Out-Law News 2 min. read
10 Oct 2016, 5:02 pm
Property litigation expert Ian Morgan of Pinsent Masons, the law firm behind Out-Law.com, said that the case was a reminder to both landlords and tenants of the need to comply strictly with any notice requirements.
"Service of notices in general, whilst often treated by parties and their advisors as a mere afterthought, is a technical area requiring thought and one that should be taken seriously," he said.
"The decision highlights again that when negotiating documents, parties should always consider how notices will be served during the so-called 'registration gap'. Buyers would be well advised to include wording requiring the seller to serve any notices on their behalf so that buyers are not left in limbo before the registration of the purchase is completed, especially if there are delays with registration," he said.
The decision was also a particularly timely reminder of "the importance of conducting proper due diligence, including confirming the identity and status of all parties, prior to service of notices in order to avoid costly mistakes" given the current debate surrounding the future of the Land Registry, Morgan said.
The so-called 'registration gap' refers to the period of time between the completion of a property transaction, and the new ownership being reflected on the Land Registry. In his High Court ruling, Mr Justice Norris said that the landlord's ability to serve the notice was dependent on its status as registered owner of the land, according to the Estates Gazette (registration required).
The landlord, Ripway Holdings, purchased a small plot of land in Ashton-with-Stodday, near Lancaster, on 19 June 2013 from Stodday Land Ltd, according to Estates Gazette. On 1 July, Ripway served a notice to quit on a tenant that farmed some of the land. However, as the change in ownership was not processed by the Land Registry until 16 July, the court found that this notice was invalid.
Although both Ripway and Stodday objected to his approach, the judge said that he had not been "overly formalistic" in his ruling, according to Estates Gazette.
"The same problem exists in unregistered conveyancing," he was reported as saying.
"It is not difficult to address it. The time will come when every completion pack for the sale of a reversion includes a document in appropriate form that can be used by the landlord in [these] circumstances," he said.
The government announced its intention to privatise the Land Registry during the state opening of parliament in May. However, these provisions did not appear in the Neighbourhood Planning Bill upon publication in September.
"In a time in which the Land Registry's future is uncertain, this decision shines a spotlight on the central role it plays in property transactions, and in particular shows how much weight is attributed to the accuracy of the Land Registry's records," Ian Morgan said. "Any changes which might leave room for a shift in emphasis away from accuracy would be a retrograde step."