Land Registry Restrictions: tips and traps

In this article I would like to remind practitioners about the use of restrictions in the conveyancing process and how to deal with restrictions that cannot be complied with.

A restriction is an entry in the register that prevents or regulates the making of an entry in the register in respect of any disposition or a disposition of a specified kind (section 40(1) of the Land Registration Act 2002).

The Land Registry have provided useful requiring conveyancers to ask:

• Does the entity wishing to impose a restriction have a valid interest in the land to which the restriction relates?
• Who is to be bound by the restriction?
• Does the registered proprietor or someone entitled to be registered as proprietor consent to the entry of the restriction. If this is not possible is evidence available to confirm that consent or is there evidence to show that the applicant has a sufficient interest in the making of the restriction?
• What type of dispositions are intended to be caught? The term disposition is not defined by the Land Registration Act 2002. If a restriction is intended to catch all dispositions this would include a transfer (including an assent), a lease, a charge, and a grant/reservation/variation of an easement and could potentially blight a title unreasonably.
• How can the restriction be complied with? Does the nature of the interest intended to be protected by the restriction require consent, or a certificate of compliance, from a particular party? Does the restrictioner know what to do?
• Is there a dedicated standard form of restriction that should be used?
• Is there a definite point in the future when the interest protected by the restriction will time expire? If this is the case the restriction should specify  an until date.
• Will the interest only apply to a specific owner/party? For example, does it cease automatically upon the death of the restrictioner? If so, again the restriction may identify when it is no longer required by starting “Until the death of … no disposition of the registered estate …”.
• The case of Jayasinghe v Liyanage [2010] 06 EG 105 highlights the test for the Land Registry under section 73(7) of the Land Registration Act 2002 and for an adjudicator on adjudication was not merely of whether the applicant had a relevant right or claim, but the additional question whether the entry of a restriction was necessary or desirable for the purpose of protecting that right or claim.

Practitioners will be aware of the availability of disapplication of restrictions where the restriction cannot be complied with due to the application of section 41(2) Land Registration Act 2002 . A temporary measure meaning notice of disapplication is placed on the title allowing a non-compliant restriction to be circumvented.

Restrictions can also be subject to permanent variation or cancellation upon application to the court as seen in the recent case of Quay House Admirals Way Land Ltd and another v Rockwell Properties Ltd [2022] EWHC 545 (Ch) and the registrar may cancel a restriction only where they are satisfied that it is no longer required.

Remember restrictions are not cast in stone. A restrictioner should be warned about the need to be co-operative swiftly if communication is received from a third party or the Land Registry concerning the restriction.

Ian Quayle, Training Consultant With IQ Legal Training

This article first appeared in the April edition of Property Law UK

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