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Land Registry Changes Now Implemented For Restrictions On Leasehold Titles

Thursday, 18 December 2014

Leasehold landlords and management companies should note the recent changes to the Land Registry’s approach to restrictions on leasehold titles. Leaseholders looking to cancel restrictions placed on the title by dissolved landlords or former managements companies can also benefit from the simplifications brought in with these changes.

In Practice Guide 19A, that came into effect in October of 2014, the Land Registry made a number of changes in regards to its practice for restrictions on leasehold properties. The guide introduced changes that will have the notable implication of simplifying and streamlining the process at the Land Registry for placing restrictions on registered leasehold titles.

Change in lessor or management company

In the situation where the lessor or management company has changed, a RX3 form can be submitted to cancel a restriction. The new lessor or the holder of the leasehold title can make this application. A new form of restriction can be formed in a separate agreement between the two parties through the RX1 form that will be submitted to the Registry. In the application there needs to be submitted a conveyancer’s certificate showing that the old covenant is no longer required.

In the case of a management company, which may have restrictions in its name, the practice guide stipulates that restrictions will not pass to the new company and as such will become meaningless. In such situations the landlord or the tenant may apply for the cancellation of the restriction to the Registry.

If landlord is a dissolved company

Under such circumstances there needs to be evidence of dissolution provided in the application to cancel the restriction. The Land Registry will seek to cancel the restriction as opposed to disapplying the restriction. This is unless there is a chance that the company may be restored. The Registry will cancel restrictions and covenants on the lease if the landlord is a dissolved company. If the restriction is cancelled but the company is restored, then an application has to be made for the restriction to be entered into by the restored company.

Implications

The key implication of Practice Guide 19A is that the process for cancellation or disapplication of restrictions on leasehold properties has been simplified. This ensures that there will be fewer problems for leasehold titles. This will particularly be the case when there is a requirement to get consent from a particular lessor or management company but they have been dissolved or there has been a change.

In addition, the new practice changes will mean that lessors will consider all the relevant information when applying for restrictions. Consequently, if the lessor changes there will be fewer or no difficulties with the restriction.

Lastly, the Land Registry itself argues that the new practice changes will “reduce unnecessary requisitions” when there are changes in the lessor or management company. Furthermore, there will be reduced delays for customers using the Land Registry.

Comment

The notable impact of introducing the practice changes is that the process of cancellation and disapplication of restrictions on registered leasehold titles is much simpler, and consequently there will be fewer delays and difficulties with the Land Registry.

For specialist advice regarding property management, leaseholds or other property issues contact Jane Canham today by email JCanham@rollingsons.co.uk or telephone 0207 611 4848.

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