The recent High Court decision in Stodday Land Limited and another v William Marsland highlights the issues raised by the 'registration gap' and emphasises the importance of ensuring that notices are served correctly during this period.
The 'registration gap' is the (often significant) period of time that the Land Registry takes to complete the process of registration of a transfer of land from the receipt of an application. A purchaser of land does not become the legal owner of that land until such time as the process of registration is completed.
In the Stodday Land case, the buyer of a plot of agricultural land completed its purchase on 19 June. On 1 July, it served a notice on the tenant of that land purporting to bring its tenancy to an end. The Land Registry did not complete the buyer's application for registration until 16 July. As the buyer was not the legal owner of the land at the time that notice was served, the court held that the notice to quit was invalid.
A buyer can seek to protect itself in situations such as these by agreeing additional provisions in the contract with the seller. Such protections could include a provision enabling the buyer to serve notices during the registration gap as the seller's agent, or a requirement for the seller to serve any notices itself until such time as the Land Registry completes the process of registration.