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Baroness Buscombe: My Lords, I thank the Minister for her full response. I feel reassured and, on that basis, beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.45 p.m.

Baroness Scotland of Asthal moved Amendment No. 64:

Page 22, line 22, at end insert--

"( ) Rules under this section must provide for applications for determination to be made to the registrar."

On Question, amendment agreed to.

Clause 62 [Power to upgrade title]:

Viscount Bridgeman moved Amendment No. 65:

Page 23, line 6, at end insert--

"( ) In the case of a registration made pursuant to an application under paragraph 1 of Schedule 6, subsections (4) and (5) shall apply as if the number of years stated there was two."

The noble Viscount said: My Lords, the purpose of Amendment No. 65 is to provide that if someone in adverse possession can apply after 10 years occupation and obtain a possessory title, he should have to wait only a further two years to upgrade the title.

Paragraph 1 of Schedule 6 states that a person in adverse possession may apply to be registered as the proprietor of the estate after 10 years. Clause 62(4) and (5) state that a possessory title entered in the register as possessory will be absolute (freehold) or good (leasehold) after 12 years. That means that it would take 22 years in which to obtain full title rather than the present 12. The amendment reduces the present number of years from 22 to 10. I beg to move.

Baroness Scotland of Asthal: My Lords, it appears that there may be a misunderstanding of the effect of a squatter's application under paragraph 1 of Schedule 6 to the Bill being successful. That may have arisen

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because it has been Land Registry practice in the past to register the squatter under a new title. That was sometimes a possessory title, even when the land squatted against was registered with absolute title.

Under paragraph 4 of Schedule 6 the successful squatter is registered as the new registered owner of the existing registered estate against which the application was made. The squatter's own title is not registered; it is extinguished under paragraph 9(1). That means that in most cases the squatter will be registered with absolute title because the former registered owner will have been registered with absolute title.

The squatter will be registered with possessory title only on those rare occasions when the former registered owner was registered with possessory title. It will therefore be rare that the newly-registered squatter has to consider the upgrading provisions relating to possessory titles in Clause 62. I hope that that explanation will serve to remove the general concerns expressed by the noble Viscount.

However, it might assist the House if I explain how the amendment would work in the comparatively rare circumstances where a squatter became a registered owner of a possessory title because the estate squatted against had such a title. A possible example of such circumstances would arise where A dies owning at her death an unregistered freehold estate; her executor cannot find the deeds and assumes that they are lost. Within a few weeks of A's death the executor applies for voluntary first registration on the basis that the deeds are lost. A possessory title is approved. Unknown to the executor the deeds are in the custody of a lender who has a first legal charge, created before such charges triggered first registration. As the executor has a possessory title, he is subject to the legal charge.

Three years after registration, a squatter applies for registration of part of the land, based on 10 years' adverse possession. She is successful and is registered in place of the executor in respect of that land. Under the amendment, the squatter could apply for the upgrading of the possessory title to absolute freehold immediately because the title has already been registered for at least two years.

If the effect of the amendment had been that in such circumstances the squatter could apply for upgrading two years after her registration in place of the executor, she would again be placed in a stronger position than, say, a buyer who would have to wait a further seven years. I hope that that clarifies the situation.

Viscount Bridgeman: My Lords, I am grateful to the Minister for her explanation. I am particularly grateful for her clarification by way of that example. In the light of that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 64 [Use of register to record defects in title]:

Baroness Scotland of Asthal moved Amendment No. 66:

Page 23, line 34, leave out "has become" and insert "is"

30 Oct 2001 : Column 1360

The noble Baroness said: My Lords, in Committee, the noble Baroness, Lady Buscombe, moved an amendment, the purpose of which was to make clear that where a defect in the title had arisen, it could be recorded on the register only if, at the time that the making of an entry was proposed, the defect still existed.

I accepted a need for an amendment and the principle behind it and undertook to introduce a government amendment on Report. Amendment No. 66 fulfils that undertaking. It makes it clear that the right to determine must still be exercisable when the registrar considers the matter by replacing the words "has become exercisable" with "is exercisable". I am grateful to the noble Baroness for her suggestion i and commend the amendment to your Lordships.

Amendment No. 67 proposes the deletion of Clause 64. This clause deals with a situation not currently catered for under the land registration system where something happens in the course of the ownership of the property that itself makes the title bad. This occurs in only a limited number of situations and in most of those situations there are already simple and well-developed practices for protecting buyers of the land affected. In such cases there is no need to record the defect in title in the register.

Perhaps I may explain how the clause will work using two examples. One example is on the assignment of a lease. There is a risk that the assignor is in breach of covenant and that the landlord will, therefore, be able to exercise his or her right to re-enter and determine the lease. However, where a landlord accepts rent from a tenant whom he or she knows to be in breach of covenant, he or she will be taken to have waived the breach of covenant. Conveyancers take advantage of this principle and require the assignor of a lease to produce the last receipt for rent prior to the assignment. This creates a rebuttable presumption that all the covenants and provisions of the lease have been fully performed. Because there is already a procedure for dealing with this situation, we respectfully suggest that there is little point in empowering the registrar to enter on the register the fact that the lease might be determined.

Rules are likely to confine the exercise of the power to those cases where there is presently no established procedure for dealing with the problem and in particular to cases concerning rent charges. My first example may suffice. I could give noble Lords a second example but I think that the first probably clarifies the position.

This clause is also needed to help achieve one of the principal objectives of the Bill: to create a conveyancing system in which title can, so far as possible, be investigated online by computer. It follows from this principle that every effort should be made to make the register as conclusive as to title as is practically possible. That includes recording the fact that the right to determine the estate has become and is still exercisable.

An obvious objection to this new duty is that it will not be easy to enforce. A solicitor or licensed conveyancer will be very reluctant to inform the

30 Oct 2001 : Column 1361

registry of a defect in his or her client's title, particularly where it is one that could lead to the determination of that client's estate. However, the move to electronic conveyancing will provide a means of enforcing such obligations via network access agreements. Under the system of electronic conveyancing that is to be created under the Bill it will be solicitors or licensed conveyancers acting for buyers who will actually carry out the process of registration. They will do so in accordance with the terms of a network access agreement with the registry that may require them to disclose specified information. They are likely to know far more about the conveyancing transaction than the registry does at present when documents are submitted for registration. They may, therefore, know the facts that make a title bad even though these will not necessarily appear from the conveyancing documents that, under present arrangements, would be sent to the registry for registration.

I hope that that explanation will have convinced the House that the clause fulfils an important purpose. It introduces a useful and flexible procedure which can be initiated by application or as a response to events which have come to the attention of the registry or the court. I beg to move.

Baroness Buscombe: My Lords, first, perhaps I may say how much we welcome the Government's response to the concerns we expressed in Committee by bringing forward Amendment No. 66. The Minister has answered a number of questions which I had proposed to ask in relation to Amendment No. 67. On that basis, I am pleased to say that I shall not move Amendment No. 67.

On Question, amendment agreed to.

[Amendment No. 67 not moved.]

Clause 66 [Inspection of the registers etc]:

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