The most important thing you need to know is that this law simply does not apply to leases for less than seven years.

 

This information article first summarises the current position on Land Registration and Prescribed Lease Clauses. We then take you through how to complete the “clauses”. 

 

For bespoke documents, or help amending the document so that it suits you, please see our drafting service or email us by clicking this link.

 

The use of prescribed clauses in leases were brought in under the Land Registration (Amendment) (No 2) Rules 2005, (the new rules). The new rules came into force on 19 June 2006 for all leases completed after 18 June.

 

These changes are intended to quicken and simplify the registration process, and result in a more accurate and complete title register. An example of what details you must enter can be found later in this article.

 

PLCs are a set of standard details, which must appear at the beginning of any lease which is for seven years or more. The prescribed clauses contain the information which the Land Registry needs in order to complete registration of the lease.

 

The ‘clauses’ require you to enter details of the lease. You can either enter the details at the top of the lease, or cross-reference to the relevant parts of the document.

 

 

 

The new rules apply to you if your lease is:

 

If you need a lease for 7 years or more, it must now be registered at the Land Registry, using the new method.  If your lease is for less than 7 years, the changes do not apply.

 

Essentially, if your lease is for a term of 7 years or more, then it is registrable. If it is registrable, then you have to include the new “clauses”. However, there are exceptions: a lease does not have to contain the prescribed clauses when it is granted in a form of:

 

Where a lease is created by a deed of variation that takes effect as surrender and re-grant, the deed does not have to be a prescribed clauses lease. This is the case whether or not the original lease was a prescribed clause lease.

 

If any of the exceptions apply to you, you must get a certificate from a conveyancer, or other evidence to satisfy the registrar as to the claim.

 

Leases granted out of unregistered estates also do not have to contain the clauses, but they can be used voluntarily.

 

If you think your lease is the one in 1000 to which one of these exceptions may apply, see a solicitor.

 

From 19 June 2006 use of the clauses is compulsory for leases completed on or after this date.

 

Applications for the first registration of a lease of a property or land must include completed forms AN1, AP1 and UN1. If the application is for a lease which has been leased before, there is no need to complete separate forms. Instead, the clauses LR9, 10, 11 and 12 suffice.

A new heading will appear at the top of all registers of title relating to leasehold estates. New specific register entries relating to the inclusion or exclusion of easements in the lease will also be made in the register. This will help to make clear which easements in the lease are included or excluded from the registration. The absence of any register entry will mean that no easements are included in the registration.

How does it affect leases signed up recently?
As long as the Land Registry received the lease before 19th June, the old rules still apply. You will not need to create a new lease. Contractual duties and obligations are not affected. When the lease ends and a new one is drawn up, it will have to comply with the new rules, and will require the clauses to be entered at the top of the lease document.

You must make sure that any leases which are agreed after 19th June 2006 re in the prescribed format. Old lease ‘templates’ will not be accepted.

 

The Land Registry can process the lease faster, saving time and money in the long run because all the information they need is in one place.

 

Below is an example of how the first few pages of a new lease should look. The Land Registry suggests that a tabular format is the best way to present the information. In the left hand column is the information they require and a box number. To the right is the space where you should insert the information. We have included notes to help you in green. Of course, these notes must be deleted before sending the lease to be registered. If you already have a lease, you can cut and paste the set of boxes below in order to comply with the law.

 

These changes are intended to quicken and simplify the registration process, and result in a more accurate and complete title register.

 

The rules do not say which “clauses” have to be completed and which do not. Very simply, the Land Registry will not register a lease if you do not give the necessary information. But . . . .

 

If the information you give is wrong, you may be bound later to your wrong answers.

 

 

If you fail to give information which you could have given, to protect your interest, you may find you have lost that interest

 

Net Lawman can check your lease before registration if you wish. For bespoke documents, or help amending the document so that it suits you, please see our drafting service  or email us by clicking this link.

 

LR1. Date of lease                              
Insert the date of the lease. Use the full date format. For example: 9 January  2009. The date entered in this box will be used for registration. Any other date on the lease, such as on a front sheet or cover, will be ignored. 

LR2. Title number(s) 

LR2.1 Landlord’s title number(s)
If the landlord's title is registered, insert the title number(s) in this box. Otherwise leave the box blank.

LR3. Parties to the lease                  

Landlord
Insert the full name and address (including postal code) of the landlord.

If there are no 'other parties' you can delete the heading.

If details of any third party to the lease have not been completed in this box, they will not be entered in the register of title.

LR4. Property
It is important to note that in the case of a conflict between the contents of this box and the remainder of the lease, The Land Registry will complete registration of the lease based solely on the contents of this box.

For example: Ground floor and part yard at 21 Main Street, Wood Green, London, N5 3AA, as edged red on plan attached.

Or, refer to the box, schedule or paragraph number in the lease that fully describes the Property.

For example: “See page 21, para.10.1 of this lease.”

If the lease specifically excludes any mines and minerals, timber and trees, stream beds, roads or other physical features, either include details in this box or refer to the box, schedule or paragraph of the lease which contains the appropriate information.

For example (continuing the description): “ . . . All rights to mine minerals are excluded from the lease”

Where there is a letting of part of a registered title, a plan must be attached to the lease, and any floor levels must be specified.

For example: “Second floor flat, 4C Pocket Road, London, N5 6RE, together with garden ground and garage number 4, shown edged red on the attached plan.”

If there is a conflict between the verbal description of the land and any plan referred to in this box, the matter will be investigated and The Land Registry will raise a “requisition” (question).

LR5. Prescribed statements etc.       

LR5.1 Statements prescribed under rules 179 (dispositions in favour of a charity), 180 (dispositions by a charity) or 196 (leases under the Leasehold Reform, Housing and Urban Development Act 1993) of the Land Registration Rules 2003.

You must select one of the three options; do not leave the box blank. Remember to use dates in the full format:

For example: From and including 9 January 2006 to and including 8 January 2106
or
The term as specified in this lease at page 21, para. 10.2 
or
125 years less 1 day from 9 January 2006

LR7. Premium                                     
Complete this box with details of the total premium paid including VAT where appropriate. Do not refer to a box in the lease. You can set the information out in one of two ways

Example 1: £100,000 plus VAT of £17,500
Example 2: £117,500 inclusive of VAT

 

LR8. Prohibitions or restrictions on disposing of this lease

This lease does not contain a provision that prohibits or restricts dispositions.
or
This lease contains a provision that prohibits or restricts dispositions.

The Land Registry will make an entry in the register of title where this box shows that the lease contains a prohibition or restriction on disposal.

Where use of the boxes is compulsory, if both options in this box have been deleted, and no separate application in form AP1 has been lodged, Land Registry will not make any entry. If an AP1 is used, specify on the form the box, schedule or paragraph of the lease that contains the prohibition.

If both options have been included, the Land Registry will not make any entry.

LR9. Rights of acquisition etc.
“Reversion” means the interest left over after the lease has expired. In this case the reversion would be the freehold (or possibly a superior lease)

Enter details of any contractual rights to renew the lease, rights to acquire the reversion of the property, rights to acquire an interest in other land, a covenant to surrender or a right for the landlord to acquire the lease. Add to box LR2.2, any title numbers affected other than the landlord's title mentioned in box LR2.1.

Please remember that the Land Registry will only note the burden of these interests; the benefit cannot benoted.

If any of the interests referred to in this box relate to only part of a registered title, a plan may be needed to show the precise extent affected. This can be a separate plan or a reference added to the lease plan.

Provided that boxes LR9 and LR2.2 (where appropriate) are completed correctly, the interests will be noted without a separate application. If you do not complete these boxes, or make a separate application in form AP1, AN1 or UN1, the Land Registry is not obliged to make any entry.With an application for first registration, you must always make a separate application.

LR10. Restrictive covenants given in this lease by the Landlord in respect of land other than the Property                     
This box can only be used to note restrictive covenants that bind land owned by the landlord, other than the reversionary interest in the property demised by the lease. An example would be a promise by the landlord not to keep pigs on his nearby farm.

Complete the box by inserting the relevant provisions or refer to the box, schedule or paragraph number in the body of the lease.

Restrictive covenants in the lease that affect land in the landlord's title(s) revealed in box LR2.1, (other than the property demised by the lease) will be noted automatically when revealed in this box.

Where the covenants affect other registered titles then unless you complete this box and box LR2.2, or lodge a separate application in form AP1, AN1 or UN1, the Land Registry is not obliged to make any entry.

With an application for first registration, you must always make a separate application.

LR11. Easements 
An “easement” is a private right (not a right for all the World) to do something in respect of land. The most common example is a right of way, such as to pass over a neighbour’s land to get to your garage; or a right to pass over land to empty bins. An easement has to be specifically granted or acquired by operation of law. If such an arrangement is informal, it is a mere license, which can be terminated at a moment’s notice, and not an easement.

For any lease where use of the boxes is compulsory, Land Registry will only consider easements that are referred to in this box. In these cases failure to complete this box means that the requirements for the registration of easements as set out in s.27 Land Registration Act 2002 will not be met, and the easements will not be included in the registered title of the land leased.

Complete this box in the same way as for box LR11.1. Where completing the boxes is not compulsory: To register an easement that affects a registered title (other than the landlord's title(s) revealed in box LR2.1.), you must lodge a separate application in form (AP1). If an AP1 is used, you must specify on the form the box, schedule or paragraph of the lease that contains the easements.

Where use of the boxes is compulsory: Provided that you complete these boxes and box LR2.2 correctly, you do not need to lodge a separate application in form AP1.

LR12. Estate rentcharge burdening the Property  
The term 'Estate rentcharge' here means a rentcharge as defined in s.1(2)(b) of the Law of Property Act 1925. Briefly, a rentcharge works rather like a ground rent as a (usually small) annual payment. Rent charges are common only in certain parts of England. If you do not know of them, forget it and leave this box blank.

Do not repeat the details of the rentcharge in this box, but refer to the box, schedule or paragraph number in the body of the lease which contains details of the rentcharge.

For any lease where use of the boxes is compulsory, if this box is left blank and no separate application in form AP1, AN1 or UN1 is made, Land Registry is not obliged to make any entry of the rentcharge.

Use this box to apply for standard restrictions as set out in Schedule 4 of the Land Registration Rules 2003, instead of using a form RX1. This applies to any lease lodged on or after 9 January 2006 that contains the boxes. Set out the full text of each restriction and include the title number(s) or other description of the land against which it is to be entered. Where the restriction is to be registered against a title other than the property or the landlord's title shown in box LR2.1, also enter the title number in box LR2.2, otherwise the Land Registry will not enter the restriction. There is no need to refer to the title of the restriction (Form N etc.), but if you do you must still set out the full text in this box.

For example: The parties to this lease apply to enter the following standard form of restriction against the title of the Property and against title WGL555500:No disposition of the registered estate (other than a charge) by the proprietor of the registered estate is to be registered without a written consent signed by Andrea Pochelli of 5 Pocklar Road, London N5 6RE or her conveyancer.

If the restriction affects only part of the land being registered, a suitable description by way of a plan or otherwise will be required to identify the precise extent of the affected land.

For example: The parties to this lease apply to enter the following standard form of restriction against the title of the Property. No disposition of the registered estate in the land edged blue on the plan to the lease, (other than a charge) by the proprietor of the registered estate is to be registered without a written consent signed by Andrea Pochelli of 5 Pocklar Road, London N5 6RE or her conveyancer.

You can delete this box, but do not renumber box LR14.

Additional information may be needed in the form of a certificate when applying for certain types of restriction. See Land Registry Practice Guide 19 - Notices, restrictions and the protection of third party interests in the register for more details. Please note that although you may delete this box, you should not renumber box LR14

This last option is for leases where special trusts have been set up, for example in a will.

Delete the options that do not apply. If there is only one tenant delete all of the alternative statements. If the tenant is a sole proprietor who is also a trustee, use panel LR13 for the appropriate restriction.

If option two has been used, The Land Registry will enter a Form A restriction in the Proprietorship Register; if option three is completed another appropriate restriction may be entered.

If the box has not been completed, and there are two or more tenants, The Land Registry will enter a Form A restriction 'by default'. A letter informing the applicant that this has been done will be issued with the completed registration.