Restrictions are entries in the Proprietorship Register of the Register of Title which prevent registration of a dispostion, or a particular category of disposition, unless a particular requirement or set of requirements is/are complied with. They protect a variety of interests, such as third party beneficial interests like interests under trusts or individuals / companies needing to ensure incoming owners enter into covenants or statutory rights such as the Official Receiver's entitlement to a bankrupt's estate, amonsgt others.
The Land Registration Rules 2003 introduced prescribed forms of restrictions to encourage consistency and to try to ensure that there is alway a route to compliance. When faced with a restriction,you should ask yourself the following questions:
- Does it "bite"? - in other words, will it need to be complied within order to register the particular disposition? Some restrictions only relate to charges, other only to transfers or to leases. Note that "disposition" relates to all types of dispositions. Even if it doesn't bite, you should consider whether your buyer and/or lender client will be able to comply in the event of sale or remortgage.
- If it bites, what do you need to do to achieve compliance and can you be certain that that is within your control?
- Is a certificate of compliance required and if so can you/someone in your firm give the certificate? Remember that where a certificate of compliance is to be given by conveyancer, it must be signed by an individual who is a conveyancer as defined by the Legal Services Act 2007, i.e. a solicitor, licensed conveyancer of CILEX Lawyer (a CILEX Fellow is not a conveyancer). It cannot be be signed in the name of the firm.
- If you cannot give the certificate, who can? Has that person/entity confirmed what their requirements and fees are and can you satisfy those requirements? Remember that if a certificate is required from a corporate entity it must be signed by an officer of the company.
- Is it intended to bind future owners? If not, can you be sure that it will be removed? See the section on Removing Restrictions for a more detailed discussion.
It is vital to be satisifed before exchange that you ensure you will be in a position on completion to comply with or remove all restrictions on the title.
Removing Restrictions
Registering Restrictions
