Minding your manors

The term “manorial rights” may sound like a feud to be battled over in Game of Thrones, but in reality it refers to ancient rights over land and minerals that can have substantial implications for modern developments. Recent changes in the law requiring registration of the rights have brought them to the attention of the media and the public.

Manorial rights are historic rights of former lords of the manor that were preserved then the original manor was broken up years ago. They include rights over mines and minerals; sporting rights; and the right to hold fairs/markets. Many people may have no idea that their property is affected.

Although no new manorial rights have been created since 1925, a vast number still exist. It is therefore critical for any developer to understand whether target land is subject to any rights.

Developers need to excavate to install foundations, basements and subterranean utilities. If this disturbs a mineral seam owned by the lord rather than the property owner, the lord could claim trespass or damages, or apply for an injunction to stop the works. Although there are counter-arguments that surface works are permitted, running them is time-consuming and expensive, and will delay development.

Similarly, if the developer wishes to sell, any known rights will need to be disclosed, which may deter purchasers. The issue is particularly topical in areas such as Cornwall, where deposits of indium are now being mined for LCD displays.

As a general rule, the lord will not have an immediate right to excavate, but must negotiate with the property owner, and any proposed mining will still require planning consent. However, it can be a most unwelcome surprise to discover that you do not own valuable minerals beneath your own property.

The media has tried to make much of this in respect of fracking. In fact, ownership of rights to oil and gas is much more complicated and involves the Crown or Coal Authority as well as the lord and the property owner. Specialist advice should be sought for properties in areas where fracking may take place.

The Land Registry received 90,000 applications in 18 months, compared to 3,200 in the previous decade

Historically, there was no requirement to register the rights. Consequently, many people were oblivious to them. In 2002, the government decided to create transparency over third party rights. The Land Registration Act 2002 set a “use it or lose it” deadline of 12 October 2013 for registering manorial rights.

This prompted a flurry of applications by large estate owners like the Duchy of Cornwall and the Church. The Land Registry received 90,000 applications in 18 months, compared to 3,200 in the previous decade. Rather than transparency, the law created worry for people receiving notices they did not understand.

Owners of manorial rights had until 12 October 2013 to register cautions against first registration for unregistered land, or notices for registered land. If they have not done so, and the land is sold without this being done, it will become free of the rights. However, if the land has not changed hands since 12 October 2013, an application can still be made.

For this reason, while the rush to beat the deadline brought the issue to the attention of the media and the Justice Committee, many new applications could still be submitted.

One difficulty with manorial rights is that the burden of proof does not lie with the lord when they apply to register them, but on the owner of the property when they challenge them. Providing proof can be time-consuming and expensive, or even impossible. Meanwhile nebulous rights will deter purchasers.

The developer should carry out research before committing resources to the development. This could include Land Registry index map and franchises and manors searches; brine or coal holdings searches; or an enquiry agent’s report. Legal advice should be sought on the title to the property.

Title indemnity insurance can usually be purchased to protect against claims during construction and the subsequent purchaser. This will not remove the issue, but it can cover the majority of the costs.

Finally, if the developer is concerned, it could seek an indemnity from the seller. However, this will only be useful if the seller is a strong covenant. It is therefore less likely to be useful than research and insurance.

There has been much in the press about the impact on house prices, and fears that home owners may not be able to re-mortgage. In practice, we have not seen that this has been the case. Nonetheless, given the rapid changes in technology and mining for different materials, the prudent developer will be wary and will take precautions.

Jill Carey is senior associate in the real estate disputes team and Luke Callaghan is senior associate in the private client team at international law firm Taylor Wessing