Since October 2003 tenants have been obliged, as a tenant of a commercial or residential leasehold property, to formally register the lease with the Land Registry and it is in their best interests to do so. Given that most standard residential leases run for under three years, this applies mainly to commercial tenancies.
Registration involves the preparation of a lease-plan which will include a detailed and scaled floor plan of the property including any shared common parts which affect the property and the access to it. The demise of the property is then clearly outlined in red with shared areas highlighted in green.
Do not rely totally on these general guidelines which apply primarily to England and Wales. They are not definitive statements of the law. Before taking action or not, always do your own research and seek professional advice with the full facts of your case and all documents to hand.
The Land Registration Act 2002 widened the requirements to register interests in land in England and Wales. The lowering of the qualifying period from 21 years to 7 years for new, or existing leases if assigned or sublet, with 7 or more years to run, is one of the mechanisms used in the Act to trigger the need for registration.
There have been proposals to reduce the registration threshold to three years in the future, and the logical extension to that is in time all leases will need to be registered.
The Land Registry requires an accurate scaled plan of the premises. It may well be that unless the drawings presented are generated from recent CAD data and are held on a computer, they may be difficult to adapt. If so, the Land Registry will reject them causing delay the registration process.
If there are no existing plans then it will be necessary to employ the services of one of the companies specialising in preparing lease plans, or alternatively engaging a chartered surveyor to do this work.
However, most existing plans will easily form a good basis for generating more updated versions. The important point to remember is that any plan submitted must not only comply with the Land Registry’s stipulations, but must also reflect the details contained within the lease documentation regarding demise, rights of way and other easements.
When preparing property plans it can be a useful opportunity to consider details that might otherwise have been overlooked in the lease agreement and the requirements of the Land Register for lease plans.
If it is necessary to commission a lease plan from new dimensions taken on site, it will be of benefit to consider combining this with a survey of usable space. This will well prove useful in the future to provide figures for other purposes, such as valuation or space planning.
The parties to a lease may agree that the information contained therein may be of a sensitive nature which they would be reluctant to make available for public inspection at the Land Registry.
One solution to this is to make an application for the lease to be designated an “exempt information document” (EID). This step needs careful consideration, not least because the Land Registry has treats the lease and counterpart as two separate documents.
Any document submitted to the Land Registry since 13 October 2003 (when the Land Registration Act 2002 (2002 Act) came into force) is made available for public inspection. Parties wishing to keep certain information in the document confidential may apply for the document to be designated an EID. The grounds for a successful application include showing that the relevant provisions would be “prejudicial”. If the application for EID is successful, the public will generally only be able to obtain a copy of the edited document.
The EID application must be submitted with the registration application, otherwise a document immediately becomes available for public inspection and copying. An EID application cannot be made before an application.