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Law Commission to review the Land Registration Act 2002 25 July 2014

The Law Commission this week unveiled its 12th programme of law reform.  It will not get property lawyers’ pulses quickening, but inevitably many potentially interesting topics have to be discarded to produce the final list of projects.  It is presumably also necessary to pick projects across a range of areas, to make use of the specialist knowledge of all of the Law Commission’s staff, not to mention that of the five Law Commissioners themselves.  Apparently over 250 proposals for law reform projects were submitted, by 180 consultees. 

The Law Commission’s website says that the following questions are used to determine which projects make the final cut:

  • How important is it: to what extent is the law unsatisfactory?
  • What are the potential benefits of reform?
  • Is the independent, non-political Law Commission the most suitable body to conduct the project?
  • Are the necessary resources available?

Before taking on a project, the Law Commission must also have confirmation from the relevant Government Department that it has a “serious intention” to take forward law reform.  I think that explains why so many suggestions relating to landlord and tenant law keep falling by the wayside year after year.  Sorting out the ludicrous Landlord and Tenant Act 1987, or trying to make sense of the anti-avoidance provisions of the Landlord and Tenant (Covenants) Act 1995 (think House of Fraser case), are simply not vote-winners. 

PROJECTS TO BE UNDERTAKEN

So, these are the projects that the Law Commission will be undertaking in its 12th programme (using the Law Commission’s own summary on its website):

Bills of sale
A law reform review of the law relating to “bills of sale” loans, including logbook loans.

Firearms 
A scoping exercise to consider the enactment of a single statute containing modified and simplified versions of all firearms offences.

The form and accessibility of the law applicable in Wales
An Advice to Government, considering ways in which the existing legislation can be simplified and made more accessible, and how future legislation could reduce problems.

Land registration 
A law reform project to examine the extent of Land Registry’s guarantee of title, rectification and alteration of the register, and the impact of fraud.  (This is not really an accurate summary.  Rather this project will comprise a wide-ranging review of the whole of the Land Registration Act 2002, as described in the following section of this article).

Mental capacity and detention
A law reform project to consider how deprivation of liberty should be authorised and supervised in settings other than hospitals and care homes.

Planning and development control in Wales
A law reform project to recommend a simplified and modernised planning system for Wales.

Protecting consumer prepayments on retailer insolvency
A scoping review to assess the scale of the problem and consider was to increase protection for consumers.

Sentencing procedure
A law reform project to recommend a single sentencing statute.

Wills
A
law reform project to review the law of wills, focusing on mental capacity and will making, formalities that dictate how a will should be written and signed, and how mistakes in wills can be corrected.

LAND REGISTRATION PROJECT

So the only project directly affecting property lawyers relates to land registration, described as “a wide-ranging review of the 2002 Act”.  The Law Commission says that it will start work on this project later this year and expects to publish its report, making recommendations for reform, and accompanied by a draft Bill, late in 2017.  This is how the project is described by the Law Commission in its programme (paragraphs 2.13 to 2.16):

The Land Registration Act 2002 established a regime for the registration of title to freehold and some leasehold land, and interests affecting such land. The 2002 Act was implemented following a joint project between the Law Commission and Land Registry.

The land registration regime is of enormous and growing importance. Over 80% of the land in England and Wales is registered, with Land Registry maintaining more than 23 million titles. Dealings and disputes that engage the land registration regime can be complex and require expert advice. Uncertainty in the regime makes advising clients difficult, incentivises litigation, and increases costs for landowners.

This project will comprise a wide-ranging review of the 2002 Act, with a view to amendment where elements of the Act could be improved in light of experience with its operation. There is evidence that, in some areas, revision or clarification is needed. The Twelfth Programme consultation revealed a range of often highly technical issues that have important commercial implications for Land Registry and its stakeholders, including mortgage providers.

In particular, this project will examine the extent of Land Registry’s guarantee of title, rectification and alteration of the register, and the impact of fraud. The project will also re-examine the legal framework for electronic conveyancing. We will consider how technology might be harnessed to reduce the time and resources required to process applications, while maintaining the reliability of the register and public confidence in it.

An example of the type of issue that might be re-examined is the decision in Swift 1st Ltd v Colin [2011] EWHC 2410 (Ch), in which the court held that it is not necessary for a legal charge to be substantively registered in order for the chargee to be able to sell under its power of sale.  This came as a surprise to everyone, not least the Land Registry, which had (until the court’s decision in this case) refused to register a transfer by a mortgagee in such circumstances.

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