This article aims to give a brief introduction to unilateral charges. The article explains what a unilateral charge is and how it is removed.
What is a unilateral charge?
A unilateral charge is a notice used to register an interest against a property by a third party. A third party can be anyone other than the owner, including finance companies (banks, loan companies, credit cards) and private individuals. Unilateral notices are entered into the charges register of a property for the registered estate to which they relate. The charges register is maintained by the Land Registry.
The affect of a unilateral notice is very limited; a unilateral notice simple protects the priority of interest in a property, based on the date the notice was registered. This means a notice entered the day before a 2nd notice has priority, no matter what the difference in value of the interest. A unilateral notice does not guarantee the interest it protects, nor does it mean the interest is valid, or even exists. An example of a unilateral entry would be:
“(22 January 2004) UNILATERAL NOTICE in respect of an Agreement dated 11 October 2008 made between (1) Joe Bloggs and (2) Jane Bloggs.
(22 January 2004) BENEFICIARY: The BIG loans company of Loans House, Loans Way, Loansville, DE8 7SS”
The date in brackets is when the unilateral notice is entered onto the register, not when the agreement was made between the parties.
When registering a unilateral notice, the land registry is not required to get the consent of the proprietor, nor does it need to satisfy itself of the validity of the claim. Luckily, unilateral notices are relatively easy to remove.
Removing or Cancelling a unilateral charge
There are two ways that a unilateral charge can be withdrawn from the register:
- Cancellation; and
The main difference between the two methods is who applies for the removal from the register. Each method will be described in the next sections.
Cancelling a unilateral notice
The owner of the property, against which the unilateral charge is registered, can apply for free to the Land Registry for the unilateral notice to be cancelled. Form UN4 is used to apply for a cancellation. On receipt of the UN4 form, the Land Registry will notify the person (beneficiary) making the claim. The person will then be given 15 business days in which to object to the application. If the individual does not object to the application for cancellation within the period (or any extension), the notice will be cancelled.
The Adjudicator for the Land Registry will be referred any case where the parties do not agree with the cancellation of the notice.
Removing a unilateral notice
The removal of a unilateral notice can only be undertaken by the beneficiary of the notice. Removing a unilateral notice is free of charge and can be applied for by using the Land Registry Form UN2.
So in summary, it appears anyone can register a unilateral notice against a property but, the actual impact of this notice is extremely limited. In addition, a unilateral notice can be cancelled by the proprietor or removed by the interested party. Detailed information can be found in the Land registry practice guide 19.