Tanya Edmonds looks at the uncertainty around Land Registry restrictions when social housing providers dispose of land.
2017 saw the introduction of a new regime for social housing dwellings. On 6 April 2017, the Housing & Planning Act 2016 repealed the consent procedure for social housing providers and replaced it with a notification procedure. Whilst the Land Registry updated its guidance on the new regime, in practice, there appears to be some ambiguity about which Land Registry restrictions still apply and need to be complied with before a disposal of social housing land.
Prior to the introduction of the new procedure, the Land Registry entered restrictions on the title register to social housing property (where applicable) to prevent disposals without compliance with statutory requirements. These included standard restrictions such as s133 restrictions (to capture the disposal of housing stock once owned by the local authority without regulator consent pursuant to s133 of the Housing Act 1988) and s172 restrictions (to reflect the requirements under s172 of the Housing and Regeneration Act 2008, which required regulator consent to the disposal of certain types of land). Following the implementation of the 2016 Act, any remaining s133 and s172 restrictions became redundant as consent is no longer required from the regulator (from January 2018 this has been Homes England (formerly, the Homes and Communities Agency)), as set out at schedule 4 of the 2016 Act.
Despite these changes, there is still inconsistency and confusion about what Land Registry restrictions need to be complied with. It is clear that the s172 restrictions are superfluous as Land Registry guidance explains that if a s172 restriction appears on title it can now be disregarded (see https://hmlandregistry.blog.gov.uk/2017/03/21/registration-requirements-following-reduced-regulation-english-social-housing-providers/). However, it has not proven easy to persuade the Land Registry to remove s133 restrictions and/or convince the Land Registry that they no longer apply. This is perhaps because although regulator consent has disappeared, certain covenants and other conditions contained in the original stock transfer agreement and/or land transfer continue to apply. Given that the standard restriction specifically refers to the need for regulator consent, the Land Registry has at times been reluctant to remove/deal with the s133 restrictions without written confirmation from the regulator - defeating the object of the new regime. Even in cases where the s133 restriction has been successfully removed, the Land Registry has not removed any equivalent s133 restriction affecting a registered charge. If the property in question is being disposed of by a registered provider and the charge discharged, this is not going to cause the registered provider any issues. However, the chargee would be bound by the restriction in the event of step-in. If s133 consent is no longer required, should the chargee and proprietor restrictions not be removed simultaneously by the Land Registry?
The change in law was meant to make life a bit easier by giving registered providers more control and freedom to dispose of social housing property. Whilst this has undoubtedly been the experience for many registered providers, the Land Registry needs to be more consistent in its approach.