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When Form 24 is used by a bank selling on foot of its power of sale in a mortgage, it clears off all subsequent burdens on a folio in accordance with section 62(10) of the Registration of Title Act 1964.

Practitioners will be aware that when Form 24 is used by a bank selling on foot of its power of sale in a mortgage, it clears off all subsequent burdens on a folio in accordance with of the Registration of Title Act 1964. Some of these burdens could be of benefit to the lands in the folio (such as puisne lease burdens or the usual easements in a building estate), and others (such as rights of way) that, if registered as a burden, benefit adjoining folios.

It is clearly desirable that these types of burdens are not automatically cleared off the folio following a transfer using Form 24. The Conveyancing Committee is of the view that the exercise of the bank’s power of sale should not have unintended consequences, and is of the view that amending legislation is required. While an application can be made subsequently to have these burdens restored (if removed following registration of the Form 24), it would be better if this could be avoided.

Following representations made by the committee, the PRA has confirmed that practitioners can rely on the contents of its , which provides that the PRA will serve a query/notice on a solicitor for an applicant before they remove these burdens. Solicitors receiving such a query or notice should ensure that they respond within the time stipulated to the PRA to indicate that they do not want such leases or other easements removed.

As an additional measure, the committee suggests that practitioners wishing to avoid removal of such leases, easements, wayleaves, etc, could try to ensure that any such burdens ranking after the bank’s charge are protected. This can be done in a number of ways:

1. In the case of a lease registered as a burden on the parent folio after the date of registration of a charge – by registering a priority note on the parent folio indicating that the lease burden ranks in priority to the charge – the consent of the owner of the registered charge will be required. Otherwise, on a sale of the lands in the parent folio, the lease burden will be discharged and the leasehold folio closed.
2. By drafting the transfer deed to the new purchaser in such a way that it transfers all interests – “…FREED AND DISCHARGED from the said Charge and from all other burdens entered in the said folio of the register over which the said Charge ranks in priority SAVE AND EXCEPT … [the burdens registered at the relevant burden number on the folio that are to be retained]…”
   or
   by drafting the transfer deed to reflect that the transferee is taking subject to the lease or other burdens.