Geldards Achieves Breakthrough with HM Land Registry to Protect Utility Companies

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As a result of issues raised by Geldards LLP, HM Land Registry have revised their guidance for caseworkers on what constitutes ‘valuable consideration.’ It will be instructing caseworkers that when an easement, lease or transfer involves a utility company, they should assume that it is made for valuable consideration. Therefore, any priority search made to protect such a disposition will be effective.

Law firms acting for utility companies are required to register easements, leases and transfers of land, which the utility companies are statutorily required to enter into. Geldards recently had a transaction where a legal charge was registered during the priority period of a search against the title of land over which their utility company client had obtained an easement. The Land Registry raised a requisition requesting the consent of the bank to the registration of the easement and their legal team stated that they were “not aware that [the covenants by the utility company in the easement] would amount to valuable consideration for land registration purposes”. Therefore, they considered that our application did not have the protection of the priority search.

Geldards worked with the Land Registry to ensure that their clients’ applications would be protected by a priority search and have priority for the purposes of the Land Registration Act. Confirmation was needed that, for these types of transactions, the Land Registry accepted that the covenants given by the utility company are, indeed, ‘valuable consideration’ for the purpose of the Act since being unable to register due to the priority issue would put such companies in breach of their statutory duties.

Up until now, there had always been doubt regarding the validity of priority searches made to protect dispositions for nominal or no financial consideration, leading, on occasions, to them losing priority and being postponed for registration to later dispositions made for full monetary consideration.

Jamie Gordon, Partner at Geldards and head of the Networks team, said:

“This is a breakthrough moment and a win-win outcome for everybody in the utilities industry who needs to secure land rights. When we first highlighted this issue, we needed to act decisively and quickly to ensure the protection of our clients and others in the industry. We have worked very closely with HM Land Registry throughout this process and would like to thank them for their cooperation and support with these changes.”

 

If you require any further information, please contact Jamie Gordon or Andrea Planchant.


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