Overlapping demise

Roof and roof space already demised

Subsequent lease takes effect in reversion

HCP (Hendon) v HM Land Registry

[2020] EWHC 1278 (Admin)

Summary

Where a lease demised premises that had already been demised to others, the Land Registry had correctly registered the subsequent lease as being concurrent with, and subject to, the earlier leases.

Facts

A development lease purported to demise to the claimant tenant (H) the roof and roof space of the existing property, together with airspace above, and obliged H to build an additional floor. However, the roof and roof space had already been demised under the flat leases. Given the overlap, the development lease could only be registered concurrently with, and subject to, the flat leases.

Issues

H argued that it should have been able to rely on the property registers of the flat lease titles, each of which stated that the lease demised the first floor "only" and made no reference to the roof or roof space.

Decision

The High Court disagreed.

The property register of a registered leasehold estate must contain a description of the registered estate and sufficient particulars of the registered lease to enable it to be identified (rule 6(1), Land Registration Rules 2003). The register will therefore give a general description of the title and location of a leasehold estate but, to ascertain the precise physical boundaries, it is necessary to inspect the lease itself. For this reason, the Land Registry is obliged to keep, and make available for inspection, an official copy of any registered lease.

The court held that each of the flat leases clearly demised the roof and roof space above the relevant flat and it was not possible to interpret the demise of the development lease as excluding these areas. Once a landlord has granted a lease, it cannot, during the term of that lease, grant exclusive possession of the demised premises to another tenant. The Land Registry had therefore taken the only available option, to register the development lease concurrently with, and subject to, the flat leases. The court acknowledged, however, that the parties could achieve the desired result by a surrender of the overlapping parts or rectification, but not by interpretation.

Citation

Martin Spencer J.:

“…After granting a lease to a tenant, it is impossible for the landlord to grant exclusive possession of the same demised premises to another tenant for the same term as the landlord has thus alienated the land in question. Having already granted a lease in possession of the demised premises, the only power of leasing which the landlord has left in relation to the same demised premises is to create a lease "to take effect in reversion" upon the existing term…in view of the at least partial physical clash or overlap between the existing leases and the new lease…, on any proper application of the above principles, the only lawful, rational and reasonable decision open to the Defendant was to register the new lease as a "reversionary" or "concurrent" lease which takes effect subject to the existing leases.” (Para 40)

Comment

This case illustrates how important it is for a developer of roof space to check the leases of the top floor flats.

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