HM Land Registry Practice Guide 27 - The Leasehold Reform Legislation, November 2013
| Author | Piers Harrison/David Lonsdale |
| Pages | 271-300 |
A5 HM LAND REGISTRY PRACTICE GUIDE 27 – THE
LEASEHOLD REFORM LEGISLATION
Updated: November 2013
Update
This edition of the guide replaces the April 2013 edition. Appendix 2 has been amended to clarify our requirements for the registration of extended leases.
Scope of this guide
This guide gives advice on the land registration aspects of the exercise of rights under leasehold reform legislation. The guide is aimed at conveyancers and you should interpret references to ‘you’ accordingly. Land Registry staff will also use the guide and it contains some information specifically for their use.
1 Abbreviations and terms used
This guide deals with the relevant legislation contained in:
ƒ the Leasehold Reform Act 1967, as amended by the Commonhold and Leasehold Reform
Act 2002 (1967 Act) ƒ the Leasehold Reform, Housing and Urban Development Act 1993, as amended by the
Commonhold and Leasehold Reform Act 2002 (1993 Act) ƒ the Landlord and Tenant Act 1987 (1987 Act) ƒ the Land Registration Act 2002 (LRA 2002) ƒ the Land Registration Rules 2003 (LRR 2003) ƒ the Land Registration (Amendment) (No 2) Rules 2005.
In this guide:
ƒ ‘conveyancer’ means an authorised person within the meaning of s.18, Legal Services Act
2007 who is entitled to provide the conveyancing services referred to in paragraphs 5(1)(a) and (b) of Schedule 2 to that Act, or a person carrying out those activities in the course of their duties as a public officer. It also includes an individual or body who employs or has among their managers such an authorised person who will undertake or supervise those conveyancing activities (r.217A, LRR 2003) ƒ ‘CRE’ followed by a number means a Land Registry computerised register entry code ƒ ‘prescribed clauses lease’ means any lease, granted on or after 19 June 2006, which is required by r.58A, LRR 2003 to contain the prescribed clauses set out in Schedule 1A, LRR 2003
ƒ ‘RTM’ means right to manage.
2 Scope and further information
Note that the following are outside the scope of this guide.
1 Reproduced with kind permission of Land Registry. Please note that Land Registry practice guides are regularly updated, and that the Land Registry website should be consulted for the most up-to-date information (www.landregistry.gov.uk).
272 Leasehold Enfranchisement: Law & Practice
ƒ The amendments and provisions of the Commonhold and Leasehold Reform Act 2002 not in force at 1 May 2003.
ƒ The extension of leases by agreement – see Practice Guide 28 – Extension of leases. ƒ The enfranchisement of places of worship under the Places of Worship (Enfranchisement)
Act 1920. ƒ Deeds of enlargement under section 153 of the Law of Property Act 1925.
In relation to leasehold enfranchisement and extension of leases of houses and flats, the Department for Communities and Local Government and the Welsh Assembly Government publish booklets covering various aspects of the legislation and procedures for exercising rights.
Land Registry publishes a range of guides. Some are referred to in the relevant sections. The following contain information relevant to a variety of applications covered by this guide and should be consulted as necessary.
ƒ Practice Guide 19 – Notices, restrictions and the protection of third party interests in the register gives more detailed information on applications for the entry and removal of these entries.
ƒ Practice Guide 46 – Land Registry forms gives details of the forms that must be used for various applications.
ƒ Practice Guide 64 – Prescribed clauses leases gives more detailed information about prescribed clauses leases.
These can be obtained free of charge from Customer Support (see Contact details), or you can download them from our website.
3 Fees
Calculate fees in accordance with the current Land Registration Fee Order.
4 Preliminaries
4.1 Search of the index map
A tenant interested in acquiring the freehold reversion of their property or extending their lease should discover at the outset whether the title to the reversionary interest, or interests, is registered.
Do this by applying for an official search of the index map. The procedure is described in Practice Guide 10 – Official searches of the index map.
It is inadvisable to apply for an official copy of the register without knowing the title number, as described in Practice Guide 11 – Inspection and applications for official copies, as this could result in an unwanted official copy being supplied.
The lessor’s title number, if shown on the register of the applicant’s title, is not always up to date. That title may of course be inspected – see section 4.2 Inspection of register of superior registered titles but check the schedule of notices of leases carefully to ensure that it includes the applicant’s lease. It is not enough to check the property register description as that too may be out of date if land has been removed from the title.
Land Registry portal customers may be able to obtain all or some of the relevant title numbers by means of the property or postal description, but this is not a substitute for an official search of the index map.
4.2 Inspection of register of superior registered titles
Anyone may apply for an official copy of the entries on the register, the title plan and any documents referred to in the register that are kept by the registrar. These facilities are described in Practice Guide 11 – Inspection and applications for official copies.
5 Houses: enfranchisement and extension of leases under the Leasehold Reform Act 1967
5.1 Generally
The 1967 Act confers on a tenant of a house for the last two years under a long tenancy at a low rent the right to either:
ƒ acquire, on enfranchisement, the freehold, or ƒ obtain an extended lease of the house and premises expiring 50 years after the date on which the existing term is due to expire – s.1AA, 1967 Act (as amended).
There is an additional right to enfranchisement in relation to tenancies that fail the low rent test. ‘House’ does not include flats in a horizontally divided building and ‘premises’ includes any garage, outhouse, garden, yard and appurtenances, let and occupied, and used for the purpose of the house
(s.2(1) to (3), 1967 Act). ‘Long tenancy’ means any tenancy originally granted for a term exceeding 21 years whether or not it is determinable by notice or re-entry (s.3, 1967 Act (as amended)).
Business tenants of a house must meet a residency requirement and hold under a tenancy originally granted for 35 years or more.
The personal representatives of a deceased tenant now have limited rights of enfranchisement.
There are further conditions and exceptions that apply in particular circumstances.
Even if the original lease included the mines and minerals they will not be included in the enfranchisement if the landlord requires them to be excepted and provision is made for support of the property (s.2(6), 1967 Act). A note of any exception will be entered in the register.
There are a variety of statutory provisions that apply to enfranchisement under the 1967 Act. If the deed or the application does not contain a clear statement, such as that set out below, the registrar will be unable to recognise it. There are a large number of applications to register the purchase of reversions and new leases entirely unconnected with the 1967 Act. If the applicant wishes to ensure that the application is completed quickly and accurately without requisitions:
ƒ in the case of transfers, conveyances or other leases a statement along the following lines should appear prominently in the deed:
‘This [transfer] [conveyance] [lease] is made under the provisions of the Leasehold Reform Act 1967.’, or
ƒ in the case of a prescribed clauses lease, clause LR5.2 should refer to the 1967 Act.
The low-rent test in respect of the right to enfranchise (but not the right to a lease extension) does not apply to long leases in England granted on or after 7 September 2009 unless arising from an agreement for lease made prior to 7 September 2009
274 Leasehold Enfranchisement: Law & Practice
5.2 Protection of claims by notice
When a tenant has given notice of their desire to have the freehold or to have an extended lease, that notice may be protected as if it were an estate contract. If the reversionary title(s) affected are registered, this may be done by application for the entry of a notice under s.34, LRA 2002. The tenant’s right cannot constitute an interest that overrides within Schedules 1 or 3, LRA 2002.
An application for an agreed notice should be made in form AN1 together with a certified copy of the notice (which will be filed at Land Registry). We will make the following entry in the charges register:
‘Notice entered pursuant to section 5(5) of the Leasehold Reform Act 1967 that a notice dated _______ has been served under that Act by _______ of _______
NOTE: Copy filed.’
(There is no CRE for this entry.)
Alternatively, application may be made for a unilateral notice by applying in form UN1.
If any of the reversionary titles affected are unregistered, the notice may be protected by a class C
(iv) entry at the Land Charges Department.
5.3 Enfranchisement
On completion of the acquisition of the freehold title, application should be made in the usual way for registration of the transfer, if the title is already registered, or for the first registration of the land, if it is not.
If the tenant’s or any superior leasehold interest is to be merged in the freehold, a request for merger should be included in the application, as described in Appendix 1 Merger of leases on acquisition of the freehold.
Where a deed of substituted security transferring a legal charge on a merged lease to the freehold is lodged, the charge will normally be registered against the freehold title. If the charge is...
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