Protecting an interest in a property, where the beneficiary of the interest is not the owner (‘the Proprietor’) of the Property can be done in one of two ways (depending on the type of interest being protected). One of these methods of protection, is by Notice, the other being by Restriction. In this article we will consider Notices.
Where there is more than one party claiming an interest in a registered title, each interest is ranked in order of priority. The lower ranking interest has to give way to the higher ranking interest.
Interests are ranked in date order (being the date of the registration of the interest on the title). This has the effect of protecting an existing interest from being affected by a later disposition or an interest that has not been registered at all. Dispositions for value, will on registration, postpone the priority of any other interest that has not been registered ( the exception to this, being Overriding Interests).
A Notice entered in the register in respect of a third party interest will protect its priority against that of subsequent registrable disposition for value.
Nature and Effect
Notices are entered in the title of the property in respect of an interest that a third party may have in that property and wishes to protect.
The entry of a Notice does not guarantee that the interest it is valid or that it even exists. A Notice merely serves to ensure that the priority of the interest referred to in the Notice is protected against any subsequent interests and will not be automatically postponed on the registration of a subsequent disposition for value.
Interests that Cannot be Protected by Notice
Not all Interests can be protected by Notice. Those that cannot are:
- interests under a trust of land (s.33(a)(i), LRA 2002)
- interests under a settlement under the Settled Land Act 1925 (s.33(a)(ii) LRA 2002)
- leasehold estates in land for a term of three years or less, except for any that have to be registered
- restrictive covenants made between lessor and lessee that relate only to the demised premises (s.33(c), LRA 2002)
- interests capable of registration under the Commons Registration Act 1965 (s.33(d), LRA 2002)
- PPP leases
Some of the interests listed above already have overriding status and therefore do not need further protection. Those that do not have overriding status can only be protected by the entry of a Restriction on the title register.
Different Types of Notice
There are two types of Notice that can be entered by a party claiming an interest in a property:
- An Agreed Notice; and
- A Unilateral Notice
Agreed Notice-
An Agreed Notice can only be entered in the register in the following circumstances:
- By or with the consent of the Proprietor (or someone entitled to be registered as such); or
- If the applicant can satisfy the registrar that the interest claimed is valid.
In order to make an application for an Agreed Notice, the applicant must provide evidence of their interest. The HM Land Registry will look at the evidence provided without involving the Proprietor and will not serve notice of the application on the Proprietor of the title, even if the application is without the co-operation of the Proprietor. The Proprietor will be notified once the entry has been made on the title to the Property.
An Agreed notice must provide details of the interest that they protect. Often this is achieved by referring to a document that describes, or which created, the interest.
An example of an agreed notice entry would be:
“(22.01.2004) Contract for sale dated 15 October 2003 in favour of James Dean Perry.
NOTE: Copy filed.”
The date in brackets at the beginning of the entry provides the date on which the entry is deemed to have been made.
The purpose of an Agreed Notice is to give notice of the interest to which it refers; it does not necessarily identify the beneficiary of the interest and does not note the devolution of any title to an interest.
In order for the Agreed Notice to be cancelled and removed from the title to the property, the registrar must be satisfied that the interest being protected has come to an end or is invalid.
Unilateral notices
In order for a Unilateral Notice to be entered on to the title to the Property, the consent of the Proprietor does not need to be obtained. There is no requirement to satisfy the registrar of the validity of the interest or to provide evidence of such.
The fact that the Proprietor of the title to the property is not notified of the application for the Unilateral Notice until after the notice has been entered in the title register, means that the Proprietor does not have the opportunity to object to the application.
Once the Proprietor has been notified of the entry of the Unilateral Notice, they can apply to have it cancelled and challenge the applicant to prove the validity of their claim.
There are two elements to a unilateral notice entry: the first part gives brief details of the interest protected and identifies that the entry is a Unilateral Notice; the second part gives the name and address of the person identified by the applicant as the beneficiary of the notice.
When a Proprietor applies to cancel a Unilateral Notice, it is the beneficiary of the notice that is required to prove the validity of their interest.
An example of a unilateral notice entry would be:
“(22.01.2004) UNILATERAL NOTICE in respect of an Agreement dated 15
October 2003 made between (1) Sandra Jane Kemp and (2) James Dean Perry.
(22.01.2004) BENEFICIARY: James Dean Perry of 23 The Burn, Ripley, Cornshire
XX1 3AB.”
The date in brackets at the beginning of the first part of the entry provides the date when the entry is deemed to have been made. The date in brackets at the beginning of the second part of the entry represents the date when the current beneficiary was entered in respect of the notice.
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