You may remember our article Registration Gap or Registration Crater last year noting the High Court's interesting decision in Baker and Another v Craggs which caused considerable concern on the registration gap.
Following registration at HM Land Registry, Mr Craggs' newly-acquired farm land was subjected to an unexpected right of way that had been granted to the Bakers following Mr Craggs' purchase. Unfortunately, Mr Craggs' purchase was not registered until after the Bakers had registered their right of way over his land. The Bakers' right of way was upheld by the High Court.
It may not come as a surprise that this controversial decision has now been overturned by the Court of Appeal.
The Court of Appeal held that the Bakers' right of way was not capable of overreaching Mr Craggs' equitable interest. To be capable of overreaching a legal or equitable interest in land, a transaction must be a legal estate in land. The Court held that the grant of a right of way is not a legal estate in land within the meaning of the legislation which governs overreaching.
How reassuring is this decision for property practitioners and land purchasers? This case has illustrated just how easily priorities can become confused where for whatever reason, a purchase or other dealing with land is not registered within the period of priority conferred by the usual pre-completion search. It is therefore crucial to ensure that documents and all additional information needed fulfil the Land Registry's requirements prior to completion, pay careful attention to the Land Registry's deadlines and seek extensions where they cannot be met, in order to avoid disputes such as this one arising.
Here, as overreaching did not take place the enforceability of the Bakers' right of way came down to a matter of priorities. We would expect a purchase to be registered by the Land Registry before any subsequent dealing. In this scenario, Mr Craggs' purchase was only saved because he was actually occupying his property. It is worrying to imagine that had Mr Craggs not been occupying the property then the subsequent right of way granted over his land would have taken priority and been enforceable against him.