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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

3.9 Applications to disapply or modify a restriction

3.9 Applications to disapply or modify a restriction

Restrictions that require the consent or certificate of a specified landlord or managing agent often create serious problems for a range of parties when the landlord or agent changes – for the buyer of a leasehold title subject to the restriction, for the registered proprietor who wants to sell that property and for any former landlord or agent named in the restriction. Please see section 4 of practice guide 19A: restrictions and leasehold properties for further guidance.

3.9.1 Disapplying a restriction

If a restriction is in favour of a dissolved company, see also section 7.7 in practice guide 35: corporate insolvency. Anyone who has a sufficient interest in a restriction may apply for an order that it is disapplied to enable a disposition or dispositions of a specified kind to be registered.

For example, a registered estate might be subject to a restriction prohibiting the registration of any transfer without the consent of or a certificate by a specified person. Application to disapply a restriction may be appropriate where that specified person cannot be traced.

In considering an application to disapply the registrar will require evidence that the applicant has used their best endeavours to comply with the terms of the restriction. . For example, if the restriction requires a certificate from somebody that clause X of a document has been complied with, we will need to see:

  • a certified copy of the document referred to in the restriction (if we do not already hold one)

  • evidence of compliance with the relevant clause. Therefore, if, say, the clause required a purchaser to enter into a deed of covenant, we would need a certified copy of the relevant deed, and

  • evidence of the steps undertaken to obtain the relevant certificate. Usually, this would comprise copies of any correspondence between the applicant and the beneficiary of the restriction

If the restriction is disapplied, the transfer can be registered but the restriction would remain in the register.

3.9.2 Modifying a restriction

The circumstances in which an order to modify a restriction will be made are extremely limited.

The registrar may only modify a restriction under section 41(2)(b) of the Land Registration Act 2002 in respect of a specified disposition or a disposition of a specified kind, not in respect of all future dispositions of all kinds.

It will almost always be more appropriate to apply to disapply a restriction where an order is sought in respect of a specified disposition.

The registrar cannot accept an application to modify a restriction so as to extend the kinds of disposition caught by the restriction. To achieve this, the restrictioner must first apply in form RX4 to withdraw it and then in form RX1 for a new restriction.

Application may be made by a person who has a sufficient interest in a restriction for an order that its terms be modified so that it no longer ‘catches’ a charge or other specified kind of disposition.

However, the registrar’s power to make an order is discretionary and, in general terms, will only be used when an applicant can explain on what basis it is considered that the parties to the relevant deed never intended the restriction to catch a disposition of the kind in question, (as by making the order the registrar will be changing the effect of a restriction that the parties agreed to). It will also be necessary for an applicant to show that it is not practicable for the restriction to be cancelled or withdrawn and a new restriction entered, or for the register to be altered under Schedule 4 to the Land Registration Act 2002.

Where a restriction is cancelled or withdrawn and replaced by a new restriction, remember that a restriction that is worded to catch dispositions by the proprietor of any registered charge will not apply to a charge that was registered before that entry of that restriction. Where the existing restriction to be cancelled or withdrawn applies to dispositions by the proprietor of any registered charge and a charge has been registered since the entry of the restriction, you should consider whether you also need to apply for an additional restriction against the charge concerned. For instance, if a Form L restriction is being withdrawn and re-entered, entry of a Form S restriction may also be required.

3.9.3 The application

To apply, include the appropriate ‘modify a restriction’ or ‘disapplication of restriction’ transaction as part of your application and upload form RX2. The application must be accompanied by the fixed fee prescribed under the current Land Registration Fee Order, see HM Land Registry: Registration Services fees.

The applicant must:

  • state whether the application is to disapply or to modify the restriction
  • explain their interest and why it is sufficient to make the application
  • state why the applicant considers that the registrar should make the order
  • give details of the disposition or kind of dispositions that will be affected by the order. If the application is to modify the restriction, give details of the modification requested

The application may be made before, or at the same time as, an application to register the disposition that is caught by the restriction.

When considering whether to make the order, the registrar will additionally consider any available evidence to clarify what purpose the restriction still serves. The registrar may ask for further evidence from the applicant and may serve appropriate notices.

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