Unilateral Notice Land Registry

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A 3D animated hand holds a blue envelope in the air showing a red '1' notification icon on it's top right corner. Can you sell a house with unilateral notice Land Registry charge? How unilateral charges work - by Parachute Law Solicitors..

What is a Land Registry unilateral notice?

Also known as a land registry unilateral charge, this type of notice is used to register an interest against a property by a third party. There are two types of notice which can be used by a third party to claim an interest. The other is an agreed notice.

All notices protect the priority of the interest that they relate to. Unilateral and agreed notices differ in the following ways:

  • Can be made without the consent of the relevant proprietor (or someone entitled to be registered as such); and
  • The applicant is not required to prove their interest
  • Applies to specific types of interest only, excluding:
    • home rights
    • an HM Revenue & Customs charge in respect of a liability for inheritance tax
    • an interest arising pursuant to an order under the Access to Neighbouring Land Act
    • a variation of a lease effected by or under an order made under section 38 of the Landlord and Tenant Act 1987 (including any variation as modified by an order under section 39(4) of that Act)
    • a public right
    • a customary right (a customary right is one that is enjoyed by some or all of the inhabitants of a particular locality)
  • Must be made with the consent of the relevant proprietor (or someone entitled to be registered as such); or,
  • Where the applicant can satisfy the registrar that the interest claimed is valid. Supporting evidence must be lodged with the application

Unilateral charges are not particularly powerful. They do not guarantee the interest it protects or even mean that the interest exists.

They can be submitted without the proprietor's consent or proving the beneficial interest, but the owner will be notified. If there is any dispute over it's validity, the proprietor can simply apply to have the notice cancelled.

If the applicant who submitted the notice is unable to to prove that the beneficial interest claimed is valid within 15 days, the notice will be cancelled. If the applicant disagrees with the cancellation, the case will be referred to the Adjudicator for the Land Registry.

What is a unilateral notice used for?

Unilateral notices may be used for a wide variety of reasons, from lenders who have secured the proprietors debt against a property, to a private individual placing the notice on rental properties owned by their spouse or civil partner when a land action is commenced as part of divorce proceedings.

The main benefits of a unilateral charge are:

1) To prioritise the interest

The main benefit of a unilateral charge is to place the notice ahead of another. It can be submitted without waiting for the consent of the proprietor or approval of evidence of the interest held. This allows the applicant of a unilateral charge priority over another notice which may be entered onto the register even one day later.

2) To notify the proprietor

A unilateral notice is also used to notify the proprietor and other relevant parties of the interest held by the benefactor

These notices can be used by any third party (someone other than the owner), often finance companies, such as banks, loan companies and credit providers; but also private individuals.

If you make an application for a unilateral charge, without reasonable cause you may become liable for damages suffered by any person as a result .

Can you sell a property with a unilateral notice?

Yes. Restrictions restrict dispositions where notices only gain the beneficiary notice of the disposition. However, common misconceptions around the function of unilateral charges can deter buyers.

The case of Valais V Clydesdale Bank found that this fear was unfounded. The bank had a notice placed on 4 properties as they held second charge(s) against the properties. This served to notify the buyer that once Valais (who was the first proprietor of four properties - they had repossessed them from the borrowers) had been paid, Clydesdale's interest was next to be paid out of any remaining funds.

The auctioneers informed Valais that the notice in Clydesdale's favour would deter buyers and Valais sought an interim order to have the bank remove the orders. The Court held that the sale by Valais, as the first mortgagee in possession, would overreach the Bank’s interest (pursuant to s.114(1) of the Law of Property Act 1925).

This meant that Valais could sell free from the effect of the equitable charge. As the bank was entitled only to funds from the sale remaining after Valais had been repaid in full, then the purchasers would take free of the bank's charge.

Need help protecting your interests in a property?

If you are disputing interests over matrimonial assets, a unilateral notice can prioritise your interest once land action is commenced.

Our experienced solicitors can help with:
  • Working out your beneficial interest
  • Pre-action negotiations
  • Application to court
  • Applying to place unilateral charge(s) on property
  • Applying to place a home rights restriction on the family home
  • Preliminary hearing
  • Mediation
  • Court appearance

We have on hand counsel to support your claim and offer guidance along the way.

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