Landlords and tenants may or may not be aware that the Land Registration Act 2002, together with the Land Registration Rules 2003, changed the categories of leases that are either compulsorily or voluntarily registrable.
Not every leasehold estate needs to be registered with its own title, but the Land Registration Act 2002 substantially extended the scope of title registration, than was previously the case.
Since October 2003 landlords and tenants have been obliged to register. As a tenant of a commercial or residential leasehold property, to formally register the lease with the Land Registry is in your best interests. 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 that all leases will need to be registered, but so far nothing has happened on that.
You must file information on the lease with HM Land Registry on its land register. Registering a lease with the land registry gives your lease the formal legal status of a legal "estate in land". You will need to provide information such as: the date the lease is signed, the lease term, the rent due and the parties to the lease.
For some lease, registration is compulsory, in other cases this is voluntary. Most commercial leases for over 7 years will fall into the compulsory registration category. At other times, registration is voluntary.
Most commercial leases for over seven years need to be registered. Where it is for less than this, you are unlikely to need to register. However, there are times when this does not apply. For example, where the lease was created before registration was compulsory. Also, If you have already registered a lease and then you transfer it, you will need to register it again.
If the lease is before 2006, but still has seven years left, tenants can voluntarily decide to register it. However, there are some leases for under seven years that need to be registered.
When registering with the Land Registry the original lease, signed by landlord and tenant, must be presented. The registration must be within two months of completion of the lease agreement - If the tenant does not do this the legal title will fall to the person who assigned. Late registration may not be possible, or if it is, this may involve drawing up and signing a new lease.
Lease registration protect a tenant's title. If then the ownership of the property changes, the new owner is obliged to uphold the lease agreement, strengthening a tenant's level of security.
Lease Plans
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 with 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 recent 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 the other easements listed above.
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 could well prove useful in the future to provide figures for other purposes, such as market valuation, business rates valuation or space planning.
Sensitive Information
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.
This step needs careful consideration, not least because the Land Registry 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 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 Exempt Information Document (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.
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