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Law Commission recommends Land Registration Act reform

The Law Commission has published a series of recommendations for reforming the Land Registration Act, with a focus on making conveyancing “faster, easier and cheaper for everyone”.

The Land Registration act, first written in 1925 and updated in 2002, has, the Law Commission argues, fallen out of step with modern times. The march of technology and the changing face of the mortgage market have over time revealed unforeseen inefficacies, and under the framework’s current guise, fraud is not easily resolved.

This latter point is particularly contentious: The commission estimates that HM Land Registry has had to pay out nearly £60m in indemnity payments as a result of fraud in the last 10 years.

To this end, the proposed reforms, a result of consultation that ran from 31 March 2016 to 30 June of that same year, offer the following recommends to specifically deal with fraud:

  • Enable HM Land Registry to set the reasonable steps that conveyancers must undertake to verify the identity of their clients, to help route out fraudsters.
  • Impose a duty of care on conveyancers with respect to identity checks, based on the directions issued by HM Land Registry.
  • That if a conveyancer fails to meet his or her duty with respect to identity checks, to ensure that HM Land Registry has a right of recourse against the conveyancer to recover the amount HM Land Registry paid for the loss caused by the fraud. Conveyancers who follow the required steps won’t be responsible if fraud still happens.

Other significant changes include preventing the register from being changed once a mistake has been recorded for a decade, bringing mines and minerals onto the register, and creating a new power to introduce electronic conveyancing that does not require completion and registration to happen simultaneously in order to facilitate electronic conveyancing.

Law commissioner professor Nick Hopkins says: “For many, the land they own is the most valuable thing they will ever have, so it’s important that the registration system provides clarity over who owns what.

“The Land Registration Act was a huge leap forward in land ownership, but 15 years on it needs to be refreshed to adapt it to the modern world and make things as efficient as possible.”

The Law Society chair of conveyancing and land law committee adds: “Effective land registration is essential… in particular we welcome changes that would both improve fraud detection and highlight the threat of fraud.”

The report summary concludes by saying that “while our full Report is likely to be read primarily by specialist lawyers, the recommendations that it contains will benefit all those who use the land registration system, including homeowners, landlords, tenants and businesses.”

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