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

3.4 Applying for a restriction

3.4 Applying for a restriction

3.4.1 Those who may apply for a restriction

You can only apply for the entry of a restriction if you:

• are the relevant proprietor
• are entitled to be registered as the relevant proprietor (see Applications made with the cooperation of the relevant proprietor)
• have got the consent of the relevant proprietor or someone entitled to be registered as such
• otherwise have a sufficient interest in the making of the entry

3.4.2 Things to consider before applying for a restriction

Before applying for a restriction ask yourself the following questions.

• Who is intended to be bound by the restriction? For example, it will be difficult to show that the title should be subject to a restriction if the interest relates to a person who is not the registered proprietor.
• Does the registered proprietor or someone entitled to be registered as proprietor consent to the entry of the restriction and can you provide evidence to confirm their consent? If not, do you have evidence to show that the applicant has a sufficient interest in the making of the restriction? Refer to [Entry of restrictions] and [Applications made without the cooperation of the relevant proprietor: the need to show a sufficient interest] for more information regarding this point.
• What type of dispositions are intended to be caught? Remember that 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 (see The general effect of restrictions and Adapt the restriction to suit your circumstances). Remember, a restriction requiring a certificate of compliance may also incorporate additional wording to allow for a certificate that simply confirms that the provisions referred to in the restriction do not apply to a disposition. To allow for this option the restriction just needs to be completed with the words “or that they do not apply to the disposition” (see the standard form of restrictions set out in Appendix B for more details).
• Does the nature of the interest intended to be protected by the restriction require consent, or a certificate of compliance, from a particular party? If so, please remember that we will require an address for service for that party – and if they are a company, limited liability partnership or corporate body, we will require the company registration number or territory of incorporation, as appropriate.
• Is there a dedicated standard form of restriction that should be used? Remember that in many instances only a limited number of standard restrictions will be appropriate - see Appendix A. In respect of leasehold titles, please also remember that a standard Form PP restriction will usually be preferable to a Form L or M restriction identifying a specific landlord or title number because the landlord and/or landlord’s title number will often change over time – see section 2.3.1 of practice guide 19A: restrictions and leasehold property. In addition, for restrictions connected to covenants in a lease where the tenant has not agreed to the entry of the restriction, please also note the contents of section 2.3.2 of practice guide 19A: restrictions and leasehold property.
• Is there a definite point in the future when the interest protected by the restriction will time expire? If so, the restriction may be able to identify this fact by starting “Until … (date) no disposition of the registered estate … “.
• 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 … “. See Adapt the restriction to suit your circumstances for further information relating to these last two points.

3.4.3 Compulsory applications

Rule 94 of the Land Registration Rules 2003 prescribes certain situations where a person must apply for a restriction. In particular, where a new trust is set up or there is a change in a trust of land and as a result a sole proprietor will not be able to give a valid receipt for capital money, a proprietor must apply for a restriction in Form A (Schedule 4 to the Land Registration Rules 2003). This is the standard joint proprietorship restriction – see practice guide 24: private trusts of land for more information.

Note that where 2 or more people are under an obligation under rule 94 of the Land Registration Rules 2003 to apply for entry of a restriction in Form A, that obligation will be satisfied by an application by one of those people. In this case however the application should be made as if it was made by a person with sufficient interest (see Applications made without the cooperation of the relevant proprietor: the need to show a sufficient interest) and HM Land Registry will serve a notice for information only on the other proprietor(s).

3.4.4 Applications made without the cooperation of the relevant proprietor: the need to show a sufficient interest

Where the applicant does not have the cooperation of the relevant proprietor, they may only apply for a restriction if they can satisfy us that they have a sufficient interest in the making of the entry.

Rule 93 of the Land Registration Rules 2003 contains a list of standard situations where a class of person will be regarded as having a sufficient interest in the making of an entry. In most cases, the rule identifies which of the standard form restrictions will be appropriate to each situation covered.

The applicant must give details of the nature of their interest and how that interest arose. We will require evidence to show sufficient interest in support of an application.

This evidence must be a statement by the applicant in panel 12 of form RX1 or conveyancer’s certificate in panel 13. If the interest arises from a document (for example, a court order) the statement or certificate should refer to that document and a certified copy should be uploaded as part of your application and listed in panel 5. We can ask for additional evidence if necessary (rule 92(4) of the Land Registration Rules 2003).

If there is more than one applicant and they chose to give a statement, that statement must be given by all the applicants. Where the applicant is a corporation the person giving the statement should confirm their position and that they are authorised to give the statement on behalf of the corporation.

3.4.5 Interests under trusts

An interest under a trust of land cannot be protected by an agreed or unilateral notice (section 33(a)(i) of the Land Registration Act 2002) but may be protected by a restriction. Generally, a beneficiary under a trust of land may apply for a Form A restriction if one has not already been entered in the register. A Form A restriction ensures that any capital money must be paid to 2 trustees or a trust corporation. A second Form A restriction cannot be entered because the purpose of a Form A is to ensure that interests behind the trust are overreached; it does not give notice of an individual’s interest under a trust.

An interest under a trust of land means the interest of a person under such a trust who stands only one step away from the registered estate. Examples include:

• where A and B are the proprietors of the registered estate and hold on trust for themselves (both have interests under a trust of land)
• where C and D are the proprietors of the registered estate and hold on trust for E for life and for F thereafter (E and F have interests under a trust of land)
• where G is the proprietor of the registered estate and holds on a bare trust for H (H has an interest under a trust of land)

If another form of restriction is required either in place of or in addition to a Form A restriction, evidence will have to be lodged showing that the applicant has a sufficient interest in the making of the entry. Whether the application can be accepted will depend on the restriction applied for, the nature of the applicant’s interest and the circumstances of the case.

If the application was for a consent restriction such as Form N, the registrar would have to be satisfied that it was necessary or desirable (for one of the purposes in section 42(1) of the Land Registration Act 2002) for such a restriction to be entered. To allow a consent restriction to be entered (except, for example, when it was required under the trust) would be to give the beneficiary a right they are not entitled to and could result, in practice, in thwarting the clear intention of sections 42(1)(b) and 44(1) of the Land Registration Act 2002 and sections 2 and 27 of the Law of Property Act 1925 that overreaching should take place. It will not normally be possible for an applicant who is not the proprietor and who does not have the proprietor’s consent, and does not fall within rules 93(n), (o), (p), (q), (s) or (t) of the Land Registration Rules 2003 to be able to show that they have a sufficient interest in the making of a consent restriction such as in Form N.

Where a Form A restriction is considered insufficient to protect a beneficiary’s interest under a trust of land, they may also apply for a restriction in Form II. A restriction in this form should ensure that the person named in the restriction receives notice of the disposition, thereby giving them the opportunity of pursuing the proceeds of sale.

If the beneficiary’s consent is required under the terms of the trust, an application may be made for a Form B restriction.

However, please remember that a Form B restriction is only appropriate if the disposition creating the trust of land contains provisions limiting the trustee’s power. A declaration of trust that simply acknowledges and/or quantifies the beneficial shares in the equity of a property will not justify the entry of a Form B restriction. Additional information about trusts and restrictions in standard Forms A, B and C is available in practice guide 24: private trusts of land.

Further information about protecting an interest under a trust of land can be found in Appendix A: some possible means of protection for common third-party interests.

The interest of a person who is two or more steps away from a registered estate which is subject to a trust of land is termed a ‘derivative interest’ in this guide. Examples include:

• proprietors J and K hold on trust for L and M and M holds on trust for herself, N and O (N and O will have derivative interests)
• proprietors P and Q hold on trust for R and S, and S holds on trust for T and U (T and U have derivative interests)
• proprietors V and W hold on trust for X and Y and X charges their interest to Z (Z has a derivative interest)

A person with a derivative interest may apply for a Form A restriction provided such a restriction has not already been entered in the register.

It is difficult to see how an applicant with a derivative interest would be able to satisfy the registrar that they have sufficient interest under section 42(1) of the Land Registration Act 2002 (see Restrictions entered at the registrar’s discretion) for any other form of restriction, for example a consent restriction, to be entered. Generally, a person with a derivative interest will not be able to apply for a different form of restriction because:

• the holder of a derivative interest cannot apply under section 42(1)(a) of the Land Registration Act 2002 on the basis that the restriction might prevent the trustees from misapplying the proceeds of sale following a disposition which overreaches the beneficial interests, as subsection (1)(a) is concerned only with preventing unlawfulness or invalid dispositions of registered estates and not with subsequent dealings with the proceeds of sale
• a derivative interest is not a right or claim in relation to a registered estate or charge within section 42(1)(c) of the Land Registration Act 2002 as it is a right or claim in relation to the beneficial interest under the trust of land (not in relation to the registered estate or charge)

A person with the benefit of a charging order over a beneficial interest under a trust of land may apply for a Form K restriction, even though their interest is a derivative interest, because of the provisions of section 42(4) of the Land Registration Act 2002 and rule 93(k) of the Land Registration Rules 2003.

The Legal Aid Agency, where it has a statutory charge over a beneficial interest under a trust of land, may apply for a restriction in Form JJ.

3.4.6 Notifiable applications

We will notify the relevant proprietor before we complete an application for a restriction unless it is either:

• made by or with the consent of the relevant proprietor or someone entitled to be registered as such
• one of the compulsory applications listed in rule 94 of the Land Registration Rules 2003
• applied for to reflect a limitation under a court order or an order of the registrar (or an undertaking given in place of such an order) (section 45 of the Land Registration Act 2002)

The notice will give the relevant proprietor 15 working days to object to the application. If a dispute arises from an objection to an application made within that period and it cannot be resolved by agreement, it will be referred to the tribunal. See practice guide 37: objections and disputes: HM Land Registry practice and procedures for more information about the resolution of disputes by the tribunal.