Ex Chief Land Registrar: Why privatising the Land Registry is wrong

Sun Jul 10 13:14:09 BST 2016

Why privatising the Land Registry is wrong

http://tlio.org.uk/2415-2/
https://weownit.org.uk/blog/why-privatising-land-registry-wrong
Monday, March 28, 2016 - 12:08
Photo of land certificate
Photo of land certificate
Emacs!

Former Chief Land Registrar John Manthorpe 
explains why land registration needs to stay public.

The Governments Annual Spending Review, 
announced by the Chancellor of the Exchequer on 
25th November 2015, included a proposal to 
consult on options to move operations of the 
Land Registry to the private sector from 2017.

The Government published its consultation 
document on 24th March. Less than two years ago a 
similar and wide ranging government consultation 
was conducted by the Department of Business, 
Innovation and Skills (BIS). This led to an 
overwhelming rejection of such a proposal from a 
wide range of stakeholders. Consultees made clear 
that the Land Registry must remain as a public 
department of Government. Despite this informed 
response the Government are now to renew the 
consultation  presumably disregarding the clear 
views expressed last year from those who use and 
depend on the Land Registrys services.

Constitutional position in Government - land 
registration an act of sovereignty

Land registration is the exercise by government 
under statute of the impartial control and 
development of an adjudicatory system which 
enables the ready creation, extinguishment and 
exchange of private interests in land under the 
law. It is the positive choice of government to 
provide and create certainty and security for the 
citizen, for business, and for public authorities 
and financial institutions. By establishing trust 
and confidence in title it promotes private 
ownership, secured lending and economic 
development. It does this by reserving to itself, 
on behalf of the Crown and under the law, the 
power to grant, and to rectify, title and to 
maintain a single authoritative and guaranteed 
register of legal interests in land. Where land 
is registered the register forms the only title to land recognized by law.

The act of registration has been described as an 
act of sovereignty inasmuch as it is in 
exercise of its sovereign power that the State 
declares title after examination to be absolute 
and makes it valid against the world.

The Registrys independence from commercial or 
specialised interests is essential to the trust 
and reliance placed on its activities. It would 
not be possible for actual or perceived 
impartiality to be maintained or public 
confidence sustained, if a private corporation or 
institution (particularly if such a body had 
conveyancing, financial or land holding 
functions) were to assume responsibility for the 
granting of legal estates in land and the maintenance of a public register

The new consultation can be said to fall into a 
continuous series of Royal Commissions, Inquiries 
and Reviews that have been conducted over three 
centuries. This includes the land registration 
statutes enacted by Parliament since 1862 (most 
recently the Land Registration Act of 2002) but 
also specific government sponsored reviews of the 
Civil Service which have included reviews of the 
organisation and financing of HM Land Registry. 
All of these reasserted unequivocally that the 
Land Registry must remain as a public department of Government.

Background

The Land Registry has been a public department of 
Government since its establishment 153 years ago 
in 1862. For 149 years it was a legal department 
of the Ministry of Justice (and its predecessor 
departments). The Chief Land Registrar, as Head 
of the Department and full Accounting Officer, 
was directly accountable to the Lord Chancellor. 
In 2012 it transferred to (BIS) with the Chief 
Land Registrar now accountable to the Minister at BIS.

What the Land Registry does

In understanding why successive administrations 
have been so clear about the Land Registrys 
position as a public department of Government it 
is helpful to restate what the Registry actually 
does - as set out in the following paragraphs.

There is, every day, a massive movement across 
the country in interests in land.  These can 
arise from sale and purchase, inheritance, 
mortgage, discharges, leases, restrictions, 
matrimonial and family matters.  In addition 
bankruptcies, repossessions, the protection of 
third party rights and Orders of the Court 
relating to land rights require protection by 
registration. The Registry handles all house 
sales activated by Estate Agents, all sales and 
purchases handled by conveyancers and every 
secured loan generated by Banks, Building 
Societies and other lenders.  Because it is 
constantly maintained, and records the priority 
of all pending land transactions in England and 
Wales, the land register stands to give 
authoritative and guaranteed notice to all.  This 
includes those who deal with land occasionally 
(e.g. purchasers) and those who deal regularly 
(e.g. lending institutions). It is the 
maintenance of the national land register which 
enables vendors to demonstrate proof of 
ownership, and purchasers and lenders to carry 
through their intentions to contract and to completion safely and simply.

None of this massive and daily movement of 
guaranteed interests in land, between citizens, 
business, public bodies and financial 
institutions, on which the market economy 
depends, could function without an impartial and 
trusted system of land registration

The input to this dynamic land register is the 
constant flow of agreements, contracts, deeds and 
documents - freely made between people, banks, 
institutions, local and central government and 
the Crown  in any combination and at any time. 
Decisions are made, contracts are agreed, 
registration is effected.  The ever changing 
legal relationship of land and people is 
constantly and instantly reflected in a public 
place. What would otherwise be hidden is 
synthesized into a common, guaranteed and public 
record open to all. Security, confidence, 
transparency, choice - all become possible. 
Publicly registered land rights are good against 
the world. Individually they protect the 
interests of the registered owner; together they 
constitute the underwritten record of the 
collective wealth of the country. Around the 
world a trusted system of land registration is 
central to social stability and economic success

The secured credit activity of Banks, Building 
Societies and other financial institutions depend 
on the guarantees provided by the Land Registry. 
These guarantees and reserved priorities are 
essential before any decision can be made to 
generate a secured loan or to go to contract. All 
lenders secure their power of sale in the event 
of default by substantive registration of their mortgages.

On every transaction the Registry is responsible, 
on registration, for the validation of 
documentation and for ensuring that conveyances, 
transfers, mortgages etc, are properly executed 
and legally effective. The Registry must verify 
that an owner has the power to sell and that the 
transaction is made having regard to any prior 
claims by third parties affecting the property. 
This constant curative process ensures, before 
the legal estate passes, that the interests of 
all parties affected by the transaction are 
properly considered and that any necessary 
Notices have been served on those entitled to 
receive them.  Quite apart from ensuring that any 
legitimate interests are protected the Registry 
is able to resolve potential problems, disputes 
or ambiguities at an early stage so avoiding, as 
far as possible, future dispute and litigation.

It is this which is the core and dominant work of 
the Land Registry. It is this which ensures the 
continuing existence of an up to date, trusted, 
register of legal interests in land. It is this 
central task of the Registry that employs the 
majority of its staff, many with highly developed 
professional and specialist skills. It is this 
that provides the essential and statutory 
machinery that enables a massive, and continual, 
movement in land interests to take place with 
confidence. Land Registry and its specialist staff

Maintaining the land register in the fluctuating 
and sometimes complex, competitive property 
market requires the exercise of sound risk taking 
judgement by the Registrys staff drawing on long 
standing practical experience and the 
interpretation of primary and subordinate 
legislation.  Their decisions have to be visibly 
impartial and free from conflicts of interest, 
dealing as they do with the sometime competing 
and contrary interests of individuals, 
neighbours, financial institutions, private companies and public bodies.

Self financing  no cost to the exchequer

The Land Registry is self-financing operating at 
no cost to the public purse. It has an excellent 
record of holding and reducing its costs, and its 
fees to customers. It pays an annual dividend to 
the Exchequer. It is highly regarded by those who 
depend on it as a provider of trusted, prompt services.

Land registration is not an activity that any 
responsible Government can transfer to the private sector.

The Land Registry is a national treasure - 
<http://tlio.org.uk/wp-admin/http://weownit.org.uk/take-action/dont-sell-our-national-treasures>sign 
the petition to keep it that way.
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