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This publication is available at https://www.gov.uk/government/publications/registration-of-legal-charges-and-deeds-of-variation-of-charge/practice-guide-29-registration-of-legal-charges-and-deeds-of-variation-of-charge
A charge may be made in form CH1 in accordance with rule 103 of the Land Registration Rules 2003. This form is not prescribed and lenders may use charges tailored to their own particular requirements.
2. Approved forms of charge
Lenders may have all their forms of charge approved by the Commercial Arrangements Section at HM Land Registry Head Office. Approval of charges carries the following benefits.
- No separate form RX1 is needed to register a standard restriction applied for in the charge
- No separate form CH2 is needed to register an obligation to make further advances that is applied for in the charge
- We will create computer codes for lenders with approved forms of charge which will ensure that their agreed name and address(es) for service and appropriate restrictions and obligation entries are always entered accurately in the register
For details of the approval process, please see practice guide 30: approval of mortgage documentation.
3. Application to register a charge
An application to register a charge should contain:
- application form AP1
- certified copy form CH1, or the lender’s own form of charge. See Application form AP1 regarding retention of documents submitted with applications
- the prescribed fee
You do not need to lodge mortgage documents incorporated by reference in the charge itself (for example, rules of a building society, mortgage conditions, or an agreement for loan).
Registered charges rank, as between themselves, according to the order in which they are entered in an individual register (section 48(1) of the Land Registration Act 2002 and rule 101 of the Land Registration Rules 2003). However, this is subject to “an entry in the individual register to the contrary”. If you wish us to make an entry when registering a charge to the effect that the charge has priority over an existing registered charge, you should make clear in the application (ideally in form AP1) that you are seeking such an entry as part of the application. The following is an example of when you might want such an entry to be made.
- Charge A is created before charge B (so charge A has priority over charge B, as first in time – section 28(1) of the Land Registration Act 2002)
- Notice is entered in the register in respect of charge A
- Subsequently, charge B is completed by registration – at this stage the effect of charge A being noted is that its priority is protected as against charge B (section 29(2)(a)(i) of the Land Registration Act 2002)
- Later, charge A is also completed by registration
It is arguable that retaining the notice in respect of charge A constitutes “an entry in the register to the contrary”, and so allows for charge A to retain its priority over charge B. But you may also wish, when applying to register charge A, to seek an entry that expressly provides for charge A to have priority over charge B. It is likely that we will serve an objection notice on the proprietor of charge B before making any such entry.
We will not automatically remove the notice in respect of a charge when subsequently completing the grant of that charge by registration, but it would still be advisable to make clear, when applying to register the charge, that the notice is to remain in the register, so that this is done; see practice guide 19: notices, restrictions and the entry of third party interests in the register.
4. Charges by UK companies and limited liability partnerships
For charges created by UK companies and limited liability partnerships on or after 6 April 2013, and where the application is lodged by a conveyancer, in addition to the application form AP1 you must also lodge:
- certified copy of charge. It must not be redacted in any way
- a copy of the certificate of registration issued by Companies House. This will be an electronic copy if the application is lodged through e-DRS (electronic Document Registration Service) or a paper copy when sent by post. A paper copy does not need to be certified
- written confirmation or a certificate by the company, lender or a conveyancer that the charge lodged for registration is:
- a certified copy the original charge of which a copy (or a redacted copy under section 859G of the Companies Act 2006) has been filed at Companies House
- a certified copy of the charge to which the accompanying certificate of registration relates.
If you do not lodge the appropriate certificate of registration at Companies House, we will make a note to the entry in the register stating that the charge may be subject to the provisions of section 859H of the Companies Act 2006 (rule 111 of the Land Registration Rules 2003).
If the application is not lodged by a conveyancer then we will also require a Companies House generated copy of the charge, bearing the unique identifier code for the charge, which should correspond with the code on the certificate of registration.
4.1 Charges which contain plans
If the charge contains a plan, Companies House will only accept an A4 sized plan for filing electronically. Where the plan is larger you will have to reduce the size of the plan annexed to the copy charge filed at Companies House. In these circumstances you can amend your written statement or certificate to say that the charge lodged for registration is:
- the original charge of which a copy (or a redacted copy under section 859G of the Companies Act 2006) has been filed at Companies House, save that the plan filed has been reduced in size to meet Companies House electronic filing requirements
- the charge to which the accompanying certificate of registration relates
4.2 Charges which are exempt from registration at Companies House
The requirement for registration at Companies House does not apply to:
- a charge in favour of a landlord on a cash deposit given as security on the lease of land
- a charge created by a member of Lloyd’s (within the meaning of the Lloyd’s Act 1982) to secure its obligations in connection with its underwriting business at Lloyd’s
- a charge excluded from the application of section 859A of the Companies Act 2006 by or under any other Act
(Note: Charges created by overseas companies on or after 1 October 2011 do not have to be registered at Companies House nor will the provisions of rule 111A of the Land Registration Rules 2003 apply.)
5. Application to enter a restriction
An application for a restriction must be made in form RX1 unless the application is for a standard form of restriction and is made in panel 8 of form CH1, or it is for a standard form of restriction made in an approved form of charge (rule 92 of the Land Registration Rules 2003). No fee is payable in respect of the restriction if application for its entry accompanies the application to register the charge to which it relates.
6. Application to note in the register a lender’s obligation to make further advances
An application to note an obligation to make further advances in an unapproved charge, or not in form CH1 must be made in form CH2, panel 8 of form CH1 or in an approved charge (rule 108 of the Land Registration Rules 2003). The application must be made by either the lender or their conveyancer. No fee is payable if the application to note a lender’s obligation accompanies an application to register the charge to which it relates.
7. Application to note agreed maximum amount of security
Under rule 109 of the Land Registration Rules 2003, an application may now be made to note in the register an agreement for the maximum amount secured by a charge.
Even if such an amount is stated in the charge itself, irrespective of whether or not the charge has been previously approved by us, or in a subsequent deed of variation, an application to note the maximum amount must always be made in form CH3.
If a later agreement is made to amend the amount of maximum security stated in the register, a further application in form CH3 can be lodged, accompanied by the appropriate fee. Although an additional entry will be made in the register in respect of the new amount, the original entry will remain in the register.
8. Consolidation of a charge
If a charge contains a right of consolidation with another specific charge, we will not make an entry in the register, unless specific application is made using form CC in accordance with rule 110 of the Land Registration Rules 2003.
9. Application form AP1
You should complete this form in the normal manner, but you should note the following points.
9.1 Panel 5
Panel 5 must be completed as to the documents lodged with the application. We will need only certified copies of deeds or documents you send to us with HM Land Registry applications. Once we have made a scanned copy of the documents you send to us, they will be destroyed. This applies to both originals and certified copies. If you lodge your application electronically, you must ensure that the ‘MD’ reference printed on the charge appears clearly on the scanned copy.
9.2 Panel 10
Panel 10 must be completed with the following.
- The lender’s full name and address, including its postcode. Note that if the form of charge has been approved by HM Land Registry and an address has been agreed by the lender with HM Land Registry we will use that address. Up to three addresses for service are allowed. One of these must be a postal address, but it does not have to be within the United Kingdom. If required, a second and third address may also be given, which may be additional postal addresses within or outside the United Kingdom; a document exchange box number within the United Kingdom; or an electronic address
- If the lender is a company, its company registration number
- If the lender is a limited liability partnership, its registered number
- If the lender is an overseas company, unless an arrangement has already been made with us, you must state the territory of incorporation, registered number in the UK including any prefix and a copy of the company’s constitutional documentation must accompany the application. A translation must be supplied if this documentation is not in English or Welsh. Alternatively a certificate in Form 7 may be given by a qualified lawyer practising in the territory of incorporation
A fee is payable under the current Land Registration Fee Order.
No fee is payable if the charge is lodged at the same time or before the completion of certain types of applications where a fee has already been paid. Further information about this is contained in the Land Registration Fee Order.
11. Documents issued on completion
The only documents that we will issue on completion of an application to register a charge are:
- an official copy of the register showing the entries that exist in the register on completion of your application
- a ‘register completion sheet’ which confirms that your application has been completed and explains the importance of keeping the register information up to date
12. Postponement of charge
To make an application to register the postponement of a charge you need to lodge form AP1 and a certified copy of the letter or deed of postponement.
12.1 Postponement by letter
The letter of postponement must be:
- on the headed notepaper of the lender which is postponing their charge
- signed by the lender which is postponing their charge
- addressed to either HM Land Registry or the lender whose charge is gaining priority.
The letter does not need to be signed by either the lender whose charge is gaining priority or the registered proprietor of the land.
See below for acceptable signatories.
|Bank or building society||The signatory should give their status or position which should be a director, secretary, solicitor or manager. We will also accept the letter if the signatory confirms they are an authorised signatory.|
|Company||The signatory should be the company’s secretary, a director or the company’s solicitor.|
|The Legal Services Commission||The signatory should be a person holding the rank of, or equivalent to, Civil Service Grade 7 or above.|
|Local authority||The signatory should be the Chief Executive, solicitor or a person who confirms they have delegated authority to sign under a resolution of the local authority and the date of that delegated authority.|
12.2 Postponement by deed
The deed must be validly executed by the lender whose charge is being postponed. It does not need to be executed by the lender whose charge is gaining priority or the registered proprietor of the land.
There is a fixed fee under the current Land Registration Fee Order unless the postponement is lodged at the same time as an application for which either a scale fee or another fixed fee has been paid.
12.4 Consent to restriction
If there is a restriction in Form P in the register in favour of the postponing lender, you do not need a separate consent to registration of:
- the postponement itself
- the registration of a new charge which is taking priority to the postponed charge.
Consent is implied by the signing or execution of the postponement. Most chargee restrictions are in Form P.
- where the restriction requires the written of a specified individual (usually the chargee’s secretary or conveyancer), a postponement executed or signed by that individual is acceptable as evidence of consent. If the postponement is executed or signed by a different individual, a separate consent is required
- where the restriction is worded so that it requires a written consent “signed by [name of company] of [address]” a separate consent is not required if the company named in the restriction has executed or signed the postponement.
12.5 Register entries
12.5.1 Postponement of one registered charge to another
“The priorities of the charges dated [date] [in favour of……] and [date] [in favour of…..] referred to above have been altered by a [letter/deed] dated [date].”
12.5.2 Postponement of agreed or unilateral charge protecting a financial interest to a subsequent registered charge
“The priorities between the registered charge dated [date] [in favour of….] referred to above and the [type of interest for example “equitable charge”] in favour of [name of beneficiary] protected by the notice also referred to above have been altered by a [letter/deed] dated [date].”
12.5.3 Postponement - Homebuy Deed of Priority
“The priorities between the charges dated [date] [in favour of….] and [date] [in favour of…] referred to above have been altered by a [letter/deed] dated [date] activated by a memorandum of application dated [date].”
12.5.4 Postponement of discount charge
“The priorities between the discount charge referred to above and the charge dated [date] [in favour of…] referred to above have been altered by a [letter/deed] dated [date].”
13. Deeds of variation of a registered charge
An application to register a deed of variation must be made under cover of an application form AP1, enclosing a certified copy of the deed.
Our Commercial Arrangements Section at HM Land Registry Head Office will continue to approve deeds of variation. Please see practice guide 30: approval of mortgage documentation for further information.
It is not possible to apply in a deed of variation for a restriction or for an entry to show that a lender is under an obligation to make further advances. If these entries are required, separate applications must be made in form RX1 and form CH2 respectively.
Although the borrower must execute the deed of variation, there is no requirement for the lender to do the same. We will accept that the lender will be bound by the terms of the variation if the deed is either lodged by the lender or a practitioner acting on behalf of the lender.
Rule 113 of the Land Registration Rules 2003 requires that an application to register a deed of variation must be made with the consent of the proprietor of any registered charge (and the proprietor of any sub-charge derived directly or indirectly from such a charge) of equal or inferior priority to the charge being varied, if the other lender is adversely affected by the terms of the variation, unless that proprietor has executed the deed itself or its consent is not required under the terms of its charge or sub-charge.
Our view is that alterations of the following types do not adversely affect a charge (and sub-charge thereof) with equal or inferior priority.
- A reduction in the interest rate
- A reduction in the capital debt
However, we consider that any alterations that either:
- increase the interest rate
- increase the capital
- extend the term of the earlier charge
- create an obligation to make further advances, to be such as may adversely affect any charge (and any sub-charge thereof) with equal or inferior priority
In these circumstances, the proprietor of any charge (and sub-charge) adversely affected must (unless their consent is not required under the terms of their charge or sub-charge) execute the deed; or give their written consent to the registration of the deed of variation. The consents, or a certificate by a conveyancer that they hold the requisite consents, must be lodged with the deed of variation application.
Alternatively, the proprietor of any such charge (or sub-charge) may supply a letter confirming that it does not consider its charge (or sub-charge) to be adversely affected by the terms of the variation and, consequently, feels that it does not need to execute the deed nor lodge a consent. However, in the absence of any evidence we will not raise a requisition. Instead, we will make a non-guaranteed entry in the following form in the register:
“A Deed dated __ made between __ is expressed to alter the terms of the Charge dated __ referred to above.
NOTE: Copy filed”.
A fee is payable under the current Land Registration Fee Order.
14. Digital mortgages
A digital mortgage is a mortgage deed that has been created, signed and dated electronically using HM Land Registry’s digital mortgage service, which is part of HM Land Registry’s network under section 92 of the Land Registration Act 2002. The digital mortgage will be made under section 91 of the Land Registration Act 2002, and (before 6 April 2018) the Land Registration (Electronic Conveyancing) Rules 2008. On and after 6 April 2018 those Rules are revoked and rules 54A to D of the Land Registration Rules 2003 (as amended) will apply. This means the digital mortgages created through the digital mortgage service will be regarded for all legislative purposes as deeds.
Digital mortgage deeds will not need to be witnessed, as the electronic signature process effectively acts as an online notarial system. The identity of the borrower is checked in advance of signing and the signature is certified. Although the digital mortgage deed is entirely electronic, it will be possible to get official copies of the deed in PDF format, once it is registered.
A digital mortgage deed can be distinguished from a paper mortgage deed in various ways, such as:
- it is headed ‘Digital Mortgage Deed’
- it contains the statement:
“This charge takes effect when the registrar receives notification from [conveyancer name] that the charge is to take effect” followed by the date the deed was made effective
- it includes a typographical representation of the borrower’s digital signature, such as: “Signed by Jane Louise Smith”
14.1 The digital mortgage service
The digital mortgage service is a service that enables a conveyancer to create a digital mortgage deed. It can be used only to create remortgages of a borrower’s existing property.
A borrower will be able to access their digital mortgage deed using the ‘Sign Your Mortgage Deed’ service website. The borrower will need to prove their identity using GOV.UK Verify. Once the borrower’s identity has been confirmed, they will be able to sign their deed electronically. This includes confirming they are signing their deed by entering a code that has been sent to their mobile phone. Once the borrower has signed the deed, the conveyancer can complete the transaction and make an application for registration.
The use of GOV.UK Verify is an additional identity check at the point of signature. Use of the service does not change the requirements for a conveyancer to undertake their own identity checks in accordance with practice guide 67: evidence of identity: conveyancers.
14.2 How to use the digital mortgage service
Conveyancers must be registered Business Gateway users who have signed an HM Land Registry Network Access Agreement, to use the service. They will also need to have developed the relevant IT capability to use the service.
A lender who undertakes their conveyancing in-house will also be able to use the service. To use the service, the lender’s digital mortgage deed will need to be approved in advance for use with the service, and allocated an e-MD reference.
15. Things to remember
Always check that:
- the charge is in a form approved by us
- if it’s not, and the charge is not in form CH1:
- your application should also contain a form RX1 to enter a restriction
- your application should also contain a form CH2 to note an obligation to make further advances
- panels 5 and 10 on the application form AP1 have been completed, and if appropriate, your application includes a copy of the lender constitution in English or Welsh
- you have enclosed form CH3 if an entry is required in the register to note an agreed maximum amount of security
- if your application includes a deed of variation, all the required parties have executed the deed or you have included the necessary consents
- you have enclosed the appropriate fee?
Please note that HM Land Registry may be unable to process applications that are incomplete or defective and your application will risk losing its priority if we have to return it to you – see practice guide 49: return and rejection of applications for registration for more information.
We only provide factual information and impartial advice about our procedures. Read more about the advice we give.