil partner’s right of occupation under the Family Law Act 1996 (section 31(10) of the Family Law Act 1996, as amended by Schedule 11, paragraph 34 of the Act) as amended by the Civil Partnership Act 2004
• in the case of dispositions only, a lease granted to take effect in possession more than three months ahead, and which has not taken effect in possession at the time of the disposition. This reflects the requirement to register such a lease (Schedule 3, paragraph 2(d) of the Land Registration Act 2002)
• rights of tenants arising from a desire notice under the Leasehold Reform Act 1967 (Schedule 11, paragraph 8(2)(a) of the Land Registration Act 2002)
• in the case of dispositions only, exercise of the Preserved Right to Buy (Schedule 11, paragraph 18(10) of the Land Registration Act 2002)
• rights under an access order made under the Access to Neighbouring Land Act 1992 (Schedule 11, paragraph 26(4) of the Land Registration Act 2002)
• rights of tenants under the Leasehold Reform, Housing and Urban Development Act 1992 (Schedule 11, paragraph 30(3) of the Land Registration Act 2002)
• rights arising from a request to a landlord for the grant of an overriding lease under the Landlord & Tenant (Covenants) Act 1995 (Schedule 11, paragraph 33(4) of the Land Registration Act 2002)

5.3 Easements and profits a prendre

On first registration, any legal easement or profit a prendre is an overriding interest (Schedule 1, paragraph 3).

On registrable dispositions, the position for legal easements and profits a prendre was the same as for first registrations until 12 October 2006 (this is the combined effect of Schedule 3, paragraph 3 and Schedule 12, paragraph 10 of the Land Registration Act 2002). Since 13 October 2006, there have been some exceptions. An unregistered legal easement or profit will now only override registered dispositions if it is:

• obvious on a reasonably careful inspection of the land
• known to the person to whom the disposition is made
• exercised within the year before the disposition
• (if a profit) registered under Schedule 3, paragraph 3 of the Commons Registration Act 1965

A transitional provision (Schedule 12, paragraph 9 of the Land Registration Act 2002) relates to an easement or profit which was an overriding interest in relation to a registered estate immediately before the Land Registration Act 2002 came into force. If the easement or profit concerned would not otherwise fall within paragraph 3 of Schedule 3 of the Land Registration Act 2002, that paragraph will take effect as if the interest concerned were not excluded from it.

Under the Land Registration Act 1925, it was possible for an equitable easement or profit to be an overriding interest if it was openly exercised and enjoyed (Celsteel Limited v Alton House Holdings Limited [1985] 1 WLR 204; Thatcher v Douglas (1996) 146 NLJ 282). This is no longer the case under the Land Registration Act 2002. One effect of this transitional provision is, therefore, to preserve the overriding status of existing equitable easements and profits of this kind. But it can only affect land which is already registered; only legal easements or profits can now override first registration.

5.4 Other interests

Other overriding interests include:

• relevant social housing tenancies
• a customary right
• a public right
• a local land charge
• an interest in any coal or coal mine, the rights attached to any such interest, and the rights of any person under sections 38, 49 or 51 of the Coal Industry Act 1994
• in the case of land to which title was registered before 1898, rights to mines and minerals (and incidental rights) created before 1898
• in the case of land to which title was registered between 1898 and 1925 inclusive, rights to mines and minerals (and incidental rights) created before the date of registration of the title
• PPP leases - PPP Leases are made overriding interests by section 90 of the Land Registration Act 2002. They are leases of parts of the London Transport railway system granted under public-private partnership agreements

5.5 Adverse possession

Rights acquired, before the Land Registration Act 2002 came into force, under the Limitation Act 1980 or under section 75 of the Land Registration Act 1925, had overriding status for three years (Schedule 12, paragraphs 7 and 11 of the Land Registration Act 2002). From 13 October 2006, they will only be protected if the claimant is in actual occupation of the land (under paragraph 2 of either Schedule 1 or Schedule 3 of the Land Registration Act 2002, and subject to the exceptions in those paragraphs. The transitional provision in Schedule 12, paragraph 8 of the Land Registration Act 2002, which applies only to dispositions, may sometimes be relevant as well), or, on first registration, if the proprietor has notice of them (sections 11(4)(c) and 12(4)(d) of the Land Registration Act 2002).

6. Things to remember

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