We are making the process by which we enter personal covenants in the register more consistent. Customers now see (since 13 November) a new entry in the register in respect of personal covenants:
A [deed] dated [date] contains positive and/or indemnity covenants.
¬ Note: Copy filed.
We will make this entry regardless of whether the deed refers to vendor’s or purchaser’s covenants or whether the covenants relate to restrictive covenants, charges, rent charges or landlord’s covenants in leases. Previously, the entry we made varied.
We will not update existing registers until an application is lodged that prompts us either to make a new entry, or to consider an existing entry. In the latter scenario, we will make an entry reflecting the new wording above if still required. We will no longer use the wording ‘a former proprietor’.
What has not changed
We will continue to make no reference to personal covenants where we are making an entry in the register due to other matters contained in a deed, for example because it contains restrictive covenants or easements.
We will also maintain the concept of the "chain of indemnity", which ensures that liability for a positive covenant's breach is transferred with each property sale.
Why we are making this change
The change will simplify and streamline the entry on the register. By specifically referring to the deed in the register, that deed will now be available for immediate download through the portal, making it easier for customers to obtain an official copy of the deed containing full details of the personal covenant.
How this change will affect customers
The main change is in what will be seen in the register. Customers may see a mixture of new and old-style entries or receive a completed register after 13 November that has the old-style entries because it was processed before the new practice took effect, but completion was delayed (for example, whilst we waited for additional information).
We know it has always been necessary for customers to obtain a copy of the deed containing the specific details. Making a copy of the deed available for immediate download means they can interpret the covenant more quickly.
8 comments
Comment by Ben Pickup posted on
Just requesting further clarity on what the Land Registry's approach will be in relation to dealing with chains of indemnities generally as it is not clear what is meant in practical terms by "We will also maintain the concept of the "chain of indemnity"".
For example, if there is a transfer which contains a positive obligation to maintain a fence, a copy of that transfer will be put on the registers as above. What happens on the next transfer of the Property (when the second transferee provides an indemnity to comply with the covenants contained in the registers - will you leave reference to the first transfer and also add reference to the second transfer? or remove the reference to the first transfer (in which case how does anyone know what the original positive covenant was?) and simply refer to the second transfer? If the second transfer does not contain an indemnity covenant will you remove the reference to the first transfer since it no longer affects the Property?
Comment by Gavin Curry posted on
Hello Ben. Thanks for your questions. If the second transfer had no indemnity covenant we would remove the existing entry. If it did include an indemnity covenant, we would remove the existing entry and make the revised format of entry referred to in the blog article. HM Land Registry is not required to record the specific details of a positive covenant in the register.
Comment by Nicola maskell posted on
Just to clarify, to know whether an indemnity covenant was entered into by the registered proprietor I will now need to pay and download a copy of the doc? That seems an unnecessarily delaying backwards step?
Comment by Gavin Curry posted on
Hello Nicola. While we aren’t required to make any entry for positive or indemnity covenants, we will continue to record a simplified entry to help customers to order the correct official documents. We are also making it easier to get these documents on the HM Land Registry portal, as mentioned in the blog.
Comment by Nicola maskell posted on
Hi gavin
In reality with the new entry it is impossible for us to know whether there are covenants or just an indemnity covenant so we have to order the document and await receipt . When checking a title raising enquiries and drafting a transfer deed this has now added a delay whereby an enquiry needs to be raised asking for a copy of the document and the transfer deed cannot be drafted until this is received (to enable us to know whether to include the indemnity covenant or not). This has added an extra layer of delays where before there was none so am unsure how this is viewed as an improvement.
Comment by Gavin Curry posted on
Hello Nicola. We understand your concerns and will make sure your feedback is considered ahead of any future changes or reviews. We’d like to reassure you that there should be no delays − the document will be available instantly via our portal.
Comment by Sarah D posted on
What is meant by this sentence? "We will also maintain the concept of the "chain of indemnity", which ensures that liability for a positive covenant's breach is transferred with each property sale."
Is it potentially a little misleading for HMLR to use words like "maintaining" in relation to a chain of indemnity, or "ensuring" that liability is transferred on sale, as HMLR doesn't have any ability to control whether the chain of indemnity survives or not? Do you simply mean that the register is facilitating the concept, by allowing those searching the register to more easily discover whether a chain of indemnity may be in place? (Although of course to get the complete picture, it may be necessary to obtain historic editions of the register as well)
Comment by Gavin Curry posted on
Hello Sarah. Yes, continuing to record personal covenants in the register allows people to more easily discover whether a chain of indemnity is in place. The chain’s survival though of course depends on the actions of the parties involved in each property sale.