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Practice Guide 29 – Registration of legal charges and deeds of variation of charge

Updated: January 2014

Update

This edition of the guide replaces the October 2012 edition. Sections 5 and 6 have been amended to reflect Land Registry’s policy to accept an RX1 or CH2 application without a further fee provided these are lodged before the principal application to which they relate is completed.

Scope of this guide

This guide gives advice on the registration of legal charges and deeds of variation of the terms of a registered charge at Land Registry. It is aimed at conveyancers. Land Registry staff will also refer to it.

1 Abbreviations and terms used

In this guide:

‘charge’ means a legal mortgage or charge over land

‘conveyancer’ means an authorised person within the meaning of s.18, Legal Services Act 2007 who is entitled to provide the conveyancing services referred to in paragraphs 5(1)(a) and (b) of Schedule 2 to that Act, or a person carrying out those activities in the course of their duties as a public officer. It also includes an individual or body who employs or has among their managers such an authorised person who will undertake or supervise those conveyancing activities (r.217A, LRR 2003)

‘LRA 1925’ means the Land Registration Act 1925

‘LRR 1925’ means the Land Registration Rules 1925

‘LRA 2002’ means the Land Registration Act 2002

‘LRR 2003’ means the Land Registration Rules 2003

‘overseas company’ means a company not registered in the UK

‘unapproved charge’ means a charge not previously approved by the Commercial Arrangements Section at Land Registry Head Office.

2 Introduction

A charge may be made in form CH1 in accordance with r.103, LRR 2003. This form is not prescribed and lenders may use charges tailored to their own particular requirements. Appendix A in this guide contains a link to form CH1.

3 Approved forms of charge

Although there is no equivalent in the LRR 2003 to r.139, LRR 1925, we still encourage lenders to have all their forms of charge approved by the Commercial Arrangements Section at Land Registry Head Office. The following benefits will be gained from having charges approved.

  • Approved charges may contain application for standard restrictions, avoiding the need for a separate form RX1.

  • Approved charges may contain application to note a lender’s obligation to make further advances in the register, avoiding the need for a separate form CH2.

  • Computer codes will continue to be created for lenders with approved forms of charge which will ensure that the agreed name and address(es) for service of the individual lenders and appropriate restrictions and obligation entries are always entered accurately in the register.

For details of the approval process, please see Practice Guide 30 – Approval of mortgage documentation.

4 Application to register a charge

An application to register a charge should contain:

  • application form AP1

  • form CH1, or the lender’s own form of charge. (A certified copy of the charge is not required, but also see section 9 Application form AP1.)

Land or charge certificates ceased to have any legal significance when the LRA 2002 came into force and must not be lodged with the application to register a charge. You should no longer lodge mortgage documents incorporated by reference in the charge itself (for example, rules of a building society, mortgage conditions, or an agreement for loan).

Registered charges rank, as between themselves, according to the order in which they are entered in an individual register (s.48(1), LRA 2002, r.101, LRR 2003). However, this is subject to “an entry in the individual register to the contrary”. If you wish us to make an entry when registering a charge to the effect that the charge has priority over an existing registered charge, you should make clear in the application (ideally in form AP1) that you are seeking such an entry as part of the application. The following is an example of when you might want such an entry to be made.

  • Charge A is created before charge B (so charge A has priority over charge B, as first in time – s.28(1), LRA 2002).
  • Notice is entered in the register in respect of charge A.
  • Subsequently, charge B is completed by registration – at this stage the effect of charge A being noted is that its priority is protected as against charge B (s.29(2)(a)(i), LRA 2002).
  • Later, charge A is also completed by registration.

It is arguable that retaining the notice in respect of charge A constitutes “an entry in the register to the contrary”, and so allows for charge A to retain its priority over charge B. But you may also wish, when applying to register charge A, to seek an entry that expressly provides for charge A to have priority over charge B1. It is likely that we will serve an objection notice on the proprietor of charge B before making any such entry.

1 We will not automatically remove the notice in respect of a charge when subsequently completing the grant of that charge by registration, but it would still be advisable to make clear, when applying to register the charge, that the notice is to remain in the register, so that this is done; see Practice Guide 19 – Notices, restrictions and the entry of third party interests in the register – 3.8.4 Notice in respect of a charge that is subsequently completed by registration.

5 Application to enter a restriction

An application for a restriction must be made in form RX1 unless the application is for a standard form of restriction and is made in panel 8 of form CH1, or it is for a standard form of restriction made in an approved form of charge (r.92, LRR 2003). Appendix B in this guide contains a link to form RX1. No fee is payable in respect of the restriction if application for its entry accompanies the application to register the charge to which it relates.

6 Application to note in the register a lender’s obligation to make further advances

An application to note an obligation to make further advances in an unapproved charge, or not in form CH1 must be made in form CH2, panel 8 of form CH1 or in an approved charge (r.108, LRR 2003). Appendix C in this guide contains a link to form CH2. No fee is payable if the application to note a lender’s obligation accompanies an application to register the charge to which it relates.

7 Application to note agreed maximum amount of security

Under r.109, LRR 2003, an application may now be made to note in the register an agreement for the maximum amount secured by a charge.

Even if such an amount is stated in the charge itself, irrespective of whether or not the charge has been previously approved by us, or in a subsequent deed of variation, an application to note the maximum amount must always be made in form CH3. Appendix D in this guide contains a link to form CH3.

If a later agreement is made to amend the amount of maximum security stated in the register, a further application in form CH3 can be lodged, accompanied by the appropriate fee. Although an additional entry will be made in the register in respect of the new amount, the original entry will remain in the register.

8 Consolidation of a charge

If a charge contains a right of consolidation with another specific charge, we will not make an entry in the register, unless specific application is made using form CC in accordance with r.110, LRR 2003. Appendix E in this guide contains a link to form CC.

9 Application form AP1

You should complete this form in the normal manner, but you should note the following points.

  • Panel 5 must be completed as to the documents lodged with the application. If you supply the original charge deed and a certified copy, we will return the original deed. If a certified copy is not supplied, we will retain the original deed and it may be destroyed.

  • Panel 10 must be completed with the following.

  • The lender’s full name and address, including its postcode. Note that if the form of charge has been approved by Land Registry and an address has been agreed by the lender with Land Registry we will use that address. Up to three addresses for service are allowed. One of these must be a postal address, but it does not have to be within the United Kingdom. If required, a second and third address may also be given, which may be additional postal addresses within or outside the United Kingdom; a document exchange box number within the United Kingdom; or an electronic address.

  • If the lender is a company, its company registration number.

  • If the lender is a limited liability partnership, its registered number.

  • If the lender is an overseas company, unless an arrangement has already been made with us, you must state the territory of incorporation, registered number in the UK including any prefix and a copy of the company’s constitutional documentation must accompany the application. A translation must be supplied if this documentation is not in English or Welsh. Alternatively a certificate in Form 7 may be given by a qualified lawyer practising in the territory of incorporation.

10 Fees

A fee is payable under the current Land Registration Fee Order.

No fee is payable if the charge is lodged at the same time or before the completion of certain types of applications where a fee has already been paid. Further information about this is contained in the Land Registration Fee Order.

11 Documents issued on completion

The only documents that we will issue on completion of an application to register a charge are:

  • an official copy of the register showing the entries that exist in the register on completion of your application, and

  • a ‘title information document’ which confirms that your application has been completed and explains how to obtain further copies of the official copy in the future.

We will also issue the original charge where a certified copy of the charge has been supplied.

12 Deeds of variation of a registered charge

12.1 General

An application to register a deed of variation must be made under cover of an application form AP1.

We will retain the original deed, unless the deed is in a form previously approved by us and the lender has requested that original deeds should be returned, or if the deed has not been previously approved, where a certified copy of the deed has been supplied.

Our Commercial Arrangements Section at Land Registry Head Office will continue to approve deeds of variation. Please see Practice Guide 30 – Approval of mortgage documentation for further information.

It is not possible to apply in a deed of variation for a restriction or for an entry to show that a lender is under an obligation to make further advances. If these entries are required, separate applications must be made in forms RX1 and CH2 respectively.

12.2 Execution

Although the borrower must execute the deed of variation, there is no requirement for the lender to do the same. We will accept that the lender will be bound by the terms of the variation if the deed is either lodged by the lender or a practitioner acting on behalf of the lender.

R.113, LRR 2003 requires that an application to register a deed of variation must be made with the consent of the proprietor of any registered charge (and the proprietor of any sub-charge derived directly or indirectly from such a charge) of equal or inferior priority to the charge being varied, if the other lender is adversely affected by the terms of the variation, unless that proprietor has executed the deed itself or its consent is not required under the terms of its charge or sub-charge.

Our view is that alterations of the following types do not adversely affect a charge (and sub-charge thereof) with equal or inferior priority.

  • A reduction in the interest rate.

  • A reduction in the capital debt.

However, we consider that any alterations that either:

  • increase the interest rate

  • increase the capital

  • extend the term of the earlier charge

  • create an obligation to make further advances, to be such as may adversely affect any charge (and any sub-charge thereof) with equal or inferior priority.

In these circumstances, the proprietor of any charge (and sub-charge) adversely affected must (unless their consent is not required under the terms of their charge or sub-charge) execute the deed; or give their written consent to the registration of the deed of variation. The consents, or a certificate by a conveyancer that they hold the requisite consents, must be lodged with the deed of variation application.

Alternatively, the proprietor of any such charge (or sub-charge) may supply a letter confirming that it does not consider its charge (or sub-charge) to be adversely affected by the terms of the variation and, consequently, feels that it does not need to execute the deed nor lodge a consent. However, in the absence of any evidence we will not raise a requisition. Instead, we will make a non-guaranteed entry in the following form in the register:

"A Deed dated ______________ made between ___________________ is expressed to alter the terms of the Charge dated ___________ referred to above.

NOTE: Copy filed".

12.3 Fees

A fee is payable under the current Land Registration Fee Order.

13 Enquiries and comments

This guide only includes basic information. If you have a particular concern that is not covered, please contact us in advance of the transaction – see Contact details. If the transaction is particularly complex, it may be better if you make your enquiry in writing at the Land Registry office that will process your application.

If you have any comments or suggestion about our guides, please send them to:

Central Operations Group
Land Registry
Trafalgar House
1 Bedford Park
Croydon
CR0 2AQ

(DX 8888 Croydon 3)

You can obtain further copies of this and of all our guides free of charge from Customer Support (see Contact details) or you can download them from our website.

14 Appendix A

Form CH1 – Legal charge of registered estate

15 Appendix B

Form RX1 – Application to enter a restriction

16 Appendix C

Form CH2 – Application to enter an obligation to make further advances

17 Appendix D

Form CH3 – Application to note agreed maximum amount of security

18 Appendix E

Form CC – Entry of a note of consolidation of charges

Land Registry advisory policy

We offer advice to our customers through our publications and Customer Support information and through the day-to-day handling of applications.

We provide factual information including official copies of registers, title plans and documents, searches and details of our forms and fees.

We provide procedural advice to explain how the land registration system works and how to make applications correctly. This includes:

  • advice in advance of an application, where this is requested
  • where an application is defective, advice as to the nature of the problem and what options, if any, are available to put it right
  • an approval service for estate layout plans and certain other land registration documents.

There are limits to the advice that we will provide. We will not provide legal advice.

This means that:

  • we will not approve the evidence to be produced in support of a registration application before we receive the application
  • apart from procedural advice, we will not advise on what action to take
  • we will not recommend a professional adviser but can explain how to find one.

We provide advice only about real cases, not about theoretical circumstances. We will not express a view on questions where the law is complex or unclear except where the question arises on a live registration application.

In providing this factual information and procedural advice we will:

  • be impartial
  • recognise that others may be affected by what we say
  • avoid any conflict of interest.

Contact details

For customer enquiries and to request this publication in an alternative format please contact Customer Support at customersupport@landregistry.gsi.gov.uk or telephone 0844 892 1111, or 0844 892 1122 for a Welsh-speaking service, from Monday to Friday between 8am and 6pm. Calls cost 3p a minute on a BT standard tariff, in addition to the current set up/connection charge. Calls from other tariffs, service providers and mobile phones may cost more. We do not receive any revenue from these calls.

To obtain copies of this and all our other guides, free of charge:

Information in this guide

The information in this publication is for the purpose of providing general guidance about Land Registry's procedures and policies. It is intended only as a guide and does not cover every situation that may arise. It also does not limit Land Registry's ability to use its discretion when appropriate to do so, within the land registration legislation.

Remember

  • Is the charge in a form approved by us?

  • If the answer is no, and the charge is not in form CH1:

  • should your application also contain a form RX1 to enter a restriction?

  • should your application also contain a form CH2 to note an obligation to make further advances?

  • have panels 5 and 10 on the application form AP1 been completed, and if appropriate, does your application included a copy of the lender constitution in English or Welsh?

  • If an entry is required on the register to note an agreed maximum amount of security, have you enclosed a form CH3?

  • If your application includes a deed of variation, have all the required parties executed the deed or have you included the necessary consents?

  • Have you enclosed the appropriate fee?

Please note that Land Registry may be unable to process applications that are incomplete or defective and your application will risk losing its priority if we have to return it to you – see Practice Guide 49 – Return and rejection of applications for registration for more information.

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