Leasehold estates

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. 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.

• Precedent 14.A - Solicitor's certificate regarding the Property (NI) Order 1997 on an application for registration of a lease 

On completion of registration the original lease will be retained in the Registry. Leases should therefore be prepared in triplicate so that counterparts will be available for both the Lessor and the Lessee. It is no longer necessary to produce a Precedent 14.B - Affidavit of disclosure in every case. 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 required for registration of a lease are:

• 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, unless an inhibition has been registered by the charge owner. 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:

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

For efficiency and ease of processing ensure that if a lease exceeds four or five pages, a Table of Contents (see Precedent 14.C – Summary of contents of a lease) should be is included. This will allow for easy identification of 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 often contain serious errors. When preparing such a lease it is essential to consider:

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

There are a number of precedent texts dealing specifically with leases of flats, apartments and maisonettes. Anyone drafting such a lease should consult one of these. The following precedents suggest a format which is acceptable to the Registry although the wording of the descriptions, covenants and easements will vary from property to property.

• Precedent 14.D - Simple lease of an apartment where the apartment is in a two storey building where common areas have not been demised and no management company has been informed
• Precedent 14.E – Lease of an apartment in a development where a management company has been formed

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. 

For extinguishments of leasehold estate by Ground Rent Certificate, see section How to redeem your ground rent and Registration of freehold estate.

When a lease is surrendered, written proof must be produced, together with evidence that the person purporting to surrender the lease is entitled to the lessee’s interest. Precedent 14.F - Surrender of Lease suggests a format of surrender where both the lease and the reversion are registered, however, this may be amended to suit the circumstances of a particular case. 

If the lessor has not executed the surrender, the consent in writing of the lessor (or their solicitor) should be lodged as evidence that the surrender has been accepted.

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 the following situations it should be noted that easements referred to in the lease may be cancelled, unless they are specifically preserved in the deed which gives rise to the extinguishment.

When the term of the lease has come to an end or expired, an application can be made to cancel lease on effluxion of time.

If the lease is a lease of a business, then it will have the added protection of the The Business Tenancies (NI) Order 1996 (‘the “1996 Order’) which cannot be opted out of in Northern Ireland.

There are also unusual leases such as Telecommunication leases which require evidence that the lease has determined in accordance with the Electronic Communications Code or confirmation that those provisions do not apply.

There may be other specific types of lease/ provisions that are unusual and should be considered on their facts. For example if a lease contains an option to renew, then the applicant must provide evidence that the option has not or cannot be exercised.

The Registry will require the lodgement of a solicitor’s certificate as per Precedent 14.G - Application to cancel a lease which has expired. This should also set out why the lease does not have the protection of the 1996 Order, if applicable. Precedent 14.G can be adapted to address the other scenarios set out above.

The documents required are:

• Counterpart Lease, if available
• Solicitor’s Certificate Precedent 14.G - Application to cancel a lease which has expired
• consent of tenant, if available

This list is not exhaustive, and further documentation may be requested to satisfy the Registrar depending on the circumstances.

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:

• the transfer or surrender in favour of the Applicant (unless he is already registered as owner of both estates)
• an application for extinguishment - LR Form 66 (Precedent 14.J) - Application for merger where both freehold and leasehold estates are registered
• releases of any charges affecting the leasehold estate
• the counterparts of the lease
• LR Form 100 and the registration fee

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:

• any transfer or surrender in favour of the applicant
• the title deeds relating to the leasehold estate, including releases of any mortgages. Where the lease has been surrendered, the surrender should first be registered in the Registry of Deeds
• an application for extinguishment - LR Form 65 (Precedent 14.I) - Application for merger under Rule 116(2) where the freehold is registered but the leasehold estate is unregistered
• the counterparts of the lease
• LR Form 100 and the registration fee

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

Rule 116(1) envisages two situations:

• where the owner of the registered leasehold estate acquires the reversion, and
• 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 (LR Form 64). 

In the second situation it is not compulsory to apply for registration of the title to the reversion. The references in the precedent to such application may be deleted.

In both instances the documents required are:

• any deeds whereby the applicant acquired the estates
• the application for extinguishment - LR Form 64 (Precedent 14.H) - Application for merger where the leasehold estate is registered but the reversion is not
• releases of any charges affecting the leasehold estate
• the title deeds relating to the reversion
• any counterparts of the lease
• LR Form 100 and the registration fee

Housing Executive Leasehold Extension 

The Housing Executive on 1 October 2022 introduced a new Leasehold Extension Policy. This enabled current leaseholders of former Housing Executive flats to apply, at any time, to extend their existing leasehold term subject to the payment of a premium.

The new policy enables eligible leaseholders to extend their leasehold term to give an unexpired term of 125 years commencing upon the date of the new extended flat lease (“Extended Flat Lease”). There will be no limit on the number of times leaseholders can apply to extend their leasehold term.

The leasehold extension was implemented by way of a Deed of Surrender of the existing flat lease and the grant of a new Extended Flat Lease. This is granted on similar terms and conditions to those contained in the surrendered lease. These documents are provided by the Housing Executive. Further guidance can be found on the Housing Executive’s website.

If the Housing Executive’s reversionary title is unregistered, then the applicant must apply for first registration of the Extended Flat Lease at the same time as applying for extinguishment of the Folio for the existing flat lease. Prior to an application for first registration, the Extended Flat Lease should also be registered in the Registry of Deeds.

The documents required for registration of the Extended Flat Lease are:

• LR Form 1 for first registration of the Extended Flat Lease
• the surrender of the existing flat lease
• any deeds whereby the applicant acquired the new Extended Flat Lease
• any Deed of Substituted Security or a Release of Charge
• the counterparts of the existing flat lease

• LR Form 100 and the registration fee

  and an application for extinguishment (one of the following):

• LR Form 64 (Precedent 14.H) - Application for merger where the leasehold estate is registered but the reversion is not; or
• Precedent 14.N - NIHE Leasehold Extension merger where the Housing Executive's reversionary title is unregistered. 

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. Applicants should include the usual covenant that the transferee will pay the rent and observe the covenants etc, and such a covenant is provided in LR Form 9. If LR 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 must indicate whether:

• one holding will indemnify the other against payment of rent Precedent 14.K - Transfer of part containing an indemnity in respect of rent, or
• whether the rent is to be apportioned between the two holdings Precedent 14.L - Transfer of part providing for an apportionment of the rent

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:

• a deed of variation and two counterparts
• Precedent 14.M – Variation in the terms of a Lease
• LR Form 100 and the registration fee

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