Practice Guide 3 – Cautions against first registration

Updated: October 2011

Update

This edition of the guide replaces the May 2011 edition. Amendments have been made as a result of the Land Registration (Amendment) Rules 2011, which change the definition of ‘conveyancer’ to make it consistent with the Legal Services Act 2007.

Scope of this guide

This guide gives advice on the processes involved in registering and dealing with caution titles. It is aimed at conveyancers and you should interpret references to ‘you’ accordingly. It explains the nature and effect of a caution title and what happens when Land Registry receives a substantive application for first registration of an estate affected by the caution.

1 Abbreviations and terms used

In this guide:

‘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)

‘Fee Order’ means the current Land Registration Fee Order

‘LRA 1925’ means the Land Registration Act 1925

‘LRA 2002’ means the Land Registration Act 2002

‘LRR 2003’ means the Land Registration Rules 2003.

2 Introduction

The ways to protect interests in estates affecting land within the unregistered system and the land registration system differ. A caution against first registration is used where the interest is in an estate that is unregistered and the cautioner’s interest would entitle them to object to any application for first registration until their claim has been considered.

Where a caution against first registration protects an interest in an unregistered estate affecting land and Land Registry then receives an application for substantive first registration of that estate which is the subject of the caution, we will serve notice of the application on the cautioner.

Each caution title has its own caution title number and individual caution register.

With some exceptions, each caution title will also have a caution plan. The exceptions are for some (but not all) cautions relating to profits à prendre in gross and for franchises.

Each caution register consists of:

• the caution property register

• the cautioner’s register.

The caution property register contains:

• a description of the estate to which the caution relates

• a description of the land affected

• a statement of the cautioner’s claim taken from either a statutory declaration or a conveyancer’s certificate

• a description of any land removed from the caution extent

• where the caution relates to a claim by the Crown to ownership of demesne land, an entry as to the effect of s.15(3), LRA 2002

• if appropriate, an entry stating that the caution was originally lodged under s.53, LRA 1925.

The cautioner’s register contains:

• the name of the cautioner together with address(es) for service of notice

• the names of any persons who have consented to the lodging of the caution under r.47, LRR 2003.

3 Registering a caution against first registration

3.1 Who may apply

The following may apply for a caution against first registration.

• Her Majesty in respect of demesne land.

• Any person who claims to be entitled to an interest affecting a qualifying estate (see section 3.3 The qualifying estate).

Please see also section 3.2 Dealings with land before first registration is completed.

A person must not lodge a caution without reasonable cause. If they do, they owe a duty to anyone who suffers damage and the person adversely affected may bring an action for damages (s.77, LRA 2002).

A cautioner against first registration is entitled to notice of any application made for the registration of that estate that may affect their interest (s.16, LRA 2002).

Please note that the owner of a freehold estate in land or a leasehold estate in land granted for a term of which more than seven years are unexpired cannot apply for a caution against first registration. A caution is not permitted in these situations because of the prohibition under s.15(3), LRA 2002. The correct form of protection for an owner of an estate in land is to apply for substantive first registration. This includes an estate which has been acquired through adverse possession.

However, the position would seem to be different where the squatter is a successor in title to an earlier squatter who has transferred the possessory estate. If the squatter does not apply for first registration within two months of the transfer of the possessory estate, the title to this estate will revert to the transferor/first squatter, who will then hold it on a bare trust for the squatter¹. The same reversion would appear to take place if the squatter does apply for first registration but the application is cancelled². Thus the squatter will have a beneficial interest in this freehold estate, and so can, if they choose³, lodge a caution against first registration on the basis that they are entitled to an interest affecting a legal freehold estate in land⁴, as opposed to being the owner of such an estate.

¹ LRA 2002, ss. 6 and 7.

² Sainsbury’s Supermarket Ltd v Olympia Homes Ltd [2005] EWHC 1235 at [65]-[71].

³ A person must not lodge a caution without reasonable cause; this duty is owed to anyone who suffers damage as a result of its breach: LRA 2002, s.77.

⁴ LRA 2002, s.29(2)(a)(ii); Sch 3, para 2.

Please see also section 3.2 Dealings with land before first registration is completed.

You should note the following important provisions.

• The prohibition under s.15(3), LRA 2002 came into force at midnight on 12 October 2005. Before then, it was possible for an estate owner to protect their claim to ownership of such an estate by a caution against first registration because the prohibition was deferred for 2 years by paragraph 14 to Schedule 12, LRA 2002.

• Any caution against first registration in respect of such an estate registered since 13 October 2003 ceased to have effect at midnight on 12 October 2005 by virtue of paragraph 14(2) of Schedule 12, LRA 2002 except where an application for first registration in respect of that estate was made before this date.

• Owners of estates protected by a caution which has ceased to have effect may wish to consider substantively registering their estate.

• Cautions against first registration registered under s.53, LRA 1925 continue to be effective until such time as they are cancelled, withdrawn, or the respective estate in the land is registered. This is because the prohibition under s.15(3), LRA 2002 does not apply retrospectively. However, in other respects, cautions registered under s.53 are treated in the same way as cautions registered under s.15, LRA 2002 (paragraph 16 of Schedule 12, LRA 2002).

• The prohibition in s.15(3), LRA 2002 does not apply to demesne land until midnight on 12 October 2013 (with provision to extend this period further) (paragraph 15 of schedule 12, LRA 2002). The right to lodge a caution in respect of demesne land will apply as if the demesne land were held by Her Majesty as freehold (s.81, LRA 2002).

3.2 Dealings with land before first registration is completed

Sometimes, an unregistered estate that has become subject to compulsory first registration (because of a qualifying transfer, lease or mortgage) needs to be dealt with again before registration has been applied for.

This is possible, but the LRA 2002 will apply to the later dealing, or dealings, as if the estate were already registered under r.38, LRR 2003. To protect the interest of a disponeee, a caution against first registration may only be applied for in certain circumstances.

Where the dealing is a transfer, transferees have a choice. They can either:

• insist that a transferor who is required to apply for first registration under s.6(1), LRA 2002 does so, and then lodge their own application (in form AP1) at the same time or later

• apply for first registration themselves, which they are entitled to do because s.6(1), LRA 2002 allows the application to be made by the successor in title of the estate owner who first became liable to make it.

The transferee may NOT apply for a caution against first registration.

Where the dealing is the grant of a lease, lessees are not successors in title to their lessor’s reversionary estate, so they cannot apply to register it. If the lessor is required under s.6(1), LRA 2002 to apply for first registration of their estate, and the lease is of a kind that will need to be registered (see s.27(2)(b), LRA 2002), the intending lessee should insist that the lessor applies for first registration should insist that the lessor applies for first registration before the lease is completed.

Until the lessor’s estate is registered, the lease cannot be registered. The grant of the lease is a disposition that does not pass the legal estate until the registration requirements are met. Those requirements cannot be met until the lessor’s title has been registered, so that the lease can be noted as an incumbrance in its register.

The lease cannot be registered voluntarily under s.3(2), LRA 2002, because there is no legal estate. If the lessor does not apply to register their own title within the two month period, the lessee cannot prevent the lessor’s legal estate, and their own becoming void under s.7(1), LRA 2002.

In these circumstances the lessee may protect their interest by registering a Class C(iv) Land Charge and/or applying for a caution against first registration (s.15(3), LRA 2002 does not prevent this, as the lessee does not have a legal estate).

Where the dealing is a first mortgage, the mortgagee should ensure that the mortgagor applies for registration of the land in the name of the mortgagor and for their mortgage to be registered as a charge. If necessary, the mortgagee can make an application in the name of the mortgagor for the estate charged by the mortgage to be registered without the consent of the mortgagor (see s.6(6), LRA 2002 and r.21, LRR 2003). The mortgagee can apply for a caution against first registration.

Where the dealing is a puisne mortgage (second charge) by the estate owner of unregistered land, the mortgagee should obtain the necessary priority for their charge by making an official search at the Land Charges Department. If they are not in a position to ensure that an application for first registration of the land (and its own charge) is made within the priority period of their search, they should protect their interest by registering a Class C(i) Land Charge. The mortgagee can also register a caution against first registration. Though the caution will not give them any priority against subsequent dealings, it will ensure that they are notified when an application for first registration is made, so that they can then apply to register the charge.

Where the dealing is a land transaction other than a transfer, lease or charge (eg the grant of an easement) and is affected by r.38, LRR 2003, then we cannot register it, guarantee the benefit of it or note it (as appropriate) until application for first registration is received. It will then require a separate dealing application and fee (unless covered by an abatement). In the interim, it can be protected by a caution against first registration or, in some cases (eg where there is an equitable easement), by registration of a land charge.

3.3 The qualifying estates

The qualifying estates against which a caution against first registration may be registered are:

• an estate in land

• a rentcharge

• a franchise

• a profit a prendre in gross.

These are set out in s.15(2), LRA 2002.

3.4 Form of application

You must use form CT1 to apply to register a caution against first registration. This is available from law stationers, or you can download it from our website.

Panel 1 – Local authority serving the property

Enter the authority to whom council tax or business rates would normally be paid in respect of the property.

Panel 2 – Property

Give the postal address, if any, of the property affected. Always include the postcode as it is an essential part of the description of the property. If there is no postal address, a general description such as "land on the north side of London Road, Whiteoaks" will suffice.

Panel 3 – Extent of land to which the caution relates

Unless the estate is a relating franchise, as defined by r.217, LRR 2003, enter sufficient particulars in this panel to enable the extent of the land affected by the caution to be identified on the Ordnance Survey map (r.42, LRR 2003).

There are two options when completing this panel.

a) Where a plan is being supplied you should place ‘X’ in the first box and state how the property is referred to on the accompanying plan. The plan must be prepared to a suitable scale and show clearly, by edging or other reference, the precise extent of the land to be subject to the caution. If you do not provide a plan and we cannot otherwise identify the property, we will reject the caution application.

b) If the postal description given in panel 2 of the application form is sufficient to allow identification of the property on the Ordnance Survey map you may place ‘X’ in the second box. However, this will usually only apply where the property is residential with established features on the ground that define its apparent boundaries on the Ordnance Survey map.

Panel 4 – Application and fee

Enter the fee payable in accordance with the Fee Order. Under the provisions of s.117, LRA 2002, no fee is payable in respect of a caution against first registration where the interest claimed by the cautioner is one falling within paragraphs 10 to 14 of Schedule 1, LRA 2002. This is provided that such an application is lodged in the period of 10 years beginning with the day on which that Schedule came into force. These interests are:

• a franchise

• a manorial right

• a right to rent that was reserved to the Crown on the granting of any freehold estate (whether or not the right is still vested in the Crown)

• a non-statutory right in respect of an embankment or sea or river wall

• a right to payment in lieu of tithe.

Panel 5 – The cautioner

Give the name of the cautioner here (not any conveyancer lodging the application on their behalf).

Panel 6 – The application is sent to Land Registry by

Complete with the details of the person sending the application to us.

Panel 7 – The estate to which the caution relates

Enter the estate affected by the caution. In the case of a rentcharge, franchise or profit a prendre in gross, enter full details of the particular estate affected, including the date, nature and parties of the instrument by which the estate was created, if known. Also, provide the amount of the rentcharge, the nature of the franchise or profit and the length of any leasehold term.

Land Registry will serve notice on a cautioner on receipt of any application for first registration of an estate that relates to an estate that is the subject of a caution (s.16(1), LRA 2002). This means that in some situations an application for first registration of one estate may trigger notice to the cautioner even though the estate that is the subject of the caution is a different estate. However, this will not apply in every situation.

Where you act for a cautioner who claims an interest in more than one estate, eg both freehold and leasehold, you must lodge separate cautions in respect of each of them to be certain of receiving notice under s.16(1), LRA 2002. This requires a separate form CT1 and fee for each estate affected.

Panel 8 – Address(es) for service of each cautioner to be entered in the register

We require this information for entry in the caution register for service of notices and correspondence. Each cautioner may give up to three addresses for service, one of which must be a postal address but does not have to be within the UK. The others may be a combination of postal addresses, whether or not in the UK, box numbers at a UK document exchange (DX) or electronic addresses (r.198, LRR 2003).

Where the cautioner is a company you must include the company’s registered number. The cautioner must be a legal person, such as an individual or a corporate body. Although a partnership is not a legal person, it may still be possible to register a caution in the firm’s name.

Panel 9 – Identity of person making statement of truth

Complete the appropriate box depending on whether the statement is made by or on behalf of the cautioner, or by a conveyancer acting for the cautioner. Only one of the boxes should be completed.

When completing the box, include the full name of the person making the statement of truth.

Panel 10 – Statement of truth

State here the nature of the cautioner’s interest in the estate, for example:

• "by having the benefit of an option to purchase the property pursuant to an Agreement dated…"

• "as claimant in a Chancery action, A. v. B., Case No.… in which the claimant claims title to (or interest in) the land"

• "as plaintiff in an action in the Chancery Division of the High Court of Justice, B. v. C., 1998 Ch. No.… in which the plaintiff claims title to (or an interest in) the land…"

• "as equitable mortgagee under a memorandum of charge dated… under the hand of…".

The declaration should not rely on any documents. For example, a declaration stating that the cautioner is interested in the land "set out in correspondence with Land Registry" would not be acceptable, since it gives no indication of the basis of the cautioner’s claim.

Panel 11 – Signature of applicant or their conveyancer

The applicant or conveyancer lodging the caution must sign and date the form here.

Panel 12 – Consent(s) to the lodging of the caution

Caution applications do not require any consents. However, a person may consent to the lodging of a caution (r.47, LRR 2003). A person who has consented may not subsequently apply to cancel the caution under s.18(1), LRA 2002 unless one of the exceptions under r.46, LRR 2003 applies.

Persons consenting can use panel 12 to confirm their consent to the lodging of the caution.

Accompanying documents

You should not exhibit any documents to the application other than a plan (if any) referred to in panel 6 of the application form, form CS continuation sheet(s) (if any) and a cheque for the fees where this is the method of payment. You should not lodge any deeds or correspondence referred to in the declaration or certificate, nor does the registrar require any copies.

4 Cancelling a caution against first registration

An application can be made to have a caution title cancelled, effectively clearing the way for substantive registration. The procedure is sometimes referred to as ‘warning-off’.

4.1 Who may apply

Either the owner of the legal estate to which the caution relates, or a person or persons deriving title out of the estate to which the caution relates (such as a lessee or chargee), may apply to cancel the caution title (s.18(1), LRA 2002 and r.45, LRR 2003).

Where the land to which the caution relates is demesne land, either Her Majesty, or the owner of a legal estate affecting the demesne land, may apply for cancellation.

Under s.18(2), LRA 2002, a person who has consented to a caution, or a person who derives title under operation of law from a person who consented, cannot apply to cancel it unless, under r.46, LRR 2003, either:

• the relevant interest has come to an end

• they claim that the consent referred to in s.18(2), LRA 2002 was induced by fraud, misrepresentation, mistake or undue influence, or given under duress.

4.2 Form of application

You must use form CCT when applying for cancellation of a caution title. This is available from law stationers, or you can download it from our website.

There is no fee for this application.

If Her Majesty is the applicant and the caution relates to demesne land you may modify form CCT, under the provisions of r.44(5), LRR 2003, to take account of the fact that Her Majesty cannot apply as estate owner.

If the application is to cancel part only of the caution title, sufficient particulars by plan, or otherwise, to allow identification of the extent on the Ordnance Survey map must accompany your application. This is covered in panel 5 of the form (r.44(2), LRR 2003).

Complete panel 9 to demonstrate how the applicant for cancellation is entitled to apply. The evidence referred to in this panel must be in documentary form demonstrating title, in line with the provisions of s.44, Law of Property Act 1925, as amended. If this is not possible, for example if it is claimed the documentary title is lost, then you should set out the circumstances in full so that the matter can be considered.

If you answer ‘Yes’ to panel 10, you must supply the necessary evidence as specified in this panel on the form. Use form DL to list any documents accompanying your application.

Please read the side notes carefully in panel 5. These describe the circumstances under which we retain or return documents.

4.3 What happens once the application is made

Provided the application is in order, we will serve notice under s.18(3), LRA 2002. The application will then be held in abeyance for the prescribed notice period, in which time the cautioner may exercise their right to object to the application (r.53, LRR 2003).

If the cautioner does object to the application, we will contact the applicant with the details. The registrar may not determine the application until the objection has been disposed of (s.16(2), LRA 2002). If the cautioner has not exercised their right to object before the expiry of the notice period, the caution title will be cancelled (s.18(4), LRA 2002).

4.4 Completion

Where the application is successful we will notify you that we have completed it and cancelled the caution title (or part of it). Where part only of the caution title is cancelled we will enclose up-to-date copies of the caution register and plan.

At the same time we will invite the estate owner to apply for first registration of the estate. This is the most effective method of preventing any further cautions against the estate.

5 Withdrawing a caution against first registration

5.1 Who may apply

The cautioner may apply to withdraw their caution at any time (s.17, LRA 2002). Typically this may be because:

• they no longer hold the interest in the estate to which the caution relates

• they are satisfied their interest is adequately protected in some other way

• an application for first registration is being made and they do not wish to impede it

• they are applying for substantive registration themselves.

5.2 Form of application

You must use form WCT when applying to withdraw a caution. This is available from law stationers, or you can download it from our website.

There is no fee for this application.

Outline applications can only be made in respect of an application to withdraw a caution against dealings.

Only the cautioner may apply to withdraw the caution. If the cautioner has died, the personal representatives must first apply to be registered in place of the cautioner under r.51, LRR 2003. They can subsequently apply for withdrawal of the caution in the capacity of cautioner.

If part only of the caution title is being withdrawn the second option in panel 6 will apply and you must supply details, by plan or otherwise, to enable the extent of that part to be clearly identified on the Ordnance Survey map.

5.3 What happens once the application is made

Provided the application is otherwise in order, it will be completed without further reference to the applicant:

• where it has been lodged by a conveyancer, or

• where it accompanies an application for first registration and the cautioner is being registered as proprietor by reason of the first registration application. This applies whether or not a conveyancer lodged the application.

In the above circumstances we will not serve notice on the cautioner as a matter of routine.

However, we will always serve notice on the cautioner:

• where the application, not being accompanied by an application for first registration, has not been lodged by a conveyancer, or

• in any other case where the registrar deems it necessary to give validity to the application (r.17, LRR 2003).

If notice is served, we will allow the prescribed notice period under r.197, LRR 2003 for the cautioner to object to the application. If we receive an objection to the application from the cautioner we will contact you with the details. The registrar may not determine the application until the objection has been disposed of (s.73(5), LRA 2002).

5.4 Completion

Where the application is successful we will notify you that we have completed it and the caution title is withdrawn. Where part only of the caution title has been withdrawn, we will enclose up-to-date copies of the caution register and plan.

6 Applying to alter the caution register

6.1 When the caution register may be altered

The registrar can alter the caution register:

• to correct a mistake

• to bring it up to date (s.21, LRA 2002)

• to give effect to an order of the court (s.20, LRA 2002).

6.2 Form of application

You must use form AP1 when applying to have the caution register altered. Written details of the alteration required, the grounds on which the application is made and any supporting documents must accompany the application (r.50(1), LRR 2003).

If the applicant claims that the whole of the interest has vested in them by operation of law they may apply for the register to be altered. The registrar is only obliged to alter the cautions register to substitute another person for the cautioner if the whole of the relevant interest is vested in that other person by operation of law (r.49(2), LRR 2003). The appropriate evidence of devolution of title must accompany the application.

If the applicant claims that the whole of the interest has vested in them other than by operation of law (by assignment, for example), they may apply for the register to be altered. The registrar has a discretion to alter the cautions register to substitute another person for the cautioner in such circumstances (s.21(1), LRA 2002 and r.50, LRR 2003). The appropriate evidence of devolution of title must therefore accompany the application. However, where that interest is a 'qualifying estate' within s.4, LRA 2002, the assignee would be required to apply for first registration under s.6, LRA 2002 in any event.

A fee is payable in cases where a new cautioner is being registered in place of an existing cautioner. Other applications may attract a fee depending on the nature and scale of the alteration required. You should refer to the Fee Order for further guidance.

6.3 Notices

Unless the registrar is satisfied that it is unnecessary, notice will be served on the cautioner giving details of any application to alter the caution register (r.50(2), LRR 2003). The cautioner may object to the alteration within the notice period prescribed under r.197, LRR 2003. Where the cautioner shown in the cautioner’s register is more than one person, then each such person may object to an application made under s.18, LRA 2002.

6.4 Completion

If the application is in order, and the cautioner has consented after the service of any notice that was deemed necessary, we will alter the register and notify you of completion. We will send you an up-to-date copy of the caution register and, where it has been changed, the plan.

7 Enquiries and suggestions

If you have a particular concern that is not covered by this guide, 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 suggestions 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.