Land Registration Bill [Lords]

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Mr. Wills: We agree with the sentiment behind the amendments, and we understand that between the parties it will often be right to apportion liability for the resulting costs. However, we must resist the amendments.

The Bill imposes an obligation on the responsible estate owner to apply for first registration of title within two months of an event that triggers first registration. If the responsible estate owner does not do so, and the registrar does not make an order allowing him extra time, the document transferring title must be repeated, which would result in further costs. The combined effect of the two amendments would be to transfer that liability to the mortgagee in cases where they have the task of submitting the application for registration. The Bill does not prevent that liability being placed elsewhere by agreement; it merely replicates the long-established default position reflected in subsections 8 and 9 of the Land Registration Act 1925, which places the primary responsibility on the person who should be registered as proprietor of the estate.

I should also emphasise a point made in another place: conveyancing practice will change dramatically over the next few years. Even if there were a strong argument for changing the default position, now is not an appropriate time to make that change. That should be left for when we have a clearer picture of what the future holds. I hope therefore that the hon. Gentleman will feel able to withdraw the amendment.

Mr. Cash: In the light of the Minister's explanation, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Cash: I beg to move amendment No. 14 in page 5, line 24, at end insert—

    '( ) For the purposes of section 12A of the Stamp Act 1891 (c. 39), an instrument to which section 7(1) applies shall be treated as having been accidentally spoiled.'.

This is a repetition of an amendment that we proposed in the other place. It is a probing amendment to ensure that if an instrument were voided by failure to apply for registration, the stamp duty paid on it could be used on any replacement instrument executed to give effect to the original transaction. The Bill states that in certain cases, which we agree are rare, a second instrument may be executed to replace the one that was ineffective because registration had not occurred. It seems to me that that is a subject to which it is worth returning. The Minister may be able to reassure me on Report.

Mr. Wills: I hope that I shall be able rapidly to reassure the hon. Gentleman on this point.

The Stamp Duties Management Act 1891 already ensures that only one payment of stamp duty is made in such situations. Section 9 of the 1891 Act states that subject to the production of evidence as to the facts, and to compliance with stamp duty regulations, allowance is to be made by the commissioners for stamps spoiled

    ''when an instrument executed by any party thereto becomes void for want of registration within the time required by law.''

I can therefore reassure the hon. Gentleman that the amendment is unnecessary, and I invite him to withdraw it.

Mr. Cash: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 8 ordered to stand part of the Bill.

Clauses 9 and 10 ordered to stand part of the Bill.

Clause 11

Freehold estates

Mr. Cash: I beg to move amendment No. 15, in page 7, line 12, at end insert—

    ', or, as the case may be, the other persons,'.

The Chairman: With this we may discuss amendment No. 16, in clause 12, page 7, line 40, at end insert

    ', or, as the case may be, the other persons,'.

Mr. Cash: These are probing amendments that are intended to cover cases in which the proprietor has no beneficial interest. Without the amendments, the provision appears to apply only where the proprietor has no beneficial interest. These are purely drafting amendments, and I look forward to the Minister's reply.

Mr. Wills: I hope that I can rapidly reassure the hon. Gentleman. It may help the Committee if I read the parts of the Bill that deal with those issues. Clause 11 states:

    ''If the proprietor is not entitled to the estate for his own benefit . . . as between himself and the persons beneficially entitled to the estate, the estate is vested in him subject to such of their interests as he has notice of.''

Clause 12 states:

    ''If the proprietor is not entitled . . . solely for his own benefit, then, as between himself and the persons beneficially entitled to the estate, the estate is vested in him subject to such of their interests as he has notice of.''

I therefore suggest that the amendments are unnecessary. Clauses 11 and 12 are clearer than section 5(c) of the Land Registration Act 1925, which does not suggest that there are two different situations to consider.

The amendments would add to the length of the clauses without adding to their clarity, and although I understand their probing nature, I hope that the hon. Gentleman will not press them.

Mr. Cash: I am glad that the Minister referred to the defects in the 1925 Act that we discussed on Second Reading. There is no doubt that the Bill is an improvement, and I should like again to record our appreciation of those who have drafted the legislation and those who have helped to improve it in Committee. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Mr. Harry Barnes (North-East Derbyshire): In clause 11 we are dealing with the effects of first registration—the clause addresses freehold estates. On Second Reading, I raised problems with that and perhaps they can be raised again. I recognise, however, that it may only be appropriate to table amendments later. I flag that up now so that the Minister can give it consideration.

I want to raise two types of cases relating to first registration. The first is where physical boundaries do not fit in with deeds and plans. During the previous sitting, the Minister accepted that that often occurs when new estates are built and a first registration is made. The problem is that it may not initially be discovered that physical boundaries—fences, for example—deviate from the deeds and the plan that have been deposited with the Land Registry. Later, the owner may want to build, say, a garage and could discover that he does not have the amount of land that he believed he had. If that problem arises, the courts may judge that the owner purchased what he saw, rather than what had been recorded in the deeds and detailed by the Land Registry. The registry may even be able to provide evidence of the deviation, but the court's judgment could still be that the individual had purchased what he had seen.

Should we not do something to add to the power of the Land Registry, so that that which is recorded in the deeds would emerge through the court system? When most people get their deeds, they think that that is it and that the deeds cannot be overridden by court decisions, but I know of cases where just that has happened. Amendments dealing with that could be tabled to clause 60, which deals with boundaries. If the Minister gives that his attention, he could probably draft a better-worded amendment than I could.

The second problem relating to first registration is cross deeds. Many complexities exist in new estates. For example, the first person to purchase a property may share access to it, such as a pathway, which may not be recorded in later deeds. I accept that if we move towards electronic conveyancing, we may be able to alert the Land Registry, when it records details, that it is in danger of registering cross deeds, but once they are registered legal difficulties may be faced in trying to correct the situation. Perhaps debate on clause 61 will be an appropriate time to discuss that.

Mr. Wills: I am grateful to my hon. Friend for his remarks. He rightly identified what is often a considerable problem, which the Bill will help to solve. The proposals in part 9 will give someone who has occupied land in good faith a right to apply to be registered. There is a procedure, as he said, to apply to have boundaries fixed. He is also right in thinking that when e-conveyancing is introduced fully it will considerably ease the problem of cross deeds.

Overall, the clause forms the central plank of the Bill's measures to ensure that the register sets out clearly who owns land, with what title and with what powers. It also paves the way for something rather more than clarification and simplification of the existing law. Its central objective is that the register should be as complete and accurate a reflection of the state of title of land at any given time as is reasonably practicable. The clause assists in that aim by providing that a newly registered freehold estate vests in the proprietor, subject only to a severely limited list of interests.

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Obviously, the first class of such interests will be those that are the subject of an entry on the register. The second will be when the estate is subject to one of the unregistered interests that override first registration specified in schedule 1, which is one of the reforming parts of the Bill. Clearly, the fewer the interests that can bind someone who acquires an interest in registered land without appearing on the register the better.

It is simply not possible to abolish such interests. With some it would be unreasonable or unreasonably burdensome to expect the person who benefited from them to register—for example, those with short and sometimes completely unwritten leases. With others, it would be practically impossible to require them to be registered—for example, rights to coal and minerals frequently depend on complex analysis of both fact and law before they can be clear.

Interests that do not meet the tests should be removed. Some of the more obscure ones will be phased out after 10 years, although they can be entered on the appropriate register without charge in the interim.

The Bill also contains measures to encourage the registration of interests that do not have to be registered to take effect, and clause 71 imposes an obligation to disclose known unregistered interests so that they can be recorded.

The remaining interests that will bind someone who acquires interest in land are new. They are interests that have been acquired under the Limitation Act 1980 and of which the proprietor has notice. This provision is designed to meet the situation when a squatter has acquired title to the land but is no longer in occupation and the buyer is unaware of the earlier squatting.

The clause and schedule 1 will make a major contribution to simplifying and clarifying the law.

Question put and agreed to.

Clause 11 ordered to stand part of the Bill.

Clauses 12 to 22 ordered to stand part of the Bill.

Clause 23

Owner's powers

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Prepared 11 December 2001