Leases: determination (PG26)

1. Introduction

There are various ways in which a leasehold estate in land may come to an end and affect either a registered title or a title that is the subject of first registration. For example:

• merger of lease – when the leasehold estate is registered and the reversionary estate is either registered, or is the subject of an application for first registration
• cancellation of notice of an unregistered lease from a registered reversionary title
• determination of a registered lease into a reversionary estate, which is neither registered nor the subject of an application for first registration

More specifically the lease itself can determine on:

• merger
• surrender by deed
• surrender by operation of law
• disclaimer
• effluxion of time
• forfeiture
• an order of the court
• determination by notice
• frustration
• enlargement

2. How to apply the LaLand Registration Act 2002nd LaLand Registration Rules 2003nd make substantive applications to HM Land Registry 2.1 Points to consider on all applications

You will need to consider and take any appropriate action on the following points.

Original documents are normally required only if your application is a first registration.

If your application is not a first registration, you will be able to certify any scanned documents by confirming them to be a true copy of the original using the certification statements available when uploading deeds or documents to our Digital Services.

However, any original copies of death certificates or grants of probate will continue to be returned.

2.1.1 Documents required

In addition to any documents that may be specified in the sections relating to the method by which the lease has been determined, the following documents will be required, depending on whether the leasehold estate and/or the reversionary estate are registered.

2.1.1.1 Both interests registered

To close a registered leasehold title on determination and cancel the notice of that lease in the registered reversionary title(s), you should apply to ‘update the existing title(s)’ and include the appropriate transaction depending upon the method of determination.

a) Your application should be accompanied by a certified copy of the original lease and/or counterpart lease, if in your possession, or a statement to account for its absence.

b) You should include evidence to account for any incumbrances affecting the determined leasehold title – see Incumbrances affecting the determined lease.

Note 1: This will also apply if the reversionary estate is the subject of an application for first registration.

Note 2: If an application is not to be made against the reversionary title we will remove the notice of the lease to bring the register up to date, but we will not issue an official copy of the register for that title.

Note 3: If the determining lease is a concurrent lease you will need to investigate which leases it is concurrent with and refer to those titles in the application.

2.1.1.2 Cancellation of notice of an unregistered lease – reversionary estate registered

A registered reversionary title may be subject to a lease, although this lease is not itself substantively registered. The lease will be noted either in the charges register or in a schedule of notice of leases in the registered reversionary title. You may apply for cancellation of the noted lease if you can lodge appropriate documentary evidence to prove that the unregistered leasehold estate has determined. To apply, select the ‘cancellation of notice (not unilateral)’ and upload:

a) form CN1 appropriately completed in panels 9 and 10 – see rule 87(1) of the Land Registration Rules 2003 (unless the lease has determined on enlargement – see Determination: on enlargement)

Note: If the lease is noted in the registered reversionary title by way of a unilateral notice (rather than by way of an agreed notice or a notice entered by the registrar in the course of an application for first registration), an application either to cancel or remove the unilateral notice must be made by selecting ‘cancellation of a unilateral notice’ or ‘withdrawal of a unilateral notice’ transaction as appropriate – see practice guide 19: notices, restrictions and protection of third party interests – Cancelling and removing notices from the register for further information).

b) documents of title to the determining leasehold estate, listed on a form DL (in duplicate), showing satisfactory evidence of title to the unregistered lease similar to that required on first registration – see rule 87(1) of the Land Registration Rules 2003. Where the application is made by the landlord, satisfactory evidence of title may be shown by the counterpart lease and copies of any assignments

Note: This will also apply if the reversionary estate is the subject of an application for first registration.

c) a certified copy of the original lease and/or counterpart lease, if in your possession, or a statement to account for its absence

d) a current Land Charges searches against the name(s) of the owner(s) of the leasehold estate being determined and account for any entries revealed

2.1.1.3 Closure of registered leasehold title – reversionary estate unregistered

A registered leasehold title may determine into an unregistered reversionary estate in the land, without triggering the first registration of the reversionary estate. To close the registered leasehold title, select the appropriate lease closure transaction and upload:

a) a certified copy of the original lease and/or counterpart lease, if in your possession, or account for its absence

b) an examined abstract of the landlord’s title

If that lease is being determined on enlargement, see Determination: on enlargement.

2.1.2 Incumbrances affecting the determined lease

You will need to consider any incumbrances affecting the leasehold estate being determined and take any necessary action in respect of them.

If a lease is determined by notice, forfeiture or frustration, all incumbrances will normally end automatically with the determination of the lease and can therefore be ignored.

If a lease is determined by effluxion of time, all incumbrances other than any inferior leases will normally end automatically and can be ignored. An inferior lease will continue to subsist if its term is extended by the Landlord and Tenant Act 1954 or Local Government Housing Act 1989.

If a lease is being enlarged, any incumbrances affecting the leasehold estate will normally be carried forward to the new registered freehold title.

If a lease is being determined by merger, surrender or disclaimer, all incumbrances affecting the leasehold estate which is being determined must be dealt with as appropriate:

• in the case of incumbrances affecting a registered leasehold title, such as registered or noted charges, restrictions and cautions, these should be either discharged, withdrawn or cancelled, and the appropriate documentation uploaded
• similarly, if the leasehold estate is unregistered, any incumbrances, such as a legal charge, which would prevent determination must be either discharged, withdrawn or cancelled, and the appropriate documentation uploaded
• where there is a Form A restriction on a registered leasehold title and/or on a registered reversionary title, it will not be possible to determine the registered leasehold title by merger unless you are able to lodge satisfactory evidence that the applicant holds both estates upon the same trusts. Similarly, if the leasehold estate and/or the reversionary estate are unregistered and there is an indication of a trust, you must upload satisfactory evidence that the applicant holds both estates upon the same trusts
• where there is a Form A restriction in the registered leasehold title and the lease is being determined by surrender, the surrender is a ‘disposition’ for the purposes of the restriction. If capital money arises from a premium being paid by the landlord to the tenant and the surrender is by a sole registered proprietor, the disposition is caught by the terms of the restriction and the registered leasehold title cannot be closed
• other incumbrances such as subjective easements and restrictive covenants will normally be carried forward to any registered reversionary title, unless they are already substantially repeated on that title

Note 1: Where a lease has been determined by notice, forfeiture or frustration, any inferior leases (meaning any under-leases derived from that lease and any sub-leases derived from such under-leases) will also determine. Where a lease has been determined by disclaimer, see practice guide 35: corporate insolvency. In other cases, an inferior lease which affects the reversionary estate will be noted against any registered reversionary title unless evidence is produced that the inferior lease has also determined and, if the inferior lease is registered, an application is made to close that registered title.

Note 2: Where a leasehold estate is registered with a possessory leasehold class of title, it will not be possible to determine that registered leasehold title unless you lodge form UT1...