Local Land Charges Act 1975

10 Compensation for non-registration or defective official search certificate

(1) Failure to register a local land charge in the appropriate local land charges register shall not affect the enforceability of the charge but where a person has purchased any land affected by a local land charge, then—

(a) in a case where a material personal search of the appropriate local land charges register was made in respect of the land in question before the relevant time, if at the time of the search the charge was in existence but not registered in that register; or

(b) in a case where a material official search of the appropriate local land charges register was made in respect of the land in question before the relevant time, if the charge was in existence at the time of the search but (whether registered or not) was not shown by the official search certificate as registered in that register,

the purchaser shall (subject to section 11(1) below) be entitled to compensation for any loss suffered by him by reason that the charge was not registered in the appropriate local land charges register or, as the case may be, was not shown by the official search certificate as registered in that register.

(2) At any time when rules made under this Act make provision for local land charges registers to be divided into parts then, for the purposes of subsection (1) above—

(a) a search (whether personal or official) of a part or parts only of any such register shall not constitute a search of that register in relation to any local land charge registrable in a part of the register not searched; and

(b) a charge shall not be taken to be registered in the appropriate local land charges register unless registered in the appropriate part of the register..

(3) For the purposes of this section—

(a) a person purchases land where, for valuable consideration, he acquires any interest in land or the proceeds of sale of land, and this includes cases where he acquires as lessee or mortgagee and shall be treated as including cases where an interest is conveyed or assigned at his direction to another person;

(b) the relevant time—

(i) where the acquisition of the interest in question was preceded by a contract for its acquisition, other than a qualified liability contract, is the time when that contract was made;

(ii) in any other case, is the time when the purchaser acquired the interest in question or, if he acquired it under a disposition which took effect only when registered under the [1925 c. 21.] Land Registration Act 1925, the time when that disposition was made;

and for the purposes of sub-paragraph (i) above, a qualified liability contract is a contract containing a term the effect of which is to make the liability of the purchaser dependent upon, or avoidable by reference to, the outcome of a search for local land charges affecting the land to be purchased.

(c) a personal search is material if, but only if—

(i) it is made after the commencement of this Act, and

(ii) it is made by or on behalf of the purchaser or, before the relevant time, the purchaser or his agent has knowledge of the result of it;

(d) an official search is material if, but only if—

(i) it is made after the commencement of this Act, and

(ii) it is requisitioned by or on behalf of the purchaser or, before the relevant time, the purchaser or his agent has knowledge of the contents of the official search certificate.

(4) Any compensation for loss under this section shall be paid by the registering authority in whose area the land affected is situated; and where the purchaser has incurred expenditure for the purpose of obtaining compensation under this section, the amount of the compensation shall include the amount of the expenditure reasonably incurred by him for that purpose (so far as that expenditure would not otherwise fall to be treated as loss for which he is entitled to compensation under this section).

(5) Where any compensation for loss under this section is paid by a registering authority in respect of a local land charge as respects which they are not the originating authority, then, unless an application for registration of the charge was made to the registering authority by the originating authority in time for it to be practicable for the registering authority to avoid incurring liability to pay that compensation, an amount equal thereto shall be recoverable from the originating authority by the registering authority.

(6) Where any compensation for loss under this section is paid by a registering authority, no part of the amount paid, or of any corresponding amount paid to that authority by the originating authority under subsection (5) above, shall be recoverable by the registering authority or the originating authority from any other person except as provided by subsection (5) above or under a policy of insurance or on grounds of fraud.

(7) In the case of an action to recover compensation under this section the cause of action shall be deemed for the purposes of the [1939 c. 21.] Limitation Act 1939 to accrue at the time when the local land charge comes to the notice of the purchaser; and for the purposes of this subsection the question when the charge came to his notice shall be determined without regard to the provisions of section 198 of the [1925 c. 20.] Law of Property Act 1925 (under which registration under certain enactments is deemed to constitute actual notice).

(8) Where the amount claimed by way of compensation under this section does not exceed the limit for the time being imposed on the jurisdiction of a county court by paragraph (b) of section 40(1) of the [1959 c. 22.] County Courts Act 1959 (money recoverable by statute), proceedings for the recovery of such compensation may be begun in the county court.

(9) If in any proceedings for the recovery of compensation under this section the court dismisses a claim to compensation, it shall not order the purchaser to pay the registering authority's costs unless it considers that it was unreasonable for the purchaser to commence the proceedings.