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Practice guide 19: notices, restrictions and the protection of third-party interests in the register

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Practice guide 19: notices, restrictions and the protection of third-party interests in the register

3.2 Entry of restrictions

3.2 Entry of restrictions

3.2.1 Restrictions entered at the registrar’s discretion

Section 42(1) of the Land Registration Act 2002 sets out the registrar’s general power to enter a restriction as follows.

“The registrar may enter a restriction in the register if it appears to him that it is necessary or desirable to do so for the purpose of –

(a) preventing invalidity or unlawfulness in relation to dispositions of a registered estate or charge,

(b) securing that interests which are capable of being overreached on a disposition of a registered estate or charge are overreached, or

(c) protecting a right or claim in relation to a registered estate or charge.”

The registrar may enter a restriction to fulfil one of these purposes whether or not an application is made to do so. However, the registrar will always notify the relevant proprietor when a restriction is entered without an application having been made to do so. See Notifiable applications for information about notices served when an application has been made to enter a restriction.

It will usually be clear whether a restriction is necessary or desirable for one of the three permitted purposes, but this will not always be the case. Note that the purpose set out in section 42(1)(c) of the Land Registration Act 2002 does not permit the registrar to enter a restriction in respect of any right or claim but is limited as follows.

  • Firstly, the registrar may not enter a restriction to protect the priority of an interest that is or could be protected by notice (section 42(2) of the Land Registration Act 2002). However, a restriction might still be necessary or desirable for one of the other permitted purposes set out in section 42(1)(a) or (b) of the Land Registration Act 2002, for example to prevent the unlawful breach of a provision in a contract that has been protected by notice
  • Secondly, a right or claim may only be protected under the third permitted purpose if it relates to a registered estate or charge. As only the legal estate will be registered, this does not include rights or claims that relate only to a beneficial interest in property

A charging order affecting a beneficial interest under a trust may still be protected by a restriction entered under section 42(1)(c) of the Land Registration Act 2002, such as Form K, as this is expressly confirmed in the Land Registration Act 2002 (section 42(4) of the Land Registration Act 2002). However, generally a restriction can only be entered in respect of an interest under a trust for one of the other two permitted purposes. In most cases, a restriction in Form A will be appropriate for the second purpose – to ensure that overreaching takes place on a disposition that gives rise to capital monies. See practice guide 24: private trusts of land for more information.

3.2.2 Where we are obliged to enter a restriction

We are obliged to enter a restriction in certain circumstances. These are where:

  • we enter 2 or more people as joint proprietors of a registered estate in land and the survivor will not be able to give a valid receipt for capital money (section 44(1) of the Land Registration Act 2002) – see practice guide 24: private trusts of land for more information
  • some other statute requires the registrar to enter a restriction (section 44(2) of the Land Registration Act 2002)
  • a bankruptcy order is registered under the Land Charges Act 1972 and it appears that a registered estate or charge is affected (section 86(4) of the Land Registration Act 2002). Practice guide 34: personal insolvency provides further detail about the entry of a bankruptcy restriction
  • the court makes an order that requires the registrar to enter a restriction (section 46 of the Land Registration Act 2002) - see Court orders requiring the entry of a restriction for more detail about restrictions required by the court

Rule 95 of the Land Registration Rules 2003 specifies the forms of restriction that we are obliged to enter under various statutory provisions.

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