Voluntary Registration: a modern necessity or an unnecessary expense?

by Richard Miller

The Land Registry have set themselves the target of having all land in England and Wales registered by 2012. In order to facilitate this aim, the Land Registry have publicised advertising campaigns and incentives for landowners to voluntarily register their property rights without waiting for something to occur, which would trigger compulsory registration.

For those who are unfamiliar with the concept of registered and unregistered land, the differences can be summarised as follows: unregistered land relies upon title deeds to illustrate a history of ownership of rights attached to property whereas once this is converted to registered land, those rights are recorded on an up-to-date accessible public record at the Land Registry.

Whenever a disposition of land occurs, for example by means of sale or the security of a mortgage, it is compulsory to make an application to the Land Registry for first registration.

The main incentive offered by the Land Registry for voluntarily registering land is that the standard compulsory application fees are reduced by 25%. The fees for first registration are calculated by reference to the value of the property being registered. For example, registration of land valued below £50,000 is reduced to £30 if the application is made voluntarily. The compulsory fee rises to £700 for land valued in excess of £1,000,001 with a voluntary application reduced to £525.  However, the fee applicable to large scale applications for vast estates will be assessed by the Registry on a case by case basis.

Not only will the Land Registry charge a fee depending on the value of the land comprised within the application, but your solicitor’s fees will also be incurred for putting the application together. Many applications are relatively straight forward and costs can be relatively small. However, more than often this proves not to be the case and the exercise can be far more complex than commonly anticipated and involve a considerable amount of research into title deeds and correspondence with the Registry.
The fact that registration means  full public disclosure of property ownership rights has led some to suspect a form of government conspiracy whereby Mr Chancellor could use this database to extract even more personal information in order to evolve further forms of land tax to burden us all with.

Many property owners are discouraged from registering their property due to the level of public disclosure of information that is required such as:

* the value of the property at the time of the application;
* the fact that one or more banks may have a legal charge secured against the land; and
* the full names and addresses of the legal owners of property rights relating to the land.

Others simply don’t want to incur unnecessary expense.  This view should be balanced against the many benefits of aiming to complete this national database.

The main benefits of an application for voluntary first registration are:

* Squatters/Adverse Possession: the owner of registered land is better protected against squatters than the owner of unregistered land.
* Security: a registered title is guaranteed by the state. It sets out a description of the land, the owner and the rights and obligations that affect the land. It also includes a plan of the property based on the latest Ordinance Survey Map.
* Proof of ownership: registration simplifies the conveyancing process as a buyer can easily obtain an official copy of the register and title plan at anytime and the seller will no longer need to rely solely on their paper title deeds.
* Access to information: all individual title registers are kept as computerised records meaning that information can be accessed readily via the Land Registry’s website.
* Difficulty in proving title: the Land Registry accepts applications where deeds and documents are lost or destroyed and will register a title where satisfactory alternative evidence is provided e.g  in the form of a statutory declaration. Once the land is registered, this will remove difficulties in proving title in the future if the land owner wants
to sell or lease the land.

The increased protection afforded to registered land against Adverse possession is one of the most important benefits for land owners due to the significant threat that this mechanism poses to ownership rights. The system of adverse possession effectively enables a third party to claim and achieve legal title to property that they do not legally own and on many occasions without the holder of the paper title to the property even knowing.

The ability to rectify defects within title deeds is particularly relevant from an agricultural point of view. Sales of agricultural property involve the initial task of proving legal title and this in turn can expose significant defects. For example, upon conducting a deeds audit, it can often become clear that fields that have been occupied by a farming family for generations may not necessarily be supported by comprehensive title deeds. Title deeds will not necessarily use plans as a point of reference for identifying the land. In the majority of cases, the real substance is often derived from reference to the appropriate ordinance survey field number. If one or more of these numbers have been omitted from title deeds, some farmers may find that they do not have legal title to land that they occupy.

In addition, informal land exchanges that took place between adjoining landowners in the past may not have been formalised properly. This could lead to title disputes between neighbours at some point in the future.

Anomalies in title deeds can usually be rectified via voluntary registration. It is certainly beneficial for these problems to come to light during an application for first registration as opposed to half way through a conveyancing process when any delay in matters could put a sale of property at risk of falling through.

If landowners have property that is not registered it is worthwhile giving consideration as to whether the fears relating to or expenses of voluntary registration outweigh the possible benefits.   

Richard Miller is Head of Agriculture at Burnetts in Carlisle.  For further information on voluntary land registration or to arrange a free deeds audit call Richard on 01228 552222.

Mar 08