REGISTRATION OF SALES
1. Documents for sales. What type of documents does your LR system envisage for sales and carrying out their registration?
Notaries are not needed for conveyancing within England and Wales, but would be required to act in cross border-conveyancing if the law of the member state in which the property is situated requires authentication by a notary. To register the purchase of land situated in England and Wales the buyer or their conveyancer must lodge an application form for registration (Form AP1 if the land is already registered, Form FR1 with an application for first registration) and the transfer in the form prescribed by the Land Registration Rules.
If the transaction is the grant of a new lease of more than seven years, the lease must be lodged. This can be in any form but must include certain prescribed clauses at the front of the lease. The mortgage deed, if any, must also be lodged, and any discharge of the seller’s mortgage when received. In addition, a certificate from HM Revenue and Customs confirming that Stamp Duty Land Tax requirements have been complied with must be included, and also any other relevant documents. There is plenty of free guidance in the Practice Guides and Public Guides on our website.
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2. Method of registration. Please, indicate which of these circumstances or data form part of the content of the registration annotated in the registration books or land books for sake of a sale or conveyance.
It will depend on the content of the transfer and mortgage. If the transfer is a straightforward transfer of registered land only the names and addresses of the registered proprietors will change, the old mortgage will be cancelled when evidence of its discharge is received, and the new mortgage will be registered. However, there may be other new entries, for instance new covenants in the transfer, or provisions in the new mortgage that need to be registered.
An example would be where the mortgage includes an obligation to make further advances, or where the mortgagee requires a restriction that no other mortgage is to be registered without their consent.
REGISTRATION OF MORTGAGES
1. Please, indicate what main legislation governs mortgages in your system.
The law relating to mortgages is mainly set out in Part III (section 85 – 120) Law of Property Act 1925. They are also affected by common law, and rules of the court in the case of repossession claims, and also by the Land Registration Act 1925 and the Land Charges Act 1972.
2. In your LR system, is the registration of a mortgage constitutive?
Until a mortgage is completed by registration it will not be a legal mortgage, only and equitable mortgage. That means it’s priority will be at risk. If it is not possible to register a charge it will usually still be possible to give it some protection by putting a notice on the register. This will protect its priority if it is a valid charge. But if there is a prior equitable charge, that will have priority whether it is noted or not since in equity the first in time prevails. Only registration can give priority over an unregistered encumbrance, or encumbrances that are not noted in the register.
3. Documents. What type of documents your LR system admits for establishing mortgages and carrying out their registration ?
The mortgage deed must be lodged for registration. A mortgage deed is usually in a standard form issued by the lender if the lender is a bank or building society. The mortgage deed will be issued by the lender to the conveyancer (solicitor or licensed conveyancer). The conveyancer will investigate the title to the property for the lender, report on title, and arrange for the mortgage deed to be signed. The funds will be sent to the conveyancer to administer, and the conveyancer will arrange for registration of the mortgage after completion.
Only professional conveyancers who are authorised under the Legal Services Act 2007 may prepare mortgages for financial gain, and make applications to the Land Registry. They will be either solicitors, licensed conveyancers, notaries or barristers. A private mortgage between individuals may be drawn up by a conveyancer, or by the parties themselves.
4. Method of registration. Please, indicate which of these circumstances or data form part of the content of the registration annotated in the registration books or land books. (In case of not making any annotation but simply recording or collecting a copy of the deed, please indicate so.)
The date of the charge, the date of registration, and the name and address of the mortgagee will be given in the charges register of the property. The amount of the loan is not included in the register, but if there is an obligation to make further advances, or an agreed maximum level of lending, that can be noted in the register to protect the priority of the further advances against subsequent charges. The parties can also apply for a restriction to be entered in the register if the mortgage includes a clause saying that the borrower cannot enter into subsequent charge without the consent of the lender. The restriction will prevent registration of any subsequent charge without that consent.
Anyone can obtain an official copy of the mortgage deed, but usually the registered deed contains very little information. Often it will not include the amount of the loan, because the document is publicly available. Most of the terms of the mortgage will be in separate terms and conditions and in the private mortgage offer letter sent to the borrower.
5. Types of mortgages. If you believe it appropriate, indicate the kinds of mortgages which are relevant in your LR system.
Legal mortgages (charges), equitable mortgages (charges), debentures, charging orders made by the Court (which take effect as equitable charges), sub-charges.
6. Modifications. What does your legal system envisage about modifying mortgages? Do debtors have any legal possibility of negotiating newly the terms of the contract or any part of them?
The most common methods used for the alteration of the terms of the charges are:
- by a separate deed;
- by a further charge;
- by a transfer of equity provided the chargee (proprietor of the charge) has indicated in some way e.g by executing the transfer that they are bound by the variation; or
- transfer of charge if the chargor (proprietor of the land) has executed the deed.
REGISTRATION OF JUDICIARY CHARGES
1. What kind of orders or judgments can create, modify or cancel an entry in your LR system ?
- Judicial orders of provisional measures to attach restrict disposition acts or freeze the assets of the debtor.
- Judicial decisions in foreclosure proceedings.
- Judicial decisions transferring the ownership or recognizing the property or other real rights on an immovable asset that can directly create, modify or cancel and entry in the land registry.
- Judicial decisions “ordering rectification of an entry in the Land Registry”?
- Judicial decisions about insolvency of owners or holders of property rights or rights in rem.
All of the above. Most commonly, a court can make a charging order over the real property of a debtor to secure a debt where the creditor has obtained a judgment confirming that the debt is due. The charging order creates an equitable charge which must be noted in the register.
If the debtor is a joint owner, the charge will be over the debtor’s share of the trust of land. In that case, a notice cannot be entered as the debtor is not the sole owner and there is a trust of land. Instead a restriction should be applied for to ensure that the creditor is given notice of any sale of the property, so they can claim their share.
2. What’s the kind of registrations or entries caused in registration books or land books by these judiciary orders or decisions?
A restriction entered as a result of a court order will usually say “no disposition by the proprietor of the registered estate [or charge] without the consent of [a named person such as the prosecutor or other appropriate person] or under a further order of the court”. But in some cases it will be open to the court to order another form of wording as to the content or duration of the restriction or notice.
3. In particular, are creditors-plaintiffs who demand payments of sums or money entitled to rely on the Courts and apply for annotations (caveats) or judiciary mortgages in order to attach debtors’ assets?
A court can make a charging order over the real property of a debtor to secure a debt where the creditor has obtained a judgment confirming that the debt is due, and has made a separate application for a charging order. The charging order creates an equitable charge which must be noted in the register. If the debtor is a joint owner, the charge will be over the debtor’s share of the trust of land. In that case, a notice cannot be entered as the debtor is not the sole owner and there is a trust of land. Instead a restriction should be applied for to ensure that the creditor is given notice of any sale of the property, so they can claim their share.
As the charging order is an equitable charge not created by deed, the creditor must go back to court if he or she wants to enforce the charging order by means of a sale of the property. The court can convert the equitable charge into a legal charge. The creditor can then sell the property under the mortgagee’s statutory power of sale contained in the Law of Property Act 1925.