Restrictions on the title to registered land

Restrictions on the title to registered land can cause undue problems when it comes to a sale. They are often registered to protect the interests of third parties who have the right to benefit (usually financially) from an agreement between them and either the registered proprietor or their predecessors in title.

Overage (clawback) arrangements

They are often used when overage (clawback) arrangements are agreed on the sale of land, where the seller is entitled to a percentage of the uplift in value of the land he is selling if it were to get planning permission.

The contract or transfer deed setting out the overage provisions will usually provide that, on a sale, the incoming buyer will enter into a deed of covenant with the beneficiary of the overage payment that they will abide by the overage agreement so that there is a direct, contractual relationship between the beneficiary and the new owner.

This obligation is normally protected by a restriction on the title, which states that no disposition is registrable without some form of written consent from the beneficiary.

Missing consent, certificate or beneficiary

What happens when that beneficiary cannot be found and no certificate or consent can be provided to the Land Registry?

This problem is occurring more and more frequently, and the Land Registry has been forced to take note. It is possible to apply to them for the restriction to be disapplied for the purposes of a transaction. Evidence that every effort has been made to locate the beneficiary needs to accompany the application and that the terms of the overage (or other) agreement that the restriction is protecting have been complied with.

This application would normally accompany the completed transfer when it is submitted to the Land Registry for registration.

What happens when a lender is involved who will not lend unless they are certain that the transfer to their mortgagor will be registered?

Following our recent discussions with Land Registry’s lawyers, they seem to be prepared to accept an application to disapply the restriction based on the evidence noted above for a specific transfer that is to take effect in the future. This should provide the lender with enough certainty to proceed.

Contact our Agriculture department today to receive expert legal advice about restrictions on titles for registered land.

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