flegg

The decision of the House of Lords in City of London Building Society v Flegg marks a key stage in how the balance is drawn between occupiers and creditors in priority disputes; the seeds of which were originally planted in the Law of Property Act 1925. It posed a serious challenge to the conventional understanding of overreaching and the machinery of conveyancing.Ref ? The importance of social context in Land Law and the reforms which have occurred as a result cannot be ignored or their significance understated. In particular is the impact of the shift in the twentieth century to ‘emergence of a property owning, particularly a real-property-mortgaged-to-a-building-society-owning-democracy’. Such growth could hardly have been anticipated when the LPA 1925 was drafted and subsequently became statute. As a consequence of this growth the doctrine of the resulting trust and to a greater extent, the constructive trust became a robust mechanism by which non legal owners could establish beneficial interests in the home. Swadling comments on the ‘complete change in attitude’ between the emphasis on security of ownership of the home in Boland and the free marketability of land which we see in Flegg. He states ‘one wonders what has happened to the demands of social justice which justified their Lordships decision in 1980 (in Boland) over such a brief passage of time’. Did the House of Lords fail to resolve the very practical issue with which they were presented that had evolved over the passage of social change since the drafting of the 1925 legislation? A primary aim of the LPA 1925 was to effect a ‘compromise between on the one hand the interests of the public in securing that land in trust is freely marketable and on the othe... ... middle of paper ... ...o the purchaser of unregistered land should the disposition be ultra vires, assuming that there is no actual notice of such then overreaching can take place. This has now evolved into their being no requirement for absence of notice. In addition Section 70 (1) (g) of the LRA 1925 protected as an overriding interest the property rights of those in actual occupation of the land as described by Lord Denning MR: Fundamentally its object is to protect a person in actual occupation of land from having his rights lost in the welter of registration. He can stay there and do nothing. Yet he will be protected. No one can buy the land over his head and thereby take away or diminish his rights. It is up to every purchaser before he buys to make inquiry on the premises. If he fails to do so, it is at his own risk. He must take subject to whatever rights the occupier may have.