Overriding interests were first introduced by the Land Registration Act 1925, they have always been a feature of Land Law but this act has been superseded by the Land Registration Act 2002 (LRA). The purpose of enacting the “Land Registration Act 2002” was to combat the evolved uncertainties of the previously enacted Act – “Land Registration Act 1925”. “The Law Commission” recommended introduction of reforms in the Act in their report. Consequently, the “Land Registration Act 2002” replaced the LRA.” Overriding interests are the land interests to which a registered title is subject, even though they do not appear in the register. Land sellers should know these interests when selling properties.
The concept of overriding interests can be understood in two contexts. First, unregistered interests which override first registration as seen in section 1 of the LRA 2002. Second, unregistered interests which override a registered disposition as seen in section 3 of the LRA 2002.
There are some complaints of innocent land buyers claiming that they were not aware of the expensive land obligations .Even though the buyers have a right to compensation for the burden left unto them, no compensation is given to them because the rules state that this burden is to be shouldered by the land buyer thus new landowners are advised to report the case to land registry. In the land occupation sector, overriding interest are vital because they serve as a means of making land ownership secure and in turn, reducing the chances of land grabbing and misappropriate ownership.
Land occupants benefit strongly from overriding interests. A land occupant is obligated to investigate their land has any overriding interests since they are not in the land registers. A well-informed land occupant enjoys this as land interest protects the right of current landowners, easements. Additionally, these interests act as a protecting pillar for the rights created informally, for it will also be very much unrealistic to register the powers at the time they were built since it will inconvenience people that occupied the properties. Moreover, “These interests can be of much importance in the event of doing away with some rights that are inconvenient, pointless and hard to register.” For example, in short-term leases.
In addition to that, some reasons are already present in the local registers hence it may not be logical and realistic to do a re-registry to already registered rights. In that connection, these overriding interests can have some severe consequences if not recorded before the deadline set. The new land occupant of the land affected will not have the interest binding them after their restless attempts of trying to express the property after the land registration deadline. However, new land owners may be affected if they delay or fail to register the affected land before the deadline, whether intentionally or unintentionally, the property will be at risk of being noted in the title register even after subsequently registering it. Thus, this slip-up will also be an impediment to subsequent landowners as it will be carried forward to them. Therefore, it is advised that a notice should be entered to the title after the first registration of land. Late registration may also lead to a penalty fee as a result of the new land registry.
Overriding interests have significantly been questioned in various ways due to its effect on registered lands. It plays a significant role for example under the area of short-term leases; overriding interest have become granted over its first registration. Land registration has been changing throughout years hence being interest rates being overridden from time to time. Due to the changes under the form of record, “the government has considered that land registration is involved with bureaucratic costs which result to filing failing hence becoming a complicated process to handle” . As a result of this, changes were made that simplified registration which includes the reversion of leases. This seriously benefits those individuals with registered lands and their work much easier.
In some scenarios, short term leases will not override, For example, grant of lease under part 5 Housing, Act 1985 under right to buy provisions, grant of a lease of a dwelling house to a private landlord where tenant’s right to buy is preserved as well as the grant of a lease to take effect in possession of more than three months from the date of the grant.
A legally sound system of land registration is underlined by three key principles as mentioned by Ruoff: the mirror principle, curtain principle and insurance principle. The mirror principle refers to the register (the mirror) that “accurately and comprehensively reflects the sum of all rights and interests affecting a title. ” The objective of the mirror principle fails to meet the LRA 2002 because its inability of providing land details to the Registry.
Nevertheless, overriding interests on registered lands has been evaluated to be problematic in various ways. For example legal easements, “they are some rights that are put aside to use another person's land as from the law commission. From the issue arising from LRA2002s' attached to the side of the purchaser” . This is inappropriate as the one who should benefit is the person that is responsible for paying interest.
Equitable easements have been recorded in such a way that the people who are to benefit from paying interest are those individuals who are responsible for having registered lands. Various individuals do not have a lot of knowledge about a person making a disposition. This disadvantages a lot of individuals who pay interest rates that are overridden and hence they do end up spending a lot of money.
The other case that is affecting the landowner whose lands are registered is their inability to identify unreasonable inspection. Overriding land rates in such a situation is much easier since the target individuals are not well educated on what action they should take. The overriding of interest puts the land purchaser at a great inconvenience to discover and to factor this kind of easement. “This kind of issue may be addressed by abolishing ORIs since they are an inconvenience and its nature of being uneasy.”
Also, overriding interest has a significant impact on registered land by targeting individuals on actual occupation. This kind of individual is likely to be exploited due to their ignorance level. Individual rights have been put in place to protect those individuals who are actual occupants. The overriding interest has been noted to appear in a disorderly manner in such a way that the individuals who own registered land fail to understand the way the land rates have been formulated and hence is a significant burden when paying such taxes. The law commission has thus considered such kind of interest to be “inappropriate and undesirable” . Registration of lands due to the overridden interest rates has been confusing mostly for those individuals who are purchasing lands. Nonetheless, the date for ascertaining whether a person is in actual occupation is the date of completion not the later date of registration as identified in Abbey National v Cann [1991].
“Existing land overriding interests make the new landowners pay more than the expected land rates.” . Even though complaints about these interests can be raised, there is no platform to justify the right occupant to dissolve these interests. This will make new occupants and people with intentions buy lands keener and confirm if the intended lands have overriding interest. “The relevance of these overriding interests is observed if new land occupants will have to disclose these overriding interests to the land registry in an attempt to keep themselves on the safer ground while helping the land registry to replace these interests with entries in the registers.”
In conclusion, overriding interests have influenced registered lands to a great extent. The land commission has held many issues relating to the purchasing of property by individuals on actual occupations. “Short term leases have also had a challenge since most individuals are ignorant about the land rates they should pay on their registered lands.” However, The law commission may find it more appropriate to abolish such interest due to its many flaws that have led to disadvantaging the ignorant people. It has caused dismay to professionals and also burdened and misled some actual land purchases.