PART 12  MISCELLANEOUS AND GENERAL

CLAUSE 116   POWER TO REDUCE QUALIFYING TERM

90. Clause 116 enables the Lord Chancellor by order to reduce the length of leases that require registration, and that power is likely to be exercised as part of a global change to the provisions of the Bill relating to leases. Leases which currently require registration are those whose length exceed 21 years. In the interests of bringing most business leases within the benefits of registration, both the Law Commission's report, and the report on the Land Registry's work prepared by Andrew Edwards CB as part of the latest quinquennial review, recommend that this should be reduced to 7 years and then further, probably to 3 years, as soon as circumstances permit. Clause 116 could be used to make an order providing for that second revision. This is a Henry VIII power to amend the provisions of this Bill after enactment, but in a very specific and limited way. The Lord Chancellor is required to consult before making the order, and the exercise of this power is subject to annulment by resolution of either House of Parliament.

CLAUSE 119   FORWARDING OF APPLICATIONS TO REGISTRAR OF COMPANIES

91. Improved information technology is creating scope for the Land Registry and the Companies Registry to work together to reduce the burden of registration requirements when a registered company creates a mortgage over registered land. Clause 119 delegates to the Lord Chancellor power to make rules about the transmission of company charge information received by the Land Registry to the Registrar of Companies. These are matters of procedure between the two registries, which need to be governed by flexible provisions, not least because they have implications for the officers of the company who are currently responsible for supplying that information and members of the public relying on information in either set of registers. The development of this linkage may also be affected by the DTI's review of the company law framework. Rules made under this clause will not be land registration rules but nevertheless merely have to be laid before Parliament after being made (see clause 125(3)(b)).

CLAUSE 124   EXERCISE OF POWERS

92. Clause 124 prescribes the composition of the Rule Committee that will have a key role in advising and assisting the Lord Chancellor to make land registration rules under this Bill. It adds representatives of the Council of Mortgage Lenders and of the Council of Licensed Conveyancers to the current composition. There is a power for the Lord Chancellor to nominate an additional member to the Committee if he thinks that their qualifications or experience would add value. This power is important as the conveyancing market becomes increasingly complex, and as the Land Registry develops the electronic conveyancing system and takes a wider role in the conveyancing process.

CLAUSE 127  APPLICATION TO INTERNAL WATERS

93. At present, title to land is only registrable if the land is within one of the counties of England and Wales. The clause provides a mechanism for extending the registration system to land beyond county boundaries which is covered by internal waters of the United Kingdom adjacent to England or Wales. This will enable title to land to be registered up to the baselines used for the purpose of defining the territorial limits of the United Kingdom (fixed in accordance with Article 4 of the Convention on the Territorial Sea of 1958). The application of the Bill to land outside counties depends on the Lord Chancellor specifying it in an order. This enables any extension to be matched to the Land Registry's ability to deal with the additional work to which it gives rise.

CLAUSE 131   TRANSITION

94. Clause 131 gives the Lord Chancellor power by order to make transitional arrangements, over and above the transitional arrangements contained in the Bill. It contains a Henry VIII power to amend the existing transitional arrangements in Schedule 12. The full extent of the transitional provisions required is likely only to be apparent at the detailed implementation stage. So it is necessary to have flexibility to make further transitional provisions and to be able, if necessary, to adjust the provisions in the Bill in the light of what at that stage is identified as required. An order made under this clause is not subject to any Parliamentary procedure (see clause 125(4)(b)).

CLAUSE 133   SHORT TITLE, COMMENCEMENT AND EXTENT

95. Clause 133 gives the Lord Chancellor power to bring the Act into force by commencement order. This is important to ensure that the new regime is put into place when customers and the Land Registry have had time to make the necessary preparations. An order made under this clause is not subject to any Parliamentary procedure (see clause 125(4)(b)).

SCHEDULE 2   REGISTRABLE DISPOSITIONS: REGISTRATION REQUIREMENTS

96. Schedule 2 sets out the registration requirements for those dispositions of registered estates that need to be completed by registration, such as transfers of legal title. The Schedule contains two rule-making powers. Firstly, rules are to deal with the nature of the information that should be recorded on the existing title when part of the land in the title is sold. This is a procedural provision to ensure that the register gives an accurate and clear picture of the current situation. Secondly, rules may modify the registration requirements which apply in the case of a right of re-entry in respect of a lease.

SCHEDULE 4   ALTERATION OF THE REGISTER

97. The Bill completely reshapes the law relating to alteration of the register, clarifying it and bring it into line with current practice. In particular, it creates a special class of alterations termed rectifications, which both correct mistakes and prejudicially affect the title of a registered proprietor (and therefore raise questions of indemnity). First, the court is given power to order alterations for the purposes of correcting mistakes, bringing the register up to date, or giving effect to any estate, right or interest excepted from the effect of registration. The Lord Chancellor is given power to make rules governing the circumstances in which that power should be exercised (except for cases involving rectification, where under paragraph 3(3) the court is required to make an order unless there are exceptional circumstances to justify not doing so), and for the procedures relating to such orders. Secondly, the registrar is given similar powers for the purposes of correcting mistakes, bringing the register up to date, giving effect to any estate, right or interest excepted from the effect of registration, or removing a superfluous entry. The Lord Chancellor is given power to make rules governing the exercise of that power (again, with the exception of cases involving rectification), and procedural rules governing how alteration is to be effected, applications for alteration, and general procedural matters. These provisions mirror clauses 20 and 21 which deal with alterations to the register of cautions against first registration.

SCHEDULE 5   LAND REGISTRY NETWORK

98. The note in the Annex outlines plans for the development of a system of electronic conveyancing. Clause 92 enables the registrar to provide for an electronic communications network for use in relation to transactions that are capable of being conducted electronically, and the Schedule governs the secure network which will be used to make changes in the register.

99. Paragraph 1 of this Schedule provides that persons outside the Land Registry can only have access to the Land Registry network by agreement. Delegated powers are given to the Lord Chancellor to regulate the use of such network access agreements to confer authority to carry out the functions of the registrar. Such arrangements will evolve over a long period of consultation with external users, and system-testing both at the registry and by users, and will need to respond flexibly to changes in practice.

100. Paragraph 2 allows the registrar to establish the terms of use of the network for qualifying transactions. Rules enable the Lord Chancellor both to regulate the terms and conditions for the use of the network and to enable access to the network to be controlled for purposes other than regulating the use of the network. This would give the Lord Chancellor scope to expand the system to deal with the whole of the conveyancing process from the beginning of the transaction. This concept forms part of the e-conveyancing model, which will be the subject of wide consultation by the Registry over the coming months.

101. Paragraph 3 enables the Lord Chancellor to make rules about the termination of network access agreements by the registrar. In particular, those rules may set out grounds of termination and the procedure to be followed, and may provide for suspension of termination pending appeal. The paragraph also provides that the rules may authorise the registrar to terminate an agreement on certain specific grounds, for example failure by the person granted access to comply with the terms of the agreement.

102. Paragraph 4 enables persons aggrieved by the registrar's decision in relation to entry into or termination of a network access agreement to appeal to the adjudicator. The Lord Chancellor may make rules about appeals under this paragraph.

103. Paragraph 5 delegates to the Lord Chancellor power to make rules about the way in which network transactions are conducted, the procedures to be followed and the supply of information. This level of detail is most appropriately left to rules.

104. The Lord Chancellor is obliged to consult before using the rule-making powers in paragraphs 1,2 or 3 of this Schedule. In making rules under paragraph 1 or in relation to the grounds of termination, the Lord Chancellor is also obliged to have particular regard to

• confidentiality of private information held on the network;
• competence to make changes via the network; and
• adequacy of insurance for potential liabilities arising from using the network.

The exercise of the rule making powers in paragraphs 1,2 or 3 of this Schedule is also subject to annulment in pursuance of a resolution of either House of Parliament. Rules under paragraphs 4 and 5 will be land registration rules, and as such will have to be laid before Parliament after being made.

SCHEDULE 6   REGISTRATION OF ADVERSE POSSESSOR

105. As noted in relation to Part 9, the Bill makes a major change in the law relating to rights of adverse possession over registered land. They are set out in full in the Explanatory Notes. The essence of the scheme is that:

• adverse possession of itself, for however long, will not bar the owner's title to a registered estate;
• a squatter will be entitled to apply to be registered as proprietor after ten years' adverse possession, and the registered proprietor, any registered chargee, and certain other persons interested in the land will be notified of the application;
• if the application is not opposed by any of those notified the squatter will be registered as proprietor of the land;
• if any of those notified oppose the application it will be refused, unless the adverse possessor can bring him or herself within one of three limited exceptions;
• if the application for registration is refused but the squatter remains in adverse possession for a further two years, he or she will be entitled to apply once again to be registered and will this time be registered as proprietor whether or not the registered proprietor objects; and
• where the registered proprietor brings proceedings to recover possession from the squatter, the action will succeed unless the squatter can establish one of the limited exceptions noted above.

106. The operation of this new scheme is set out in full in the Schedule. Delegated powers are given to the Lord Chancellor to prescribe the procedures which will govern applications under the Schedule. A further delegated power concerns the application of the Schedule to registered rentcharges which is a question of relative detail.

107. Finally, under the new scheme if an estate in land is divided between the adverse possessor and the registered owner, and both parts of the land are to remain subject to a charge, then the charge shall be apportioned between the parcels of land. When a charge is to be apportioned, rules may make provision about the procedure to be adopted, the valuation to be undertaken, and calculation of the chargee's costs and payment of the costs of the chargor.

SCHEDULE 8   INDEMNITIES

108. Schedule 8 deals with the payment of indemnity for errors in the register entries. It sets out the circumstances in which indemnity can be paid. Delegated power is given by rules to prescribe when interest is payable on the indemnity paid. It also allows rules to specify what rates of interest and what periods the interest will cover. These are procedural questions, which will need to change periodically to take account of alterations in the level of interest rates, and similar matters.

SCHEDULE 10   MISCELLANEOUS AND GENERAL POWERS

109. This Schedule brings together for convenience certain rule-making powers which relate to specific situations and others which are general in nature. They cover matters not covered (or not fully covered) elsewhere in the Bill.

DEALINGS WITH ESTATES SUBJECT TO COMPULSORY FIRST REGISTRATION

110. Rules can be made to deal with the application of land registration principles to a dealing with land which occurs before the first registration application is lodged. Rules can also set out the date on which that dealing is to be treated as effective. This level of detail is more appropriately dealt with in rules.

REGULATION OF TITLE MATTERS BETWEEN SELLERS AND BUYERS

111. Rules may make provision about the obligation as between buyer and seller to prove the seller's title or to ensure that title passes to the buyer in relation to a registered estate or charge. These rules can be expressed to have effect notwithstanding any stipulation to the contrary. It is likely that this rule-making power will not be exercised immediately but may be found useful at a later date, particularly when electronic conveyancing becomes a reality.

IMPLIED COVENANTS

112. Implied covenants are the covenants which are implied by law into documents dealing with the disposal of interests in land. The Lord Chancellor is given delegated powers by rules to address:

• the form of provisions that extend or limit the application of implied covenants in a document disposing of an interest in land which is to be registered;
• the application of Law of Property Act provisions relating to implied covenants to the extent that they relate to dealings with registered land; and
• the reference to and the conclusive nature of entries in the register relating to implied covenants.

This level of detail is more appropriately dealt with in rules as under the existing framework.

LAND CERTIFICATES

113. Rules may make provision as to when a land certificate will be issued, its form and content and when it should be produced or surrendered. This level of detail is currently dealt with in rules. It is important that the use of certificates is contained in secondary legislation as this will change as electronic developments occur.

NOTICE

114. Rules may make provision about the form, content and service of notices under the Bill, in particular:

• regarding the supply of an address for service and the entry of addresses for service in the register;
• the time and mode of service; and
• when service is to be regarded as having taken place.

This level of detail is currently contained in rules.

APPLICATIONS

115. Rules may make provisions about:

• the form and content of applications and the evidence to be provided in support;
• when the application is to be taken to have been made;
• the order of competing applications; and
• the circumstances in which an alteration by the registrar to correct errors in applications and supporting documents have effect.

This level of detail is currently contained in rules.

RESIDUAL POWER

116. Rules can be made under the residual power where it is expedient to give effect to the Bill, whether or not they are similar to any specific rule-making powers given to make land registration rules under the Bill. It is envisaged that this power will be used to make rules similar in content to the existing rules for the smooth operation of the Registry's business - such as the Registrar's powers to relax specific requirements at his discretion. Any significant or new rule-making powers are set out in specific provisions in the Bill.

SCHEDULE 12   TRANSITIONAL PROVISIONS

117. Schedule 12 deals with the transitional provisions, in particular how the new framework applies to interests and rights that are already in existence at the time that the Bill comes into force. Rules may be made about the treatment of cautions against dealings which are already registered. This level of detail is most appropriately dealt with in rules.

118. For two years following the coming into force of the Bill, the provision relating to lodging cautions against first registration will apply in a modified form to allow certain existing unregistered interests to be protected by means of a caution.

119. The Crown is treated as a special case and is given ten years to lodge such cautions. Power is reserved to the Lord Chancellor to adjust the length of the period if it is found that the Crown needs longer to do this.

120. Rules may also be made about the transitional arrangements for the cases where rentcharges are held in trust for an adverse possessor by the rentcharge owner at the time that the provisions in the Bill come into force. This level of detail is more appropriately dealt with in rules.

June 2001