This article describes the process of registering a lease and tells you about prescribed clauses.
What are the Prescribed Lease Clauses?
The use of prescribed clauses (PLCs) in leases was introduced under the Land Registration (Amendment) (No 2) Rules 2005.
The changes were intended to make the lease registration process easier, faster, more accurate and more efficient for the Land Registry. For many years, the Registry struggled to find critical registrable information in a lease document - which can be any length from 2,000 to 20,000 words long.
The system compels registrants to record all the information the Registry needs in one place - effectively a summary of the details of the agreement, and all the information that the Registry needs in order complete registration.
The regulations require that the prescribed clauses are placed together at the beginning of the document. Most practitioners have taken the view that the easiest way to be certain of compliance is to draw the document they want, then add the prescribed clauses in a couple of extra pages, tacked onto the opening page of the lease. This effectively duplicates the provision of the information because, of course, it is all still there in the remainder of the document itself.
So, when the PLCs are added as additional pages, their status is that they are information for the Registry only and not part of the contract.
PLCs do not change contractual rights or obligations. They are just a means of communicating important information to the Registry. The tenant has no obligation for the PLCs (although he will probably request proof that the lease has been registered).
Do I have to use Prescribed Lease Clauses?
You have to use PLCs if your lease:
- was completed after 19 June 2006
- is for a registered estate in land
- is required to be completed by registration
The general rule is that a lease for a term of 7 years or more must be registered, and that registration requires the use of PLCs.
If your lease is for a term of less than 7 years, then you are not usually required to register it, and you don't need to use PLCs.
Leases that don't qualify
There are some exceptions. If you think your lease may be an exception (which is uncommon), we advise seeking the advice of a solicitor.
A lease is exempt from registration if it was created or arises from:
- an agreement entered into before 19 June 2006
- an order of the court
- an enactment
- a necessary consent or licence for the grant of a lease given before 19 June 2006
- a deed of variation that takes effect as surrender and re-grant, whether or not the original lease was a prescribed clause lease
Exempt leases
- those of franchises, manors or profits
- those incapable of registration
Voluntary use
Of course, you can use the clauses voluntarily in any lease. You may find it convenient to draw attention to the matters they contain.
If you do use them, make sure you complete them accurately.
Completing the Prescribed Lease Clauses
Prescribed format
In anticipation of most registrants using the “separate pages” method rather than re-jigging the lease itself, the Land Registry has supplied a style and format for the PLCs.
You should use a black font in at least 10pt size.
The Registry suggests that a tabular format is the best way to present the information. In the left hand column should be the title of the information they require and a box number. You should insert the information on the right hand side.
The PLCs can either contain the necessary information or can contain a cross-reference to the relevant parts of the lease.
They should be attached to the front of the document so that the Land Registry can find them easily.
Required information
These clauses required are:
- LR1: Date of lease
- LR2: Title number(s)
- LR3: Parties to the lease
- LR4: Property
- LR5: Prescribed statements
- LR6: Term for which the Property is leased
- LR7: Premium
- LR8: Prohibitions or restrictions on disposing of the lease
- LR9: Rights of acquisition
- LR10: Restrictive covenants given in this lease by the Landlord in respect of land other than the Property
- LR11: Easements
- LR12: Estate rent burdening the Property
- LR13: Application for standard form of restriction
- LR14: Declaration of trust (where there is more than one tenant)
First registration
Applications for the first registration of a lease of a property or land must include completed forms AN1, AP1 and UN1.
If the application is for a lease that has been leased before, there is no need to complete separate forms. Instead, the clauses LR9, LR10, LR11 and LR12 suffice.
Supplying incorrect or incomplete information
The rules do not say which clauses have to be completed and which do not.
Very simply, the Land Registry will not register the document if you do not give the necessary information.
If the information you give is wrong, you may be bound later to your wrong answers.
If you fail to give information, you can lose your interests that would have otherwise been protected.
We suggest that you complete the PLCs as fully and as accurately as possible.
Easements
Specific register entries relating to the inclusion or exclusion of easements in the lease will be made in the register. This will help to make clear which easements in the document are included or excluded from the registration. The absence of any register entry will mean that no easements are included in the registration.
Leases created before 19 June 2006
For leases received by the Land Registry 19 June, PLCs are not required. When the lease ends and a new one is drawn up, the new one will have to comply with the new rules, and will require the clauses to be entered at the top of the lease document.
Points to remember
- If you claim exemption from the use of the clauses, you must write and say why.
- The clauses are not a Land Registry form, and should not be made to look like one.
- Remember to add all appropriate title numbers for clauses LR2.1 and 2.2.
- Easements: failure to complete clause LR11 means that these details will not be included in the register of title. It follows that they may not enforceable as between the parties to the lease.
Useful documents
Net Lawman offers a selection of commercial property lease agreements to suit all letting scenarios. These are suitable for long term leases, and contain reference within them to the PLCs.
We also offer as a free download, a Word document containing all the prescribed lease clauses that can be attached to any lease that requires registration.