Leases

[jidboy85]

Hi there,

I'm confused by a question at the moment regarding leases in unregistered land. The amount of information available is limited so apologies, but any help would be appreciated.
The question concerns the sale of unregistered land to a purchaser who claims to have undertaken all "necessary searches" ie: through good root of title. The purchaser then wants to know whether they are bound by certain third party interests, one of which is a seven year lease created 6 years ago (2002). There is no further information on the nature of the lease, the only limitation here is that we are supposed to ignore the requirements of first registration under the LRA 2002.
Can the lease be legal or equitable? And what are the repercussions on the purchaser?

Thanks for any help.

[jen78]

If there is a lease in place then I would have thought it would constitute an overriding interest.

Back in 2002 it would not have been registrable as the requirement to register leases over 7 years came in later than that.

It still means that a third party has a legal interest in the land though unless it can be proved that it was terminated mutually, by law etc...

It's very recent not to be able to find out any information about it, how did it come up? Did the purchasers find it on a Land Charges search?

If that is the case then there should be details of parties and some way of trying to trace them. This is a tricky area as it may, in turn, bring up more problems and invalidate any indemnity insurance (which has limitations in itself) the purchaser may be willing to accept.

Did you (or whoever bought) own the land in 2002? If you bought after that then did anything come up when you bought.

There would also be concerns about the unknown contents of the lease as there could be terms giving rights to renewal etc...

The Land Registry have a number of practice guides on their site which might be useful.

If this is an academic exercise then back to the books I'm afraid as I'm looking at it from more of a practitioners point of view.

[jidboy85]

Thank you for your response.
To answer your questions, yes, this is an academic exercise, hence the rediculous assumption that we are meant to ignore the requirements of the LRA 2002 for first registration.
My confusion stems from the fact that we although we have studied what interests may be in place, we have not gone into any detail as to what effects these have on a purchaser beyond being bound or not.
If a purchaser were to be bound by this lease, does it simply mean that they take the title, but are forced to live with a tenant in the property for the last year of the lease?!