Voluntary vs compulsory first registration of unregistered land

Annie Button has written her latest blog article, which covers voluntary vs compulsory first registration of unregistered land.

As the property sector continues to evolve, conveyancing solicitors and property professionals must stay up-to-date on the important nuances of land registration when it comes to property transactions.

A key aspect to understand is the distinction between compulsory and voluntary first registration of unregistered land. Both are pivotal in ensuring accurate property records following transfers, optimising costs, and increasing efficiency.

This article will explore the legalities that conveyancers need to know in this regard, providing guidance on the process and benefits of each approach.

Unregistered land in England and Wales

HM Land Registry is responsible for documenting all property and land ownership records across England and Wales. While the end goal is to achieve comprehensive registration by 2030, currently around 14% of freehold land remains unregistered. This means the ownership details for these properties are not officially recorded with the Land Registry.

Implications

Unregistered properties can raise several issues for property owners and tenants alike. Homeowners may be exposed to possession claims by third parties when selling, whilst lenders may be more hesitant to provide mortgages when registration is unclear.

A key consideration for tenants is understanding that no official Land Registry record can threaten their occupancy rights. The extent of a landlord’s legal interest in the property can be called into question, and this may similarly impact how a landlord both manages their tenancy, or expedites a transfer or mortgage to their property at a later date.

Conveyancing and property professionals need to be ready to provide assurance and guidance with all such potential worries.

As Jon Clayson, Managing Director of Hunters Group, outlines, “Being able to put your total trust in your property professional is paramount when any property issue arises. We don’t just specialise in property, we specialise in people too”.

Trigger events

Properties become unregistered when a “trigger event” has not occurred since land registration became mandatory.

These trigger events include:

* The transfer of ownership through a property sale

* Inheritance or gift

* The creation of a mortgage

* The death of the sole proprietor

If none of these events have happened, the property may still be unregistered, even if it was purchased long ago by the current owner.

What is compulsory first registration?

When a trigger event does occur for an unregistered property, first registration with the Land Registry becomes mandatory.

To register a property with the Land Registry, the conveyancer must submit an assortment of deeds and documents, known as an “epitome of title” which explains the land’s ownership history and any associated rights or restrictions.

This process can be time-consuming, as the conveyancer must review old documents to identify and account for all relevant information. Navigating historical records and ensuring the new title register accurately reflects the property’s status, and the new owner’s liabilities, is a critical responsibility for the conveyancing solicitor. However, compulsory registration is legally required in these circumstances.

Voluntary first registration

Alternatively, property owners are not required to wait for a trigger event to occur. They can choose to voluntarily register their unregistered land at any time, even before listing their property for sale. This optional process follows the same steps as compulsory registration, but the associated Land Registry fees are lower.

Voluntary registration offers several benefits. It streamlines the conveyancing process if the owner later decides to sell, transfer or gift the property. Additionally, it creates a permanent, protected record of ownership, which is beneficial compared to relying on potentially lost or damaged deeds.

From the conveyancer’s perspective, voluntary registration is often preferable as it reduces the time and effort required compared to compulsory first registration triggered by a transfer or other event. This, in turn, can lead to cost savings for the client and a more efficient conveyancing process overall.

Importance of land registration

Whether compulsory or voluntary, the first registration of unregistered land is an essential process that conveyancers must navigate. It’s always in landowners’, property owners’ and conveyancing solicitors’ best interests to ensure that the Land Registry’s records maintain accurate and complete validity. Therefore, going forward, any restrictions, boundaries and rights can be identified and navigated with more confidence.

It’s no secret that unregistered titles are complex to overcome during the conveyancing process. Minimising inquiries pertaining to land registration is always preferable, and it is particularly important when advising clients on potential property purchases or when handling transactions involving unregistered land.

Historical deeds and documents may be lost or damaged over time. Registration provides greater security, as it is more challenging for someone to claim adverse possession of registered land. Additionally, the state provides compensation if mistakes in the register lead to a registered proprietor suffering a loss.

Next steps

Understanding the differences between mandatory and voluntary registrations of land can help conveyancing solicitors and property professionals offer better, tailored advice to their clients.

What’s more, minimising disruptions and bottlenecks in the property sale and exchange processes is always something that clients will value. However, streamlining processes to minimise administration should not come at the extent of land registration disputes or problems down the line.

Ensuring the accurate documentation of property ownership in England and Wales is something that should always be prioritised, whether faced with the legal obligation or option to do so.

Promoting voluntary registration where possible – even if not a legal requirement as per a compulsory arrangement – can still yield advantages for both conveyancing professionals and their clients. In turn, they will feel much more reassured having their names and assets registered with the Land Registry at the right time.