Registration Gap

In this article, the Thompson Smith and Puxon (TSP) team discusses the growing implications of the registration gap. Most purchasers of a property expect that on completion day, when they pay for their new property and take occupation, the property then legally belongs to them. This is not the case when purchasing property that is already registered at the Land Registry as the purchaser does not become the legal owner until their purchase is registered.

The Land Registry have always imposed strict time limits for purchasers to register but currently have a backlog of anything but the most simple of applications and the “registration gap” is becoming more of an issue.

The registration gap causes problems for purchasers wanting to serve notices on tenants shortly after purchase such as;

• For agricultural property -  notice to quit on a farming tenant
• For Commercial property – statutory notices relating to protected tenancy renewals under the Landlord and Tenant Act 1954, and break notices

In these cases the notice has to be given by the seller if registration has not been completed and the buyer is not yet the “registered proprietor” on the Land Registry records.

The registration gap can cause other problems. In the recent case of Baker v Craggs, the High Court held that a right of way had been validly but unintentionally granted to a subsequent purchaser due to a failure by a previous purchaser to register their ownership in time.

The seller sold land and buildings forming part of their farm to Mr Craggs but no right of way was reserved for the benefit of the land they still owned. Shortly after completing that sale they sold an adjoining barn to Mr and Mrs Baker. Due to an error in the conveyance plan and a delay in correcting it, the registration of Mr Craggs’ purchase was delayed and eventually the Land Registry cancelled his application in accordance with their usual practice. This meant the second sale, to the Bakers, was registered first with the benefit of a right of way through the yard which adversely affected the first property sold to Mr Cragg.  The right was granted and recorded on the title to both properties even though the Bakers and their lawyer knew the details of the first sale.

It is always important for conveyance plans to be accurate and although usually prepared by the seller the responsibility for ensuring their accuracy sits with the buyer and their surveyor. The buyer must check that any plans are Land Registry compliant, and they should take the plans to the property and check them “on the ground” against the property they are buying.

If a buyer may need to serve a notice or if buying one of several lots the buyer must be aware of the time it can take to register them as the legal owner and where necessary they should incorporate relevant provisions in the contract and transfer documents.

Kerry advises on all Commercial Property matters that concern businesses, farmers and landowners. She can be contacted on 01206 217017 or by email at kerry.addison@tsplegal.com