Correcting errors The Land Registry has provided guidance on how to correct mistakes in documents relating to registered land. Bruce Dear and Peter Williams consider its contents
Unsurprisingly, given the speed and pressure of transactions, parties may discover after completion that their documentation does not reflect what they intended or needs to be amended for some other reason. A clerical error may have crept in, the plan may be incorrect or, where the document needs to be delivered to the Land Registry, it may fail to comply with the Registry’s requirements for form or content. Whatever the problem, the document must be corrected.
The traditional solution for unregistered conveyancing was by way of deeds of rectification or variation. There has been very little analysis of why, or even whether, this is legally effective (in the absence of formal rectification by the court). Even so, in practical terms, conveyancers accept that it is sufficient to achieve what is necessary.
However, as the Registry has recently pointed out, what is appropriate for unregistered land may not be so for registered land. The Land Registration Act 2002 and the Land Registration Rules 2003 lay down the requirements for achieving legal ownership of property and the forms that the parties must use.
To take the simplest example, title to registered property can be transferred only by a transfer document in the form prescribed by the 2003 Rules. Thus, if the plan contained in a transfer of part mistakenly omits some of the land intended to be sold, the error cannot be corrected simply by preparing a confirmatory document containing the correct plan. The original transfer document must be corrected or the land that was omitted from the original plan must be transferred using a second transfer document. In the latter case, a new priority search should also be obtained to cover the additional land.
The Land Registry has issued guidance on these issues in Practice Guide 68 Amending deeds that effect dispositions of registered land. This covers transfers, leases and charges. The position with regard to transfers and charges is relatively straightforward, but correcting errors in leases can be more complicated.
Correcting transfers and charges
The guide states that if it is necessary to correct or amend an executed document, it should be altered to reflect the parties’ true intentions before it is lodged for registration. If it has already been lodged, the parties can request its return at any time before the registration is completed. Alternatively, the Registry may itself decide to send it back for correction.
The guide states that any alteration must be authenticated by each party signing against it. If a plan to the original deed is amended or substituted, all the parties should sign the amended or new plan.
If an error cannot be corrected before a priority period expires, the Registry will be prepared, if certain conditions are satisfied, to accept an application on the basis of the uncorrected document (to ensure that priority is preserved), and subsequently to return that document for correction and resubmission.
Some advisers are not comfortable with amending documents after they have been completed. However, this practice was approved by Lewison J in Frazer v Brown [2009] EWHC 2692 (Ch). In that case, the transfer plan included land that the seller apparently did not own. During the course of the application for registration, the Registry returned the transfer so that the plan could be amended by the removal of the doubtful land. The court expressly accepted that this procedure had been effective to vary the plan.
A variation that is made after the completion of registration may require a separate application to the Registry. For example, following the registration of the purchase of a new house on an estate, it may be necessary to vary the easements granted in the original transfer. Where this results in the creation of new or altered easements, those easements will have to be registered in order to be effective in law, in the same way as any other easement granted out of a registered title.
Leases are more problematic
The general rule for leases is identical to that for transfers. A correction to a lease can be made only in a form that complies with the 2003 Rules. If the lease is registered at the Registry, a deed of rectification will not be appropriate if the error to be corrected concerns the extent of the term or the premises. A change to either of these would create a new tenancy by a deemed surrender and regrant.
The guide provides a number of examples of how errors can be corrected:
? Too much land has been demised: The surplus can be removed only by a deed of surrender or a transfer by way of surrender.
? Land has been omitted from the lease: This frequently occurs (see box). It can be resolved either by a supplemental lease of the missing land or by a deed of variation that inserts a revised plan into the lease.
A deed of variation, however, will take effect as a deemed surrender and regrant. In that case, the Registry will close the existing leasehold title and require an application to register the new lease with a new title number (assuming that the term exceeds seven years). The lease must contain the Registry’s prescribed clauses, except where it results from a variation that is a deemed surrender and regrant (this exception is contained in r 58A(4)(d) of the rules). Given this, and the other issues that arise following a deemed surrender and regrant, a supplemental lease of the omitted land is probably the easiest solution. This can reference the provisions of the original lease, keeping the document as short as possible.
? The term needs to be extended: This can be done by way of a reversionary lease or a deed of variation. Again, however, a deed of variation, if used, will take effect as a deemed surrender and regrant. The guide does not mention how the term of a lease can be shortened. Fortunately, this is a rare occurrence and can probably be achieved only by a deed of variation, which will effect a deemed surrender and regrant.
? Other variations: Where other provisions need to be amended, any form of deed of variation may be used. The guide states that the deed will have to be completed by registration against the titles of the landlord and tenant using form AP1. Although the guide is unequivocal on this point, it is not clear that this represents the law. Counsel’s opinion on the issue was obtained by a number of law firms when the Act came into force in 2003. Counsel’s view was that it is likely that a deed of variation will require registration only if it contains provisions that would trigger a need for registration, broadly an increase in the extent of the premises or the term or the grant or variation of easements.
Clearly, it is best practice to note a deed of variation on both parties’ titles. However, this may not always have been done in the past. The question of whether a deed that varies the covenants in a lease needs to be noted at the Registry if it is to bind third parties remains to be decided by the courts.
The classic problem |
The correction that is most commonly needed to a lease is an alteration of the extent of the demised premises. It is not unusual for the plan to include land that should not have been included or to omit land in error. Sometimes, the boundaries of the premises are incorrect in both respects. In the past, the parties would have attempted to correct this by a “deed of rectification” containing the correct plan. The Land Registry’s view is that, for registered land at least, this effects a deemed surrender and regrant. Unpopular as this view is with practitioners, it is probably correct in law. The only safe approach, therefore, is to document the correction in a deed by which the tenant surrenders any parts of the premises that were included in error and takes a lease of any areas that were omitted. In this way a deemed surrender and regrant can be avoided. |
The guidance is available in the forms/publications section of www.landregistry.gov.uk.
Bruce Dear is head of London real estate and Peter Williams is a professional support lawyer in the real estate group at Eversheds LLP
