Watch out for the (registration) gap

During the registration gap, can a landlord enter premises to carry out works without the legal owner’s consent? Elizabeth Dwomoh finds out. Key points A landlord whose title has not been registered did have a right to enter the land to carry out works and make an application for dispensation in respect of those works Urgency was not a precondition to the grant of dispensation under the statutory consultation procedure When an individual purchases land, there is a gap between completion of the purchase and the registration of the transfer at HM Land Registry. The delay is colloquially referred to as the “registration gap”. During this period the vendor holds the legal title as a bare trustee for the purchaser. In RM Residential Ltd v Westacre Estates Ltd and another [2024] UKUT 56 (LC); [2024] PLSCS 45, an issue arose as to whether, during the registration gap, a purchaser of the freehold of a block of flats had the right to carry out works to the premises and make an application for dispensation from the statutory consultation requirements, when, at the material time, it was not the legal owner of the premises. Remedial works In December 2020, RM Residential Ltd purchased the property known as 2 The Waterloo, Cirencester. It became the registered proprietor in January 2022. The property was a mixed-use block comprising four self-contained commercial units on the ground floor and six residential flats spread over the upper two floors. The respondents were the long leasehold owners of the flats. Shortly after RM purchased the property, it instructed an engineer to inspect and report on the condition of the property. The property was deemed to be in disrepair and suffering from movement-related issues. A further report commissioned by RM in April 2021 revealed that the property was in an “extremely poor condition” and contained asbestos that required removal. RM commenced the remedial works advised. Structural works were substantially completed in September 2021 and the outstanding asbestos removal work completed in early 2023. The remedial works were qualifying works within the meaning of section 20 of the Landlord and Tenant Act 1985 and the Service Charges (Consultation Requirements) (England) Regulations 2003. Although RM had engaged with some elements of the consultation procedure, it had failed to fully comply with its statutory consultation obligations. In May 2023, RM applied to the First-tier Tribunal under section 20ZA(1) for dispensation. Although the FTT found that the leaseholders had not suffered any prejudice from RM’s failure to consult, it refused to grant dispensation. The refusal was posited on two grounds. First, the FTT found that RM did not have standing to bring the application. In short, RM was seeking dispensation for works carried out at a material time when it was not the legal owner of the property. Second, the FTT found that RM had failed to establish that the works were so urgent and necessary that they could not be delayed until such time as it became the registered legal owner of the property. The appeal RM’s grounds of appeal included the following: the FTT had erred in finding that a landlord whose title had not been registered could not enter and do works on property without permission from the legal owner; the FTT had wrongly held that RM could not apply for dispensation without prior registration of its title; a lack of urgency in respect of the works could not be a reason to refuse dispensation; and where the FTT had found that the leaseholders did not suffer any prejudice, it had erred in not granting RM dispensation. The Upper Tribunal (Lands Chamber) was critical of the FTT’s analysis in relation to the registration gap issue. It observed that, under section 24 of the Land Registration Act 2022, a person was entitled to exercise owner’s powers in relation to a registered estate or charge if they were entitled to be registered as the proprietor. On the day of completion, the transfer was signed and dated and keys to the property were handed over to the purchaser. The property belonged to the purchaser in equity, and to say at that stage the purchaser was not the owner of the property flew “in the face of everyday reality”. There were some steps an equitable owner could not take during the registration gap but, as the UT highlighted, entering the property was not one of them. Additionally, the UT found that RM had standing to make an application for dispensation. On the relevance of “urgency of work” in determining an application for dispensation, the UT determined that it was not a precondition to the grant of dispensation. Relying on the decision of the Supreme Court in Daejan Investments Ltd v Benson [2013] UKSC 14; [2013] 2 EGLR 45, prejudice was the main, if not the sole, consideration for the FTT. In the present case, it had erred in not granting RM dispensation where no prejudice had been suffered by the leaseholders. Elizabeth Dwomoh is a barrister at Lamb Chambers Photo by Jessy Smith/Unsplash