Practice Guide 47 – Transfers of public housing estates

Updated: October 2011

Update

This edition of the guide replaces the September 2010 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 transfer and registration of publicly owned housing estates and on the preserved right to buy. It is aimed at conveyancers, local authorities, social landlords and other bodies acquiring public housing estates and their legal advisers. Senior Land Registry staff will also refer to it. For this reason some footnotes make reference to our computer codes.

1 Abbreviations and definitions 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)

‘CRE’ means a Land Registry Computerised Register Entry

‘house’ includes a flat

‘housing estate’ means a group of two or more houses

‘initial vendors’ means local authorities and housing action trusts

‘LRA 2002’ means the Land Registration Act 2002

‘LRR 2003’ means the Land Registration Rules 2003

‘TSA’ means the Office for Tenants and Social Landlords, which operates under the name of the Tenant Services Authority.

1.1 Relevant legislation

The assistance given in this guide assumes that the reader has access to the relevant legislation. This is largely contained in:

• the Housing Act 1985 (the 1985 Act) as amended

• the Housing Act 1988 (the 1988 Act)

• the Housing (Preservation of Right to Buy) Regulations 1993¹ (the 1993 Regulations) as amended

• the Housing Act 1996 (the 1996 Act).

Sections, schedules and paragraphs are identified in the footnotes.

¹ S.I. 1993/2241.

2 Subjects, aims and introduction

2.1 Subjects covered

The guide covers:

• the voluntary sale of housing estates by housing authorities and other local authorities, including county, county borough, district or London borough councils, the Common Council of the City of London or the Council of the Isles of Scilly, the Broads Authority, a joint authority established by Part IV of the Local Government Act 1985, the London Fire and Emergency Planning Authority, a police authority established under s.3 of the Police Act 1996 and National Parks authorities²

• their acquisition and disposal by housing action trusts

• the impact of the preserved right to buy³.

² The local authority voluntary sale provisions are to be found in ss.32 and 43, Housing Act 1985 and s.133, Housing Act 1988.

³ The preserved right to buy provisions are to be found in the 1993 Regulations, which set out Part V, Housing Act 1985 as it applies by virtue of those regulations.

It will thus be of interest to those acting for local authorities and for social landlords and other bodies acquiring public housing estates.

This guide is set out broadly in the chronological order of a proposed transaction. That is to say it deals with the questions that each party will have to resolve during each step in the disposal. There is one exception to this and that is the subject of consents to the various transactions by the Secretary of State, TSA or National Assembly for Wales. These are interrelated and are, therefore, dealt with as one subject. There are also certain additional matters which relate only to specific situations and these appear in separate sections at the end.

2.2 Subjects not covered

This guide does not cover:

• the voluntary sale of housing estates by urban development corporations (which do not require the Secretary of State’s consent), though it does cover the incidence of the preserved right to buy on such sales

• disposals of individual houses and flats under the compulsory right to buy provisions⁴, and the voluntary sales provisions⁵ of the Housing Act 1985 and under the Housing (Extension of Right to Buy) Order 1993⁶.

⁴ The right to buy provisions are to be found in Part V, Housing Act 1985. This guide does contain information about the preserved right to buy.

⁵ The voluntary sales provisions are to be found in Part II, Housing Act 1985.

⁶ S.I. 1993/2240.

2.3 Forms

The following forms are set out in section 9 Land Registry forms referred to in this guide and are referred to in the text.

• PSD13 – Certificate of Title to a House (For use on a conveyance of the freehold to a qualifying person under the preserved right to buy).

• PSD14 – Certificate of Title to a Flat (For use on the grant of a lease to a qualifying person under the preserved right to buy where the landlord owns the freehold).

• PSD15 – Certificate of Title to a House or Flat (For use on the grant of a lease to a qualifying person under the preserved right to buy where the landlord does not own the freehold).

• PSD17 – Certificate of Title on disposal of Housing Land or Buildings.

• PSD101 – Application by a Private Sector Landlord or a connected company in respect of a preserved right to buy.

• PSD103 – Certificate by a Private Sector Landlord that land is not subject to any rights of a qualifying person in respect of a preserved right to buy.

All these forms are available free of charge from any Land Registry office. Form PSD17, along with all the other forms, are available on our website.

2.4 Consultation with the Land Registrar

In view of the value and the potential complexity of all the transactions covered in this guide, except for the preserved right to buy, the parties to a potential transfer should consult the Land Registrar personally at the appropriate Land Registry office. Their names and their office's telephone numbers can be found in the Office Finder section of our website. This will enable us to offer advice at all stages of the transaction and to have a better understanding of our customers’ requirements.

3 Statutory powers and land registration

The initial vendors in the transactions covered by this guide are not natural persons. Their powers are conferred by statute and they can only undertake actions in accordance with the law governing them.

The registrar is satisfied that all the transactions covered by this guide are within the powers of each of the initial vendors. No further enquiry on this point will be made.

Where the title is registered there may be a restriction in the register which reflects the limited powers of such a proprietor compared to the unrestricted powers conferred on registered proprietors generally⁷. If there is such a restriction it must be complied with. On first registration of title to property acquired from an initial vendor, evidence of compliance with statutory requirements (usually the consent of the Secretary of State, TSA or the National Assembly for Wales) will be required.

⁷ Under s.23, LRA 2002.

Consents are discussed further in section 4.3 The consents from the Secretary of State, TSA or National Assembly for Wales and the restrictions which enforce them.

For the relevant purchaser protection provisions and a general outline of the powers of each of the initial vendors to undertake the transactions, see section 7 Powers of initial vendors to dispose of the land and the relevant purchaser protection provisions.

4 Common matters

4.1 The identification of the land to be transferred and the plans needed

Some readers will not have dealt with the transfer of an entire housing estate, or even a part estate, in one transaction, particularly one where there may have been extensive activity by way of sales or leases in recent years. Perhaps the nearest comparison would be the purchase from a residential builder of the half built residue of an estate. Where the housing estate is unregistered particular care is needed.

Points to consider are:

The boundaries of the estate

The initial vendor’s terrier will give considerable help, if it has been kept up to date. Boundaries shown on old conveyance plans should be compared with the modern Ordnance Survey map and any discrepancies affecting the land to be registered should be resolved. Often the surrounding areas will have been registered. You should, therefore, make a search of the index map to guard against conflicting registrations or unrecorded sales by the vendor. Having completed these preliminary matters, the precise extent of the estate to be registered should be considered and plans prepared for the application as set out below.

Registration of discrete manageable extents

From our experience, we have found that it is often administratively easier or all concerned if very large estates are sub-divided into manageable areas. Such areas may be determined either by reference to extents contained in earlier conveyances of title or simply by reference to suitable topographical features (for example, roads, footpaths, rivers, adjoining estate features). We will be pleased to advise if required.

Housing action trust disposals

Where the disposal is being made by a housing action trust and some, but not all, of the estate is occupied by secure tenants, it may be appropriate to split such housing from the other land. The mandatory restriction can then be confined to the part occupied by secure tenants (see section 4.3 The consents from the Secretary of State, TSA or National Assembly for Wales and the restrictions which enforce them).

Internal sales off

Local authorities have been selling off houses and flats to tenants since at least 1957. During the 1980s very large numbers were sold. Where the sales took place under the right to buy legislation, they had to be registered. Unless the area was one where compulsory registration on sale applied, voluntary sales made under the Housing Act 1957 and what is now Part II of the 1985 Act did not have to be registered. Many will have been registered but an official search of the index map which does not reveal a registration cannot be treated as evidence that the authority still owns it.

Internal leases off

Flats and maisonettes will invariably have been sold on long lease and so will some houses under the shared ownership provisions of the 1985 Act. These will need to be identified and either excluded or included depending on the contract.

Passageways and rooms over them

Many houses have been built with joint passageways and with rooms over them. Adequate records of these features are often unavailable and consequently many sales off have taken place on the basis of the ground floor layout. Some of these, but not all, have been picked up on registration. Care should be taken to ensure that the conveyance or transfer plan does not conflict with the prior sales. The result of the official search of the index map may assist, but as the register or the index map may not be correct, a physical inspection is advisable.

Roads, footpaths, common parts

The plans must also identify:

• any roads, footpaths, common parts, unadopted sewers etc which serve the area and which run over the remainder of the estate being retained by the initial vendor

• any easements previously obtained by the initial vendor from adjacent owners to enable the estate to be developed in the first place.

Plans and the Ordnance Survey

The plans used in the conveyance, transfer or lease must include sufficient details so that the land can be identified clearly on the Ordnance Survey Map. Extracts of the Ordnance Survey Map should be used and, generally, the preferred scale is 1/1250 but only if the details of the layout including individual house boundaries can be shown clearly. Where rooms over passageways or other such detail exists, which is not easily shown at this scale, a scale of 1/500 should be used, as insets if necessary. Please see r.26, LRR 2003. We will not accept plans described “for identification only” or marked “do not scale from this drawing” or any other similar phrase. Practice Guide 40 – Land Registry plans and Practice Guide 41 – Developing estates – registration services with its supplements give advice on acceptable plans which may be applied as appropriate to an already built estate. You can obtain these free of charge from Customer Support (see Contact details) or you can download them from our website.

For these reasons it will not normally be possible to draw on the plan a simple red line around the estate to transfer it all; careful consideration needs to be given to plan colouring and colour wash may be preferable to edging. Again, we will be pleased to advise where necessary.

4.2 The existing incumbrances to which the land is subject

The extent of the land to be sold is not the only problem. Most if not all of the prior disposals will have involved the grant and reservation of easements over the land to be comprised in the estate disposal.

NB: The grant and reservation of new easements in the estate disposal is covered in sections 4.10 New easements granted over unregistered land and 4.11 New easements granted over registered land.

Where the land to be comprised in the estate disposal is already registered then these beneficial and adverse rights should already be shown on the title. Where the land is not registered, note (7) of the Certificate of Title form PSD 17 gives guidance on how the easements, covenants and other rights granted and reserved in those sales may be treated in the conveyance, transfer or lease and in that form.

When the register is prepared following the estate disposal, the easements will be treated as follows.

Where previous disposals of land from the estate under the right to buy provisions have created statutory easements, they will be covered by an entry in the property register along the following lines:

“By [transfers] [conveyances] of adjacent or neighbouring land pursuant to Chapter 1 of Part I of the Housing Act 1980 or Part V of the Housing Act 1985 the land [in this title] has the benefit of and is subject to the easements and other rights prescribed by paragraph 2 of Schedule 2 to the Housing Act 1980 or Schedule 6 to the Housing Act 1985.” ⁸

⁸ CRE AK882 contains fields in the order *M<>M*, *E<>E*.

Other easements, if granted in common form, for example, in standard form transfers under Part I of the 1985 Act (voluntary sales of council houses) or under Schedule 11 1988 Act (sales of a single house under voluntary provisions by a housing action trust) may be dealt with by general entries like the above.

Where specific unusual rights were granted, they will probably be referred to specifically in the register.

Beneficial easements will be entered in the register as appurtenant to the title if the title of the servient land is registered and an entry relating to the right is shown in the charges register. They will also be shown as appurtenant where the servient land is unregistered unless both the conveyance, transfer or lease and the Certificate of Title form PSD17 exclude them. Initial vendors who have doubts about the title to a prior beneficial easement should therefore exclude the easement specifically ⁹. If they do not, they may be liable to indemnify the registrar if it is not shown to be a legal easement in the event of any subsequent dispute.

⁹ They should bear in mind the effect of s.62, Law of Property Act 1925 and covenants for title if they do not specifically want to transfer the benefit of a right.

Where the land was acquired under any compulsory purchase provisions and the authorising statute either permitted the acquiror to extinguish any private rights such as easements which previously affected the land or extinguished such easements automatically¹⁰, then these facts should be stated in the Certificate of Title.

¹⁰ For example, s.295, 1985 Act.

Other entries will be made in respect of restrictive covenants burdening the estate being registered.

The conveyance, transfer or lease should refer to the restrictive covenants which affect the land or any part of it. However, if preferred, a general statement that restrictive covenants affect may be made there provided the form PSD17 gives full details of where the text of the covenants can be found.

Some legislation allows local authorities, in effect, to suspend the operation of restrictive covenants while they own the land¹¹. However, when the land is sold the covenants may again be enforceable. Such covenants should be referred to in the conveyance, transfer or lease.

¹¹ For example, under s.237, Town and Country Planning Act 1990.

If the land is subject to leases which need to be noted in the register, or disclosed as overriding interests, you should lodge the counterpart leases.

A lease needs to be noted in the register if it was granted:

• for a term of more than seven years

• to take effect in possession more than three months after the date of the grant

• under the right to buy or shared ownership provisions in Part V of the 1985 Act, or

• in circumstances where s.171A of the 1985 Act (the preserved right to buy) applies¹².

¹² Leases of these kinds must be protected by notice because they do not have overriding status under Schedule 1, LRA 2002.

In addition, any lease granted for a term of more than three but no more than seven years, and which still has more than one year left to run, must be disclosed as an overriding interest, so that it can be noted in the register¹³.

¹³ R.28, LRR 2003.

Counterparts of any other leases should be lodged if they contain options to purchase, as this information will be needed to protect the option by notice in the register.

The entry in the charges register for shared ownership leases will be along the following lines:

“The leases specified in the Schedule of Leases which are shared ownership leases made pursuant to [Part I of the Housing and Building Control Act 1984] [sections 143 – 153 of the Housing Act 1985] took effect with the benefit of and subject to the easements and other rights prescribed in paragraph 2 of Schedule [2 to the Housing Act 1980] [6 to the Housing Act 1985].”¹⁴

¹⁴ CRE CK321 contains fields in the order *M<>M*, *M<>M*.

There may be other overriding interests that need to be disclosed. See Practice Guide 15 – Overriding interests and their disclosure for more information. Where a form PSD13, 14, 15 or 17 is used, you should give details of any disclosable overriding interests on it. If you do so, you will not need to lodge a form DI as well¹⁵.

¹⁵ The PSD form will be a document of title under r.28(2)(b), LRR 2003.

4.3 The consents from the Secretary of State, TSA or National Assembly for Wales and the restrictions which enforce them

Once the extent of the estate disposal has been agreed, you will usually need to obtain the consent of the Secretary of State, TSA or National Assembly for Wales to the disposal. This section deals with the relevant provisions.

You must distinguish between:

• initial consent to the disposal of the estate by the initial vendors, and

• subsequent consent to a disposal out of that estate by the purchaser.

Initial consents will usually contain provisions which allow the disposal of assets with the subsequent consent of the Secretary of State or National Assembly for Wales.

Because of this interaction the consent requirements are dealt with in this section. It also sets out the required statements in the conveyance, transfer or lease which declare under what provisions the transaction is being made and the restrictions that will be entered in the register to reflect the requirement for subsequent consent.

4.3.1 Initial consents

Initial consents from the Secretary of State or National Assembly for Wales will be required for any disposal of housing by local authorities¹⁶ or housing action trusts¹⁷.

¹⁶ Under ss.32 or 43, 1985 Act.

¹⁷ Under s.79, 1988 Act.

4.3.2 Subsequent consent, required statements and restrictions

Disposals by local authorities

Where an initial consent was required for the initial disposal under ss.32 or 43 of the 1985 Act, and that consent did not otherwise provide, the subsequent disposal generally requires a further consent¹⁸. It will usually do so. However, such consent may provide that only some of the houses on the estate are subject to this further restriction on disposition. If this is the case then they should be listed. If convenient this can be done negatively, i.e. the whole estate can be stated to be subject to the restriction save for e.g. No’s 1 to 21 (inc) Acacia Avenue. It is important to be accurate in identifying any such properties by making it clear, for example, whether or not they include even or odd numbers or both.

¹⁸ S.133, 1988 Act.

Where there is a requirement for a subsequent consent the approved form of the required statement in the disposal deed is as follows.

“The requirement of section 133 of the Housing Act 1988 for the consent of the [Secretary of State] [TSA] [National Assembly for Wales] to disposals of [the land] [the following properties] in this [Conveyance] [Transfer] [Assignment] [Lease] applies to a subsequent disposal of the said land or properties by the [purchaser] [lessee]. The [purchaser] [lessee] hereby applies to the Chief Land Registrar for the entry of a restriction in form X.”

The restriction will be entered in the proprietorship register in form X, as follows.

“RESTRICTION: No disposition by the proprietor of the registered estate or in exercise of the power of sale or leasing in any registered charge (except an exempt disposal as defined by section 81(8) of the Housing Act 1988) is to be registered without the consent of

(a) in relation to a disposal of land in England by a private registered provider of social housing, the Regulator of Social Housing,

(b) in relation to any other disposal of land in England, the Secretary of State, and

(c) in relation to a disposal of land in Wales, the Welsh Ministers,

to that disposition under [as appropriate [section 81 of that Act] or [section 133 of that Act] or [section 173 of the Local Government and Housing Act 1989].”

Disposals by housing action trusts under s.79 of the 1988 Act

A housing action trust is a public sector landlord and thus subject to the right to buy. Its powers of disposal of a house subject to a secure tenancy are limited by s.79(2) of the 1988 Act. The sale must be either to an “approved person” or to a housing authority or other local authority. If the sale is to an approved person, the requirement in s.81 of the 1988 Act that the consent of the Secretary of State be obtained to any subsequent disposal of the house by the approved person applies. The disposal deed must state that the requirement applies to any such disposal. The recommended form of the required statement is as follows.

“The requirement of section 81 of the Housing Act 1988 for the consent of the [Secretary of State] [TSA] [National Assembly for Wales] to disposals of the land in this [Conveyance] [Transfer] [Assignment] [Lease] applies to a subsequent disposal of the said land by the [purchaser][lessee]. The [purchaser] [lessee] hereby applies to the Chief Land Registrar for the entry of the restriction in form X.”

A restriction in form X will be entered in the proprietorship register as above but substituting section 81 of that Act for section 133.

If a disposal comprises both houses subject to secure tenancies and other houses or land, it should be completed by two instruments, one relating to the houses subject to secure tenancies and containing the required statement, the other relating to the other houses or land. The former will be registered with the appropriate restriction under a separate title number.

Disposals under the preserved right to buy

The requirements in relation to the required statement and the restriction are dealt with in sections 5.4 The disposal subject to preserved rights to buy and 5.6 The required restriction.

Cancellation of restrictions

The restrictions set out above are obligatory and cannot, therefore, be withdrawn by the proprietor of the land. They will, however, be cancelled on registration of a subsequent transfer made with the consent of the appropriate authority.

4.4 Contracts and their protection

The disposals covered in this guide, with the exception of those under the preserved right to buy provisions, are consensual. They may, therefore, be preceded by a contract between the parties in the usual way. The terms of any contract should have regard to the matters discussed in this guide and to the requirements of s.2, Law of Property (Miscellaneous Provisions) Act 1989.

If the title is registered, the contract can be protected by an agreed or a unilateral notice. If it is unregistered, a land charge class C (iv) (estate contract) should be registered under the Land Charges Act 1972 at the Land Charges Department, using form K1. If this has been done, applicants for first registration must produce the cancellation certificate with the application.

Where a qualifying person is entitled to a preserved right to buy, in the case of registered land a notice should have been entered in the register in respect of that right when the property was transferred to the new landlord. Similarly, where a new property becomes subject to a preserved right to buy, the landlord should apply to enter an agreed notice in the register. If the landlord fails to do so, the tenant can apply for an agreed notice if they can satisfy the registrar that their claim is valid¹⁹. Alternatively, they can apply for a unilateral notice. If the land is unregistered, a land charge can be registered.

¹⁹ Under s.34(3)(c), LRA 2002.

An application for an agreed notice should be made in form AN1, and for a unilateral notice in form UN1.

Register entries relating to the preserved right to buy are dealt with in section 5 The Preserved Right to Buy. It is considered that such entries provide adequate protection for a person entitled under a preserved right to buy.

An application to the court²⁰ to enforce the statutory duty of a disponor of land subject to a preserved right to buy to transfer it subject to that right may well constitute a pending land action within the meaning of the Land Charges Act 1972. If so, it can be protected by an agreed or unilateral notice²¹ or, if the land is unregistered, by registering the pending land action at the Land Charges Department. Similarly, any court order enforcing the statutory duty could be protected by agreed or unilateral notice²² or registered as a writ or order affecting land in the Land Charges register.

²⁰ For example, under s.181, 1985 Act.

²¹ Ss.34 and 87(1)(a), LRA 2002.

²² Ss.34 and 87(1)(b), LRA, 2002.

However, a preserved right to buy is not an overriding interest (even where the person entitled is in actual occupation)²³. Consequently, if the property is transferred for valuable consideration without the preserved right to buy being protected in the register, the tenant cannot register a notice in respect of it²⁴. Nor can they register a land charge if the land is unregistered²⁵.

²³ Paragraph 6(1) of Schedule 9A, 1985 Act, as substituted by paragraph 18(10) of Schedule 11, LRA 2002.

²⁴ Because the purchaser will have gained priority over it under s.29(2), LRA 2002.

²⁵ Paragraph 6(2) of Schedule 9A, 1985 Act.

4.5 Searches

Because of the extent problems already discussed, you should always make an official search of the index map.

An acquiror under any of the disposals covered in this guide will be able to make an official search with priority to protect the purchase of the land²⁶. This includes a purchaser under the preserved right to buy provisions.

²⁶ Under r.148, LRR 2002.

4.6 Discharges of existing mortgages

The general principle for all the disposals covered in this guide is that all mortgages, unless the contract otherwise provides, will need to be:

• discharged as to the whole or part using the appropriate Land Registry form

• in the case of disposals by lease, to be accompanied by a consent from the mortgagee, or

• in the case of unregistered land, released or consented to in the usual way.

There is one exception to this principle where the legislation provides that the mortgage is automatically discharged or released, although the mortgagor’s personal liability will not be. This exception arises under the right to buy (whether or not preserved)²⁷. No discharge, consent, or release will be required for such a disposal.

²⁷ Paragraph 21 of Schedule 6, 1985 Act.

4.7 The form of the transfer, conveyance or lease

The prescribed form of transfer for these transactions is form TR1 or TP1.

There is no prescribed form of conveyance or lease. The instrument must contain the required statements and where necessary, the list of properties occupied by secure tenants.

4.8 Unregistered land and the Certificate of Title

The Certificate of Title which must be given under the legislation is form PSD17 for all transactions covered in this guide²⁸ except individual sales to tenants exercising the preserved right to buy²⁹. You can obtain copies of form PSD17 from our website.

²⁸ The Certificate is that approved by the registrar under s.171G and paragraph 2(4) of Schedule 9A 1985 Act, ss.81(9), 108 and paragraph 2(2) of Schedule 12 and 133(8) 1988 Act.

²⁹ There are two Certificate of Title provisions under the preserved right to buy. The first, for the disposal of the estate or individual house to a person other than the secure tenant is made under Schedule 9A 1985 Act. The second, where the former secure tenant exercises the preserved right to buy is under section 154 1985 Act as applied by the 1993 Regulations. Such latter cases will be rare, as discussed in section 5.13 Exercise of the preserved right to buy by a qualifying person, because the estate will usually already have been registered. However, the new landlord can, as discussed below, move tenants to unregistered property and a sale to the tenant will then be under the second regime.

The Certificate of Title avoids the need for the purchaser to investigate the title and any easements granted in the disposal, and the registrar can rely upon it when considering what class of title to grant in respect of the land. If there are any errors in the Certificate of Title and as a result the registrar suffers loss by having to indemnify a proprietor or anyone else³⁰, the giver of the certificate will, in turn, have to indemnify the registrar.

³⁰ Under s.103 and Schedule 8, LRA 2002.

4.9 Compulsory registration

The various regimes originally contained provisions which required the compulsory registration of any disposals under them. These provisions have now been superseded by the general requirement to register contained in s.4, LRA 2002.

Note, in particular, that the grant of a lease under the right to buy, or the grant or transfer of a lease where the land is subject to a preserved right to buy, gives rise to compulsory registration, even if the lease has less than 7 years to run³¹.

³¹ S.4(1)(b)(e) and (f), LRA 2002. See also s.27(2), LRA 2002 where such a lease is granted out of a registered estate.

4.10 New easements granted over unregistered land

Where any land over which easements are granted is unregistered then the Certificate of Title should be given, see section 4.8 Unregistered title and the Certificate of Title. Land Registry’s view is that the requirement for a Certificate of Title and the power of the initial vendor to give it extend to the grant of any easement over unregistered land in the ownership of the vendor even if the dominant land is already registered. Any easements granted in conveyances by initial vendors will be registered as appurtenant to the title unless other extrinsic evidence available to the registrar contradicts the certificate³².

³² For example, if part of the servient land was already registered in the name of someone other than the initial vendor.

4.11 New easements granted over registered land

Where specific beneficial easements are granted over other registered land in the ownership of initial vendors by the instrument of disposal they will be treated in the normal way. The application form should give the title number of the servient land. As long as the servient land is registered wholly in the name of the vendor the easements will be included in the registered title.

4.12 The registration of the transfer, conveyance or lease

Applications for registration should be made in the normal way to the proper office. Normally, this will be the Land Registry office covering the area in question – see Practice Guide 51 – Areas served by Land Registry offices.

4.13 The registration of the proprietor

Where the purchaser is a body corporate of a particular type, such as a registered social landlord, restrictions may be required to reflect limitations on their powers to deal with the registered estate. Where the purchaser is a non-exempt charity, the appropriate charity restriction will be entered in the register – see Practice Guide 14 – Charities.

4.14 Fees payable

Land Registry fees are payable under the current Land Registration Fee Order.

4.15 Dealing with disposals while the estate is being registered

In many cases the financing arrangements made by the purchaser will mean that it is relying on making sales to tenants and others while the land is being registered. The problems to which this gives rise are well known and are not discussed here. However, there are purely practical ways of avoiding a long delay in being able to complete the sales off. These include:

• the initial vendors completing as many sales as possible before completion where tenants have exercised their rights under the Housing Acts

• making sure the application is correct and that all necessary documents are lodged

• dividing the purchase up into parcels so that a problem on one part does not affect the whole

• where it is known in advance that properties are to be sold, obtaining separate Certificates of Title (where applicable) and transfers for them so that they can be registered individually.

It is strongly recommended that these matters should be discussed with the Land Registrar at the Land Registry office concerned, particularly as the use of multiple applications could lead inadvertently to increased fees.

4.16 Mortgages after acquisition by the purchaser

Where the legislation requires the entry of a restriction in the register then, even if the title has not yet been registered, a charge or mortgage is a disposal. Since it must occur after the purchaser has acquired the interest being registered, a charge is subject to the need for consent under the restriction before it can be registered. However, provision is made for this so that where such restrictions apply there can be an exempt disposal of an interest by way of security for a loan³³. It is also provided that the charge itself will be subject to a condition of consent before the proprietor of it can exercise powers under it³⁴. Where the new landlord is subject to the preserved right to buy regime, consent to the creation of the charge will be needed, see section 5.7 A mortgage by the new landlord.

³³ Ss.81(3) and133, 1988 Act. In all these cases exempt disposal is defined in s.81(8), 1988 Act.

³⁴ Ss.81(4) and 133(2), 1988 Act.

Where the proprietor of the charge exercises the power of sale a purchaser will need to be satisfied, and be able to satisfy Land Registry, that the consent has been given. Where the consent is a general consent which provides:

• that the property will be vacant at the time of the sale

• that the purchaser is an intending owner occupier

• that the price is the best reasonably obtainable

then the registrar will require a certificate from the vendor/mortgagee that the conditions of the consent have been fulfilled in respect of the transfer. In these circumstances the registrar would have no objection to this certificate being endorsed on the transfer.

No enquiry will be made by Land Registry as to the existence of any such consent if application is made to protect the charge by an agreed or a unilateral notice. If subsequently application is made to register it substantively (it will have to be if any exercise of the power of sale is contemplated) the consent will be needed.

However, where the court has ordered a sale under s.90, Law of Property Act 1925 the consent will not need to be produced on the basis that the court will have had to be satisfied that a charge existed in equity before making the order and will have thus had to satisfy itself that there was consent.

4.17 Restrictions on other disposals

The restrictions on further disposal discussed in this paragraph do not include the provisions restricting disposals where the preserved right to buy also applies. In such a case, a consent under those much more restrictive provisions will also be needed and will be reflected in the separate proprietorship restriction for those regimes – see section 5.6 The required restriction).

As reflected in the proprietorship restrictions discussed above, the general rule is that all dispositions are restricted by the need for consent unless they are classed as exempt disposals. For the purposes of the legislation a contract to dispose of an interest is a disposal³⁵.

³⁵ Ss.81(11), 133(4), 1988 Act, ss.32(4) or 43(5),1985 Act and s.173(4), 1989 Act.

Before registering any disposition, therefore, the registrar will need to be satisfied either that:

• there has been a specific or general consent to the disposition by the Secretary of State, TSA or National Assembly for Wales, or

• that it is an exempt disposal.

Where application is made to note a contract for a disposition³⁶ the applicant will have to satisfy the registrar similarly.

³⁶ Under s.34, LRA, 2002.

Land Registry reserves the right to require the applicant to obtain confirmation from a vendor that the transaction falls within the consent and, in particular, that any conditions set out in the consent, such as valuation or notification to tenants, have been complied with. Such confirmation is particularly likely to be required where the consent is a general consent by the Secretary of State, TSA or National Assembly for Wales. The confirmation is required to ensure that a disposition which needs consent is not registered by mistake. If the conditions have not been complied with, it is likely that the transaction is not within the consent and may therefore be void.

Land Registry will accept a copy of the consent certified by a conveyancer as a true copy in place of the original.

So far this section has dealt with disposals of registered land. However, in the case of disposals of land owned by a housing action trust, the land itself may not be registered. As mentioned, a trust may acquire its land by statutory vesting and may not have registered it. Where it has not been registered, it will need to be registered on a disposal by the trust under the normal provisions (s.4, LRA 2002).

The registrar will require similar evidence on the registration of the disposition as if the land were registered, but certain additional requirements are imposed on sales by housing action trusts and these are as follows.

Sales of a single house under voluntary provisions

Unlike the right to buy provisions, where a housing action trust has been added to the list of landlords against whom such provisions operate³⁷, special provision is made for voluntary disposals of land by housing action trusts³⁸. Where consent is given by the Secretary of State or National Assembly for Wales and that consent allows sales at a discount and does not exclude the imposition of a discount charge, the usual obligation to repay the whole or part of any discount on early disposal and the charge to secure the obligation apply.

³⁷ S.83, 1988 Act.

³⁸ S.79 and Schedule 11, 1988 Act.

There are no provisions requiring the housing action trust to give a Certificate of Title under such voluntary sales to the purchaser.

Since these provisions are very similar to those contained in Part II, 1985 Act they are not further discussed. However, if the housing action trust imposes a discount charge under these provisions, the disposition must make it clear that the trust is acting under its powers under Schedule 11, 1988 Act so that the appropriate entry may be made in the charges register of the purchaser’s title.

The form of the entry will follow that of the entry of the discount charge under Part V, 1985 Act but with reference to s.79(13) and Schedule 11, 1988 Act.

Cancellation of the discount charge will be dealt with in the same way as discount charges under the 1985 Act.

Disposals of houses subject to a secure tenancy

There are special provisions on the disposal of a house or flat which is subject to a secure tenancy immediately before the disposal. Although the legislation³⁹ refers to a house or flat, it is in fact more likely to be appropriate to sales of an estate or part estate and the following discussion assumes this to be the case.

³⁹ S.81, 1988 Act.

The purpose of the legislation is to protect the tenant as the tenancy moves from being a tenancy in the public sector to one which may be in the private sector.

This it does by:

• requiring that such transfers can only be to approved persons⁴⁰, and

• (to ensure that such persons cannot then dispose of the estate to unapproved persons) providing that there cannot be a further disposal without the consent of the Secretary of State, TSA or National Assembly for Wales.

⁴⁰ Defined as a registered social landlord, local housing authority or other local authority: s.79(2), 1988 Act.

There is an exemption for transfers falling within Part V of the 1985 Act (the right to buy). These provisions can be contrasted with the preserved right to buy provisions (see section 5 The preserved right to buy) which protect a specific right of such a tenant to buy their house or flat. The two regimes can, and often will, run in parallel in the same transaction.

The following is a paraphrased list of exempt subsequent disposals of land for which no consent is required. However, it does not include disposals permitted under the preserved right to buy provisions which, although they are similar, are not the same and are dealt with in section 5.4 The disposal subject to preserved rights to buy.

• The disposal of a dwellinghouse to a person having the right to buy under Part V of the 1985 Act, whether the disposal is in fact made under that part or otherwise. This exemption will extend to cases where the preserved right to buy operates (see the 1993 Regulations) or under the Housing (Extension of Right to Buy) Order 1987.

• A compulsory disposal within the meaning of Part V of the 1985 Act. This is defined in s.161 of that Act. Essentially, this should be taken as a disposal made under any compulsory purchase provisions.

• The disposal of an easement or rentcharge.

• The disposal of an interest by way of security for a loan – see section 4.16 Mortgages after acquisition by the purchaser.

• The transfer of an interest held on trust for any person whether the disposal is made in connection with the appointment of a new trustee or in connection with the discharge of any trustee.

In addition to the above exempt disposals there is one further circumstance⁴¹ where consent will not be required. This is where the proprietor of the land loses it by operation of law or by an order of the court and the land passes, or is transferred, to another person. In these cases the new owners will be registered but subject to the same restriction.

⁴¹ The legislation is contained in s.133(2), 1988 Act.

Where the proprietor is registered with a restriction preventing the disposal of an interest without the consent of the Housing Corporation or National Assembly for Wales, this restriction may be ignored if consent is given by the Secretary of State under one of the restrictions set out in section 4.3 The consents from the Secretary of State, TSA or National Assembly for Wales and the restrictions which enforce them⁴².

⁴² S.81(7) or 133(7), 1988 Act.

Finally, the registrar will make one non-statutory, and wholly discretionary, exception to the need for consent. This is where the registered proprietor certifies that the land comprised in a disposition (whether transfer of part or lease or transfer of whole) is land which, while it was originally included as part of a larger parcel which contained houses on which the restrictions on further disposal operate, has never been subject to such restrictions. This is intended to cover the situation where, for example, houses around a green were disposed of with the green in one original transfer, so that they were registered under a single title with a restriction, and there is subsequently a disposal of part of the green. In such circumstances the certificate that the land in question had never been affected by the restriction will need to be signed by a responsible officer of the registered proprietor.

 

5 The preserved right to buy

5.1 The consents from the Secretary of State or National Assembly for Wales and the restrictions which enforce them

In section 4 Common matters, reference is made to the arrangement under which tenants may be protected against the actions of an indifferent private sector landlord by a system of approval for the new landlord and its immediate successor. This protection is in relation to the general nature of the tenancy. The preserved right to buy is a specific right of a former tenant of a public sector landlord to have one of their rights as a tenant preserved against a social or private sector landlord, namely the right to buy the freehold or a lease under Part V, 1985 Act.

A tenant will generally cease to be a secure tenant when their landlord’s interest in their house is transferred to a landlord which does not fall within the class of public sector landlords set out in the 1985 Act.

The class of public sector landlords currently includes⁴³:

• a local authority

• a development corporation

• a housing action trust

• the TSA

• the Secretary of State

• an urban development corporation

• a housing trust which is a charity

• a housing association which is a registered social landlord or a private registered provider of social housing but is not a cooperative housing association

• a cooperative housing association which is neither a private registered provider of social housing nor a registered social landlord

• a housing cooperative within the meaning of s.80(4) of the 1985 Act

• and in certain circumstances the class can include the Homes and Communities Agency and Welsh Ministers.

A new ‘right to acquire’ is conferred upon certain tenants of registered social landlords by s.16 of the Housing Act 1996⁴³.

⁴³ As to registered social landlords, see s.1, Housing Act 1996.

5.2 The specific right

Under the normal right to buy a secure tenant (broadly speaking, the tenant of a public sector landlord) ‘takes’ with them the right to buy whatever property they may currently occupy⁴⁴, and this right will go on even if during the time the tenant is a secure tenant, they move – from a house, to a flat and back to a house, for example. The right is not confined to one particular house or flat. However, once a tenant is no longer a secure tenant, the right to buy crystallises against the house currently occupied. This right then becomes the preserved right to buy and it is noted as a burden against the particular property. In certain circumstances the new landlord is given the right to move the tenant, and the right then applies to the new property. The old entry must then be cancelled and a new one made. Similarly, if the right ceases to exist (for example, because the tenant dies and there is no succession to the right) the entry may be cancelled. It is this package of rights that this section describes.

⁴⁴ Subject to the exceptions in Schedule 5, 1985 Act.

5.3 The legislation and transitional arrangements

In this section the footnote references are to Part V of the 1985 Act as it applies by virtue of the 1993 Regulations. These Regulations contain the complete code for the preserved right to buy.

The 1993 Regulations replaced almost identical 1989 Regulations except for cases where notice to exercise the preserved right to buy was served before 11 October 1993.

5.4 The disposal subject to preserved rights to buy

The preserved right to buy will come into operation whenever there is a disposal of a house subject to a secure tenancy to a person who does not satisfy the landlord condition for the creation of a secure tenancy and the secure tenancy⁴⁵ thereby ceases to be such⁴⁶. There may well therefore be two separate regimes governing any particular house, eg the voluntary disposal regime and the preserved right to buy regime. In certain crucial areas, particularly the creation of a mortgage by the new landlord, the regimes do not coincide; a consent may be required under one regime but not under another (see section 4.3 The consents from the Secretary of State, TSA or National Assembly for Wales and the restrictions which enforce them). It is also the case that there are landlords in respect of which the preserved right to buy may be the only regime that operates.

⁴⁵ Ie the new landlord does not come within the class of public sector landlord set out in s.80(1), 1985 Act as from time to time amended or added to (see section 5.1 Introduction).

⁴⁶ S.171A(1), 1985 Act.

The qualifying disposal, which may be a conveyance, transfer or lease, must:

• contain a statement that it is a disposal to which section 171A of the 1985 Act applies⁴⁷. The strongly recommended form is as follows.

“Section 171A of the Housing Act 1985 applies to this deed so far as it relates to dwellinghouses occupied by secure tenants. The [purchaser][lessee] applies for entry of the notice and restriction required by paragraph 4 of Schedule 9A to that Act.”

• list, to the best of the vendor’s knowledge and belief, the houses occupied by secure tenants. This list should be drawn up, preferably in a schedule to the instrument, in alphanumeric order⁴⁸. Normally all houses must be listed separately. However, it is permissible to list them as “Nos 1 – 15 (odd) Acacia Avenue”, or to say “all numbers”, provided that it is clear exactly what the addresses of the properties are

• be registered, in the case of a lease, regardless of the length of the lease⁴⁹

• where the land is unregistered, or where the dominant land is registered but the instrument grants rights over unregistered land, be accompanied by a Certificate of Title in form PSD17.

⁴⁷ Paragraph 1 Schedule 9A, 1985 Act.

⁴⁸ See section 5.5 The entries in the register of a title subject to preserved rights to buy for an example of an alphanumeric entry.

⁴⁹ Ss.4(1)(b) and (f) and 27(2)(b)(v), LRA, 2002.

5.5 The entries in the register of a title subject to preserved rights to buy

The registrar has a duty to make entries in the register reflecting the statements made in the instrument. This will be done in the charges register and except where only one or two houses are involved (where no schedule will be created), the entry will take the following form:

“Such dwellinghouses as are listed below are the subject of a preserved right to buy entered on the date shown in favour of qualifying persons within the meaning of Part V of the Housing Act 1985 as it applies by virtue of regulations under section 171C of that Act.

Item No. Description of Qualifying Dwellinghouses Date of Entry of Notice.”

A specimen entry might look like this:

Item No	Description of Qualifying Dwellinghouses	Date of Entry of Notice
1	3 Acacia Gardens	1.4.1991
2	4 Acacia Gardens	1.4.1991
3	5 Acacia Gardens	1.4.1991
4	27 Bracken Road	1.4.1991
5	32 Bracken Road	1.4.1991
6	2 Crabtree Avenue	1.4.1991

This is an example of an alphanumeric entry. Since on very large estates, for reasons which will be discussed below, there may well be considerable changes in the properties subject to preserved rights to buy, Land Registry considers that it is helpful to all concerned if this method is used.

5.6 The required restriction

The statements required in the instrument referred to in section 5.4 The disposal subject to preserved rights to buy are required so that the registrar can identify the transaction. The registrar is under a duty to enter a restriction in the register against any proprietor who becomes registered as a result of the instrument. That proprietor cannot dispose of less than their whole interest without the consent of the Secretary of State, TSA or National Assembly for Wales, unless it is to a qualifying person or persons⁵⁰. A disposal without consent is void except where the registrar has failed to make an entry in the register reflecting the preserved right to buy. Suppose, for example, that number 1 Acacia Gardens was listed in the schedule in the instrument but the registrar failed to include it in the register entry, so that it was included in a mortgage entered into without the consent of the Secretary of State, TSA or National Assembly for Wales. The tenant would then be in danger of losing their preserved right to buy, as it is not an overriding interest⁵¹ and will be postponed to a registrable disposition made for valuable consideration⁵². The qualifying tenant would be entitled to indemnity from the registrar for the loss caused by the failure of the registrar to perform their statutory duties⁵³. If, on the other hand, the original vendor failed to list number 1 Acacia Gardens as it was not known to be subject to the right to buy then an action for breach of statutory duty will lie against it⁵⁴. Finally, if a property is listed erroneously and a person suffers loss as the result of the registrar making an entry, the registrar is entitled to be indemnified for such loss if they have to pay it in the first place⁵⁵. The restriction in the proprietorship register is as follows in Form W:

“No disposition (except a transfer) of a qualifying dwelling-house (except to a qualifying person or persons) is to be registered without the consent of

(a) in relation to a disposal of land in England by a private registered provider of social housing, the Regulator of Social Housing,

(b) in relation to any other disposal of land in England, the Secretary of State, or

(c) in relation to a disposal of land in Wales, the Welsh Ministers,

to that disposition under section 171D(2) of the Housing Act 1985 as it applies by virtue of the Housing (Preservation of Right to Buy) Regulations 1993.”

⁵⁰ S.171D, 1985 Act.

⁵¹ Paragraph 6 of Schedule 9A, 1985 Act, as substituted by paragraph 18(10) of Schedule 11, LRA 2002. As will be discussed below, in certain circumstances the preserved right to buy can exist against an unregistered title. In those circumstances when the right to buy ceases to be preserved it will be treated, if it is not registered as a land charge, as void against a purchaser under paragraph 6(2).

⁵² S.29, LRA 2002.

⁵³ S.103 and Schedule 8, LRA 2002. The registrar’s statutory duty is set out in section 171G and in paragraph 4 Schedule 9A 1985 Act, as substituted by paragraph 18(7) of Schedule 11, LRA 2002.

⁵⁴ Paragraph 9 of Schedule 9A, 1985 Act.

⁵⁵ I.e. as a claim for indemnity under the LRA 2002.

Since it may not be clear to the registrar on a disposition by way of lease whether or not the applicant lessee is a qualifying person, a requisition may be avoided if the lease makes it clear that the applicant is such a person. In all other cases (apart from transfers, which are not covered by the restriction) a consent will be required.

Previous forms of this restriction did not make it clear that a transfer of the landlord’s whole interest did not need this consent. Any such restriction will now be read as if this was the case.

5.7 A mortgage by the new landlord

A mortgage by a proprietor will be a disposition for which consent will be needed if it includes any houses subject to the preserved right to buy. The creation of a mortgage is not an exempt disposal and, since it is clearly not a disposal of the entire interest of the new landlord, it is caught by the requirement of consent.

5.8 Change of entries relating to the preserved right to buy

The entries relating to the preserved right to buy will not be entirely static. The new landlord has the right to move tenants, with their consent, around its estate or indeed to any other house that it may own. In this case, the preserved right to buy goes with the tenant.

The landlord has a duty to apply to the registrar to enter notice of the tenant’s rights and for a restriction in Form W whenever:

• the house is entirely different from the old house, or

• they add land to the existing house extent⁵⁶.

⁵⁶ Paragraph 5 of Schedule 9A, 1985 Act, as amended by paragraph 18(8) of Schedule 11, LRA 2002.

Tenants also have the right to apply to enter the notice and restriction⁵⁷. Landlords should make application on form PSD101 – see section 9.6 Form PSD101.

⁵⁷ Under ss.34 and 43(1)(c), LRA 2002. Paragraph 5(3) of Schedule 9A, 1985 Act is repealed by paragraph 18(9) of Schedule 11, LRA 2002.

This is the case where the new house or land is held on a registered title.

However, it is possible that the other house is not registered and, since there is no requirement to register it, provision is made⁵⁸ for the preserved right to buy to be registered as a land charge class C(iv) (estate contract) under the Land Charges Act 1972. Any application to the Land Charges Department should be made on the normal land charges form K1.

⁵⁸ Paragraph 5(4) of Schedule 9A, 1985 Act.

If the tenant has been moved to a new house and the old house is not occupied by a tenant with the preserved right to buy, the landlord should certify on form PSD 103 that the land previously affected is no longer subject to the preserved right to buy, and apply for the cancellation of the entries relating to it.

5.9 Cancellation of entries relating to the preserved right to buy

Entries relating to the preserved right to buy for any particular qualifying dwellinghouse will be cancelled by the registrar provided the statements listed below are included in the transfer or lease.

• Where there is a sale to the tenant under the preserved right to buy, the disposition must contain the following statement, or one to like effect, prominently in the instrument:

“This [transfer][lease] is to a qualifying person and is made in pursuance of the provisions of Part V of the Housing Act 1985 as they apply by virtue of section 171A of that Act.”⁵⁹

⁵⁹ Paragraph 7(1) Schedule 9A, 1985 Act.

• Where there is a sale to the tenant who has the benefit of the preserved right to buy but not actually under those provisions, e.g. on terms similar to voluntary disposals of council houses and the preserved right to buy ceases to exist, the disposition must contain the following statement, or one to like effect, prominently in the instrument:

“This [transfer][lease] is to a qualifying person but is not made in pursuance of the right to buy and the land [transferred][leased] ceases to be subject to any rights arising under Part V of the Housing Act 1985.”⁶⁰

⁶⁰ Paragraph 7(2) Schedule 9A, 1985 Act.

• Where the land is transferred to a public sector landlord (i.e. a person who satisfies the landlord condition for secure tenancies) the transfer or lease⁶¹ must contain the following statement, or one to like effect, prominently in the instrument:

“Under the provisions of section [171D(1)(a)][171E(2)(a)] Housing Act 1985 the land [transferred][leased] ceases as a result of this [transfer][lease] to a person who comes within section 80(1) of that Act to be subject to any rights arising by virtue of section 171A of that Act.”⁶²

⁶¹ It seems that the provision will operate if the landlord grants the lease to the public sector landlord so that the tenant becomes a tenant of the latter.

⁶² Paragraph 7(3) Schedule 9A, 1985 Act.

5.10 Further cancellation provisions

(i) If land ceases to be subject to a preserved right to buy, for example because the tenant has quit and the new tenant, if any, does not have the preserved right to buy, the landlord should apply for cancellation of the entries relating to the preserved right to buy. The application must be made in forms CN1 and (if no land in the title remains subject to the preserved right to buy) RX3, supported by a certificate in form PSD103⁶³. A wrongful application which leads to a claim against the registrar will make the landlord liable to indemnify him⁶⁴.

⁶³ Paragraph 8 Schedule 9A, 1985 Act.

⁶⁴ Paragraph 9(2)(c) Schedule 9A, 1985 Act.

(ii) If the landlord’s registered interest has determined, the title will be closed on application. The entries relating to the preserved right to buy will be carried forward to the title to the superior interest (assuming it is registered) unless:

• the termination of the landlord’s interest results from a transfer to a public sector landlord and the transfer contains the last of the three statements set out in section 5.9 Cancellation of entries relating to the preserved right to buy⁶⁵, or

• the applicant applies for cancellation of the entries on the basis that the right to buy has ceased to be preserved, in which case the entries will simply be cancelled. The application must be in forms CN1 and (if no land in the title remains subject to the preserved right to buy) RX3, supported by a certificate in form PSD103.

⁶⁵ The statement should refer to section 17E(2)(a) of the 1985 Act.

Whether the right to buy ceases to be preserved in such circumstances depends on the detailed provisions of section 171E of the 1985 Act.

5.11 Land charge cancellation

In no circumstances will there be automatic cancellation of any entries in the Land Charges Department. The usual application will have to be made for cancellation by the person having the benefit of the entries.

5.12 Fees

The normal fees for entry of notices in the register under ss.34 or 43, LRA 2002 payable under the current Land Registration Fee Order apply to entries made in respect of the preserved right to buy. A notice may be cancelled without fee.

5.13 Exercise of the preserved right to buy by a qualifying person

In most cases when a qualifying person having the preserved right to buy exercises that right, the land will already be registered. However, where the tenant/qualifying person has been moved by the landlord it is possible that the qualifying dwellinghouse is unregistered. The landlord must give the tenant the appropriate Certificate of Title in such cases⁶⁶. These are as follows.

• PSD13 – for use where the estate being conveyed is freehold.

• PSD14 – for use where a new lease is being granted out of the landlord’s freehold.

• PSD15 – for use where a new lease is being granted out of the landlord’s existing leasehold title.

⁶⁶ Section 154 1985 Act as applied by the 1993 Act.

The conveyance or lease must contain the first statement referred to in section 5.9 Cancellation of entries relating to the preserved right to buy⁶⁷.

⁶⁷ The other statements will not be relevant in such transactions.

5.14 The entries on the landlord’s title after exercise of the preserved right to buy

This section deals with the additional entries which will be made against a landlord’s title when a tenant exercises the preserved right to buy. Although this right is very similar to the ordinary right to buy, it is undertaken under its own separate code. Accordingly any existing entries that there may be on a landlord’s title relating to the ordinary right to buy which operated before they bought it, will not be appropriate for transactions under the preserved right to buy.

In the case of freehold transfers the entry made in the property register of the landlord’s title on the first transaction will be as follows.

“The transfers of those parts edged and numbered in green on the title plan which were made pursuant to Part V of the Housing Act 1985 as it applies by virtue of the Housing (Preservation of Right to Buy) Regulations 1993 took effect with the benefit of and subject to the easements and other rights specified in paragraph 2 of Schedule 6 to the said Act as it so applies.”⁶⁸

⁶⁸ CRE AK528 contains no fields.

In the case of new leases the following entry will be made in the charges register.

“The leases specified in the Schedule of Leases hereto which were made pursuant to Part V of the Housing Act 1985 as it applies by virtue of the Housing (Preservation of Right to Buy) Regulations 1993 took effect with the benefit of and subject to the easements and other rights specified in paragraph 2 of Schedule 6 to the said Act as it so applies.”⁶⁹

⁶⁹ CRE CK357 contains no fields.

6 Acquisition of land by a housing action trust

This part is concerned with the acquisition of an estate by a housing action trust.

Since this poses some particular problems over future disposals from the estate, it is included in this guide.

A housing action trust is established by the Secretary of State or National Assembly for Wales in relation to a designated area which may be added to and which does not need to be contiguous⁷⁰. Broadly, the aims of a housing action trust are to renovate an area of run down housing and its general environment⁷¹. In pursuance of this objective, the trust has power to:

• acquire, hold, manage, reclaim and dispose of land and other property

• carry out building and other operations

• seek to ensure the provision of water, electricity, gas, sewage and other services

• carry on any business or undertaking and generally do anything necessary or expedient for the purposes of those objects and powers or for purposes incidental thereto⁷².

⁷⁰ The provisions governing housing action trusts are to be found in Part III of the 1988 Act, sections 60 to 92 and schedule 11.

⁷¹ The precise objects are set out in s.63, 1988 Act.

⁷² S.63(3), 1988 Act.

A housing action trust can acquire its assets in the following ways.

• By order of the Secretary of State or National Assembly for Wales ordering a transfer of housing accommodation from a local housing authority, a county council, a waste disposal authority, a joint body established under Part IV of the Local Government Act 1985 or a residuary body established under Part VII of that Act⁷³. The Order may provide for financial terms so that the local housing authority etc receives compensation.

• By statutory vesting by an order of the Secretary of State or National Assembly for Wales and, where appropriate, a minister⁷⁴ of land which is owned by a public body or a statutory undertaker.

• by agreement, or provided the Secretary of State or National Assembly for Wales consents, compulsorily⁷⁵. Land whether within or without the designated area of the housing action trust and whether or not adjacent to that area may be acquired and it also has limited rights to acquire other land for the purposes of exchanging land to carry out its functions⁷⁶. It may also acquire compulsorily new rights over other land, such as easements⁷⁷.

⁷³ Ss.74 and 75, 1988 Act.

⁷⁴ S.76, 1988 Act.

⁷⁵ Schedule 10, 1988 Act contains extensive provisions on the powers of housing action trusts to compulsorily acquire land or rights and to extinguish rights or override easements.

⁷⁶ S.77, 1988 Act.

⁷⁷ S.77(4), 1988 Act.

Land which is acquired by agreement or under compulsory powers will need to be registered in accordance with the general principles of compulsory registration – see section 3 Statutory powers and land registration.

Where the land is vested in the housing action trust by statutory instrument then:

• in the case of unregistered land it will not normally need to be registered under the LRA 2002. Proof of title on any subsequent transaction will consist of the normal conveyancing evidence of title for at least 15 years from a good root together with a copy of the statutory instrument under which the land was vested

• in the case of land that is already registered an application for alteration of the register to show the new owner should be made under paragraph 5(b) of Schedule 4, LRA, 2002.

Fees will be payable in the normal way under the current Land Registration Fee Order for land acquired by agreement.

Applications for alteration of the register following a statutory vesting do not attract a fee under the current Land Registration Fee Order.

Because of the limitations in the powers to dispose of housing land mentioned in section 7 Powers of initial vendors to dispose of the land and the relevant purchaser protection provisions, on registration of a housing action trust, you should consider an application for the entry of a restriction in the Proprietorship Register reflecting these limitations. Where the property is subject to secure tenancies, the provisions of section 4.3 The consents from the Secretary of State or National Assembly for Wales and the restrictions which enforce them apply.

7 Powers of initial vendors to dispose of land and the relevant purchaser protection provisions

7.1 Local authorities

Local authorities have virtually unrestricted powers to dispose of land although the consent of the Secretary of State or National Assembly for Wales is often required⁷⁸. S.128(2), Local Government Act 1972 provides that a purchaser need not be concerned to see if the consent has been given or whether it covers the particular transaction.

⁷⁸ Housing land may only be disposed of under s.32, 1985 Act which imposed a consent requirement.

Notwithstanding s.128(2), the disposal of a house or flat by a local authority without consent is void unless:

• the disposal is to an individual or to two or more individuals, and

• the disposal does not extend to any other house⁷⁹.

⁷⁹ S.44(1), 1985 Act.

7.2 Housing action trusts

A housing action trust is free, subject to any directions by, and with the consent of, the Secretary of State or National Assembly for Wales, to dispose of any land that it owns⁸⁰. However, it is restricted in what it can do with a house or flat which is the subject of a secure tenancy unless it is sold under the right to buy⁸¹. All disposals of land require the consent of the Secretary of State or National Assembly for Wales which may be given generally or specifically⁸². A disposal of land which includes a house or flat made without such consent is void unless:

• the disposal is to an individual or to two or more individuals, and

• the disposal does not extend to any other house⁸³.

Where the land does not consist of a house or flat, then a purchaser is not concerned to enquire whether or not a consent has been given and the disposal is not invalid⁸⁴.

⁸⁰ S.79, 1988 Act.

⁸¹ S.79(2), 1988 Act.

⁸² S.79(4) and (5), 1988 Act.

⁸³ S.80, 1988 Act.

⁸⁴ Section 80(2), 1988 Act.

8 Enquiries and comments

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 freely download them from our website.

9 Land Registry forms referred to in this guide

9.1 Form PSD13

Form PSD13

9.2 Form PSD14

Form PSD14

9.3 Form PSD15

Form PSD15

9.4 Form PSD17

Form PSD17

9.5 Form PSD101

Form PSD101

9.6 Form PSD103

Form PSD103