In April 2024 HM Land Registry updated its current information around application processing times. Applications to transfer a title are currently taking between 4 and 9 months to process. First registrations are taking on average 17 months to complete. New lease registrations are taking approximately 20 months.
Any delay to the formal registration of title by HMLR creates a legal grey area known as the "registration gap". During this period, the new owner of the title holds only equitable ownership and does not become the legal owner until registration is completed.
The widening of the registration gap to the sort of timescales we are now seeing is causing real practical and legal problems. Workarounds are required for almost any situation where action is required by or against the legal owner. Property owners are used to this to some extent – we are familiar with the occasional need to rely on "owner's powers" under the Land Registration Act 2002, or to incorporate transitional provisions into sale contracts to ensure that the outgoing legal owner can be required to take steps on behalf of its successor until such time as registration is completed. But these are supposed to be temporary stop gaps to cover a relatively short period. They are not suitable to cover long delays.
Registration gap problems cannot always be resolved by clever drafting. If you are a tenant in occupation under an equitable lease awaiting registration, can you serve a valid break notice? If you are a successor landlord awaiting registration, how can you control the service of counter notices in respect of collective enfranchisement proceedings, or oppose a section 26 request under the Landlord and Tenant Act 1954? If you have purchased development land, will you have the appropriate authority to clear trespassers or enforce covenants without involving your seller?
Longer term strategic considerations are also being caught by the ever expanding gap. Opposing a lease renewal under ground (f) of section 30(1) of the 1954 Act requires proving an intention to redevelop at the date of the hearing, when the relevant intention will be that of the person who holds the legal interest at that time. Incoming successor landlords can no longer assume that they will have the appropriate legal standing by the time the matter comes to trial. We are also seeing issues around development sites and section 106 agreements, which again require completion by a registered proprietor regardless of which party owns the equitable interest in the land.
The Law Commission's 2021 review of the Land Registration Act 2002 confirmed that the only way to solve the registration gap is to close it. It is not an option to reverse the current law so that legal title passes on completion rather than registration – this would undermine the whole system of registration. More resource is needed within HMLR to address the backlog, and this does seem to be on the way – perhaps helped by the fact that the mainstream media has begun to take an interest, particularly in relation to residential sales and purchases where delays can have a significant impact on individual lives.
HMLR points out that anyone suffering financial or personal hardship as a result of delays in registration can ask to expedite the application. However, not every affected landowner will be able to provide direct evidence of hardship. Some parties may be reluctant to apply on public record for confidentiality reasons.
In terms of practical advice, applications should be prepared thoroughly to minimise requisitions and delay when they do reach the top of HMLR's pile. If appropriate, make an application to expedite the registration as early as possible. Parties would be well advised to assume on any sale transfer or letting that registration could take over 12 months and draft accordingly; and to pay very close attention to pending applications on title as part of property due diligence. The register may be definitive, but it is increasingly unlikely to be up to date.
