2 The registration process and role
of the Land Registry
Statistics on
registration levels
16. Although those with claims over manorial rights
had ten years to register their claims with the Land Registry,
much of the anecdotal evidence received during our inquiry was
that the effect of the October 2013 deadline was to lead to large
numbers of applications claiming manorial rights on properties
being made to the Land Registry in the months preceding the deadline.
In its written evidence the Ministry stated that it did not hold
data for applications made for registration of a notice to protect
a claim to the ownership of manorial rights prior to December
2012, while Mr Coveney from the Land Registry stated that they
had only begun to collect data when "it seemed that it might
be becoming a more high profile problem".[28]
The figures provided by the Ministry to us indicate that between
December 2012 and July 2014, 84,000 notices had been registered.
In addition, the Land Registry noted that a further 116,500 titles
included an entry related to manorial rights from the preregistration
title deeds i.e. when the deeds lodged on first registration indicate
that the property is subject to such rights. Taken together, this
equates to slightly less than 1% of all registered titles in England
and Wales.[29] The Ministry's
written evidence goes on to state that, of the 84,000 notices
registered under the 2002 Act:
· These had been received from 142 applicants.
· Around 6,000 applications had subsequently
been received to withdraw the notice by the person entering the
notice.
· Around 16,000 applications to challenge
notices from landowners had been received, although the Land Registry
was unable to indicate how many of these were successful, i.e.
resulted in the notice being removed. However, the Land Registry
believed that "anecdotal evidence" suggested approximately
a third of challenges were successful.[30]
17. During oral evidence Mr Towns of Bond Dickinson
LLP said that he had been told by the Land Registry that, prior
to December 2012, 3,200 notices had been registered since 2003.[31]
In this light, and given the Land Registry's role in the process
of registering manorial rights, it seems surprising that it was
not possible for the Ministry or Land Registry to provide us with
full statistics regarding the extent of the registration of manorial
rights before December 2012. Similarly, given successful challenges
result in the removal of unilateral notices from the land register,
we would have expected that it would be possible to collate such
information. We therefore recommend that the Land Registry
should carry out the necessary work to assess accurately the number
of manorial rights claims now registered against titles in England
and Wales following changes in the 2002 Act. With an eye to any
future review or changes to the law relating to manorial rights,
it would also seem beneficial for the Land Registry or Ministry
to collate statistics on the extent to which manorial rights are
challenged and the success rates of such challenges, including
the incidence of claims being decided by the Courts or Tribunal.
Main impacts of registration
18. Many of the issues faced by landowners and subsequent
complaints raised have been due to the registration processes
and an apparent unintended consequence of the 2002 Act's October
2013 deadline for registrations causing a surge in applications,
rather than the policy objectives of the 2002 Act specifically
or the impact of individuals exercising manorial rights. While
many of those affected by the two main cases upon which we received
representations, Anglesey and Welwyn Garden City, were particularly
unhappy that they had not been aware of the existence of a claim
to such rights against their property upon purchase, as outlined
in the previous chapter one of the primary policy objectives of
the changes in the 2002 Act was to make the register more transparent
and avoid this lack of knowledge in the future. Indeed, as Amanda
White from the campaign group to abolish manorial right, The Peasants'
Revolt, noted, "I never had a problem with the Registration
Act. We were grateful for the registration of this because, although
it was a smack in the face … at least we knew about it now,
and people who subsequently buy their properties will know about
this."[32]
THE USE OF UNILATERAL NOTICES
19. Following the changes to the status of manorial
rights in the 2002 Act, the primary means by which the majority
of manorial rights holders chose to register their claims was
through requesting that a unilateral notice be entered on to the
register by the Land Registry, in a process defined by the 2002
Act.[33] The entry of
a unilateral notice on the register requires the Land Registry,
after the entry is made, to send notification to the registered
proprietor of the property informing them that someone else has
registered a claim that they own an interest that affects their
land or property. The Land Registry noted in its written submission
that the 2002 Act actually allowed for two types of notices to
be used in registering rights that were previously overriding
interests-agreed or unilateral notices.[34]
In the case of an agreed notice, the landowner has to consent
to the entry of the notice, or the applicant has to satisfy the
Land Registry as to the validity of their claim. There is no such
requirement in the case of a unilateral notice. In order to satisfy
the Land Registry of the validity of a claim in the case of an
agreed notice the applicant has to submit detailed evidence. Therefore,
as the Land Registry notes, "in practice, applicants opted
to apply for unilateral notices to protect their manorial rights,
rather than agreed notices".[35]
The process of registration and dispute
20. Making an application to register manorial rights
via a unilateral notice simply protects a claim to these rights
and ensures their priority when a future transfer or disposition
of land takes place. The entry does not guarantee that the interest
it protects is valid or even that it exists and it does not mean
that the Land Registry has endorsed or approved it. Rather it
is a claimed interest that the owner can seek to challenge. However,
it is entered in the register on the title of a property without
the consent of the landowner. The applicant is not required to
satisfy the Land Registry that there is a valid claim and does
not need to support the application with any evidence. The Land
Registry states that a unilateral notice gives the landowner the
opportunity to consider the issue and to apply to cancel the notice
if they think their property is not subject to it. The landowner
can apply at any time to cancel the notice.[36]
All objections are considered in the first instance by Land Registry
lawyers, who determine whether there are clear grounds for an
objection.[37] The objection
will then be put to the applicant in an attempt to resolve the
dispute. There are then three primary options:
· The applicant may withdraw the application,
or not object to the landowner's cancellation application within
a specified period in which case the notice is cancelled.
· The objector may withdraw the objection
(usually if provided with clear evidence from the applicant).
· Either party may decide to go to court
to resolve the dispute.[38]
21. If neither party withdraws and they have not
settled their dispute either through the courts or otherwise,
the Land Registry will refer the case to the Land Registration
division of the Property Chamber, First-tier Tribunal, which is
a tribunal specifically set up to decide Land Registry disputes.
The Land Registry notes in its written evidence that any dispute
that cannot be resolved by agreement has to be referred to tribunal
and that it has no power to determine such a dispute.[39]
However, the Land Registry also notes that prior to 2003 disputes
"could be determined by a senior lawyer in the Land Registry.
The Law Commission recommended that … it was desirable to
create a completely independent office for adjudication and that
was established in the Land Registration Act 2002".[40]
22. Throughout the process the Land Registry is not
formally able to provide legal advice to either party or tailored
advice about individual notices. However, during a Westminster
Hall debate on the subject in January 2014, the then Minister
for Business and Enterprise, Rt Hon Michael Fallon MP, stated
that in cases of dispute the Land Registry would try to assist
the parties in resolving the dispute including, if asked, to express
its view based on the available evidence.[41]
FUTURE PROPERTY SALES
23. Some of the evidence received also pointed to
concerns regarding the impact of manorial rights claims on future
property sales and securing loans. However, in the majority of
cases this does not appear to have happened in practice. For example,
the evidence from The Peasants' Revolt acknowledges there has
not been an adverse impact in this respect to date.[42]
Mr Owen indicated that he was aware of issues in this regard,
although primarily related to instances when a claim was in the
process of being disputed.[43]
On access to loans, during the January 2014 Westminster Hall debate
on manorial rights, Mr Fallon said that:
The Land Registry has been monitoring the situation
and, where it has been able to contact individuals who may have
been affected, those individuals usually, but not always, turn
out not to have been affected. We know that in some cases there
has been a short delay in granting a loan because of an earlier
application by the property owner to remove the notice. The lender
would have wished to ensure that any dispute had been resolved
before proceeding. In one case, the property owner changed lawyers
because of concerns about the advice given, and the change in
lawyers enabled the loan to be granted. The Land Registry stands
ready to assist anyone else facing similar problems.[44]
24. As Dr Stafford pointed out, the legal profession
has been well versed in the law relating to manorial rights for
centuries, and "there is no reason why the profession today
cannot provide a better service by treating it as something which
may need to be advised on in any residential conveyancing transaction".[45]
It is notable, however, that due to the use of unilateral notices,
claims to manorial rights are required to be placed on the charges
register by the Land Registry, rather than having them as part
of the historic property register. Evidence received from those
both for and against the abolition of manorial rights acknowledged
that this was anomalous and had the potential to create unnecessary
problems for landowners looking to sell their property. For example
Mr Towns told us that using unilateral notices was "wrong"
because they went on the charges register and some "solicitors
who are not used to seeing that think it is a legal charge. They
think it is something to do with the financial charges."[46]
He also pointed out the anomalous situation whereby in cases where
the Land Registry makes an entry upon first registration based
on manorial rights indicated on the deeds lodged, the note is
placed in the main property register, rather than the charges
register:
The Land Registry says there are about 116,500 titles
which have an existing note, so when this land was first registered
the Land Registry saw that it was former copyhold and they have
put a note in the property register, which is just the descriptive
part, saying, "This land is former copyhold and subject to
reserved manorial rights." When this legislation first came
out I thought that is what we would be applying to do—to
put that kind of standard entry in the property register. Doing
that would have been a far better approach, or perhaps creating
a new manorial rights notice which you then apply for, rather
than trying to shoehorn something as complicated as this into
an existing method.[47]
THE BURDEN OF PROOF
25. Evidence received from those against manorial
rights has indicated that the burden of proof of a claim lies
too heavily with the landowner, with the claimant having to incur
relatively low costs to register their claim to manorial rights.
As a result, the financial cost of proving or disproving a claim
often fell disproportionately on individual property owners rather
than the claimants, who may have substantial resources and easier
access to legal advice on property matters. The incentive not
to object is therefore greater due to the processes for registration
specified by the 2002 Act.[48]
These claims again have their roots in the use of unilateral notices.
As already noted, under the 2002 Act no evidence is required for
the Land Registry to issue a unilateral notice and place a claim
on the register, but this does not mean the claim has been endorsed
or approved by the Land Registry; rather it is a claimed interest
that the owner can challenge. Mr Towns acknowledged that it was
"a fairly aggressive thing to use, because, by its nature
being unilateral, the Land Registry will register it without any
proof. It is a bit like getting an interim injunction; you get
it and then you argue your case",[49]
while Mr ap Iorwerth asserted "the truth is that most would
find it difficult, if not impossible, to prove that the rights
do exist as they claim".[50]
Mr Owen believed:
The Land Registry should […] require a claimant
to show documentary evidence of his or her claim […]. If
this evidence is not forthcoming then it should be for the Land
Registry to determine that such a claim cannot be valid […]
the onus should also be on the Registry to carry out research
on the basis of the claim to coincide with the evidence provided
by the claimant. Parliament should legislate to this effect. The
Land Registry rightly point out that it is for Parliament to decide
how the claims are administered. Therefore, Parliament should
specify that the burden of proof is on the claimant so that they
are obliged to provide evidence of a claim to the Land Registry
before any notifications are distributed. By taking these two
steps, the burden of proof would be removed from the property
holder removing both the stress and financial burden of fighting
a claim that was not known.[51]
26. Dr Stafford made a similar suggestion, but noted
that such a change to the process would require "extra work
for the Land Registry, involving scrutiny by legally qualified
staff, and this would no doubt require a higher fee from the applicant".
Nevertheless, he believed that the "… higher hurdle
which the applicant has to overcome would have the effect of discouraging
or eliminating weak applications, and so would the higher fee".[52]
NOTIFICATIONS SENT BY THE LAND REGISTRY
27. Much of the evidence received pointed to failings
in the actions of the Land Registry, which in some instances the
Land Registry has subsequently acknowledged. For example, Mr ap
Iorwerth's written evidence stated:
I was unhappy about the way this matter was dealt
with by the Land Registry […] and indeed they admitted they
could have handled this much better in an e-mail to me in November
2013: "I think it is fair to say that we haven't always managed
to get the right balance in simplifying the legal language we
use. [We] offer our full apologies for how we have handled this
and the confusion caused to your constituents." […]
People did not understand the legal jargon which only contributed
to their fear of the unknown implications these rights might have
and the Land Registry failed to simplify.[53]
28. Indeed, even those registering manorial rights
felt that the Land Registry could have done more. For example,
Mr Troman told us it should have been "adequately explained
to the freeholder what was actually being registered and what
was being claimed. That has often been explained to them since
then, and quite often people just say there is not a problem.
It is because concern has built up due to a lack of information",[54]
while Mr Towns noted that his firm had "acted to provide
additional information which the Land Registry has sent out with
notices because we felt that they were not giving sufficient information".[55]
The Land Registry has acknowledged that there were problems with
the wording of its letters sent to landowners notifying them of
claims to manorial rights over their property, and it is the case
that letters have subsequently been amended to make them clearer
and easier to understand.[56]
Mr Fallon pointed out during the January 2014 Westminster Hall
debate on manorial rights that there was little the Land Registry
could do about letters being sent to landowners as the statute
required the notice to be entered in the register and for the
landowners to be notified of the entry.[57]
However, he did state that the Land Registry appreciated that:
it can cause concern and upset when people receive
a letter from it saying that a third party has protected a claimed
interest […] Where an owner disputes that their property
is subject to the rights claimed, the Land Registry does what
it can to help the parties in the dispute. For example, it encourages
the party claiming the rights to produce its evidence at the earliest
possible stage, and in many cases that brings the matter to a
conclusion. The Land Registry always gives the parties the opportunity
to try to resolve their dispute, and the time to do so. In addition,
where it can, the Land Registry will try to assist, if asked,
by expressing its view, based on the available evidence. However
[it] must, throughout this process, remain strictly impartial.[58]
Conclusion
29. The evidence received from both sides of the
argument would seem to suggest the enabling of use of unilateral
notices to register manorial rights claims, and their consequential
presence on the charges register, was a mistake. The fact that
an interest is placed on the register, which the landowner can
only then seek to challenge, clearly skews the burden of proof
unfairly away from the claimant and on to the landowner, when
in some cases there may be little evidence to support a claim.
Although the Land Registry points out that the legislation also
provided for the use of agreed notices, it is not surprising that
manorial rights claimants and their lawyers in the vast majority
of cases have opted for the use of unilateral notices. Provision
in the 2002 Act to allow registrations only by means of an agreed
notice would have ensured notices were only placed on the register
when suitable evidence of rights had been presented and, importantly,
the Land Registry had been satisfied of the validity of this evidence.
This would have avoided the inequality that exists in the current
process with regard to the burden of proof, and the limited role
the Land Registry is able to play in adjudicating upon disputes.
However, we also note that a greater use of agreed notices would
not have resolved the issue of the claims appearing on the charges
register.
30. We welcome the improvements that have been
made by the Land Registry to the letters sent to landowners notifying
them of claims to manorial rights over their property. The rate
of registrations of claims has now subsided following the October
2013 deadline, thus reducing the frequency with which problems
with the registration process will occur. However, as the Ministry
itself acknowledges, applications may continue to be made for
the "foreseeable future",[59]
and therefore problems will continue to arise. We also believe
that the ongoing presence of new manorial rights registrations
in the charges register will continue to mean that there will
be confusion when affected properties are sold in the future.
31. In light of the above, we believe there is
a case for considering improvements to the existing processes
and procedures for registering manorial rights as defined and
required by the 2002 Act, and that there is an opportunity for
the Law Commission to do so as part of its forthcoming project
on land registration. We note that the Law Commission considers
this project to be a wide-ranging review of the 2002 Act, with
a view to amendment of elements that could be improved in light
of experience with its operation. We would consider the inclusion
of such work on manorial rights within the Law Commission's current
project to be separate and in addition to any consideration of
a wider review of the law related to the general principle of
manorial rights, which would not appear to fall within the scope
of the Law Commission's current project.
32. In this context, we recommend that the following
should be considered as proposals for change to the existing process:
· Ending the use of unilateral notices
as a mechanism to place manorial rights claims on the register,
and providing for the use of agreed notices as the only mechanism
by which manorial rights may be registered. Such changes would
ensure that claimants are required to provide suitable supporting
evidence before an entry on the register is made.
· Changing where current and future claims
to manorial rights sit on the register and, in particular, moving
those currently placed on the charges register to elsewhere on
the register.
· Measures to strengthen the ability
of the Land Registry to provide legal advice to either party,
or tailored advice about individual notices.
· Reinstating the ability of the Land
Registry to adjudicate in some cases where disputes over manorial
rights claims arise, although resolution through the Land Tribunal
or Courts may on some occasions still be necessary.
28 Ministry of Justice (MAR0031), Q 84 Back
29
The Land Registry Annual Report and Accounts 2013/14 indicated
that there are 23.8 million registered titles in England and Wales.
Back
30
Ministry of Justice (MAR0031) Back
31
Q 37 Back
32
Q 5 Back
33
Although it should be noted that a unilateral notice is a mechanism
predating the 2002 Act that lawyers traditionally use to protect
option agreements and contracts. Back
34
Land Registry (MAR0035) Back
35
Ibid. Back
36
Land Registry Blog, "Letters we send about manorial rights",
December 2013 Back
37
Land Registry Public Guide 25, December 2013 Back
38
Land Registry Practice Guide 37, September 2014 Back
39
Land Registry (MAR0035) Back
40
Ibid. See Section 73(7) of the 2002 Act. Up until July
2013 this role was carried out by the Adjudicator to HM Land Registry.
On 1 July 2013 the Land Registration division of the Property
Chamber, First-tier Tribunal replaced the post of Adjudicator,
with the former Adjudicator, Edward Cousins sitting as Principal
Judge with three other full-time salaried judges and 28 part-time
fee paid judges. Back
41
HC Deb 15 January 2014 c335WH Back
42
The Peasants' Revolt (MAR0023) Back
43
Albert Owen MP (MAR0007) Back
44
HC Deb 15 January 2014 c335WH Back
45
Dr Paul Stafford (MAR0039) Back
46
Q 20 Back
47
Ibid. Back
48
See for example: Albert Owen MP (MAR0007); Richard Hill (MAR0020);
and Rhun ap Iorwerth AM (MAR0026) Back
49
Q 20 Back
50
Q 6 Back
51
Albert Owen MP (MAR0007) Back
52
Dr Paul Stafford (MAR0039) Back
53
Bewcastle Parish Council (MAR0036) Back
54
Q 36 Back
55
Q 20 Back
56
Land Registry Blog, "Letters we send about manorial rights",
December 2013 Back
57
HC Deb 15 January 2014 cc334-35WH Back
58
HC Deb 15 January 2014 35WH Back
59
Ministry of Justice (MAR0031) Back
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