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Landnet 30

June 2012

Welcome to Landnet 30.

In this issue you can read about some of the new Land Registry services either under development or recently launched in response to customer demand. Whether they're improvements to our registration services or additions to our range of commercial Add Value services, they’re all created after listening to what you tell us about your business and professional needs.

It's a theme that's reflected in our annual report for 2011/12, which shows how we've evolved – and continue to evolve – into a more customer-focused organisation while coming through a very tough period of internal change.

Please carry on telling us how we can help you, including by letting me know which practice topics you'd like to see Landnet covering.

Gavin Curry, Editor
0300 006 7299
gavin.curry@landregistry.gsi.gov.uk

Landnet can be made available in other formats on request. If you require Landnet in another format, please contact Customer Support by email customersupport@landregistry.gsi.gov.uk or on 0844 892 1111.

To receive a bulletin every time Landnet is published, please send your name, job title and email address to gavin.curry@landregistry.gsi.gov.uk

Follow Land Registry on Twitter: @LandRegGov

News

Annual Report and Accounts 2011/12

Our Annual Report and Accounts 2011/12 tell the story of a year of change and achievement for Land Registry.

A new era for the organisation began with our move to the Department for Business, Innovation and Skills. We also became a founder member of the Public Data Group with a brief to support economic growth and efficiency.

During the year we completed an internal restructuring programme that has helped us move back into financial surplus.

Our efforts to become increasingly customer-focused were meanwhile rewarded by achieving a customer satisfaction rate of 97 per cent, with a record result of 99 per cent in the last three months of the year.

Chief Land Registrar and Chief Executive Malcolm Dawson, in his foreword to the report, said there was a great foundation to build on.

“Having completed our restructuring programme, we are now focused on embedding the cultural change that is already making a difference to our customers,” said Malcolm.

“There are some real challenges to come over the next two to three years but I am confident that we will meet them to the benefit of our customers, our partners, our employees and the wider economy.”

New e-document registration service is on track

In September 2012 Land Registry will launch our new e-document registration service (e-DRS) on Business Gateway to provide a faster and more cost-effective way for customers to submit and receive applications electronically instead of via current paper-based methods.

We have developed e-DRS as part of our continuing commitment to improve our services. We will launch it in stages with roll-out to our portal customers planned for winter 2012/13.

Landnet readers will be aware of this exciting new service through articles in previous issues. We are pleased to let you know that we are on track to roll out e-DRS through Business Gateway in September. Between now and then, we are working with customers to continue to develop and enhance the solution to ensure that it delivers the benefits which we have identified for both our customers and Land Registry. These include:

speed The electronic submission of applications and the removal of postal delivery will reduce average end-to-end processing times
costs and environmental impact The new e-service will support your efforts to cut back on paper consumption. It will also provide an opportunity to reduce costs such as postal and manual processing
electronic audit trail All applications will be received and responded to electronically, creating an audit trail. This will provide a useful tool in the prevention of fraud.

In addition to these benefits, e-DRS will also provide you with a number of services that will make the applications process easier.

The service will allow substantive registration applications and transaction types (form AP1 and scanned versions of accompanying documents) to be submitted by a signed-up organisation with legally qualified supervision.

Applications to register transfers and/or charges together with other common transaction types affecting the whole of a registered title will be included in the pilot.

Applications will be registered by Land Registry and the completed application returned to you electronically.

Portal customers

Work is already underway for the prototype of e-DRS for portal customers and the pilot is on schedule to take place over the summer. The launch date for e-DRS through the portal is winter 2012/13.

Please watch this space where we will keep you updated on developments with e-DRS.

More information on our full suite of Business e-services is available at http://www.landregistry.gov.uk/professional/business-e-services

Market Trend Data

Our Market Trend Data is now being published on our website every month. Market Trend Data includes Transaction Data and Price Paid Data along with our House Price Index.

Telephone Services consultation

You have until Friday 27 July to tell us your views on proposed changes to Land Charges legislation that will allow us to close our telephone ordering service for business customers (Telephone Services).

HMRC fraud alert

We are aware of a scam aimed at estate agents and their clients who are absent landlords. The fraud involves a fax apparently from HM Revenue & Customs requiring that form NRL1 be completed with personal information about the absent landlord including identifying properties with an absent owner. Form NRL1 is used to apply for UK rental income to be paid without deduction of UK tax.

Please note HMRC will not accept faxed or photocopies of this form. The information divulged in the completed form if it has been faxed may make a property vulnerable to title theft. While this is not a widespread problem, our Protect your home from property fraud guidance outlines what owners can do to reduce the risk of this happening by updating the address for service and applying on form RQ for a restriction.

Land Registry on LinkedIn

Land Registry now has an official presence on LinkedIn, the world’s largest professional network – including eight million users in the UK.

Our company page provides a platform where LinkedIn members can follow live updates from Land Registry and talk to us about our services. It includes a product showcase where visitors can recommend our products and services to other LinkedIn users.

Celebrating 150 years

Land Registry first opened its doors to business on 15 October 1862 following the passage of Lord Chancellor Westbury’s Land Registry Act.

We’ll be celebrating our 150^th anniversary over the coming months by delving into our rich history and highlighting some of the landmark events and personalities.

Title race

It took almost 90 years to register the first million titles in England and Wales – but only another 62 to go beyond 23 million.

The relatively slow start can be attributed to the haphazard spread of compulsory registration after the 1897 Land Transfer Act made it possible but optional for local authorities.

The County of London was the first to vote to introduce compulsion in 1899 but others were slow to follow.

It was only in 1990 that it was imposed in the last remaining areas, by which time the Land Register had grown to 10 million titles.

Computerisation and the development of online services have helped us keep on top of the boom in growth since then, with 15 million titles registered by 1998 and 23 million by October last year.

Services

Lender Services

We’ve been asking customers how our information can be delivered more effectively and used to achieve real efficiencies.

When we talked to lenders we identified three areas where we could develop a specific service.

We learned it was business critical that lenders held first priority on their registered charges so we created:

Priority Checker for our existing Data Synchronisation customers to alert them on a monthly basis to legal charges that do not have first priority on the register, enabling them (or their representative) to take swift action
Charge and Discharge Confirmation for lenders who do not use Data Synchronisation, offering them an ongoing monthly analysis and automatically sending them a report of all new charges that have been registered during the previous month and providing their priority on the register.
Both services offer the assurance that charges have been correctly secured. Discharge Confirmation in particular provides peace of mind to lenders who are concerned about fraudulent activity in the paper discharge process.
Customer Retention Analysis analyses remortgage trends on previous customers.
Cash/Mortgage Indicator helps lenders measure trends in unfinanced sales transactions compared with financed ones and enables better targeted customer campaigns and cleansing exercises.

For more information on these and our other commercial Add Value services please call our Add Value Team free on 0800 678 1678 or email us at commercial.services@landregistry.gsi.gov.uk

Information Services on the portal

Three of the Business e-services available through the Land Registry portal have been improved in recent months. Further enhancements are planned for later this year.

Request Official Copies

Request Official Copies allows an authorised user to search for a title by entering property details or a title number. Authorised users can choose to order a register and/or title plan and/or documents in one request. Documents referred to on the register are displayed for selection and include the register entry number to help identify the correct document. The availability of documents for download is displayed where the information is available in Land Registry systems.

As well as introducing the property details search to the Request Official Copies service, recent changes to Land Registry systems have increased the number of documents available to customers for download, such as increasing the file size able to be e-delivered to customers to 10MB. Authorised users can collect some downloads immediately following submission or collect their electronic results from their PDF downloads area within the General Facilities signpost.

Search of the Index Map

A facility to upload a plan to support an electronic submission of a search of the index map has been introduced. Results are electronically delivered on completion of the application, removing all postal delays. Authorised users collect their electronic results from their PDF downloads area within the General Facilities signpost.

Official Search of Part with Priority

This is a recently introduced e-service that allows customers to upload a plan to support an electronic official search of part with priority. Results are electronically delivered on completion of the application, removing all postal delays. Authorised users collect their electronic results from their PDF downloads area within the General Facilities signpost.

See our training for these services on our website.

Practice

Protecting your clients’ interests: a step-by-step guide

A Land Registry lawyer explains how to apply to protect third party interests

It is an unfortunate irony that many of the applications we have to reject are those which can be most time-critical for the applicants. These are applications made by someone who is not the owner of the property but is claiming to have some other interest in it.

Many such ‘third party interests’ need to be protected in the register. If they are not, their priority may be lost to a later purchaser and they may cease to be enforceable.

This is the first in a series of three articles that look at the ways in which third party interests in registered land can be protected. This first article considers the subject generally, including a step-by-step guide to how to apply to protect a third party interest. It will be followed in future issues of Landnet by articles looking in more detail at notices and restrictions.

Priorities

Here is a reminder of the important points about the priority of competing interests in registered land.

– The general rule is that priority depends on when an interest was created – later interests being subject to earlier interests.

But a purchaser* will not be bound by an interest if, when the purchase is completed by registration, the priority of the earlier interest is not protected.
Some interests are ‘overriding interests’ and their priority is automatically protected; the priority of other interests can be protected by entering a notice.
A restriction does not strictly preserve the priority of an interest, but as it can prevent a later purchase from being registered it can indirectly prevent the priority of an unprotected interest from being swept away.
The priority of applications can be reserved by outline applications or priority searches even before the application is lodged.

*In this article ‘purchaser’ is used to refer to someone acquiring an interest (including a legal charge, lease or easement) under a registrable disposition made for valuable consideration; ‘purchase’ has a meaning corresponding with that of 'purchaser'.

Among the main reasons for enacting the Land Registration Act 2002 were to simplify the land registration system and reduce the problem of interests existing that are not shown in the register.

Now the only two methods of protecting third party interests are by way of notices and restrictions and much fewer interests now qualify as overriding interests (with more categories of interest losing their overriding status next year – see Landnet 25: Protecting manorial rights).

The new registration system tends to pigeon-hole third party interests according to the manner in which they can be protected in the register. Some interests can be protected by way of notice. Others cannot but can entitle the interested party to apply for a restriction. There is little overlap between the types of protection.

So if an application is to be successful the interest claimed must be correctly matched to the appropriate form of protection for that category of interest. If the wrong form of protection is sought, the application is likely to be rejected.

Tip: Check an application by working backwards!

When we receive an application for a notice or restriction to protect a claimed third party interest we work backwards; we start with the application that has been made and then consider the interest claimed. If the interest is one that would justify the form of protection sought, we then consider the evidence lodged to support the claim. If it is not clear either what interest is being claimed, or (depending on the application) that the evidence of the claim is sufficient, we cannot proceed.

This approach is opposite to that which applicants and their conveyancers are faced with: they start with the facts, consider what claims might be made and only then consider what protection might be available. The usual approach adopted in litigation, where claims may be pleaded in the alternative and refined over time as efforts are made to resolve any dispute, is also different from that needed when applying for registration.

Where facts could be interpreted as giving rise to more than one type of interest, the interest(s) claimed need(s) to be clearly specified in the application form. If only the claimed facts are set out, when working back from the application we would not be able to assume the nature of the claim. For example, is it claimed that representations made to a cohabitee have led to a proprietary estoppel (which could be protected by way of a notice) or a constructive trust (which could not, but which might justify an appropriate restriction)?

A step-by-step guide to protecting third party interests

Step 1 Decide the nature of the right or interest claimed

By identifying the nature of the right or interest claimed at an early stage it should be clear both what needs to be proved to establish the interest and whether the interest (if established) needs to be or is capable of protection in the register.

Step 2 Obtain details of the title to which the interest relates

This step is obvious but easily overlooked.

You may first need to check whether the title to the land is registered or not by carrying out a search of the index map, using form SIM.

Once you have identified the relevant title number, you should check the state of the title and whether there are any pending applications that may have an effect on the priority of your application. Business customers with access to the Land Registry portal can view the register and the daylist (which shows pending applications and priority searches) online. Otherwise, official copies can be applied for in form OC1 and a search without priority can be made in form OS3.

Step 3 Decide if and how the interest can be protected in the register

Appendix A to Practice Guide 19 – Notices, restrictions and the protection of third party interests lists 23 examples of the most common categories of third party interests and how each one may be protected.

If the interest claimed does not fall into one of those categories, then you will need to consider what type of protection is available (if any) for interests of that nature. More guidance is given in Practice Guide 19 about what interests can (and cannot) be protected by notice and when the registrar may enter a restriction.

It may be that the reason why the interest is not listed in Appendix A (despite being of a type that is commonly encountered) is because it is not one that can be protected against a registered title – for example a personal obligation on an individual to apply the proceeds of a forthcoming sale in a particular way, or a personal licence to use an access track.

Alternatively it may be that an entry may be made in the register, but not one which will have any effect on the priority of interests. Confusingly sometimes the word ‘noting’ is used to mean the making of any sort of entry in the register other than one made to complete a disposition by registration. For example, entries can be made which clarify the extent of a title following a boundary declaration or party wall agreement, or which reflect that a sole proprietor has died, or in respect of positive or indemnity covenants made by the proprietor. These entries are not 'notices' as defined in the Land Registration Act 2002. Applications for entries where there is no specifically prescribed form should be made in form AP1.

Step 4 Protect the priority of any application to be made

The speed with which action needs to be taken to protect the interest will of course depend on the circumstances. However, in some cases it will be crucial to ensure that the priority of the interest claimed is protected in the register as soon as possible.

A conveyancer tasked with protecting their client’s interest, especially in circumstances where it is known or suspected that the proprietor may be about to deal with the property, may need to act immediately. Should they fail to do so, they risk criticism or worse if priority is lost due to the delay.

The way in which such applications may be protected is by outline application (referred to informally by Land Registry caseworkers as OLAs). Guidance is given in Practice Guide 12 – Official searches and outline applicationsabout OLAs and how they may be made.

OLAs can be made remotely (by telephone or online) or in person without any paper application form and their effect is to reserve priority for the application if the appropriate application form and supporting documents are lodged before noon on the fourth business day after the OLA was made. The purpose of an OLA is to allow someone claiming a third party interest to obtain immediate priority protection so that they are not placed at a disadvantage compared with a purchaser, who can instead apply for an official search with priority. Note however that to apply for an OLA the applicant’s interest must already exist (for example, if a notice is to be applied for to protect a pending land action the OLA can only be made after the proceedings have been issued).

Given the frequency with which applications are hurriedly made by third parties fearing that the proprietor may imminently dispose of the property, it is perhaps surprising how few OLAs are made. Statistics for the last financial year show that only just over 1,100 were made. This compares with approximately two million priority search applications.

Over time we would expect the number of OLAs made to fall, as more and more customers are able to lodge applications for notices and restrictions electronically, so allowing for the application to be entered on the day list straightaway (if lodged on a business day). However, the current lack of take up may be due to a lack of awareness that OLAs exist rather than to a conscious decision that the immediate priority of the interest does not need protection.

We frequently receive applications for priority official searches from conveyancers who later apply for notices or restrictions apparently believing that their client’s third party interest has benefited from the search’s priority protection. If a priority search is applied for to ‘protect’ an application for a notice or restriction, it will have no effect save that we will usually have to delay processing the application until the priority period expires. Any purchase lodged for registration between the date of the search and the date on which we receive the search-applicant’s third party interest application will be processed first, so it is likely to sweep away the third party interest.

Step 5 Make the necessary application

The final step is to make the application itself or, where an OLA has already been made, to provide the appropriate application form and supporting documents to complete the application.

Ensure that the interests claimed which are to be protected by the application are clearly identified and ensure that enough evidence has been supplied to establish the claim (though this may vary depending on the nature of the protection sought).

If the application relates to only part of the title that is the subject of the application, the part that is affected will need to be properly identified. If identification is with reference to a plan, the plan will need to meet the same standards as would any other plan lodged for registration. Applications to register third party interests relating to only part of a title are often rejected because the plan lodged to establish the part of the title to which the application relates is of insufficient quality. Further guidance about Land Registry plans specifications is available in Practice Guide 40 – Land Registry plans – Supplement 2 – Guidance for preparing plans for Land Registry applications.

Features

Registering High Speed 1

The registration of High Speed 1 (HS1) has a long history – so long, in fact, that the Land Register was still closed to public inspection when it began.

At the outset in 1989 the property information team at the project could apply for index maps showing the registered land on the proposed routes.

But Land Registry could not provide Doug Geden and his colleagues with the proprietorship information, leaving them very dependent on door knocking and other research to compile the list of affected owners.

“The land referencing job was made a lot easier once we had an open register in 1990,” said Doug, who is still working for London & Continental Railways (LCR) as Property Information & Systems Manager.

Today’s 68-mile line from St Pancras to Ashford International is the end product not only of one of Britain’s biggest civil engineering projects but also the complex process of identifying owners, selling surplus property and carrying out compulsory purchases.

At the height of the project, the property team were handling and processing thousands of registers each month as they tracked the ownership of around 6,000 properties with around 12,500 separate interests.

At each stage Doug worked closely with Land Registry teams at Tunbridge Wells, Stevenage, Harrow, Peterborough, Birkenhead and Wales offices as well as Head Office.

Together they agreed the best ways to handle the anticipated land research, monitoring, service of notices, registration of cautions, compulsory purchase and eventual conveyance of land together with the assembly of the scheme titles.

“Tunbridge Wells was the lead office,” Doug explained. “We set up all of the processes and procedures with Tunbridge Wells and those were adopted by the other Land Registry offices.

“They weren’t standard processes but they could be understood by everyone and could be transferred and that proved the case.

“We developed relationships with key individuals at the local offices and we also had meetings at Head Office to decide strategy.”

Property checks

The first step was to order searches of the index map (SIMs) and keep a check on properties within the rail line corridor for changes in ownership. Under a groundbreaking agreement, the lists of titles identified from the SIMs were supplied to Land Registry and weekly reports sent to LCR for monitoring, an arrangement that continued up until 2000.

Another key process was the use of scheme titles (now superseded in Land Registry practice by developer schemes) that grouped properties together geographically.

Eventually the project generated 96 scheme titles along the whole route, including 36 subsoil schemes for the tunnelling work through east London.

“The scheme titles meant we were able to concentrate on each section of the route individually, breaking the project down into manageable components,” said Doug.

About 80 per cent of the land was acquired by around 12,500 compulsory purchase orders and the other 20 per cent by private treaty or from other government departments and Network Rail.

LCR aimed to sell the business once construction of the line was complete in November 2007 but first it needed a lease in place. By autumn 2009 only 80 per cent of the surface area was owned by the Secretary of State so no lease could be credibly granted.

An intense campaign followed to acquire and register the remaining land and document any ‘estoppel’ gaps.

“To the immense credit of all involved the lease was granted on 30 September 2010 with less than 1 per cent by surface area still not acquired,” said Doug.

At the same time the closure of Stevenage and Tunbridge Wells offices meant the transfer of their project work to Wales Office.

“All of the frameworks and processes we put in place were really tested during 2009/10,” said Doug. “We were thrust into the limelight but our relationship with Land Registry proved itself robust.”

The 30-year concession to own and run services on HS1 was sold to a consortium of Canadian pension funds in November 2010, “thanks in no small part to the efforts of the property information team at LCR and Land Registry”, said Doug.

“Once the sale had completed we quickly set about registration of the HS1 lease and the ‘estoppel’ gaps with absolute and good leasehold title given, depending on the quality of the superior title. We completed this process in September 2011.

“A great team in Swansea was able to pick up the baton from the other offices. It’s testament to way Land Registry operates.”