Practice guide 1: first registrations

5. The examination process and classes of title

5. The examination process and classes of title

5.1 Examination of title

In unregistered conveyancing, title is ultimately based on the estate owner’s right to be in possession of the land or to receive the rents and profits of it. Showing a full documentary title commencing with a good root of title that is at least 15 years old should normally establish this right. However, there may be instances where it is apparent that land forming the subject of application is not occupied by the applicant. Such land may not be eligible for registration unless the applicant is able to provide evidence that deals with this point. Any such evidence will be considered on its merits. If no explanation is provided, or any further evidence does not adequately address why the applicant is not in possession, the land may be excluded from the registration.

The appropriate class of title available to an applicant under sections 9(1) and 10(1) of the Land Registration Act 2002 is primarily determined by the quality of documentary title lodged. An HM Land Registry examiner assesses the title deeds accompanying the application to determine if they prove a good holding title. The Land Registration Rules 2003 provide that we may have regard to any prior examination of title by a conveyancer and to the nature of the property when considering the granting of title (rule 29 of the Land Registration Rules 2003).

To ensure that the best possible class of title is given to applicants, the Land Registration Rules 2003 also provide for all the available deeds and documents relating to the title to be lodged (see rule 24(1)(c) of the Land Registration Rules 2003). If, therefore, any of the title deeds that should be in an applicant’s possession are not produced, you must properly account for their absence, especially where the grant of an absolute title might be prejudiced. Where a deed that is not essential to proving title is not lodged, HM Land Registry may make a protective entry, for example when it is known that the missing deed contains restrictive covenants.

Situations where relevant title deeds or documents are unavailable are covered in Evidence of title where the deeds have been lost or destroyed.

For other situations where the applicant cannot show a 15-year documentary title prior to the deed inducing registration, see either Land that has been in the same ownership for a considerable time or Short titles.

For the provision of certificates of title in lieu of other evidence, see Purchases by tenants of public housing, purchases of housing estates etc and repurchases of defective housing.

For titles based on adverse possession, see practice guide 5: adverse possession of (1) unregistered and (2) registered land where right to be registered was acquired before 13 October 2003.

The examiner may also make searches and enquiries under rule 30(a) of the Land Registration Rules 2003, or require the applicant to make any further searches or enquiries considered necessary under rule 30(b) of the Land Registration Rules 2003.

HM Land Registry may give notice of a first registration application to other persons under rule 30(a) of the Land Registration Rules 2003, and may also advertise it under rule 30(c) of the Land Registration Rules 2003. Advertisements are rare, but we will serve notice on third parties if we believe they may have grounds for objecting, for example, on either:

• the Highway Authority, if an application appears to include part of the highway (normally highway land is excluded from the red edging on a title plan. The effect of the General Boundaries rule in section 60 of the Land Registration Act 2002 is to leave the ownership of the highway undetermined)
• a person who has a caution against first registration of the estate concerned

Any person may object to the application, whether or not we notify them of it (section 73 of the Land Registration Act 2002). We will notify the applicant of any objection and the title will not be registered until the objection has been withdrawn or disposed of. If necessary, the matter will be referred to the Land Registration division of the Property Chamber, First-tier Tribunal under section 73(7) of the Land Registration Act 2002.

Any purchaser or mortgagee should always make a prior search of the index map. This will reveal any caution against first registration, as well as revealing whether any part of the land is already registered.

5.2 Evidence of title where the deeds have been lost or destroyed

The vendor’s ability to produce the title deeds of the property and the absence of any unexplained memoranda of sales off or other dealings with the land are important safeguards for a purchaser of unregistered land, and for the registrar on first registration.

Where the applicants are unable to produce all the deeds that ought to be in their possession or control, the possibility of an undisclosed mortgage, of defective recollection by the applicant, or even of fraud, cannot be ruled out.

Because of this we take special precautions when registering land when it is claimed that all or some of the title deeds have been lost or destroyed. Particular attention will be given to:

• the identity of the applicant
• custody of the deeds at the time of their loss
• the evidence of the loss or destruction and the circumstances in which it occurred
• any available secondary evidence of the contents of the missing deeds
• the possibility of restrictive covenants, easements or other incumbrances on the title

For more information on class of title, protective entries and the undertakings we may require, see practice guide 2: first registration of title if deeds are lost or destroyed.

5.3 Classes of title

5.3.1 Absolute freehold title

A person will be registered with absolute freehold title if we are satisfied that their title to the estate is:

“such as a willing buyer could properly be advised by a competent professional adviser to accept” (section 9(2) of the Land Registration Act 2002).

An application based on a purchase of unregistered land for value by the responsible estate owner (or a successor in title, see section 6(1) of the Land Registration Act 2002) supported by a proper documentary title commencing with a good root at least 15 years old at the date of the acquisition will normally result in the grant of an absolute title.

HM Land Registry may additionally disregard the fact that a title is technically flawed if the examiner is satisfied that any defect will not cause the holding under the title to be disturbed (section 9(3) of the Land Registration Act 2002). See Qualified titles for applications where the examiner is not able to disregard such title defects.

An application based on a first mortgage of unregistered land, supported by a proper documentary title commencing with a good root at least 15 years old at the date of the mortgage, will also normally result in the grant of an absolute title.

5.3.2 Absolute leasehold and good leasehold titles

Absolute leasehold title will only be granted if:

• we are satisfied that title to the estate is such as a willing buyer could properly be advised by a competent professional adviser to accept, and
• we approve the lessor’s title to grant the lease (section 10(2) of the Land Registration Act 2002)

We must also approve the title to any intermediate leasehold title that exists. We will not normally grant an absolute title to the lease being registered unless we are satisfied on the evidence lodged either:

• that it and any superior leases were validly granted
• that the lease is binding on the current lessors and their mortgagees, if any, and that the current lessor’s title is capable of registration with absolute freehold or absolute leasehold title

Prior to 19 June 2006, it was our practice to grant only good leasehold title either:

• if the applicant for registration was unable to lodge a consent by a head-lessor if the lease to be registered was a sub-lease and the lessor’s own lease contained a limitation on alienation
• if the lessor’s mortgagee had not consented to the grant of the lease

Following a review of our practice, and for leases registered since 19 June 2006, we now grant absolute leasehold title on:

• registration of a sub-lease where the consent of the head-lessor is not lodged. At the request of the Law Society that the issue of consent by the head-lessor be dealt with in the individual registers for sub-leases, we will make the following entry in the property register of the lessee’s title

Note: While we will not make this entry if the registrar sees a consent, the consent may not have been a sufficient consent in terms of the head-lease. We will not check the terms of the head-lease, nor whether any consent has been given by the correct person.

It is our view that while a sub-lease in breach of a prohibition or restriction in a head-lease is a valid lease that may be registered with absolute leasehold title, absolute title in respect of that sub-lease would not prevent the forfeiture of the head-lease and determination of the sub-lease, with closure of the sub-lease title.

• registration of a lease where the consent of any mortgagee is not lodged. If no evidence is lodged that the mortgagee consented to the granting of the lease, or that the lease is within section 99, Law of Property Act 1925 or expressly authorised by the mortgage, we will make the following entry in the property register of the lessee’s title

The purpose of this entry is to alert any potential purchasers to the possible vulnerability of the registered lease. It should also reduce the possibility of the mortgagee’s right effectively to determine the lease being lost as a result of section 29 of the Land Registration Act 2002.

Note: This practice applies equally to legal charges, floating charges and fixed equitable charges.

Good leasehold title is granted where the lessee’s right to assign the lease has been shown but the evidence is not such as to satisfy the registrar as to the 2 points above.

5.3.3 Qualified titles

Qualified titles are rare. They cannot be applied for unless HM Land Registry has refused to grant a superior title. They may be granted if the registrar is of the opinion that the applicant’s title to the estate has been established only for a limited period or subject to certain reservations that cannot be disregarded (section 9(4) of the Land Registration Act 2002). An example would be where the title depended on a transaction that appeared to be in breach of trust. The title would then be qualified so as to preserve any interest of the beneficiaries of the trust.

Where leasehold titles are concerned, we will grant qualified title if we think that either the applicant’s title to the estate, or the lessor’s title to the reversion, has been established only for a limited period subject to certain reservations that cannot be disregarded under section 10(5) of the Land Registration Act 2002.

5.3.4 Possessory titles

Possessory title may be granted for freehold estates under section 9(5) of the Land Registration Act 2002 and leasehold estates under section 10(6) of the Land Registration Act 2002 if the registrar is of the opinion that:

• the applicant is in actual possession of the land, or in receipt of the rents and profits of the land, by virtue of the estate, and
• there is no other class of title with which they may be registered

An estate owner with a limited or no documentary title may still be registered with possessory title.

5.4 Titles based on assents

Under section 36(7) of the Administration of Estates Act 1925, a purchaser may accept an assent by a personal representative in respect of an unregistered legal estate as sufficient evidence that the assentee is the person entitled to have the legal estate conveyed to them, unless notice of a previous assent affecting that legal estate has been placed on or annexed to the probate or letters of administration.

See also Inheritance tax.

5.5 Title to appurtenant easements

You must not only show title to land being registered but also to any appurtenant easements. We will normally make no entry of the benefit of easements unless we are satisfied as to the title to them. However, there is usually no need to show any earlier title to appurtenant easements that are created or transferred by the root deed. We can only register title to appurtenant legal easements.

Title to the easement must be shown even where the servient land is registered and the easement is already noted in the register of the servient land. This notice does not guarantee the validity of the easement (section 32(3) of the Land Registration Act 2002) and so is not automatically sufficient evidence of title.

If the notice was entered on or after 13 October 2003 and before 6 April 2018, the easement will only be a legal easement for the purposes of section 27(1) and 27(2)(d) of the Land Registration Act 2002 if the notice was entered following an application made in form AP1: you can check if form AP1 was used by applying for a copy of the application form (the prescribed form to use is form OC2).

Where the servient land is registered and the easement is not already noted in the register, we can still enter it as appurtenant to the dominant land on first registration if we are satisfied that it exists. However, we will normally need to note the burden of the easement on the servient title at the same time. If the easement was granted on or after 13 October 2003 over land that was registered at the time, you will first need to apply for registration of the easement on that title, using either form AP1 or form AN1 (on or after 6 April 2018). That is because until the easement is noted pursuant to rule 90(b) of the Land Registration Rules 2003 it will not operate at law under section 27(1) of the Act. In other words, it will not be a legal easement, it will only be an equitable easement. Before we can register the easement on first registration by entering the benefit on the new title, it must first be registered against the servient title.

From 6 April 2018, the application to complete a grant by registration, where only the servient land is registered, can be made in form AP1 or form AN1: it can be lodged before or at the same time as the application in form FR1 for first registration of the title which it benefits. If notice is entered without an application for first registration, the express easement may be legal unless the notice is a unilateral notice.

In all cases where we propose to note the burden of the easement on the servient title, we will serve notice on the registered proprietor, and normally on any chargee, before doing so. However, you will need to supply evidence of the consent of any registered chargee whose charge already existed when the easement was granted. You will also need to comply with any restriction, if the servient land was registered when the easement was granted.

5.6 Land charges void for non-registration at the Land Charges Department

If you are claiming that a post-1925 restrictive covenant or other incumbrance is void for non-registration and therefore should not be noted in the register, raise the matter in a covering letter and supply the necessary evidence. Note that a restrictive covenant, that is unprotected by registration at the Land Charges Department, is nevertheless binding on the estate owner where there has been no intervening purchase for money or money’s worth of the legal estate affected by the covenant (section.4(6) of the Land Charges Act 1972. For the position in relation to land charges of other categories see the provisions of that section).

You should also note that the Land Charges Act 1972 does not apply to a land charge created by an instrument that conveys, grants or assigns an estate in land and affecting that estate, if the instrument was executed on or after 27 July 1971 and gives rise to compulsory first registration (section 14(3) of the Land Charges Act 1972). It follows that purchaser’s restrictive covenants in such an instrument are not void for non-registration at the Land Charges Department.

So where, for example, a purchaser’s restrictive covenant appears in a transfer on sale dated 4 August 1971 and has not been registered at the Land Charges Department, it is necessary to check the date on which first registration became compulsory. If the date is earlier than August 1971, the covenant is not void for non-registration.

You should note the following points when preparing the evidence in support of a claim that a land charge has become void for non-registration at the Land Charges Department:

• you must provide a clear Land Charges search certificate in the name(s) of the relevant estate owner(s), including any former names or variations
• your search must cover the whole period of ownership of each of the estate owners to which it relates. Where an estate owner has died, it should also cover the period from the death to the next transfer for value. A search where the priority period expired before the date of a transfer, that it is claimed took effect free from the land charge, is clearly unacceptable
• the search must correctly state the county and any former counties
• under the Land Charges Act 1925 (repealed), restrictive covenants in favour of a local authority could be registered either at the Land Charges Department or as local land charges (section 15(1) of the Land Charges Act 1925 (repealed)). Since 1 August 1977 the 2 categories are mutually exclusive, and restrictive covenants binding on successive owners of the land affected by reason of their being made for the benefit of land belonging to the local authority are no longer classed as local land charges. Therefore, if you apply to register land free from a restrictive covenant in favour of a local authority in a deed dated before 1 August 1977, HM Land Registry will need to see a clear local land charge search as well as a clear land charges search
• a restrictive covenant made with a local authority on or after 1 January 1926 and enforceable against a purchaser by virtue of a special statutory provision, rather than by virtue of the general law, is a local land charge (Sections 1(1)(c) and 2(c), Local Land Charges Act 1975.) and as such cannot be void for non-registration (Paragraph 6 of Schedule 1 to the Land Registration Act 2002. If such covenants appear on the title they will be noted in the register). It is an overriding interest until protected in the register(Paragraph 6 of Schedule 1 to the Land Registration Act 2002. If such covenants appear on the title they will be noted in the register). The same applies to a restrictive covenant made with a minister of the Crown or government department on or after 1 August 1977 and enforceable against a purchaser by virtue of a special statutory provision (Sections 1(1)(c) and 2(c), Local Land Charges Act 1975)
• if any of the land falls within the former North, East or West Ridings of Yorkshire and the land charges search relied on is dated prior to 1 April 1976, the search may not reveal land charges registered at the relevant Yorkshire deeds registry (or if it is a search in the Yorkshire deeds registry land charges register, at the Land Charges Department). In this situation, you should make a further search at the Land Charges Department
• any correspondence with the Land Charges Department must be lodged

5.7 Land that has been in the same ownership for a considerable time

Where land has not changed hands for centuries it may be impossible to deduce title in the normal way because the applicant has no satisfactory documents of title. In extreme cases there may be no record at all of the circumstances in which the land was acquired.

Applications where full documentary title cannot be produced are provided for by rule 27 of the Land Registration Rules 2003. You must lodge evidence:

• satisfying the registrar that the applicant is either entitled or required to apply for first registration
• where appropriate, accounting for the absence of documentary evidence of title

In cases involving ancient possessions, where the deeds (if any) cannot be easily identified or do not clearly identify the land, you must lodge a statutory declaration in support of the application.

Information should also be provided as to whether or not the applicant is either in occupation of the land or receiving any rents and profits from it.

Individual arrangements for certificates of title may be considered for charities and other large landowners who can provide reliable information on title.

5.8 Inheritance tax

The registrar is obliged, under rule 35(1) of the Land Registration Rules 2003, to enter notice in the register of any interest which appears from the registrar’s examination of title to affect the registered estate. This includes notice of a charge for any inheritance tax (or interest on the tax) which might be due. Where tax on a chargeable transfer (or interest on the tax) is unpaid, HM Revenue & Customs is entitled to an inheritance tax charge on any property comprised in the estate.

An inheritance tax charge is protectable by registration of a D(i) land charge and where such a registration exists we will make the following register entry on first registration of the property unless evidence of discharge is supplied:

Where a property forming part of the estate is transferred for value then the property is not transferred subject to the inheritance tax charge; however, where the property is assented or gifted (that is, not for valuable consideration) then it passes to the recipient subject to the inheritance tax charge. The registrar must make an appropriate entry in the charges register if, from evidence of the applicant’s title supplied, it appears to the registrar that the land may be liable to a subsisting inheritance tax charge. There may be circumstances where an inheritance tax liability arises, even if the value of the deceased’s estate is below the maximum exempt threshold; the registrar is not in a position to know what percentage of any exempt threshold may have been used up or transferred, or what other circumstances (for example, a deed of variation of a will, or gift with a reservation) might have affected the tax position.

Situations where the inheritance tax charge may arise include:

• When the property passes on a death

If (a) the property has not been sold since the donor died; (b) the death occurred within 6 years of the date of the application; and (c) the net value of the donor’s estate shown in the probate or letters of administration exceeds the current inheritance tax threshold.

• When the donor of a lifetime gift died within 7 years of making the gift

When it is known that (a) the donor of a lifetime gift died within 7 years of making the gift; (b) the property has not been sold within 8 years of the date of the application; (c) the gift was made within 8 years of the application; and (d) the value of the property is in excess of the current inheritance tax threshold.

Where the application is not founded on a disposition for value we have to consider whether there may be any liability for inheritance tax irrespective of any land charge registration. You can avoid an entry being made in the register or a requisition on this point by providing the requisite evidence. Alternatively, you can lodge written confirmation of this provided by HM Revenue & Customs.

5.9 First registration based on dispositions by the Crown and the Duchies of Lancaster and Cornwall

Section 80 of the Land Registration Act 2002 lists those dispositions by the Crown that are subject to compulsory registration. For dispositions by the Royal Duchies, the normal provisions of section 4 of the Land Registration Act 2002 apply.

You should lodge applications based on dispositions by the Crown or Duchies in the normal way, using form FR1 and form DL in duplicate.

We will not normally expect you to have any deeds deducing title other than the grant by the Crown or the transfer by the Royal Duchy. If you do hold any affecting deeds and documents, however, you should include them with your application so that we can extract any matters affecting the title that need entry in the register.

You will need to supply land charges searches against the Crown Estate Commissioners, the Sovereign, the Duchy of Cornwall and/or the Duchy of Lancaster, as appropriate. For information about the special arrangements for ordering these searches, see practice guide 63: land charges: registration, official search, office copy and cancellation.

5.9.1 Foreshore

If the land you are applying to register comprises or includes foreshore, or abuts Crown foreshore, we will serve notice on the Crown Estate Commissioners and, where appropriate, on the Royal Duchies and the Port of London Authority (rule 31(1) of the Land Registration Rules 2003) before we complete the registration.

You should lodge any agreement as to the operation of accretion and diluvion, together with any necessary consents (rule 123(1) of the Land Registration Rules 2003), the terms of which we shall enter in the register under section 61(2) of the Land Registration Act 2002.

5.9.2 Escheat

If you are applying to register an estate where a previous freehold estate has reverted to the Crown or Duchies on escheat, you should apply as normal using form FR1 and Form DL in duplicate. The grant or transfer will recite the details of the escheat, including the title number, if the determined estate is registered. Subject to serving notice on the registered proprietor of the determined estate, we will register the applicant as proprietor of a new freehold estate and close the title of the determined estate. The new estate will be subject to all the incumbrances that previously affected the determined estate, unless you are able to lodge evidence to the contrary, such as a court order or evidence that they are unenforceable.

5.10 Purchases by tenants of public housing, purchases of housing estates etc and repurchases of defective housing

Absolute, or in certain cases, good leasehold (when the interest acquired is an underlease, the class of title will depend on how the certificate in form PSD3 has been completed) title is granted without any examination of the vendor’s or lessor’s title in the case of purchases under the ‘right to buy’ scheme or its extension (See Part V, Housing Act 1985 and the Housing (Extension of Right to Buy) Order 1993), and in certain other cases for which statutory provision has been made.

(See as to the preserved right to buy, section 154, Housing Act 1985 as applied by the Housing (Preservation of Right to Buy) Regulations 1993; as to disposals subject to the preserved right to buy, paragraph 2(4) of Schedule 9A, Housing Act 1985 as applied by those regulations; as to the repurchase of defective housing, paragraph 17(2) of Schedule 20, Housing Act 1985, as to voluntary disposals, section 133(8), Housing Act 1988; as to Housing Action Trust sales, section 81(9) and (11), Housing Act 1988; as to sales by the Development Board for Rural Wales, sections 172-3, Local Government and Housing Act 1989 and New Towns (Transfer of Housing Stock) Regulations 1990).

In these cases a certificate of title will be provided in one of the following forms.

5.10.1 Right to buy/right to a shared ownership lease

• PSD1 On conveyance of the freehold of a house.
• PSD2 On the grant of a lease of a flat or a shared ownership lease of a house or flat where the landlord owns the freehold
• PSD3 On the grant of a lease of a house or flat where the landlord does not own the freehold
• PSD16 On conveyance of the freehold of a house to a secure public sector tenant even though the immediate landlord owns only a leasehold estate and not the freehold

5.10.2 Preserved right to buy

• PSD13 On the conveyance of the freehold of a house
• PSD14 On the grant of a lease of a flat where the landlord owns the freehold
• PSD15 On the grant of a lease of a house or flat where the landlord does not own the freehold

5.10.3 Disposal subject to preserved right to buy/voluntary disposal with consent of the Secretary of State/disposal by Housing Action Trust or the Development Board for Rural Wales

• PSD17 On the conveyance, lease or assignment of housing land or buildings. Further information on lodging these applications may be found in practice guide 47: transfers of public housing estates.

Where one of the above certificates is provided, you must ensure that the certificate is properly completed and signed. Land Charges Department searches are not required. The property will be registered subject only to the incumbrances mentioned in the certificate or in the deed inducing registration, and those created by the applicants.

5.10.4 Repurchases of defective housing

• PSD11 Freehold dwelling
• PSD12 Leasehold dwelling

Where one of these certificates, properly completed and signed, is provided by the applicant authority the property will be registered subject only to the incumbrances mentioned in the certificate and any incumbrances created by the applicant authority on or after the date of the certificate. Land Charges Department searches need not be lodged.

5.11 Short titles

Sometimes a contract for sale provides for title to be deduced from a root deed less than 15 years old. Such a title might be offered where, for example, the vendor is a donee and holds no title deeds other than the deed of gift. HM Land Registry is unlikely to grant an absolute or good leasehold title in such circumstances.