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The Five Year Trap – Issues Relating to the Registration of Easements on Shorter Commercial Leases
The Five Year Trap – Issues Relating to the Registration of Easements on Shorter Leases
The RIC article ‘Property In The Economy 2012:Key Data and Statistics Executive Summary’ notes that the average length of commercial leases has approximately halved in the last ten years – falling to 4.8 years in 2011.
There are significant issues that need to be considered in relation to the registration of such leases running to less than 7 years in length, particularly those which incorporate easements such as the right to use a service road or external staircase. Since the Land Registration Act 2002 came into force on 13th October 2003 the express grant or reservation of an easement must be registered in order to operate and pass to the buyer of the ‘servient tenament’ – i.e. the land which bears the burden of the easement. In basic terms, if the right of a lessee to use the freeholder’s service road is not registered against the freeholder’s title then there is a significant risk that it will not bind a purchaser of the freehold title .
There are, evidently, plenty of exceptions to such rules, and specific details are required for legal assessment of a particular situation, but this issue is particularly pertinent for the more popular category of commercial leases of less than 7 years in length.
We would recommend careful consideration of the position before the granting of any commercial lease, and also the assessment of existing easements such as access rights on shorter leases by commercial tenants in order to avoid the loss of these often essential rights. Commercial landlords should also be wary that there is a risk of litigation by commercial tenants against their original landlord if they find easements are void for want of registration after sale of a freehold.