When you’ve made the decision to sell land, you want the process to run as smoothly and quickly as possible with no hiccups. Recently we have been finding more and more sales where there are restrictions on title to registered land, which can cause problems and delays during a sale.

Restrictions are registered to protect the interest of third parties. Commonly restrictions are used to deal with overage (clawback) arrangements, where a third party is entitled to a percentage of the uplift in the value of the land if it is developed.

The document containing the overage provision will state that any incoming buyer must enter into a deed with those who have the benefit of the overage payment and that they will be bound by the terms of the agreement, so that there is a direct contractual relationship between the respective parties. The individual who has the benefit of the overage will then provide a form of consent, which is acceptable to the Land Registry to enable the transfer to be registered.

We have found that restrictions are often left on the register of the title to the property, even though they are no longer applicable and should be removed. In addition, on occasions the document that is protected by the restriction cannot be found and this also holds up a sale.

If the party who has the benefit of the overage payment cannot be found and the relevant consent cannot be given, it is possible to apply to the Land Registry to disapply the restriction (not cancel it), based on evidence that every effort has been made to locate the beneficiary and confirmation that the terms of the original agreement have been complied with.

We recommend if you are considering selling land, now or in the future, to take action before any sale is agreed, starting by locating the title information document and reviewing it. If you have any concerns seek advice from your solicitor who can confirm if your land has any restrictions which need to be overcome before proceeding to sale.

This article was first published in our rural newsletter Newslink.  

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