What is a registrable lease?

Residential and commercial leases with a term of seven years or more are registrable leases and can be registered with the Land Registry. B P Collins’ property team advises that by registering the lease this makes it a valid legal lease, otherwise it will only take effect as an equitable lease which is considered much weaker in the eyes of the law and can have implications for both tenants and landlords. By registering the lease, the details will be noted on the title to the freehold property and a separate leasehold title will be created.

Implications for tenants

It is important for tenants to register their leases if they can because otherwise their right to occupy the property for the term of the lease will not be protected. This is an implication of the lease taking effect as an equitable lease and will lead to further implications as listed below.

If a lease is not registered, then the rights that are granted to tenants within the lease may not be enforceable should the landlord decide to sell their interest in the property. This is because following a sale, any new landlord is not obligated to grant the same rights to a tenant of an unregistered lease. For this same reason, it may also be difficult for tenants to sell their leasehold interest if it is not registered because a new tenant may not want to take on a lease where they are not protected and may not benefit from the rights granted to them.

Some leases also contain a clause where it is a requirement for the tenant to register this interest at the Land Registry within a given time period. Therefore, leaving it unregistered would be considered a breach of the lease which could give rise to the landlord being able to terminate.

Implications for landlords

It is also important for landlords that these leases are registered. Should they decide to sell their freehold interest in the property, any potential buyer will likely require that the unregistered lease is registered before purchasing the property. Therefore, this will cause delays in the transaction.

It will also put them at risk of not being able to recover any unpaid rent from the guarantor because their liability to do this under the lease has not been registered and therefore is not enforceable. Furthermore, should the landlord decide to obtain a loan against the property, the unregistered lease could cause any lender to refuse the application because the income stream on the property, through flows such as rent and service charge, will be considered vulnerable because the covenants for the tenant to pay these costs may not be enforceable.

Non-registrable leases

Residential and commercial leases with a term between three and seven years are not considered registrable leases but can still be noted at the Land Registry. The difference between this and registering leases is that instead of creating a separate leasehold title, the lease will be noted on the freehold title under the schedule of leases.

It is just as important to note leases against the freehold title if you are able to because otherwise, both landlords and tenants may suffer the same implications as detailed above.

How you can check whether your lease is registered or noted

As you can see, whether you are the landlord or tenant of a commercial or residential lease which you believe is able to be registered or noted, it is important to check whether this has been done.

You can check whether your lease is registered by checking MapSearch which is a free tool on the Land Registry website. By searching the address, you can see if there is a leasehold title associated with it.

You can also check whether your lease is noted by obtaining the freehold title of the property and seeing if your lease is listed under the schedule of leases.

If you find that your lease has not been registered or noted then our property team would be happy to assist you with completing this process. They can be contacted by email at enquiries@bpcollins.co.uk or please call 01753 889995.

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