Why registering your interests is so fundamental for Off Plan Property.
Brett Alegre-WoodChairman, YPC Group
Hey guys,
Today is a great story that has been happening without many clients realising it is going on in the background.
It revolves around the fact that when you exchange on an off plan property it is vital that you register your interests on Land Registry to the property at the point of exchange, if you don't you may lose the property or have it sold from underneath you.
The problem comes because many people aren't aware that the solicitors actually do this and when they are charged a fee they immediately think they are being over-charged. this is not the case, registering your interests under the exchanged contract is important so that you don't potentially lose out.
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All of our solicitors do this on your behalf in every case.
Below is an email from Karen James from Ramsdens solicitors who wrote about the law pertaining to this area to Karen Earthrowl, our Director of Client Services.
It's heavy reading so when you've had enough, skip to the bottom and see the real meaning for the rest of us.
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Hi Karen,
I thought it might be easier just to copy the relevant section from the Land Registry's Practice Guidance Notes on this matter:-
2.3 The priority of competing interests ? the reason why third party interests require protection
The revised system of title registration introduced by the LRA 2002 aims to make the register a complete and accurate reflection of the state of the title to a registered estate at any given time (paragraph 1.5, Law Com 271).
The proprietor of a registered estate can make a disposition of almost any kind permitted by the general law1 and someone dealing with the proprietor can assume that their powers are unlimited except for any restriction reflected by an entry in the register or imposed by or under the LRA 2002 itself (s.26, LRA 2002).
Where more than one party has an interest in a registered estate or charge, the general rule that decides the priority of each party?s claim is that each interest ranks in accordance with the date of its creation. Someone with an existing interest will not be affected by a later disposition2.
However, there is one important exception. Someone who acquires a registrable disposition for value will, by registering their interest, postpone the priority of any other interest that has not been protected by the entry of a notice in the register3. In other words, they will not be affected by interests that have not been noted. Not all interests are postponed in this way (s.29(2), LRA 2002). In particular, certain interests have ?overriding status? and may bind someone who acquires a registrable disposition for value even if not entered in the register. However, many fewer interests have overriding status under the LRA 2002 than was the case under the LRA 19254.
A notice entered in the register in respect of a third party interest will protect its priority against that of a subsequent registrable disposition for value. A restriction, by preventing the registration of a subsequent registrable disposition for value, will prevent the priority of a third party interest from being postponed.
I am happy to expand upon this when we meet later today, but in very simple terms the pros are that the buyers' interest in respect of that individual property is given to all third parties inspecting the title deeds. So, for example, the sellers couldn't sell the same apartment twice (which has been known!). If the developer wanted to re-finance, it would put his bankers on notice that sales have already been contracted. Should the developers go into administration, the liquidators would be aware of the agreed sales etc etc. The only downside is the cost to register the notice.
I confirm that we have registered the contracts for all previous off plan sales we have dealt with on your behalf.
Kind Regards,
Karen
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We only work with professionals in the industry that are experienced in the many areas we work and this is just one example of how these things pay off.
Live with passion,
Brett Alegre-Wood
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