News & Insights

Registration of title: mind the gap!

Dean Bickford, a partner in our Real Estate team, looks at some of the issues caused by the gap between completion and registration at the Land Registry.

You have completed your purchase, paid the price and documents have been dated: so you now own the property?  Sadly, it is not that simple. Until your purchase of the property has been registered at the Land Registry you are not the “legal owner”. This period is known as the registration gap. The relevant legislation gives you certain powers to deal with the property, but there are some shortcomings.

Does it matter?

It can do, depending on what you are intending to do with the property and when. For example, if you were planning on serving notice on tenants (eg break notices; commence forfeiture proceedings), only the legal owner can do so. Until you are the registered owner, your notice would be invalid (as was the case in Stodday Land Ltd v Pye [2016]).

It can also cause problems for the seller. In the case of East Lindsay District Council v Thompson [2001] it was held that until the registration of a purchase, the seller would remain responsible to comply with any enforcement notice.

The effect of the registration gap can also impact on enforcing legal charges (mortgages), grants and assignments of leases. A tenant may find that it is unable to serve a break notice if its assignment has not been registered at the Land Registry. This can have very costly implications (as was the case in Sackville UK Property Select II (GP) No 1 Ltd and another v Robertson Taylor Insurance Brokers Ltd and another [2018]). Knowing who is the correct person to serve notice on, or who can issue the notice can prove to be very challenging.

With the waiting times at the Land Registry only increasing (6 – 9 months for a registration of a new lease, and longer for a complex transfer of part), it is important to factor in your plans early when negotiating a property transaction. At the point of the transaction more robust obligations can be incorporated to protect both parties from unexpected consequences due to the delays in registration.