You'll often see unilateral notices in the charges register of a property, especially if it's registered.
These notices are used when someone, like a bank, loan provider, credit card company, or even an individual, believes they have a claim to a property but doesn't have all the proof yet. But if they can't prove it, the notice can be taken down.
However, unilateral notices don't solve every problem and they often confuse buyers, sellers, and even their advisors despite their limited effects.
In this article, we'll explain what unilateral notices are, who can apply for them, when and why one might be needed, and how to remove a unilateral notice. We'll also answer common questions like whether you can still sell a property or get a mortgage if there's a unilateral notice on it, and we'll clear up the difference between unilateral notices and agreed notices.
What is a unilateral notice?
A unilateral notice serves as a record in the Land Registry indicating someone's claim to a property.
Generally, unilateral notices signify a legitimate claim. However, if the property owner disputes the claim and the person making it can't provide substantial evidence to support it, the notice may not hold up.
What is the purpose of a unilateral notice?
Unilateral notices primarily establish the sequence in which third-party claims to a property's beneficial interest are considered. However, while they help organise these claims, they don't directly safeguard the interest in itself. In the event of a disagreement, the person claiming still needs to present evidence in support of their claim, even if a unilateral notice is in place.
When can a unilateral notice be added to the land registry?
A unilateral notice can be added to the Land Registry without the property owner's knowledge or consent. Further, the person applying doesn't need to back up their claim with evidence right away, but the registrar will ensure it's a valid claim.
The property owner isn't notified of a unilateral notice until it is added. However, they can ask to cancel the notice afterward. If they do, the claimant must then prove the validity of their claim.
A unilateral notice has two parts:
It describes the protected interests and states it's a unilateral notice;
It lists the beneficiary's name and address. This is important because they'll be served notice and must prove their interest if the property owner seeks to cancel the notice.
Unilateral notices vs agreed notices
While an agreed notice may be preferable if the property owner consents or the claimant can prove the claim to the registrar outright, a unilateral notice might be used if the owner's consent is unavailable and the evidence is uncertain.
Sometimes, a unilateral notice is used to keep the interest confidential, especially if it's commercially sensitive. Plus, having the beneficiary's details in the register is useful, and these details can be updated if the beneficiary changes.
How to apply for a unilateral notice
To apply for a unilateral notice, you'll need to complete form UN1 and pay the fixed fee outlined in the current Land Registration Fee Order.
It's essential to clearly state whether the interest impacts the entire registered title or just part of it. If it only affects a portion of the registered title, you should include a plan showing the extent of the affected land, unless it's already clearly identified on the title plan.
Completing the UN1 form accurately is important, as errors could lead to requests for further information, causing delays in the application process.
Describe the nature of your interest
When applying for a unilateral notice, you must describe the nature of your interest in the property using form UN1. You can either write a statement yourself or have a conveyancer provide a certificate on your behalf. The statement or certificate should clearly explain your interest. Simply mentioning a written agreement, with no further details, isn't enough.
If your interest is part of ongoing court proceedings or a court order where the registered owner isn't involved, you should mention this in your application. If there are multiple applicants, all of them must sign the statement.
Make sure to mention the registered owner of the property by their name, not just as the 'registered proprietor.' If there are any discrepancies in the name shown in the register or if the registered owner isn't involved in the interest, you should explain.
At this stage, you don't need to submit any other documents to support your claim. however, if you choose to do this, the registrar may keep hold of them and refer to them in the notice entry. Keep in mind that any documents kept will be available for public viewing.
If you're applying on behalf of a company, the person giving the statement should confirm their position and authorisation to act on behalf of the company.
Identify the beneficiaries of the notice
When applying for a unilateral notice, you must identify the beneficiaries of the notice, including:
The name of the beneficiary of the notice, whether an individual, company, or organisation;
Up to three addresses for service. these can be postal, Document Exchange, or electronic, however at least one must be postal, even if it's located outside of the UK;
The company registration number if the beneficiary is a UK-based company or limited liability partnership.
The territory of incorporation for companies incorporated outside of the UK.
How to cancel a unilateral notice
Only the registered owner of the property or someone entitled to be registered as the owner can request cancellation. They can do this at any time without needing to provide a reason. If there are multiple owners, each of them must make the application.
To cancel a unilateral notice, the owner of the property against which the notice is registered must apply to the Land Registry using form UN4. There's no fee for this.
If the application is made by someone entitled to be the owner, they need to provide evidence of their entitlement, usually through a conveyancer's certificate.
Upon receiving the cancellation application, the registrar notifies the beneficiary of the notice. The beneficiary then has 15 working days to object to the application and present a valid argument for the validity of their claim.
If they don't object within the period or fail to present a valid argument the notice will be cancelled. Each beneficiary has the right to object if there are multiple.
If there's a dispute about whether the notice should be cancelled and it can't be resolved amicably, it will be referred to the tribunal for resolution.
How to remove a unilateral notice
Withdrawing a unilateral notice at the request of the beneficiary is known as removal. Only the person named as the beneficiary of the unilateral notice, or in certain cases, the personal representative or trustee in bankruptcy can apply for a removal however they must provide evidence of their entitlement.
To remove a unilateral notice, you must complete form UN2. There's no fee for this.
If the benefit of the protected interest has been transferred to someone else, such as through a transfer, you must first apply to amend the unilateral notice by registering the new or additional beneficiary using form UN3 before applying for its removal.
Registration of new or additional beneficiaries of a unilateral notice
To keep the register updated, anyone who becomes entitled to the benefit of an interest protected by a unilateral notice can apply to be listed as the beneficiary. They can be replaced or added to the existing beneficiaries.
Someone with the benefit of the claim needs to make sure they're listed as the beneficiary because only the beneficiary can object to an application to cancel the notice.
To apply, you need to fill out form UN3 and pay the fixed fee. You must also provide enough evidence to prove your entitlement to the claimed interest.
It's important to know that you aren't required to confirm the validity of the claim to enter the notice initially. The only evidence required for this application is to show that you're entitled to the benefit of the claim, not that the claimed interest is valid.
If possible, the existing beneficiary should sign the form UN3 or consent to the application. If they don't consent, the registrar will notify the current beneficiary unless the applicant is the personal representative of the beneficiary and provides evidence of their entitlement to act.
If there's a dispute about who is entitled to the benefit of the protected interest, the new claimant can apply for a new notice instead of trying to be registered as the beneficiary of the existing notice.
Types of interests to which unilateral notices apply
Unilateral notices apply to various types of interest, but not all. They apply to:
Contract for sale;
Option to Purchase;
Right of Pre-emption;
Option to renew a lease;
Equitable charges against a legal estate.
Types of interests do unilateral notices not apply to
Unilateral notices don't apply to the following interests:
Home rights granted to spouses or civil partners to occupy a matrimonial home, typically during divorce or dissolution processes;
Charges placed on an estate to secure payment of any inheritance tax owed to HMRC;
Interest from an order under the Access to Neighbouring Land Active;
Any changes to a lease made through a legal order under the Landlord and Tenant Act 1987, particularly modifications made under section 39(4) of the Act;
Public rights, such as rights of way or access to public spaces;
Rights enjoyed by residents of a particular area based on local customs or traditions such as rights to use common land or resources in a specific locality.
What are the advantages of unilateral notices?
Unilateral notices serve various purposes, from lenders securing debts against properties to individuals safeguarding rental properties during divorce proceedings.
The key advantages of a unilateral notice include:
Prioritising interest
The notice allows the applicant to establish priority without needing the proprietor's consent or providing evidence upfront. This makes sure that their notice takes precedence over any subsequent ones, even if entered just a day later.
Notifying the proprietor
A unilateral notice serves as a formal notification to the proprietor and other relevant parties about the interest held by the beneficiary.
These notices a typically used by financial institutions like banks, loan companies, and credit providers, as well as private individuals.
However, if a third party does not have a valid reason for applying a unilateral charge it could lead to potential liability for damages incurred by affected parties.
The main benefit of a unilateral notice is its speed and the fact it can be lodged without the Registered Proprietor's agreement. Additionally, during registration, the applicant doesn't need to demonstrate the validity of their interest; they only need to show that it's the kind of interest that can be safeguarded through a notice.
What are the disadvantages of a unilateral agreement?
The presence of a notice in the register doesn't ensure the validity or existence of the protected interest. the property owner can request the cancellation of any notice affecting their title, prompting the applicant to prove their entitlement.
If a dispute arises, it may be referred to an HM Land Registry Adjudicator for resolution.
This process can be lengthy and expensive, often leading to delays in property sales as buyers may not want to wait for a resolution.
Can you sell a property with a unilateral notice?
Yes, you can sell a property even if there's a unilateral notice.
These notices don't stop a sale like restrictions do, they mainly make sure that the beneficiary is informed about any property transfer.
Can you get a mortgage with a unilateral notice?
Yes, you can still get a mortgage with a unilateral notice on the property's title. However, it may impact the approval process and the terms of the loan.
Lenders carefully review a property's title to make sure it's suitable collateral for the mortgage. If there's a unilateral notice, it could raise concerns about the property's marketability, ownership issues, or limitations on its use. This may, in turn, affect the loan terms or interest rates offered by the lender.
How can Lawhive help?
If you're caught up in a dispute over assets, particularly relating to property, Lawhive's network of experienced property solicitors can help secure your interests using a unilateral notice.
They can help you figure out your stake in a property to court procedures and proceedings if necessary, covering everything from negotiating to representing you in court.
For more information and guidance, get a free case evaluation from our expert legal assessment team today.