Housebuilder Top Tip: Beware of the registration gap

Published 31 marzo 2021

Whilst the Land Registry is doing its best to ensure the pandemic does not impact upon applications, inevitably, some will take much longer – particularly where the register needs to be changed. Current guidance indicates simple applications (for example, changing a name or removing a charge) will take four to six weeks. Complex applications (such as registration of new leases and transfers of part) will take between six to nine months.

Consequently, we do need to be mindful of the "registration gap”, being the period between the date of the disposal of a registered estate and registration of that disposal at the Land Registry. For housebuilders, the registration gap can cause particular issues where a notice needs to be served shortly after an acquisition.

In the case of Sackville UK Property Select II (GP) No 1 Ltd & Another v Robertson Taylor Insurance Brokers Ltd (2018), the tenant had taken an assignment of a lease from a group company and served a break notice prior to registration of the assignment. As the legal title to the lease had not yet passed when the break notice was served, it was held that the notice was invalid, irrespective of the assignee being a group company of the original tenant.

Therefore, it is crucial that registered titles are thoroughly checked to ensure notices are properly served by and on the correct party. We should also consider in advance whether any notices will need to be served shortly after a disposal (such as a notice of assignment of an option or a notice to terminate a tenancy). You should advise us so that we can ensure that appropriate provisions are drafted in the contract which enable you to serve any such notices and avoid any issues that may be caused as a result of a registration gap.