Background

Overriding interests are interests that are not registered at the Land Registry, but which still bind a party who acquires land that is subject to that interest.

For example, an interest that belongs to a person in actual occupation will override the first registration of the land affected by that interest. The requirements for such an interest to bind the land on a subsequent disposition (for example, on a transfer) are slightly stricter. The interest must still be protected by actual occupation by the interest's owner, but the interest will not bind in certain circumstances, including where both of the following conditions are met:

  • The interest belongs to a person whose occupation would not have been obvious on a reasonably careful inspection of the land at the time of the disposition.
  • The interest was outside the actual knowledge of the person taking the disposition.

Facts

Number 52 and number 46 Melville Street were adjoining properties. A triangular part of the land at the rear of number 52 (garden triangle) was fenced off from the rest of number 52. The garden triangle was accessible from number 46.

T took an assignment of a very long underlease of number 46 (the "Lease") in 1968. The premises demised by the Lease included the garden triangle. The area was not subject to compulsory first registration in 1968, so the Lease remained unregistered.

In 1989, T bought the freehold of number 46, but the garden triangle was not included in their freehold title. They remained in occupation of the garden triangle by virtue of the Lease and used this area for storage.

The freehold title to number 52 was registered in 2009 and it included the garden triangle. In 2013, W and B bought the freehold of number 52.

In December 2013, T applied to register a leasehold title to the garden triangle, claiming that their lease overrode both the first registration of the freehold title of number 52 and also the subsequent transfer to W and B. W and B objected to the application and the dispute was referred to the First-tier Tribunal (Property Chamber) ("FTT").

Decision

The FTT had no problem in finding that the lease overrode the first registration of number 52 because T had been in actual occupation of the garden triangle since 1968, when they acquired the lease.

The FTT was also satisfied that W and B acquired number 52 with no actual knowledge of the lease. This meant that W and B would not be bound by the lease, unless T's interest in the garden triangle would have been obvious on a reasonably close inspection when W and B acquired number 52.

W had visited number 52 on three occasions before buying it. The evidence indicated that she had not checked behind the fuchsia plant that concealed the fence that cut off the garden triangle. The FTT found that in this case a reasonably careful inspection would have involved at least looking at the property's boundaries. Anyone checking those boundaries could have seen the fence simply by moving the fuchsia's branches. As such, T's lease over the garden triangle was binding on W and B and should be registered.

Comment

While this case involves no new law, it is a useful reminder of the principles relating to overriding interests protected by occupation, including the extra requirements that apply where the interest is to override a disposition of the registered title.

In particular, this case shows the importance of checking the boundaries of a property for unusual features and to make sure that they accord with any title plans. The survey W and B obtained referred to number 52's boundaries as "well-defined", but did not say where those boundaries lay.

Leaving aside issues of land registration, it is generally good practice to check a property's boundaries for encroachments and other evidence of matters that might need further investigation. While sometimes property lawyers carry out site visits, usually it will be a client or a client's agents who will inspect a property and they might welcome a reminder of the need to check for signs of third party interests, especially if this discloses issues that can then be dealt with before any dispute occurs.

Case - Trevallion v Watmore and another [2016] EWLandRA 2015_0295 (Bailii).