Understanding the Charges Register
The Land Registry holds an electronic record of each property which is registered with it in the form of the registers of title. The registers of title detail all of the interests and rights which affect the property as well the ownership details. Each property record is split into three registers – the property register, proprietorship register and the charges register.
Each register gives a different set of information about the land. The charges register lists any interests which burden the land (i.e. interests which it is subject to).
What the Charges Register lists
The charges register list all of the interests to which the property is subject. These include positive covenants (obligations on the land owner to perform some action such as carry out repairs and maintenance to a shared facility), restrictive covenants (restrictions on what the land owner can do with the land such as not to use it for trade or business or to keep animals), notices and financial charges (i.e. mortgages and secured loans).
Notices on Charges Register
There are two types of notice – a unilateral notice and an agreed notice. They can be used to protect a number of different types of interest such as rights of occupation for a spouse or civil partner under the Family Law Act 1996 (home rights notices), financial interests such as a Charging Order or a contract for sale. Their purpose is to give notice to a potential purchaser that third party may have an interest in the land.
A legal charge is usually registered to protect a mortgage loan. The owner of legal charge has a power of sale should the mortgage payments not be maintained. Anyone buying a property which is subject to a legal charge must ensure the seller pays off the mortgage on completion otherwise the buyer will be subject to the lender’s power of sale. Unlike an interest protected by a notice, or an equitable charge, a legal charge is an actual legal interest in land, just like a right of way, and so it is capable of binding future owners of a property who were not a party to the mortgage contract.
There are two basic reasons for an equitable charge to be created. Either an attempt was made to create a legal charge but the formalities were not dealt with correctly or a court order has been obtained to charge the property with a previously unsecured debt. Holding an equitable charge does not give the owner a power of sale, though he may be able to go to court and obtain an order for sale based on his charge.
Covenants found on Charges Register
Covenants which affect the property are found in the charges register. Covenants can be either positive or negative. Positive covenants oblige the property owner to do something, such as maintain a fence or wall, whereas negative covenants (also called restrictive covenants) prevent the property owner from doing something on the land, such as keeping animals or causing a nuisance. The enforceability of covenants is subject to well established rules and covenants cannot always be enforced.