Key point

  • A company which owns land can apply, free of charge, for a restriction on the registered title which could help prevent the company from becoming a victim of property fraud

Background

A couple of years ago the Land Registry introduced a mechanism to help combat fraud against residential property which is not owner-occupied (e.g. buy to let, or where the owner is in long term residential care).  Private individuals can apply for a restriction against their own title, free of charge, using form RQ. A restriction is an entry in the register that limits the powers of a registered owner to deal with or dispose of the land. When made via form RQ, the restriction is that no dealing with the property (e.g. a transfer or a mortgage) will be registered unless a solicitor or other professional conveyancer certifies that they have checked the identity of the person who has signed the deed. This could help to prevent a fraudster forging a signature.

Companies

Though form RQ is aimed at individuals, it's now being extended in a six-month trial by Land Registry so that companies can use this service as well.  Application is made on form RQ (Co).  The restriction for companies is, again, designed to help safeguard against forgery, particularly to prevent forged signatures. Once registered, a solicitor (or other professional conveyancer) must certify they are satisfied the company transferring or mortgaging the property is the same company as the owner before any new sale, lease or mortgage is registered. They must also certify that they have taken reasonable steps to establish that anyone who executed the deed on behalf of the company held the stated office (i.e. director, secretary or manager) at the time of execution. The full text of the restriction which will appear on the title is: “No disposition of the registered estate by the proprietor of the registered estate is to be completed by registration without a certificate signed by a conveyancer that the conveyancer is satisfied that (1) the company which executed the document submitted for registration as disponor is the same company as the proprietor, and (2) reasonable steps have been taken to establish that each person who signed as an officer of the company held the stated office at the time of execution.”

How much does it cost?

A restriction may be registered free of charge against up to three titles belonging to a company.  If it is desired to enter a restriction against more than three titles, form RX1 should be used for the additional titles and normal Land Registry fees will apply.

Who shouldn't apply for one of these restrictions?

Insolvency practitioners may consider applying for one if circumstances warrant it.  However, it is important to note that if an insolvency practitioner then executes a deed which is to be lodged at Land Registry, a conveyancer will not be able to give the certificate required by the restriction, and will need to apply for it to be disapplied or withdrawn.  Where a company routinely executes documents by attorney, if the attorney is not also an officer of the company, the restriction could create difficulties.  Again, in these circumstances a conveyancer will not be able to give the certificate required by the restriction, and will need to apply for it to be disapplied or withdrawn. Companies which have one of these restrictions on their titles should be prepared for additional checks, and requests for verification of identity of their officers, when dealing with their land.

How to apply for the restriction

Form RQ (Co) is available from Land Registry's website.  The form can be submitted by email to rq-request@landregistry.gsi.gov.uk.  Otherwise, it should be sent in hard copy to Land Registry Wales officeAnswers to Frequently Asked Questions can be found on the Land Registry website.   A restriction entered during the trial period will remain on the property after the end of the trial unless application is made to remove it.