Cancellation of a Lease (Burden or Leasehold Folio)
Extinguishment of leasehold estates
A leasehold estate may be extinguished by merger, when the same person becomes entitled to both the leasehold estate and the reversion, or on a surrender of the lease. The situation where a leaseholder becomes the owner of the freehold estate by virtue of the Ground Rents Act (NI) 2001 is not dealt with in this section of help. The remainder of this section deals with situations where an extinguishment occurs by other means.
As in unregistered conveyancing, extinguishment is prevented if the leasehold estate is subject to a mortgage or charge. (This problem can be overcome by a Deed of Substituted Security. However, unlike unregistered estates, registered estates do not merge automatically. Rule 116 requires certain formalities to be observed, and the nature of these depends upon the nature of the estates involved. In all of the following situations it should be borne in mind that easements referred to in the lease may be cancelled unless they are specifically preserved in the deed which gives rise to the extinguishment. (The following precedents may be adapted if only part of the leasehold estate is to be extinguished.)
Extinguishment where both the leasehold estate and the reversion are registered
The documents required for extinguishment under Rule 116(3) are:
(i) the transfer or surrender in favour of the applicant (unless he is already registered as owner of both estates);
(ii) both Land Certificates;
(iii) an application for extinguishment (Precedent 5.D);
(iv) releases of any charges affecting the leasehold estate; and
(v) the counterparts of the lease
PRECEDENT 5.D
APPLICATION FOR MERGER UNDER RULE 116(3) WHERE BOTH
THE FREEHOLD AND LEASEHOLD ESTATES ARE REGISTERED
LAND REGISTRY
County:
Folio: .......... (“the superior folio”) Registered Owner:
Folio: .......... (“the inferior folio”) Registered Owner:
I, the undersigned .........., a partner/solicitor in the firm of .......... of ......... hereby certify that:
1. I act for AB of .......... (“the applicant”) who is (entitled by virtue of ......... to be) the registered owner of the lands comprised in the above-mentioned folios.
2. The applicant is entitled in the same right to both of the estates of which he is (entitled to be) registered as owner.
3. The lease described in the inferior folio was not made pursuant to a building scheme by virtue of which persons other than the lessor can enforce the restrictive covenants therein contained; none of the covenants, conditions and agreements contained in the lease continues in full force and effect by virtue of Section 28 of the Leasehold (Enlargement and Extension) Act (NI) 1971.
4. The applicant is entitled to the estates comprised in the said folios subject to the following burdens:
(Specify same, identifying the folio to which they relate.)
5. (Where appropriate, insert: The several parties entitled to the burdens affecting the estate in the inferior folio have agreed to the extinguishment of such estate upon the following terms: ..........)
6. It is the intention of all necessary parties that the said registered lease be extinguished by merger and that the aforementioned burdens affecting the same (save the rent reserved by and the covenants by the lessee and conditions and agreements contained in the said registered lease) be carried forward and registered as burdens on the superior folio.
7. I therefore request the Registrar to make such entries and cancellations on the title register as may be necessary to give effect to this application.
Dated:
Signed:
Notes:
- Rule 116 permits the statements contained in this application to be incorporated in the transfer deed (see paragraph 6.9 and Precedent 6.F).
- If the lease has been surrendered by act and operation of law, full particulars of the surrender should be set out in paragraph 1 or in a separate certificate.
Extinguishment where the reversionary estate is registered but the leasehold estate is unregistered
Rule 116(2) covers the situation where a lease has been registered as a burden but there is no leasehold folio in existence. (This will usually relate to leases which were created prior to 1 October 1977.) The documents required for extinguishment are:
(i) any transfer or surrender in favour of the applicant;
(ii) the Land Certificate relating to the reversion;
(iii) the title deeds relating to the leasehold estate, including releases of any mortgages. (Where the lease has been surrendered, the surrender should first be registered in the Registry of Deeds);
(iv) an application for extinguishment (Precedent 5.E) ; and
(v) the counterparts of the lease.
PRECEDENT 5.E
APPLICATION FOR MERGER UNDER RULE 116(2)
WHERE THE LEASEHOLD ESTATE IS UNREGISTERED
LAND REGISTRY
Folio:
County:
Registered Owner:
I, the undersigned .......... a partner/solicitor in the firm of .......... of .......... hereby certify that:
1. I act for AB (“the applicant”) who is the above-named registered owner (or who is entitled by virtue of .......... to be registered as owner of the lands comprised in the above-mentioned folio) and as such is entitled to the interest of the lessor in the lease dated .......... and made between .......... and .......... registered as a burden on the above folio on .......... 20. (“the registered estate”).
2. The applicant is also entitled to the lessee’s interest under the said lease (“the unregistered estate”).
3. I have examined the title to and made or caused to be made all necessary searches and enquiries in respect of the unregistered estate as thoroughly as would be required for its purchase for full value.
4. The applicant is entitled in the same right both to the registered estate and to the unregistered estate.
5. The lease described in the above-mentioned folio was not made pursuant to a building scheme by virtue of which persons other than the lessor can enforce the restrictive covenants therein contained; none of the covenants, conditions and agreements contained in the said lease continues in full force and effect by virtue of Section 28 of the Leasehold (Enlargement and Extension) Act (NI) 1971.
6. The applicant is entitled to the unregistered estate free from burdens.
OR
The applicant is entitled to the unregistered estate subject only to the following burdens:
7. (Where appropriate, insert: The several parties entitled to the burdens affecting the registered estate have agreed to the extinguishment of such estate upon the following terms:)
8. It is the intention of all necessary parties that the said lease be extinguished and the registration thereof as a burden affecting the lands comprised in the above-mentioned folio be cancelled (add, if appropriate: and that upon the extinguishment of the said lease the following encumbrances affecting the same be registered as burdens affecting the registered estate:……)
9. I believe that the applicant has been in undisputed possession of the land since ..........
10. I am not aware of any question or doubt affecting the unregistered estate or of any claim to such estate adverse to the interest of the applicant and I am satisfied that the applicant has not entered into any arrangement, created any encumbrance, or incurred any liability giving rise to any encumbrance which ought to be registered against the land in the said folio except for the burdens (if any) referred to above.
11. I therefore apply that the registration of the said lease as a burden affecting the said lands be cancelled (add, if appropriate: and that the encumbrances referred to in paragraph 8 be entered on the Register as burdens affecting the said lands with the priority indicated in that paragraph).
Dated:
Signed:
Extinguishment where the reversion is unregistered and the leasehold estate is registered
Rule 116(1) envisages two situations: (a) where the owner of the registered leasehold estate acquires the reversion and (b) where the owner of the reversion acquires the registered leasehold estate. In the first situation, if merger is required, the applicant must apply for registration of the title to the reversion at the same time as he applies for extinguishment (see Precedent 5.F ). However, in the second situation it is not compulsory to apply for registration of the title to the reversion (and the references in the precedent to such application may be deleted).
In both instances the documents required are:
(i) any deeds whereby the applicant acquired the estates;
(ii) the Land Certificate relating to the leasehold estate;
(iii) the application for extinguishment (Precedent 5.F);
(iv) releases of any charges affecting the leasehold estate;
(v) the title deeds relating to the reversion; and
(vi) any counterparts of the lease.
PRECEDENT 5.F
APPLICATION FOR MERGER UNDER RULE 116(1)
WHERE THE REVERSION IS UNREGISTERED
LAND REGISTRY
Folio:
County:
I, the undersigned .......... a partner/solicitor in the firm of .......... of .......... hereby certify that:
1. I act for AB of ........ (“the applicant”) who is entitled to the interest of the lessor (“the superior estate”) in the lease described in the above-mentioned folio (“the lease”) and who holds the superior estate (insert details showing whether such estate is held in fee simple or held under a lease, with details of the lease or any fee farm grant under which the estate is held).
2. I have examined the title to, and made or caused to be made all necessary searches and enquiries in respect of the superior estate as thoroughly as would be required for its purchase for full value.
3. The applicant is the registered owner (or, entitled to be registered as the owner) of the lands comprised in the above-mentioned folio (“the leasehold estate”).
4. The applicant is entitled in the same right to both the superior estate and the leasehold estate.
5. The lease was not made pursuant to a building scheme by virtue of which persons other than the lessor can enforce the restrictive covenants therein contained; none of the covenants, conditions and agreements contained in the lease continues in full force and effect by virtue of Section 28 of the Leasehold (Enlargement and Extension) Act (NI) 1971.
6. The applicant is entitled to both estates free from burdens.
OR
The applicant is entitled to both estates subject only to the following burdens:
(i) as regards the superior estate, to the following burdens (list burdens in order of priority);
(ii) as regards the leasehold estate, to the following burdens (list burdens in order of priority).
The several parties entitled to the burdens set out at (ii) above have agreed to the extinguishment of the leasehold estate upon the following terms:..........
7. It is the intention of all necessary parties that the leasehold estate be extinguished (and that the above-mentioned burdens affecting the leasehold estate save the rent reserved by and the covenants on the part of the lessee and conditions contained in the lease be carried forward and registered as burdens against the superior estate).
8. I believe that the applicant has been in undisputed possession of the land since ..........
9. I am not aware of any question or doubt affecting the superior estate or of any claim to such estate adverse to the interest of the applicant and I am satisfied that the applicant has not entered into any arrangement created any encumbrance or incurred any liability giving rise to any encumbrance which ought to be entered on the Register on registration of the superior estate (except for the matters listed in paragraph 6 above). All material facts have been disclosed.
10. I therefore apply that:
(a) the above-mentioned folio be closed;
(b) the applicant be registered with a (Good Fee Farm Grant) (Good Leasehold) (Absolute) title as full owner of the superior estate;
(c) the following be entered as burdens against the superior estate:…..
Dated:
Signed: