New Land Registry Practice Guide 75 – Transfer under a chargee’s power of sale

The Land Registry has recently issued its first dedicated Practice Guide setting out the procedure and requirements for registration of transfers pursuant to a mortgagee’s power of sale. The Practice Guide explains the Land Registry’s process for applications where:

  • a charge has been created by deed or has been expressed to be by way of legal mortgage (whether or not it is a “registered charge”); or
  • an order (e.g. order for sale) has been made under section 90 Law of Property Act 1925 to vest a legal term of years to enable a mortgagee to carry out a sale.

Section 3.2 of the Practice Guide gives guidance regarding the Land Registry’s approach to cancellation of charges, notices and restrictions noted on the register; and also details the Land Registry’s requirements for removal of estate contracts (as previously noted in Practice Bulletin 14). It is important to note that Estate Contracts are not automatically removed upon a sale by a chargee; but that the Land Registry will remove the entries where a written statement is provided by or on behalf of an authorised officer of the chargee or its conveyancer (either in the Transfer deed or separately) confirming that the chargee was not a party to the contract, did not consent to it/adopt it, and is not otherwise bound by it.

Section 4 of the new Practice Guide confirms the Land Registry’s practice for dealing with cases where a power of sale is exercised under the terms of a legal mortgage which does not appear on the register as a “registered charge”. In the case of Swift 1st Ltd v Colin [2011] EWHC 2410  the court held that a mortgage which is expressed to be by way of legal charge and is by way of deed, sections 101 and 104 Law of Property Act 1925 permit such a chargee to exercise its power of sale and to overreach subsequent interests.

The Practice Guide will assist chargees and their solicitors in addressing queries regarding Land Registry procedures which are raised by buyer’s solicitors during the course of the chargee’s sale.

The new Practice Guide is available here: Land Registry Practice Guide 75