Recent change in the law makes conveyancing safer for home buyers

As from 13 October anyone buying a home or land will know for certain that their property is not affected by various old feudal liabilities unless these are clearly noted in the title register.

A long-standing defect in English property law has been that you could buy a home and then find out some time afterwards that it was subject to one of a number of legal rights or liabilities dating back to medieval times – and there was nothing you could do about it.

Most people think that lords of the manor and feudal dues have long since been consigned to the dustbin of history. Unfortunately that is not entirely correct, and there are still various relics of medieval property law which linger on and can still cause problems for homeowners.

Relics of feudalism that still affect property owners

Being told that the lord of the manor can still exercise various rights over your home or that you could have to make payments for tithes or pay for repairs to an old church will be an unwelcome surprise for a property buyer.

What has been an even more unpleasant surprise is to find one of these rights affecting your home even when there was no mention of it on the property title and your solicitor found no record of it when you bought the property.

One of the failings of the current system of land registration in England and Wales is that the title registers do not contain full details of all the legal liabilities and restrictions which can affect a property.  

The register will tell you who owns the property and if there are any mortgages on it but it will not always tell you if there are certain rights and other liabilities which continue to affect a property after you have bought it.

A flaw in the land registration system - overriding interests

This is because the land registration system created in 1925 had to be grafted onto the existing system of land law and property conveyancing. Under that system many rights and liabilities which could affect a property were not necessarily set out or even mentioned in the title deeds.  

So when a landowner applied for first registration of title the land registry would have no way of knowing whether or not a property was affected.  

However the rights themselves could not just be abolished so instead it was decided that they would become what were called ‘overriding interests’ and would continue to affect a property even if they weren’t mentioned in the register.

Some of these things would either be fairly obvious on inspecting the property or else the seller would know about them – for example if someone other than the seller was occupying the property or if a neighbour had a right of way over it – but many of them would not be at all obvious.

These included several matters which dated back to medieval times such as

various rights which could still be exercised by the lord of the manor (especially sporting rights and rights to mines and minerals)

rights of certain old churches to require landowners to pay the cost of repairing the chancel (chancel repair liability)

Buyers could find that their home was affected by one of these overriding interests even though there was nothing about it in the registered title (or old title deeds) and the seller knew nothing about it.  

How a change in the law has made conveyancing safer 

This aspect of the land registration system brought a lot of criticism, and in 2002 an attempt was made to overhaul the system. Regrettably parliament did not see fit to abolish the ancient rights and liabilities altogether – that would have meant paying compensation!

Instead they changed the law so that as from 13th October 2013 (ten years after the Land Registration Act came into force) various rights and liabilities will cease to be overriding interests as far as buyers are concerned if they have not been registered against a property when it is sold.  

So homebuyers will in future know for certain that they are not going to receive a demand for payment of tithes or chancel repairs and that the lord of the manor cannot exercise sporting rights or start digging a mine in the back garden unless such rights were noted against the title when they bought the property.

Unfortunately anyone who already owns a home or even gets given one cannot assume the same thing – even if a right was not registered by 12th October 2013 the person having the benefit of the rights can still apply for registration at any time. The change in the law will only benefit people who buy a property for full value.

The new law will benefit homebuyers as it removes the considerable uncertainty which has until now surrounded the whole topic of overriding interests. This will also make it easier for conveyancing solicitors to advise buyers and mortgage lenders

The rights which are affected by the new law are:

  • manorial rights (often sporting rights and rights to mines and minerals)
  • church chancel repair liability
  • a right to payment in lieu of title
  • a franchise granted by the Crown such as the right to take a toll or the right to hold a fair or market
  • a right to rent that was reserved to the Crown on the granting of any freehold estate (whether or not the right is still vested in the Crown)
  • a non-statutory right in respect of an embankment or sea or river wall

Overriding interests have not all been abolished

The concept of overriding interests has not been abolished, and there are still many which can continue to affect a property even when they have not been registered. These include:

  • Leases for a term not exceeding seven years 
  • Interests of people in actual occupation (with various exceptions) 
  • Easements e.g. rights of way, light and drainage (with various exceptions)
  • Profits a prendre, e.g. sporting or fishing rights 
  • Customary and public rights
  • Local land charges
  • Mines and minerals in some cases

A buyer’s solicitor will make enquiries and searches as part of normal conveyancing procedure to try and find out if any of these affect the property. However it is important for buyers to rely on their own inspection of the property and to inform their solicitor about anything suspicious – for example if the property appears to be occupied by anyone other than the seller and his or her immediate family, or if there is a pathway which could be used by a neighbouring property.

 


by admin
Monday 14th of September 2015 09:34:29 PM