B P Collins’ property team explores what is meant by registration of a property and its benefits.
What is meant by registration of a property?
In England and Wales, a record is kept at the Land Registry of all properties that have been registered. Details such as the description of the property, any rights the property may benefit from, the current registered owners, any restrictions or covenants affecting the property, and any financial charges form part of the record.
Registration was made compulsory in 1990 and now approximately only 13% of properties in England and Wales remain unregistered.
As detailed in the Law Commission Report 2001 the main objective of the register is that it ‘…should be a complete and accurate reflection of the state of the title of land at any given time, so that it is possible to investigate title to land online, with the absolute minimum of additional enquiries and inspections.’
If a property is not registered at the Land Registry when a sale is completed it will trigger compulsory first registration.
Benefits of registering a property
Compulsory first registration
- The sale of an unregistered property will trigger compulsory first registration. In some instances, buyers may insist that the seller registers the property so that they will be responsible for answering any registration queries that may be raised by the Land Registry. Therefore, opting to register the property prior to a sale would result in a more efficient sale when the time comes.
- Registration is compulsory after certain events, including for example:
- A transfer of an unregistered freehold interest;
- A transfer of an unregistered leasehold interest where there are more than 7 years left of the lease term;
- The grant of a new lease for a term of more than seven years;
- Entering into a first legal charge.
The abovementioned transfer or grant must be:
- For valuable consideration;
- By way of gift;
- Pursuant to a court order; or
- By way of Assent.
- An application for compulsory first registration must be submitted within a period of two months of the date the transaction completed, otherwise the transaction is treated as void and the estate would revert back to the previous owner. Requests for extensions to the two month period may be granted at the discretion of the Land Registry providing there is a valid reason for doing so.
Lower registration fee
- There is a fee associated with registering a property at the Land Registry. This fee is based on the open market value or the sale price of the property in the event of a sale. The property value could increase over time resulting in an increased registration fee. Additionally, in comparison to compulsory first registrations as a result of a sale, voluntary first registrations benefit from a 25% reduction in fees.
Avoidance of property fraud
- You could be at a higher risk of your property being fraudulently sold or mortgaged if your property is not registered. This is predominantly because unregistered properties do not have the benefit of the Land Registry’s free Property Alert Service. This service allows you to be notified when an activity occurs on a property you are monitoring, allowing you to act quickly. For further details of the advantages of registering your property from a fraud perspective, please read this article written by Gillian Price, Principal Lawyer in the B P Collins LLP Property department.
Electronic Deeds
- Registration of your property will mean that all deeds and documents are made readily available electronically. This gives property owners peace of mind as they do not have to worry about lost/missing deeds and documents. This also makes it much easier to identify the legal owners of properties.
Certainty
- When land is registered at the Land Registry a title plan is created which shows the extent of the property and associated land held under that particular title. This should result in fewer boundary disputes as the boundaries are clearly identified by the plan. However, note the boundaries shown on plans are not legally definitive and the Land Registry is entitled to move the boundaries slightly if they appear different following an inspection.
Currently, the Land Registry are experiencing significant delays meaning that registration of a property can take up to18 months to complete. A request can be made to expedite an application, for example if a sale or mortgage is being held up by the delay in registration. If you would like us to assist you with the registration of your property, please get in touch with one of our experts.
For further information, please contact B P Collins’ property team at enquiries@bpcollins.co.uk or 01753 889995.
