Land Registry Restrictions - what, where, when and how?

What are restrictions?

Put simply, Land Registry restrictions regulate the registration of certain transactions against a title registered at the Land Registry. Such transactions may include a transfer, lease and/or charge. Restrictions come in all shapes and sizes and may seek to prohibit the registration of all transactions or only specific types; they may apply indefinitely or be time limited and they may require a specified procedure to be followed to enable registration of the relevant transaction, or the consent of a specific person, for example.

Where do you find them?

Restrictions appear in the proprietorship register (section B) of the title register and the wording of the restriction itself will detail the terms of that restriction, for example, what transactions are caught by the restriction and how it can be complied with.

The wording of the restriction must be clear and to assist with this, there are over 40 standard form restrictions prescribed by the Land Registry, which should be used as the starting position when registering a new restriction. It is possible for non-standard form restrictions to be registered against the title, but it is usually more suitable for one of the standard restrictions to be tailored where possible to suit the circumstances.

There may be more than one restriction registered against the title, in which case the terms of each restriction will need to be carefully considered on any transaction relating to the property.

When are restrictions useful?

Restrictions are useful when it is desirable or necessary to restrict the power of a registered proprietor or other person (such as the proprietor of any registered charge) to deal with their interest in the property, or to ensure that something specific happens before a transaction relating to the property is registered at the Land Registry.

Commonly encountered restrictions are standard Form P restrictions which are registered by a mortgage lender against the title to a property they have charged, prohibiting the registration of any transaction relating to the property without their consent.

If the purpose of the restriction is to ensure compliance with a specific provision in a deed or document then a Form L restriction may be used, which requires a certificate to be provided by a specified person confirming those provisions have been complied with, to enable registration of the transaction. This may, for example, be used to ensure that a successor in title agrees to comply with positive covenants in a previous transfer of the property, which wouldn’t otherwise be enforceable against them (see Transfers of Part: Key Considerations).

Restrictions can also be used to protect the registered proprietors. For example, a Form A restriction prevents the registration of any transaction relating to the property by one registered proprietor where there are multiple registered proprietors holding the property as tenants in common. A Form LL restriction may also be registered against the title to help to protect against fraud: This requires a conveyancer to certify that they are satisfied that the person who executed the document submitted for registration is the same person as the registered proprietor.

How are restrictions complied with?

The wording of the restriction should specify whether a certificate or consent is required to comply with the restriction and signed by whom. In respect of restrictions which require the consent of a third party, it is important to note that restrictions regulate registration, so the consent requested from the relevant third party should be for the registration of the transaction, as well as consent to the transaction itself (where applicable).

The Land Registry have introduced a new form RXC to assist in providing a consent or certificate to ensure that they provide the Land Registry with all relevant information to comply with the restriction.

Unless time limited, restrictions apply indefinitely until cancelled or withdrawn and so whilst they can be an extremely useful tool to protect third parties or the registered proprietors themselves, they should be used with caution and the wording of any restriction should be carefully considered both before first being registered on the title and also on any transactions where the title to the  property is subject to a restriction.

We are increasingly encountering restrictions which prohibit the registration of any transaction without the consent of a third party, which generally aren’t acceptable to future buyers and lenders. Dealing with such restrictions may cause a delay to future transactions, for example, whilst the registered proprietor liaises with the relevant third party to seek to obtain their consent to registration of the transaction in question and/or to agree with the third party for the restriction to be withdrawn or modified. Accordingly it is advisable to seek proper legal advice at an early stage.

This blog provides general information only and does not constitute legal advice. For further advice on the above please contact Sophie Read or another member of the Feldon Dunsmore team on 01926 954 694.