1. Introduction

The Land Registration Act 2002, together with the Land Registration Rules 2003, changes the categories of leases that are now either compulsorily or voluntarily registrable, and also the leases that we can note.

Not every leasehold estate is capable of being registered with its own title, but the Land Registration Act 2002 substantially extends the scope of title registration, for example, many more business leases will be subject to compulsory registration.

The information within this guide applies to:

  • leases dated on or after 13 October 2003
  • leases existing before 13 October 2003
  • assignments, transfers (on sale, by way of gift or by order of court) or assents, including vesting assents, dated on or after 13 October 2003, of existing leasehold estates having more than seven years of the term left to run
  • first legal mortgages dated on or after 13 October 2003
  • assignments and transfers dated on or after 6 April 2009 of existing unregistered leasehold estates having more than seven years of the term left to run
    • giving effect to a partition of land subject to a trust of land
    • by a deed that appoints, or by virtue of section 83 of the Charities Act 1993 has effect as if it appointed, a new trustee or is made in consequence of the appointment of a new trustee
    • by a vesting order under section 44 of the Trustee Act 1925 that is consequential on the appointment of a new trustee.

See also practice guide 62: easements for details of the registration requirements in respect of easements granted in leases.

2. How to apply the Land Registration Act 2002 and Land Registration Rules 2003: compulsory registration

Section 4 of the Land Registration Act 2002 specifically sets out the circumstances when an application for first registration must be made.

The estate owner, or their successor in title, must apply for first registration – see section 6(1) of the Land Registration Act 2002.

The period for registration is two months from the date of the deed inducing registration – see section 6(4) of the Land Registration Act 2002. However, an order can be made to extend the period of registration – see section 6(5) of the Land Registration Act 2002.

Section 27(2)(b) of the Land Registration Act 2002 specifically sets out the circumstances when leases out of a registered title must be registered.

Section 4(5A) of the Land Registration Act 2002 exempts relevant social housing tenancies from compulsory registration, regardless of term.

2.1 New leases granted for a term of more than seven years out of unregistered land

See section 4(1)(c) of the Land Registration Act 2002.

Leases granted for a term of more than seven years from the date of the grant, out of either an unregistered freehold or leasehold estates, will be compulsorily registrable provided they are either:

  • for valuable or other consideration – that under section 4(6) of the Land Registration Act 2002 includes estates that have a negative value
  • by way of a gift – section 4(7) of the Land Registration Act 2002 provides for
    • grants for the purpose of setting up a trust, where the person setting up the trust, ‘the settlor’, does not retain the whole of the beneficial interest
    • transfers of the legal title to the beneficial owners, where the settlor did not retain the whole of the beneficial interest when the trust was set up
  • pursuant to an order of any court
2.2 New leases for a term of more than seven years out of a registered title

See section 27(2)(b)(i) of the Land Registration Act 2002.

Leases granted out of existing registered titles, that are for a term of more than seven years from the date of the grant are compulsorily registrable.

2.3 Transfers or assignments of unregistered leases having more than seven years of the term unexpired

See sections 4(1)(a), 4(1)(aa) (as introduced by the Land Registration Act 2002 (Amendment) Order 2008) and 4(2)(b) of the Land Registration Act 2002.

Transfers or assignments of unregistered leases, that at the time of the transfers (or assignments) have more than seven years to run, are compulsorily registrable if they are made either:

  • for valuable or other consideration – that under section 4(6) of the Land Registration Act 2002 includes estates that have a negative value
  • by way of gift – section 4(7) of the Land Registration Act 2002 provides for
    • transfers for the purpose of setting up a trust, where the person setting up the trust, ‘the settlor’, does not retain the whole of the beneficial interest
    • transfers of the legal title to the beneficial owners, where the settlor did not retain the whole of the beneficial interest when the trust was set up
  • pursuant to an order of any court
  • by means of an assent – including a vesting assent
  • if dated on or after 6 April 2009
    • to give effect to a partition of land subject to a trust of land
    • by a deed that appoints, or by virtue of section 83 of the Charities Act 1993 has effect as if it appointed, a new trustee or that is made in consequence of the appointment of a new trustee
  • by a vesting order under section 44 of the Trustee Act 1925 that is consequential on the appointment of a new trustee

Note: Not all transfers or assignments attract compulsory registration.

The following are specific types of transfer or assignment that are not subject to compulsory registration

  • transfer by operation of law, such as, when a deceased’s property vests in their executors – see section 4(3) of the Land Registration Act 2002
    • however, a transfer by operation of law that is within section 4(1)(aa) of the Land Registration Act 2002, such as, when property vests in a new trustee by an express vesting declaration, or one that is implied, under section 40 of the Trustee Act 1925 in a deed appointing a new trustee, is subject to compulsory registration
  • an assignment of a mortgage term, ie mortgage by demise – see section 4(4)(a) of the Land Registration Act 2002
  • an assignment or surrender of a lease to the owner of the immediate reversion where the term is to merge into that reversion – see section 4(4)(b) of the Land Registration Act 2002
2.4 Transfers or assignments of unregistered leases where section 171A of the Housing Act 1985 applies

See section 4(1)(b) of the Land Registration Act 2002.

All transfers of unregistered leases, irrespective of the length of the term of the lease, made pursuant to section 171A of the Housing Act 1985 (Preserved Right to Buy) are compulsorily registrable.

2.5 Transfers of any registered leases

See section 27(2)(a) of the Land Registration Act 2002.

Most transfers of registered leases, irrespective of the length of the term of the lease, are compulsorily registrable. However, the following transfers by operation of law are not required to be registered:

  • a transfer on the death or bankruptcy of an individual proprietor
  • a transfer on the dissolution of a corporate proprietor
2.6 Right to buy leases: Part V of the Housing Act 1985

See sections 4(1)(e) and 27(2)(b)(iv) of the Land Registration Act 2002.

All leases, irrespective of the length of the term of the lease, made pursuant to Part V of the Housing Act 1985 are compulsorily registrable.

2.7 Leases where section 171A of the Housing Act 1985 applies

See sections 4(1)(f) and 27(2)(b)(v) of the Land Registration Act 2002.

All leases, irrespective of the length of the term of the lease, made pursuant to section 171A of the Housing Act 1985 (Preserved Right to Buy) are compulsorily registrable.

2.8 Reversionary leases taking effect more than three months from the date of the grant

See sections 4(1)(d) and 27(2)(b)(ii) of the Land Registration Act 2002.

A ‘reversionary’ lease gives the lessee a right to possession of the leased property in the future, ie the lessee does not have an immediate right to possession of the land in the lease, at the date of the lease.

A lease granted out of either an:

  • unregistered leasehold estate, that at the date of grant has more than seven years left to run
  • unregistered freehold estate
  • existing registered title

that is granted for any term to take effect more than three months from the date of the grant is compulsorily registrable.

2.9 Discontinuous leases out of registered titles or granted for a term of more than seven years out of unregistered land

See section 27(2)(b)(iii) of the Land Registration Act 2002.

These are leases where the lessee’s ‘right to possession’ of the land demised is discontinuous. The lease may be of a property, such as, a flat, apartment or market stall, that is for either:

  • a specified number of days in a week, for example, every Monday to Friday (inclusive)
  • a specific week(s) in a calendar year

All discontinuous leases granted out of a registered title must be registered, regardless of the term.

Discontinuous leases granted for a term of more than seven years out of unregistered freehold or leasehold estates will be compulsory registrable.

See sections 4(1)(c) and 4(2)(b) of the Land Registration Act 2002 and see New leases granted for a term of more than seven years out of unregistered land.

To calculate the length of the term on such a lease, multiply the number of complete weeks each year the property is demised by the number of years granted.

If the total is more than seven years (ie more than 364 complete weeks), the lease and/or transfer will be compulsorily registrable.

2.10 Protected first legal mortgage

See sections 4(1)(g) and 4(2)(b) of the Land Registration Act 2002 and rules 21 and 22 of the Land Registration Rules 2003.

A protected first legal mortgage of an unregistered leasehold estate, that has more than seven years of its term unexpired, is subject to compulsory first registration. In order for such a mortgage to be registered, the leasehold estate will also need to be registered. Rule 21 of the Land Registration Rules 2003 allows a...