Merger of freehold and leasehold titles—law and land registration procedure

The following Property practice note provides comprehensive and up to date legal information covering:

  • Merger of freehold and leasehold titles—law and land registration procedure
  • Charge over leasehold
  • Effect of merger on underlease
  • Effect of merger on restrictive covenants
  • Effect of merger on easements
  • Land registration procedure
  • Registered lease and registered reversion
  • Unregistered lease and registered reversion
  • Unregistered lease, reversion is subject to an application for first registration
  • Registered lease and unregistered reversion
  • More...

Merger of freehold and leasehold titles—law and land registration procedure

Merger may determine a lease when both the lease and the reversion on that lease become vested in the same person and that person holds both interests in the same capacity.

However, merger does not arise automatically when that vesting occurs. Instead, merger is a matter of intention, and in the absence of any direct evidence of intention it is to be presumed that merger was not intended.

So, for example, evidence of a contrary intention was found where:

  1. the tenant had not applied to HM Land Registry for its freehold and leasehold interests to be merged, and

  2. merger would have caused the tenant to lose the benefit of valuable easements

Where merger does not occur the reversion and the lease remain as separate estates and can be dealt with separately (eg assigned or charged) by the common owner(s) of them. All rights and burdens enjoyed by or imposed on each estate pass to a successor in title of the particular estate.

Charge over leasehold

Where the leasehold interest is charged, it is unclear whether merger can occur. Generally, merger depends on intention. However, see Capital and Counties Bank v Rhodes where it was suggested that the lease will be kept alive for the benefit of the mortgagee notwithstanding the intention of the borrower. If merger does occur, it seems

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