Centre for Legal Education

Nottingham Law School is planning to respond to two consultations concerned with land registration. One is the concerned with a proposal to sell the Land Registry services to a private company, and the other is to update the Land Registration Act 2002.

Land registration is a vital part of our land law. When it works well it secures our ownership of land and keeps legal costs on sales or mortgages or inheritance down. When it works badly it leaves people unprotected against sharp practice and escalates costs. A house is often the biggest investment a person makes in life, and the land market is of great importance to the economy. Therefore the law in this area is important for the financial security of people. It is also an important area for the provision of legal services. But perhaps most important of all it affects people’s security in their home – affecting people literally where they live.

The Land Registry has quasi-judicial roles, such as deciding upon applications for rectification – putting right the Register; and indemnity – paying compensation for losses caused by errors in the Register. Land law is complicated, and the Land Registry has a proud reputation for competence, but there are fears this may be compromised by a profit driven ethos.

Land registration has emphasised speed and the reduction of costs as it has been reformed. One concern is that as the land market has become more virtual – which increases speed and reduces costs – it has also become more susceptible to fraud and sharp practice. There is a tension between two types of security. The first is the security of the owners of interests in land. The second is the security of the buyer of land. To increase the first security (and make owners more secure) is to reduce the second security (and put buyers at risk). The emphasis on speed and cheapness has come together with a preference for the security of the buyer at the expense of the security of the owner.

Land registration does have some strong mechanisms to protect the rights of owners in occupation. It does not go as far to protect buyers as some overseas systems, such as the Australian Torrens system of land registration. However, there seems to be an increase in fraud and sharp practice, and one worry is the levels of demand on indemnity payments – as the Land Registry picks up the costs of bad practices by people and businesses. One recommendation of the Law Commission is to cap indemnity payments, but this would threaten the security of buyers in a way that undermines the system.

Central to the consultation proposals is the problem of fraud and sharp practice. One important cause of rectification is fraud. Identity theft is made easier by remote communications. The Courts have been struggling with the statutory provisions and the desire to protect the victims of fraud and sharp practice and the result is the area of rectification is becoming ever more complex and hard to understand.

Protecting the reliability of our system of land registration is important for lawyers who work in the area but it is vital to land owners and buyers and lenders. The Law School is considering the Consultation Paper issued by the Law Commission (http://www.lawcom.gov.uk/wp-content/uploads/2016/03/cp227_land_registration_web.pdf) and will make a collective response. Our experience and expertise can help the law reform process as we have the unusual combination of high expertise and low vested interest. We can try to represent the common interest in a robust fair and effective system of land registration in our jurisdiction.


Graham Ferris