PROBLEMS OF THE LAND CHARGES SYSTEM

1) Search is usually undertaken after the seller and purchaser have entered into an enforceable
contract to sell the property, because it is only then that the purchaser has access to the title
deeds and is able to discover the relevant names. Of course, this means that a purchaser might
discover a registered land charge that would seriously diminish the value of the land they
propose to buy, yet he is bound by contract to go through with the sale.
To meet the obvious injustice that this situation can create, section 24 (1) LPA 1969 provides
that a purchaser shall be entitled to escape from the contract if he did not have real notice of the
registered land charge at the time he entered into a contract.
2) System of registration of land charges is incomplete, in that some equitable rights are
non-registrable. This means that the old doctrine of notice still has a part to play, albeit of
rapidly diminishing importance since first registration of title became compulsory. Nevertheless,
it is a serious criticism that a system that was intended to bring certainty to dealings with land
was unable to do away with the vagaries of the doctrine of notice.
3) The land charges register is a name-based register, and this brings several problems, of
varying importance:
-The use of wrong names or incorrect versions of names, both in the registration of a land charge
and in a search of the register, causes obvious problems, as charges are not properly protected
and a purchaser may obtain a search certificate on which he cannot safely rely.
-Long-lived land charges may be registered against names which the purchaser cannot discover
and cannot, therefore, search against, as where a purchaser of a lease cannot discover the
names of previous freeholders and, more importantly, where names are hidden behind the root
of title. A purchaser of unregistered land has no right to view title documents that exist behind
the root of title. Yet, root of title is only 15 years, so a purchaser may well be bound by charges
registered against names that appear in a conveyance made more than 15 years before the date
of the transaction under consideration. These names are potentially undiscoverable but the
registered land charge is binding (s. 198 LPA 1925). To meet this unjust situation (which was
exacerbated when root of title was reduced to 15 years instead of 30) section 25 (1) LPA 1969
provides that a purchaser may obtain compensation for being bound by a registered land charge
hidden behind the root of title. This provision is of necessity, a compromise and demonstrates
clearly the inadequacies of the land charges system of registration.
-Land charges must be registered against the name of the estate owner of the land that is
intended to be bound; thus, sub-purchasers in a chain of uncompleted transactions may register
against the wrong person.
4) The official search certificate is conclusive, rather than the register itself.
Consequently, in the event that the registry fails to carry out an accurate search, a properly
registered charge may be lost. The remedy for the person prejudiced by this error may lie in the
law of tort, but this remains uncertain.
5) Some would question whether the absolute voidness of an unregistered land charge is
justifiable, especially where the purchaser has full knowledge of the unregistered charge and
acts deliberately to defeat it, as in Midland Bank v. Green. However, the LCA 1972 is neutral as
to fault and is premised on the paramount need for certainty, even at the expense of those who
might be thought to have a deserving case. Although the steady demise of unregistered
conveyancing makes the matter less pressing, there has been much debate about whether the
LCA 1972 should be applied as vigorously as it was in Green, or whether the purchasers actual
state of mind should be as important as the registration requirement.
6) The LCA 1972 does not protect the rights of persons in actual occupation of the land;
rather, the position is that if a person has a proprietary right over another persons land, that
right will be binding if it is either legal or registered as a land charge, or occasionally protected
by the doctrine of notice. If, however, a right is registrable, but not registered, then the right is

lost and the owner cannot rely on the fact that they are occupying the property. CASES:
Hollington Bros v Rhodes / Lloyds Bank v Carrick In both cases, if this had been land of
registered title under the LRA 2002, the interests would have been protected as unregistered
interests which override within para 2 of Schedules 1 or 3 through the right-holders actual
occupation of the burdened land. This is a serious defect in the system of unregistered
conveyancing and means that the continuing validity of a persons rights might actually turn on
the chance of whether the land is registered title or not.