An overriding interest is an interest in land that automatically binds the owner of the land even though there is no record of that interest on the registered title to the land. However from 13th October 2013 a limited number of these interests will lose their status as overriding interests. These will include:-
- Manorial rights (e.g. rights to hunt, shoot, fish).
- Franchise rights (e.g. the right to hold a market, fair).
- Crown rents (e.g. the right to rent reserved by the Crown).
- Non-statutory rights in respect of an embankment or sea or river wall.
- A right to payment in lieu of tithe (e.g. a right to receive payment from church parish owners).
- Chancel repair liability.
What does this mean?
From 13th October 2013, such interests will not bind a bona fide purchaser of land for valuable consideration, unless the interest has been protected by notice on the registered title. However this does not mean that the overriding interest no longer exists against the title from 13th October 2013 – if you still own the property from this date and the interest has not been noted on the title, the property will still be subject to the overriding interest unless it is sold for valuable consideration. In this case the buyer will take free from the interest and the interest will then cease to apply to the property.
Anyone who believes that they have the benefit of one of the overriding interests will have until 12th October 2013 to register a notice of the interest against the land that it affects to make certain that they will retain the benefit of the interest after that date. Additionally, until the 12th October 2013, the Land Registry will not charge a fee to protect one of these interests.
Chancel repair liability
Parochial Church Councils which can prove they are entitled to demand chancel repair contributions from the owner of a property can still apply for the liability to be noted on the title in order to bind successors. Property owners could therefore find that new entries are added to their registers to protect these chancel repair contributions. If protected, future buyers of that land will still take subject to that chancel repair liability, but as an expressly protected interest rather than as an overriding interest.
Until 12th October 2013, purchasers of land are well advised to consider purchasing a chancel repair indemnity policy where the chancel search reveals that the land is in a liable parish.
Beverley Merrell is a Director at BHW Solicitors in Leicester and regularly writes on commercial property issues. Beverley can be contacted on 0116 281 6221 or by email at email@example.com.