On account of the repeal of certain enactments pursuant to Section 8 of the Land and Conveyancing Law Reform Act 2009 (LCLRA 2009), the Conveyancing Committee is updating its previously published practice note on enquiries that a purchaser should make of a vendor selling as mortgagee in the context of assuring the nominal reversion in the purchase deed.

Nominal Reversion : Pre LCLRA 2009 position

Traditionally where there was a mortgage by sub-demise it was the practice to include a provision in the mortgage whereby the borrower appointed the mortgagee or its agent as its attorney for the purpose of conveying the nominal reversion in the event of an enforced sale.

Such a provision or practice was subsequently no longer necessary as Section 80(2) of the Landlord and Tenant Amendment Act 1980 (“1980 Act”) provided that if land the subject of a mortgage by sub-demise, either created before or after the commencement of the 1980 Act, was being sold for the enforcement of the mortgage then the purchaser is deemed to have acquired the interest of the lessee for the entire of the unexpired term of the lease including the period of the nominal reversion.

Post LCLRA 2009 position

Pursuant to the LCLRA 2009 Act, section 80(2) of the 1980 Act was repealed and consequently was no longer relevant.

Accordingly, practitioners are advised that if purchasing an unregistered leasehold property from a vendor as mortgagee, to ensure that the nominal reversion is assured to the purchaser in the deed, the purchaser should ensure that (subject to checking the relevant provisions are contained in the mortgage) the attorney of the borrower (as specified in the mortgage) joins in the deed of assurance for the purposes of assuring the nominal reversion to the purchaser.