|
Prescribed clauses - which leases? |
|
A reminder that all leases granted for a term in excess of seven years are
now automatically registerable under LRA 2002. Accordingly, prescribed
clauses will have to be used in all such leases from June. It follows that
most leases for up to seven years (only) will qualify as short lettings and
therefore not be compulsorily registerable.
But, if such a lease is for a
discontinuous term, or is a reversionary lease for a term that commences
more than three months after the date of the grant of the lease, then it will
be compulsorily registerable, and so prescribed clauses will have to be
included. At the same time, do not forget that the LR intends to extend the registration requirements to leases for terms of more than three years (not
seven years) and so, in time, the vast majority of leases granted out of
registered land will eventually require prescribed clauses.
What happens if you should include prescribed clauses in the lease but fail
to do so? The answer is that you can expect to get your lease rejected; in
recent times, the LR has become much stricter about ‘substantially
defective’ applications. Accordingly, it is important for T to ensure that the
prescribed clauses requirements are always met. Failure to do so could
result in a lease that is unregisterable. Source: Denton Wilde Sapte.
|
|
May 2006 |
