A lease granted on or after 13 October 2003 may not require or even be capable of registration. But, if it grants easements over registered land, then those easements must be completed by registration in order for them to be legal, rather than equitable, easements.
Since the Land Registration Act 2002 came into force on 13 October 2003, the categories of leases that are now either compulsorily or voluntarily registrable or are capable of being noted have changed. For the purpose of this article, these unregistrable leases will be referred to as ‘short–term leases’. It can be so easy to overlook easements contained in such a lease when the lease itself is one that, in normal circumstances, might go straight back to the client once the usual formalities have been completed.
This article looks at the steps that need to be taken to register easements contained in short-term leases. It will also explain the difference between schedules relating to leases referred to in the charges register of the servient title, so that practitioners can consider, when an application can be completed, whether or not the easements have been protected and (if so) whether they have been completed by registration, so as to operate as legal easements.
It will assume the easements in the short term lease are capable of taking effect as legal easements and the lease has been validly created by deed.
Step 1 – Identifying a ‘short-term lease’
A short-term lease is one which is not:
- the grant of a lease for more than seven years;
- the grant or assignment of a lease which triggers compulsory registration; or
- the subject of voluntary registration.
A full list of leases that either require registration or are capable of registration is set out in Practice Guide 25 – Leases – when to register, sections 3 and 4.
Step 2 – Deciding whether the short-term lease needs protecting
Short-term leases that do not have to be registered are overriding interests.
Some short-term leases for more than three years can be protected by entry of notice in the register but will lose their overriding status if they are.
If it is decided to apply to enter notice of the short-term lease in the register of the landlord’s title then an application may be made on form AN1 for an agreed notice or form UN1 for a unilateral notice.
For further details see Practice Guide 15 – Overriding interests and their disclosure, section 5.1 and Practice Guide 25 – Leases – when to register, section 7.3.
Step 3 – Easements
An easement expressly granted on or after 13 October 2003 cannot take effect as a legal easement unless it is completed by registration.
That is the case even where the easement is granted in a short-term lease that cannot itself be registered (or even noted).
So, to ensure that an easement in a short-term lease operates at law as a legal easement and to avoid the risk of the benefit of the easement being lost, an easement contained in a short-term lease must be completed by registration.
As the leasehold estate having the benefit of the easements will not be registered, there will not be a registered dominant title so an application to register those easements will be only required against the servient title.
The protection of equitable easements in short-term leases is considered in more detail in Practice Guide 62 – Easements, section 9.
Step 4 – How to apply for registration of easements in short-term leases
As indicated in step 2 above, some short-term leases are capable of protection by notice so it is necessary to consider the different applications that might be made.
a) Easements contained in a short-term lease that will NOT be noted on the servient title
- Apply on form AP1
√ Complete panel 4 along the following lines:
“registration of the easements within the lease”, and
- include with the application:
√ original lease or counterpart
√ certified copy of the lease (if the original is to be returned)
√ stamp duty land tax form, if relevant
√ any necessary consents/certificates, and
√ the appropriate fee as set out in the current Fee Order.
b) Easements contained in a short-term lease that is to be noted on the servient title
- apply on form AP1
√ complete panel 4 the same as step 4 (a) above, and
√ complete panel 11 as to ‘Disclosable overriding interests’, and
- lodge a completed form DI to include details of the lease, and
- include with the application:
√ the same as step 4 (a) above.
- apply on form AP1
√ complete panel 4 as step 4 (a) above, and
- apply on form AN1 or UN1 to note the short-term lease, and
- include with the application:
√ the same as step 4 (a) above.
NB: Without a specific application to note the lease in form DI, AN1 or UN1, the lease will not be noted.
Step 5 – Checking the register; checking the entries
Normally, there will be a general entry in the charges register relating to noted leases, referring to a schedule for more details of the lease and what it may contain. Sometimes there may be more than one general entry to cover differences between leases. For example, some may grant and reserve easements and others may not.
However, some registers may have more than one schedule in the charges register that relate to leases in some way or another and it is important to understand their purpose to ensure any entry arising out of the short-term lease is where you would expect it to be.
1) Schedule of leases
This schedule is used to note all leases and is where notice of a short-term lease should be entered if an application has been made to note it on the landlord’s title on form AP1 and DI or form AN1/UN1 as in Step 4 (b) above.
There is usually a charges register entry preceding the schedule. However, the following entries would not cover the registration of easements contained in a short-term lease.
“The land is subject to the lease set out in the schedule of leases hereto”, or
“The parts of the land affected thereby are subject to the leases set out in the schedule of leases hereto”.
So, check there is an entry that specifically mentions easements.
“The parts of the land affected thereby are subject to the leases set out in the schedule of leases hereto. The leases grant and reserve easements as therein mentioned.”
So far, so good.
But, if only form AN1 or form UN1 is lodged to note the short term lease and the easements contained in it, with no separate application made on form AP1 to specifically register the easements, the easements can only be equitable.
For example, an application to note the short term lease and the burden of the easements contained in it on the landlord’s title on form AN1 or form UN1 will result in the following note appearing after details of the lease in the schedule of leases for AN1 applications or the usual unilateral notice entry for form UN1 applications.
“NOTE: The grant of the rights in the above lease has not been completed by registration in accordance with section 27 of the Land Registration Act 2002 and so does not operate at law.”
This tells you that the easements contained in the short term lease are only equitable.
An easement granted in a short-term lease for value that is only noted and not completed by registration will not enjoy the protection afforded by s.29, Land Registration Act 2002 to a registrable disposition for value that is completed by registration. This means that the noted equitable easement may be overridden if, for example, a charge given before the grant of the short-term lease is subsequently completed by registration and if the registered estate is then transferred by that mortgagee in exercise of the power of sale.
But, worse still, if the application made on form UN1 or AN1 only relates to the short-term lease and not the easements contained in it, with no separate application made on form AP1 in respect of the easements, no reference to the easements will be made in the register.
As the easements cannot be overriding interests, they will have no protection and may be overridden if a subsequent registrable disposition for value is completed by registration.
2) Schedule of notices of leasehold easements
This schedule is used to note the burden of a series of leases of easements on the servient title.
Under s.1 (2) of the Law of Property Act 1925, in order to be legal rather than equitable, easements must be equivalent to:
- either a fee simple absolute in possession
- or a term of years absolute.
An easement over land can therefore be granted in fee simple or for a term of years, in the same way as land and buildings can be conveyed or transferred in fee simple or leased for a specific period.
Again, like easements created in short-term leases, since 13 October 2003 easements granted for a term of years must be registered under s.27 Land Registration Act 2002 (LRA 2002) to be valid legal easements.
Just like an easement in fee simple granted for the benefit of land over someone else’s land, an easement granted for a specific term of years cannot be registered with its own title separate from the benefitting land. This means any application will be only required against the servient title (although it is possible to enter leases of easements as appurtenant to the dominant title to the land benefitting from it).
An entry in the charges register of the servient title relating to a lease of easement would look like this:
“The land is subject, during the terms created by the leases of easements specified in the schedule of leases of easements hereto, to the rights granted by the said leases.
Schedule of Leases of Easements
1. Benefitting land : 1 High Street
Title Number of
Benefitting land : AB123456
Date of Lease : 8 January 2011
Term of Lease : 25 years from 8 January 2011
Registration date : 12 January 2011”
The requirements of s.27 LRA 2002 would have been satisfied and the lease of easement would be a valid legal easement.
3) Schedule of notices of leasehold easements with an amended charges register entry for registration of easements in short-term leases
Where an application is made to register easements contained in a short-term lease but no separate application is made to note the lease, it is less straightforward to work out where to find the entry relating to the registration of the easements.
Clearly, these are easements and not a lease, so it would not be appropriate to make reference to them in the schedule of leases.
Similarly, these are easements being granted for the benefit of an unregistrable leasehold estate in land; they are not leases of easements that could be for the benefit of a freehold estate in land, so they are unlikely to be found in the schedule of leases of easements.
Or are they?
So, where can the relevant entry/entries be found?
Normally the relevant entry relating to the easements contained in the short-term lease may be found in the charges register rather than a schedule to it.
i. “The land is subject to the easements granted by a lease dated…. of….for a term of…..
NOTE: Copy filed.”
However, it is also possible that if the charges register of the servient title appeared likely to have more than three short-term leases noted, because, for example, it was a commercial title, then the following entry could have been made in the charges register when the first application was made to register easements contained in a short-term lease.
ii. “The parts of the land affected thereby are subject to the easements granted by the leases set out in the schedule of leases of easements hereto.
NOTE: The heading to the schedule should be read as if it said “Schedule
of notices of leasehold easements.”
Provided the charges register contains either entry i or entry ii with details of the short-term lease entered in the schedule of leases of easements, the registration of the easements contained in the short term lease are duly reflected on the servient title and the easements will be valid legal easements.
- This is an updated version of an article first published in Landnet 24.