Completion and post-completion steps - Registration at Land ...

Learning Outcomes

This article outlines completion and post-completion steps for registration at the Land Registry, including:

• Practical mechanics of completion: transfer of funds, dating of the transfer deed, release of keys/vacant possession arrangements
• Deed execution requirements for individuals and companies, including when the buyer must also execute the transfer
• SDLT/LTT filing deadlines, SDLT5/WRA certificates, and the impact of late filing or non-payment on registration
• Purpose and effect of OS1/OS2 priority searches, searches in the lender’s name, and how priority can be lost
• Documents required for Land Registry applications (AP1 for registered titles; FR1/DL for first registrations), including evidence of discharge (e‑DS1/DS1/DS3), mortgage deed, Form DI, and Companies House certificate (where applicable)
• Discharge of charges for whole vs part (DS1 vs DS3), electronic discharge routes, and undertakings and their enforceability
• The rule that title passes on registration in registered land and consequences if an application is lodged outside the priority period
• Registration requirements for legal leases over seven years and options to protect shorter leases and easements
• The two‑month first registration rule (Land Registration Act 2002), triggering events, and the effect of failure to register (bare trust and reversion)
• Land Registry early completion policy and its implications for priorities where discharge evidence is delayed
• The 21‑day Companies House charge registration window (MR01) and the consequences of missing it
• Common pitfalls and appropriate remedial steps (e.g., searching in the wrong name, missing priority deadline, failing to lodge Form DI)

SQE1 Syllabus

For SQE1, you are required to understand the completion and post-completion process in property transactions, including Land Registry registration requirements, with a focus on the following syllabus points:

• The legal effect and process of completion in property transactions
• The transfer of funds and execution of the transfer deed
• SDLT/LTT compliance and deadlines
• The application process for registration at the Land Registry, including required documents and priority periods
• Discharge of existing mortgages and undertakings
• The consequences of errors, delays, or non-compliance in post-completion steps
• Title passes on registration in registered land and the two‑month first registration rule for unregistered titles
• OS1/OS2 searches, priority mechanics, and searches in lender’s name
• Lease registration rules (over seven years), protection of shorter leases and easements
• Companies House registration of charges by companies

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What is the effect of failing to register a transfer of registered land within the OS1 priority period?
2. What documents must be submitted to the Land Registry to register a completed transfer of registered land?
3. Who is responsible for ensuring the discharge of the seller’s mortgage after completion, and how is this usually evidenced?
4. What is the time limit for submitting an SDLT return and payment after completion?

Introduction

Completion and post-completion steps are the final stages in a property transaction, ensuring the buyer acquires legal title and the interests of all parties are protected. These steps involve the transfer of funds, execution of the transfer deed, compliance with tax obligations, and registration at the Land Registry. Errors or delays at this stage can have serious legal and financial consequences. In registered land, title does not pass until registration is completed, so timely and accurate Land Registry applications are essential to perfect the legal estate and secure priority. In unregistered land, triggering events require first registration within two months; failure has severe statutory effects.

Completion: Legal Transfer of Ownership

Completion is the point at which the legal estate in the property is transferred from the seller to the buyer. The process involves several coordinated steps, typically carried out under the Law Society’s Code for Completion by Post and supported by formal undertakings.

Transfer of Funds

The buyer’s solicitor must ensure that the balance of the purchase price is transferred to the seller’s solicitor, usually by same‑day electronic transfer (e.g., CHAPS) from a client account at a clearing bank. The seller’s solicitor confirms receipt, which triggers completion. Clear completion funds are important where chained transactions or same‑day redeems are involved; completion statements should provide the daily interest rate for any mortgage redemption.

Key Term: completion
The moment when the balance of the purchase price is paid, the transfer deed is dated, and legal title passes (subject to registration).

Execution and Dating of the Transfer Deed

The transfer deed (usually TR1 for a transfer of the whole of a registered title, TP1 for a transfer of part) must be properly executed by the seller, and by the buyer if required (e.g., if the buyer is giving new covenants or making a declaration of trust). Execution must comply with deed formalities: signature, attestation by an independent adult witness, and delivery as a deed. Companies execute either by two authorised signatories or by a single director in the presence of a witness under Companies Act 2006, section 44. The deed is dated on completion.

Key Term: transfer deed
The legal document (e.g., TR1) that transfers the legal estate in the property from seller to buyer.

Key Term: TR1/TP1
Prescribed Land Registry forms used to transfer the whole (TR1) or part (TP1) of a registered title.

Practical Arrangements

Arrangements for the release of keys, confirmation of vacant possession, and apportionment of outgoings (such as service charges or ground rent in leasehold transactions) are finalised. The buyer’s solicitor should raise the Completion Information and Undertakings form to confirm practical points (keys, location, method of completion) and to secure undertakings concerning discharge of mortgages and the delivery of evidence of release.

The seller’s solicitor provides undertakings to discharge any existing mortgages (for registered titles, commonly by electronic discharge or DS1/DS3) and to send evidence of discharge when received. Undertakings are personally binding and enforceable.

Key Term: undertaking
A binding promise (often by a solicitor) to perform a specific act, such as redeeming a mortgage after completion.

Post-Completion Steps

After completion, both solicitors must take further steps to finalise the transaction and secure the buyer’s title. In registered land, legal title passes only on registration.

SDLT/LTT Compliance

The buyer’s solicitor must submit the SDLT return (or LTT in Wales) and pay any tax due within 14 calendar days of completion for SDLT (30 days for LTT). Even if no tax is payable, a return is typically required and the certificate must still be obtained. HMRC issues the SDLT5 certificate (and the WRA issues the LTT certificate), which is mandatory for Land Registry applications.

Key Term: SDLT5 certificate
The official receipt issued by HMRC confirming payment of Stamp Duty Land Tax, required for Land Registry registration.

Consequences of late filing include penalties and interest. Without SDLT5/WRA certificate, the Land Registry will not process the registration application.

Discharge of Existing Charges

If the property was subject to a mortgage, the seller’s solicitor must redeem the mortgage and provide evidence to the buyer’s solicitor. In registered land, this is usually done by electronic discharge (e‑DS1 or direct electronic discharge) or by sending a paper DS1 (discharge of whole) or DS3 (discharge of part) for registration. In unregistered land the original mortgage deed is returned to the lender for a vacating receipt.

Key Term: electronic discharge (e-DS1)
An electronic notification from the lender to the Land Registry confirming that a registered charge has been redeemed and should be removed from the register.

Key Term: DS1
Land Registry form confirming discharge of a registered charge over the whole of a title.

Key Term: DS3
Land Registry form confirming discharge of a registered charge over part only of a title (used on sales of part).

Where discharge evidence is delayed, undertakings are enforceable. Land Registry’s early completion policy may complete the transfer and new charge but leave the seller’s charge subsisting until evidence of discharge is lodged; priority implications are considered below.

Registration at Land Registry

The buyer’s solicitor must apply to register the transfer (and any new mortgage) at the Land Registry. In registered land, title passes on registration, not on completion, so this step is critical. The application should be made and received by Land Registry within the 30‑working‑day priority period conferred by the OS1 search (or OS2 for a sale of part) and by 12 noon on the final day.

Key Term: OS1 search
An official search with priority of the whole of a registered title, conferring a 30 working‑day priority period for registration.

Key Term: OS2 search
An official search with priority of part only of a registered title (sale of part), conferring a 30 working‑day priority period and normally requiring a plan.

The OS1/OS2 should be made in the lender’s name where the purchase will be financed by a mortgage. Searching in the lender’s name secures priority for both the transfer and the lender’s charge; a search in only the buyer’s name does not protect the lender’s charge.

Key Term: priority period
The 30‑working‑day period following an OS1/OS2 search during which the buyer’s application for registration takes precedence over any later applications.

Required documents for a registered title (application form AP1) generally include:

• Evidence of discharge of any existing mortgage (e‑DS1/ED or DS1/DS3)
• Executed transfer deed (TR1/TP1)
• SDLT5 certificate (or LTT certificate)
• Mortgage deed (if applicable)
• Companies House certificate of charge registration, if the borrower is a company (and written confirmation tying the same charge to the Land Registry application)
• Form DI disclosing any overriding interests
• Appropriate Land Registry fee

Key Term: AP1
Application form to change the register for registered titles (e.g., register a transfer, charge, discharge).

Key Term: Form DI
Land Registry form to disclose any overriding interests known to the applicant (e.g., short legal leases).

Land Registry accepts certified copies for AP1 applications in most cases. If the application is not made within the priority period, the buyer risks losing priority to any intervening interests, which may then bind the buyer’s title.

For unregistered land, first registration must be made within two months of completion where a triggering event has occurred (e.g., conveyance for value of a freehold, grant/assignment of leases over seven years, first legal mortgage). Failure to register within two months renders the legal transfer void as regards the legal estate: the legal estate reverts to the transferor, who holds it on bare trust for the transferee until registration is completed; costs of remedy fall on the defaulting party.

Key Term: FR1
Application form for first registration of title in unregistered land on a triggering event.

First registration applications must be accompanied by the documents listed on form DL (in duplicate), including the epitome/abstract of title, searches, contract, transfer, receipted mortgage (if any), SDLT/LTT certificate, mortgage deed (if any), Companies House certificate (if applicable), DI, and fee.

Key Term: DL (Documents List)
Land Registry form listing documents sent in support of an FR1 first registration application.

Leasehold specifics:

• Legal leases over seven years are substantively registrable and require an AP1 (if granted out of registered land) or FR1 (if granted out of unregistered land).
• Leases up to and including seven years are overriding interests; in registered land, it is good practice to enter a notice of the lease (where possible) and register easements granted in the lease so they take effect in law.

Key Term: title passes on registration
In registered land, the disposition does not operate at law until registration is completed; completion alone does not transfer the legal estate.

Early completion policy

Land Registry may complete the transfer and new charge even if discharge evidence for the seller’s charge is outstanding (rejecting only the discharge application), leaving the seller’s charge on the register temporarily. If a restriction prevents registration without the prior lender’s consent/evidence, the buyer must supply discharge evidence within the time limits or applications can be cancelled; practitioners often exchange additional undertakings to manage this risk.

Key Term: early completion policy
Land Registry practice of completing applications other than a discharge where discharge evidence is delayed, potentially leaving a prior charge subsisting until evidence is provided.

Companies House Registration (if applicable)

If the buyer is a company and has granted a mortgage, the charge must be registered at Companies House within 21 days of creation using MR01. Failure to register renders the charge void against a liquidator, administrator, or creditors. Evidence that the charge has been registered (the Companies House certificate) must accompany the AP1/FR1 and be tied expressly to the charge lodged for registration.

Key Term: Companies House registration (MR01)
Statutory filing of a company’s charge within 21 days; otherwise the charge is void against insolvency office‑holders and creditors.

Consequences of Delay or Error

Failure to comply with post-completion requirements can have serious consequences:

• If SDLT is not paid and the SDLT5 certificate is not obtained, the Land Registry will reject the application for registration.
• If registration is not completed within the OS1/OS2 priority period, the buyer’s application may lose priority to intervening interests (e.g., a competing charge).
• If the seller’s mortgage is not discharged, the buyer’s title will remain encumbered; early completion can leave the prior charge on the register.
• Late payment of SDLT/LTT incurs penalties and interest.
• In unregistered land, failure to apply for first registration within two months results in the transfer being void as regards the legal estate, with the legal estate reverting to the transferor and held on bare trust for the purchaser pending registration.
• Failure to register a company charge within 21 days renders the charge void against a liquidator/administrator and creditors; remedial court orders may be required.

Worked Example 1.1

A buyer completes the purchase of registered land, but the solicitor submits the application to the Land Registry after the OS1 priority period has expired. In the meantime, a third party registers a charge against the property.

Answer:
The buyer’s application for registration will lose priority to the third party’s charge. The buyer’s title will be subject to the intervening charge, which could have significant financial and legal consequences.

Worked Example 1.2

The seller’s solicitor gives an undertaking to discharge the seller’s mortgage after completion but fails to do so. The buyer’s solicitor discovers the charge is still registered when the Land Registry issues the updated title.

Answer:
The buyer’s solicitor can enforce the undertaking against the seller’s solicitor, who may be personally liable to ensure the mortgage is redeemed and the charge removed. The early completion policy may have registered the transfer and buyer’s charge, but the prior charge persists until discharge evidence is produced.

Worked Example 1.3

A purchase is financed by a lender. The buyer’s solicitor makes an OS1 search in the buyer’s name only, not in the lender’s name. Both the transfer and the lender’s legal charge are lodged within the apparent priority period.

Answer:
The lender’s charge is not protected by the buyer-only OS1 priority. If a competing application (e.g., another charge) is lodged during that period, the lender’s charge may lose priority. Best practice is to conduct the OS1 in the lender’s name to protect both transfer and charge.

Worked Example 1.4

A conveyance of unregistered freehold for value completes, but no FR1 application is made within two months. The buyer tries to sell the property a year later.

Answer:
Failure to register within two months renders the transfer void as regards the legal estate. The legal estate reverts to the transferor, who holds on bare trust for the buyer. The buyer cannot convey a legal estate until first registration is completed; remedial steps and costs fall on the defaulting party.

Worked Example 1.5

On completion, discharge evidence for the seller’s mortgage is delayed. Land Registry registers the transfer and the buyer’s new charge but leaves the seller’s charge on the register.

Answer:
Under the early completion policy, the discharge is rejected, while transfer and new charge proceed. The seller’s charge remains and may outrank the buyer’s charge until discharge evidence is lodged. Urgent follow‑up is required to secure removal; additional undertakings at completion help manage this risk.

Key Point Checklist

This article has covered the following key knowledge points:

• Completion is the legal transfer of ownership, triggered by payment of the balance purchase price and execution and dating of the transfer deed.
• Deeds must be properly executed and delivered; companies execute under Companies Act section 44.
• SDLT/LTT must be paid and the SDLT5/WRA certificate obtained within statutory deadlines; Land Registry will not proceed without it.
• OS1/OS2 searches provide a 30 working‑day priority period; searches in the lender’s name protect both transfer and charge.
• Registration of the transfer and any charge must be lodged within the priority period; in registered land, title passes on registration.
• Evidence of discharge of existing mortgages must be supplied (e‑DS1/DS1/DS3), and undertakings to redeem are enforceable.
• First registration must be made within two months of a triggering event; failure renders the legal transfer void as regards the legal estate.
• Legal leases over seven years are substantively registrable; shorter leases can be protected by notices and easements should be registered to take legal effect.
• Land Registry’s early completion policy may register transfer and new charge despite delayed discharge evidence, but the prior charge remains until discharge is proved.
• Company charges must be registered at Companies House within 21 days (MR01); failure renders the charge void against insolvency office‑holders and creditors.

Key Terms and Concepts

• completion
• transfer deed
• TR1/TP1
• undertaking
• SDLT5 certificate
• electronic discharge (e-DS1)
• DS1
• DS3
• OS1 search
• OS2 search
• priority period
• AP1
• FR1
• DL (Documents List)
• Form DI
• early completion policy
• Companies House registration (MR01)
• title passes on registration