Land Registration Act 2002

Historically, the Crown was the only absolute owner of land in England and Wales and over the centuries various Monarchs have created various new forms of tenure: the Law of Property Act 1925 reduced these back to just two – generally known as `freehold' and `leasehold' – although land could still have the benefit of, or be subject to, other interests, rights and obligations belonging to third parties, often neighbouring owners.

This legislation paves the way for the most radical reform of conveyancing practice since the Sale of Property Act 1925 – and the Law of Property (Miscellaneous Provisions) Act 1989 – which it effectively replaces.

In registered conveyancing, there is a single statement of title as it stands at any given point in time, which is guaranteed by the LR on behalf of the State. If any person suffers a loss as a result of some omission or mistake in the register of title, they are entitled to be indemnified for that loss.

The 1925 Act has been amended several times to improve conveyancing, but rather than change the underlying law, the amendments left many definitions which seem obscure and confusing. The 2002 Act is more radical and introduces a new system for dealing with the transfer of land electronically. It creates the necessary legal framework to enable all registered conveyancing to be conducted on line.

Eventually it will be possible to investigate title to land on line, with a minimum of additional inquiries and inspections. The execution and registration will then become simultaneous with the process initiated by conveyancers although access to the network will remain under the control of the LR.

The new system will require new methods of working by the Registry and conveyancing practitioners alike and hence is to be introduced in stages which the Lord Chancellor will regulate by Order. However many of the benefits of e-conveyancing can only be maximised once it is used universally and accordingly the Lord Chancellor has the power to make the use of electronic conveyancing compulsory in due course.

The Act also reduces the length of registrable leases from those for 21 years or more to those exceeding seven years which the Lord Chancellor could reduce still further, probably down to five and then two leaving omitting just Assured Shorthold Tenancies.

Important changes apply to 'overriding interests' including all the encumbrances, interests, rights and powers which, although not entered on the Register, could have become an overriding registered dispositions. This concept created a number of problems and most of these anomalies are being abolished altogether or phased out over ten years. Charge certificates will be abolished, and land certificates will have a less important role.

New arrangements will protect the interests of registered owners against the acquisition of title by persons in adverse possession, or `squatters' (q.v.).

Finally, the Act revises the arrangements for the handling LR business with a new system of independent adjudication of disputes. It aims to restate the law in modern and simple language.