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Published 30 abril 2018
It cost a party over £200,000 per annum in rent for failing to serve a notice correctly.
The recent case of Sackville UK Property Select II (GP) No 1 Ltd & Another v Robertson Taylor Insurance Brokers Ltd (2018) reminds us of the dangers of the "registration gap", being the period of time between the date of the transfer of a registered estate and registration of that transfer at the Land Registry. For housebuilders, on many occasions, it can take months before a registration is processed. This can cause an issue where a notice needs to be served shortly after an acquisition.
In the case of Sackville, the tenant had taken an assignment of a lease from a group company and exercised the break notice prior to registration of the assignment. The Court held that as the legal title to the lease had not passed at that point, the break notice was invalid, irrespective of the assignee being a group company of the original tenant.
The case highlights that special care is required to ensure that notices are served by and on the correct party and that the registered titles should always be checked when preparing such notices. Furthermore, you should be mindful of whether there are any notices to be served or actions that you wish to take shortly after an acquisition, such as a notice of assignment of an option or a notice to terminate a tenancy. You should advise us accordingly so that we can ensure that appropriate provision is included in the contract to enable to you serve any such notices or take any other action to avoid you falling into the trap of the registration gap following completion.
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