Leasehold estates in land
226.Paragraph 1 provides that a leasehold estate granted for a term not exceeding seven years from the date of grant overrides registered dispositions, subject to seven exceptions. The first three exceptions are the same as those that apply on first registration. The other four apply in respect of a lease granted by the proprietor of a registered estate or charge where that grant constitutes a registrable disposition required to be completed by registration. They are:
a lease which is granted to take effect in possession more than three months into the future;
a discontinuous lease (commonly thought of as a time-share where the lease grants exclusive possession for periods which are not consecutive);
a right to buy lease under Part 5 of the Housing Act 1985; and
a lease granted by a private sector landlord to a person who was formerly a secured tenant and has a preserved right to buy.
Interests of persons in Actual occupation
227.Paragraph 2 provides that, an interest belonging to a person in actual occupation of land overrides registered dispositions, subject to four exceptions. The first exception is the same as the exception that applies on first registration. That is, where the interest arises under a settlement under the Settled Land Act 1925. The second exception adopts one of the principles under the current law. If the person with the interest is asked before the disposition occurs and he or she fails to disclose the interest when that could reasonably have been expected, then overriding status is lost. A new exception relates to the rights of a person whose occupation would not have been obvious on a reasonably careful inspection of the land at the time of the disposition and which the person acquiring the interest did not know about at that time. To fail the test as formulated in the Act, it is the occupation that has to be obvious not the interest. Lastly, there is excepted from overriding status a leasehold estate granted to take effect in possession more than three months from the date of grant but which has not taken effect in possession at the time of the disposition. This exception will not often apply and will only occur when the lease in question has not been registered and the person to whom the lease was granted was for some other reason already in occupation.
