Removing a Restriction

MartinW6

Hi all,

I've got myself into a lather and would welcome any thoughts on the below.

We need the Land Registry to remove the following restriction from the title deeds in order to sell the house;

"RESTRICTION: No disposition by the proprietors of the registered estate is to be registered unless one or more of them makes a statutory declaration or statement of truth, or their conveyancer gives a certificate, that the disposition is in accordance with the Lawrence Davis Houston Wright Will Trust or some variation thereof referred to in the declaration, statement or certificate."

I've spoken with the Will Writers who drew this up, and they've stated that mum and I are perfectly entitled to sell the house. It doesn't go against dad's wishes. So all good.

However, the Land Registry have come back and said...

"Please therefore lodge documentary evidence that shows the Will Trust ended. As an alternative, a statutory declaration or statement of truth by the registered proprietors, or a certificate by their conveyancer, showing with full details that the registered estate is no longer affected by the trust that gave rise to the Form B restriction, would be acceptable."

We obviously can't provide documentary evidence that the trust has ended, because it hasn't. Our conveyancer has therefore said that...

"As the correspondence states that acting Conveyancer can provide a certificate of compliance to confirm that the restriction is no longer required due to the change in ownership in accordance with the will, I will be sending this to the Land Registry today."

The thing that I'm fixating on is the section from the Land Registry that reads "the registered estate *is* no longer affected by the trust". Do they mean currently, or do they mean it won't be? Because right now it is​ affected by the trust. Or am I taking it too literally?

What do you think?

By the way, I have little faith that the conveyancers have experience with trusts. They sent the wrong RX form originally, and haven't asked what I want to do with the trust post-sale - or given any answers as to what my options actually are.

Thank you in advance.

user1977

What's the problem with "the proprietors of the registered estate [you, I guess?]...making a statutory declaration or statement of truth...that the disposition is in accordance with the Lawrence Davis Houston Wright Will Trust"?

That just means you're allowed to sell it and you're going to treat the proceeds in accordance with the terms of the trust? I wouldn't interpret it as being something you can remove before the disposition happens without somehow ending the trust, this is simultaneous with completion of the sale. The buyers just need to be satisfied that on completion they're getting a declaration which will be good enough for the Land Registry.

propertyrental

Yes too literally. Both the will writers and your conveyancers agree that the property cane be sold, and in that sense it is not affected by the trust. It sounds like the correct RX (4?) will get the restriction cancelled.

But I'm neither a solicitor nor trust expert!

Well unless they are trust experts as well as conveyancers, they may not be able to help you there.

or they may need to call in a colleague (at extra charge) to advise on the trust.

MartinW6

I was told that Land Registry case managers aren't trust experts, so hopefully they just wanted a certificate of compliance to go with the RX3.

SDLT_Geek

MartinW6 said:

Hi all,

I've got myself into a lather and would welcome any thoughts on the below.

We need the Land Registry to remove the following restriction from the title deeds in order to sell the house;

Perhaps you don't.  Perhaps the restriction will be removed once its terms are complied with, being removed as part of the process of the registration of title.

"RESTRICTION: No disposition by the proprietors of the registered estate is to be registered unless one or more of them makes a statutory declaration or statement of truth, or their conveyancer gives a certificate, that the disposition is in accordance with the Lawrence Davis Houston Wright Will Trust or some variation thereof referred to in the declaration, statement or certificate."

I've spoken with the Will Writers who drew this up, and they've stated that mum and I are perfectly entitled to sell the house. It doesn't go against dad's wishes. So all good.

So it seems the terms of the restriction can be complied with.  It is a matter of reading what the restriction says. 

However, the Land Registry have come back and said...

"Please therefore lodge documentary evidence that shows the Will Trust ended. As an alternative, a statutory declaration or statement of truth by the registered proprietors, or a certificate by their conveyancer, showing with full details that the registered estate is no longer affected by the trust that gave rise to the Form B restriction, would be acceptable."

Perhaps they have been asked the wrong question.  It sounds as if they have been asked if the restriction can be removed ahead of the sale.  It should not be, if the property is still head by the trustees of the Will Trust.

We obviously can't provide documentary evidence that the trust has ended, because it hasn't.

It does sound as if the LR have been asked the wrong question.

 Our conveyancer has therefore said that...

"As the correspondence states that acting Conveyancer can provide a certificate of compliance to confirm that the restriction is no longer required due to the change in ownership in accordance with the will, I will be sending this to the Land Registry today."

Surely they should be supplying the certificate to the buyer's conveyancer at completion, so the buyer can be registered as owners in due course!

The thing that I'm fixating on is the section from the Land Registry that reads "the registered estate *is* no longer affected by the trust". Do they mean currently, or do they mean it won't be? Because right now it is​ affected by the trust. Or am I taking it too literally?

It sounds as if you have been drawn into a blind alley of thinking the restriction needs to be removed ahead of the sale, rather than complied with in the course of the sale.

What do you think?

That someone has confused this by thinking the restriction needs to be removed before the sale goes through.

By the way, I have little faith that the conveyancers have experience with trusts. They sent the wrong RX form originally, and haven't asked what I want to do with the trust post-sale - or given any answers as to what my options actually are.

Thank you in advance.

I have made comments in bold above, assuming that the present owners are still the trustees of the Will Trust, that the property is being sold and that the sale will be in accordance with the terms of the Will Trust.  That seems to fit most of what you say.

SDLT_Geek

user1977 said:

What's the problem with "the proprietors of the registered estate [you, I guess?]...making a statutory declaration or statement of truth...that the disposition is in accordance with the Lawrence Davis Houston Wright Will Trust"?

That just means you're allowed to sell it and you're going to treat the proceeds in accordance with the terms of the trust? I wouldn't interpret it as being something you can remove before the disposition happens without somehow ending the trust, this is simultaneous with completion of the sale. The buyers just need to be satisfied that on completion they're getting a declaration which will be good enough for the Land Registry.

@user1977 makes the same point as me, but much more briefly and elegantly!

MartinW6

Thank you @SDLT_Geek.  

The original query from the buyer's solicitors was as follows...

4. Please provide your undertaking to remove Entry B3 of the Title on or before completion (for us to provide this undertaking, we require a copy of the trust named the Lawrence Davis Houston Wright Will Trust – do you hold this document?). The wording of this restriction for your reference is printed below:

(07.08.2014) RESTRICTION: No disposition by the proprietors of the registered estate is to be registered unless one or more of them makes a statutory declaration or statement of truth, or their conveyancer gives a certificate, that the disposition is in accordance with the Lawrence Davis Houston Wright Will Trust or some variation thereof referred to in the declaration, statement or certificate.

From what you're saying, the removal could have occurred on completion, not beforehand?

As I mentioned, I'm not sure my conveyancers are that familiar with trusts - so it could be they thought the restriction had to be removed before the sale.  In my layman's mind, I did question that.  For instance, what if the restriction was removed and then the sale falls through?  It seemed a bit cart before the horse.

In your opinion is it best to continue with trying to get the restriction removed (now that a certificate of compliance has been sent to the LR), or, cancel that and proceed with exchange and have the restriction removed on completion (the removal of the restriction was the last sticking point)?

user1977

What's your understanding about the trust? If the house is held by the trust, presumably that's going to continue to be the case until the sale happens? In which case, no, it wouldn't make sense for the restriction to be removed any earlier.

MartinW6

Exactly, it's going to remain in trust until the sale happens.  It seemed the wrong way round to remove the restriction before the sale - as it would apply until the sale.

Sounds like I've lost a few nights of sleep over nothing, but still debating whether it's best to see what happens with the certificate anyway.

SDLT_Geek

MartinW6 said:

Thank you @SDLT_Geek.  

The original query from the buyer's solicitors was as follows...

4. Please provide your undertaking to remove Entry B3 of the Title on or before completion (for us to provide this undertaking, we require a copy of the trust named the Lawrence Davis Houston Wright Will Trust – do you hold this document?). The wording of this restriction for your reference is printed below:

(07.08.2014) RESTRICTION: No disposition by the proprietors of the registered estate is to be registered unless one or more of them makes a statutory declaration or statement of truth, or their conveyancer gives a certificate, that the disposition is in accordance with the Lawrence Davis Houston Wright Will Trust or some variation thereof referred to in the declaration, statement or certificate.

From what you're saying, the removal could have occurred on completion, not beforehand?

As I mentioned, I'm not sure my conveyancers are that familiar with trusts - so it could be they thought the restriction had to be removed before the sale.  In my layman's mind, I did question that.  For instance, what if the restriction was removed and then the sale falls through?  It seemed a bit cart before the horse.

In your opinion is it best to continue with trying to get the restriction removed (now that a certificate of compliance has been sent to the LR), or, cancel that and proceed with exchange and have the restriction removed on completion (the removal of the restriction was the last sticking point)?

The buyer's solicitor should not be asking for an undertaking to remove the entry on or before completion.  They should be requiring that at completion a certificate is handed over in a form which will satisfy the restriction.  It would make sense to have the form of that agreed by exchange of contracts and perhaps attached to the contract.

It seems wrong to seek to remove the restriction before completion.

MartinW6

@SDLT_Geek Thank you again.  Any idea what the certificate might be called (that we provide to satisfy the restriction)?  I'd ask my conveyancers, but I've little faith in them after all this - or rather, they don't seem to be familiar with trusts if I want to be kind.

I'm still inclined to see if the LR go ahead and remove the restriction beforehand now that the conveyancers have gone down that route.  But I take heart in the fact that if it fails, it's not necessary to remove the darned thing beforehand.