Leasehold estates

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This section contains precedents and guidelines to help you to prepare applications for registration in the Land Registry.

Registration of leases

Leases created out of registered land which are for a term of more than 21 years (or for the term of a life or lives) must be registered in the Registry. Schedule 2 Part I of the Act provides that such leases must be lodged for registration within six months of their creation otherwise they will become void. However, the Registrar has a discretion under Part II of that Schedule to extend the time limit in certain circumstances. Thus where a lease is being lodged for registration more than six months after its creation, it should be accompanied by a letter explaining the delay and requesting the Registrar to extend the time limit.

The Property (NI) Order 1997 prevents (with certain exceptions) the creation of new long leases. On any application for registration of a lease dated on or after 10 January 2000, evidence must be produced that the lease falls within one of these exceptions.

On completion of registration the original lease will be retained in the Registry. It is therefore desirable that leases should be prepared in triplicate so that counterparts will be available for both the Lessor and the Lessee. It is no longer necessary to produce an Affidavit of disclosure - Precedent 14.B in every case, although the Registry may require such an Affidavit to be lodged if, for example, there is a long delay in the lodgement of a lease. The documents which should be lodged for registration of a lease are as follows:

  • the Lease and two counterparts
  • LR Form 100 and the registration fee

Where there is an existing charge registered on the Lessor's folio, it is possible to register a lease even though the charge owner has not consented to its creation. However, it is highly desirable that such consent should be obtained, as otherwise the lease could be defeated at a future date if the charge owner were to exercise his power of sale.

The Rules do not prescribe any particular form of lease, because of the wide variety of clauses which can be inserted in a lease. A lease should be prepared in the same manner as a lease of unregistered land, but it should include:

  • (i) a Land Registry heading, and
  • (ii) a reference, in the description of the property, to the appropriate folio - see the comments in mapping requirements

At a time when the Registry and the legal profession are united in a desire that registration times should be reduced, it is not desirable that Registry staff should have to spend time searching for information in long complex documents.

It will assist the Registry to speed up registration if, where a lease exceeds four or five pages, a Table of Contents is included so that the Registry staff can quickly identify the parties, the term of years, the description of the property and any demised easements.

Where a lease is created by someone other than the actual registered owner, or where it is executed in an unusual manner, certain additional proofs may be required. The requirements for such leases are the same as for transfers.

Leases of apartments which are encountered by Registry staff often contain serious errors. When preparing such a lease, it is particularly important to give careful consideration to:

  • (a) the description of the premises on the map
  • (b) the verbal description of the boundaries, especially those above and below the premises
  • (c) covenants and easements relating to common areas, and
  • (d) the advantages of setting up a management company

There are a number of precedent books dealing specifically with leases of flats, apartments and maisonettes. Anyone drafting such a lease would be well advised to consult one of these since, although the following Precedent suggests a format which is acceptable to the Registry, the wording of the descriptions, covenants and easements will vary from property to property.

Extinguishment of leasehold estates

A leasehold estate may be extinguished by merger, when the same person becomes entitled to both the leasehold estate and the reversion, or on a surrender of the lease. As in unregistered conveyancing, extinguishment is prevented if the leasehold estate is subject to a mortgage or charge. This problem can be overcome by a Deed of substituted security. However, unlike unregistered estates, registered estates do not merge automatically. Rule 116 requires certain formalities to be observed, and the nature of these depends upon the nature of the estates involved. In all of the following situations it should be borne in mind that easements referred to in the lease may be cancelled unless they are specifically preserved in the deed which gives rise to the extinguishment. 

The following precedents may be adapted if only part of the leasehold estate is to be extinguished.

Extinguishment where both the leasehold estate and the reversion are registered

The documents required for extinguishment under Rule 116(3) are:

Extinguishment where the reversionary estate is registered but the leasehold estate is unregistered

Rule 116(2) covers the situation where a lease has been registered as a burden but there is no leasehold folio in existence. (This will usually relate to leases which were created prior to 1 October 1977). The documents required for extinguishment are:

Extinguishment where the reversion is unregistered and the leasehold estate is registered

Rule 116(1) envisages two situations:

  • (a) where the owner of the registered leasehold estate acquires the reversion, and
  • (b) where the owner of the reversion acquires the registered leasehold estate

In the first situation, if merger is required, the applicant must apply for registration of the title to the reversion at the same time as he applies for extinguishment (Precedent 14.H). However, in the second situation it is not compulsory to apply for registration of the title to the reversion (and the references in the precedent to such application may be deleted).

In both instances the documents required are:

Transfers of registered leasehold estates

A simple transfer of all of the land in a leasehold folio may be effected in the same way as a freehold transfer, using LR form 9 or 10. It is obviously desirable to include the usual covenant that the transferee will pay the rent and observe the covenants etc, and such a covenant is provided in form 9. If form 10 is being used a suitable covenant may be inserted in panel F.

Transfers of part of the land in a leasehold folio should be in LR form 11 and should indicate whether one holding will indemnify the other against payment of rent (Precedent 14.K) or whether the rent is to be apportioned between the two holdings (Precedent 14.L):

Variation of covenants and conditions in a registered lease

An application for the entry of a note that covenants or conditions in a registered lease have been varied may be made by lodging:

This precedent may be adapted for other situations, for example, an extension of the term or a variation of the premises.

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