Unregistered Interests in Land
What can you do if you have an interest in land that is not registered? Alternatively, how do you oppose any claim of an interest made by another against your land?
A recent case of Nugent v Nugent (20 Dec 2013) provides an illustration of the difficulties the courts face balancing the respective interests of different parties.
Interests claimed in land
Under the Law of Property Act 1925, a deed is required in respect of any conveyance of land or of any interest in land. There are exceptions to this for ‘equitable interests’ i.e. interests which have not arisen from normal legal transaction but through conduct or circumstances where the courts recognise an interest e.g. interests arising by way of adverse possession or interests founded on a promise made by a legal owner of land to another upon which the other has relied to his detriment (known as proprietary estoppel).
Equitable interests in land may be registered against land under the Land Registration Act 2002. Such registration is undertaken by registering what is known as a unilateral notice.
However, caution needs to be taken before registering a unilateral notice, since very substantive costs and damages could become payable by anyone registering a unilateral notice without reasonable cause. The question you must first ask yourself before registering a unilateral notice, is whether you have a reasonably arguable case for an interest in land. Given the risks involved in getting this wrong it is advisable to seek legal advice before registering a unilateral notice.
It should be noted that the act of registering a unilateral notice does not in itself create an interest in land. It is for the court or land tribunal to make such a finding. However, priority is given to an interest that is registered by a unilateral notice if such interest is determined by the court to be founded.
Court’s power to cancel a unilateral notice
The recent case of Nugent v Nugent had to decide whether the court had the power to order the cancellation of a unilateral notice registered against a title and, if so, how such a power should be exercised. In this case, the grandson of the owner of a farm claimed he was entitled to the farm on his grandmother’s death on the grounds he was promised the farm by his grandmother and late grandfather and that he had acted to his detriment in reliance on such promise (proprietary estoppel).
The grandmother wanted to stay in the farm and the grandson wanted a declaration that she was not free to sell more of the property than was reasonably needed to meet her needs and debts and that the balance of the property and its proceeds be left by will to the Claimant. His solicitors therefore registered a unilateral notice against the grandmother’s title to the farm to protect his alleged interest. The practical effect was to stop the grandmother being able to sell the farm. She therefore applied to have the unilateral notice cancelled.
Although the court determined that the grandson had a reasonably arguable case for registering a unilateral notice, the notice was set aside by the court in order to allow the grandmother to raise monies against the property in question, to defend the claim made by her grandson.
The case is notable because the grandson had not registered an interest ‘without reasonable cause’. The court had decided he had an arguable case. Rather, the court noted that the effect of the unilateral notice was to prevent the grandmother selling any part of the farm which might prevent her being able to afford to defend the grandson’s claim. It is likely this issue will require further clarification at the Court of Appeal as the court’s jurisdiction to vacate a unilateral notice with reasonable cause was far from certain.
Conclusion
Interests in land may arise by promises, assurances or conduct of the landowner. Interests in land do not always arise by conventional legal conveyance.
If you believe you have such an interest in land, urgent steps may be necessary to protect your interest, by registering a unilateral notice. However, caution needs to be applied before registering a unilateral notice and it is strongly advisable to seek legal advice.
If you are a landowner who wants to prevent a claim for an equitable interest in land being declared valid or you wish to remove a unilateral notice, then you should seek immediate legal advice.
As Redress Law, we have experts in Land Law who can advise you as to equitable interests in land and bringing or contesting claims in respect of such interests.
