Legal leases of seven years or less as overriding interests (LRA 2002 Sch 3 para 1)
Rhys Morgan is the registered proprietor of a freehold yard containing several lock-up units. In February 2026 he granted Amara Bello a six-year lease of one unit by deed, taking effect immediately, at a market rent. The lease was not registered or noted on Rhys's title. Amara uses the unit to store stock and visits it only occasionally; when it was inspected, the unit was padlocked and there was no sign of use. In September 2026 Rhys sold the freehold to Callum Price for value, and Callum was registered as proprietor. Callum had no actual knowledge of Amara's lease.
Which of the following best describes whether Callum is bound by Amara's lease?
Choose one answer to see the reasoning.
Worked answer
Correct answer A: Callum is bound, because a legal lease granted for seven years or less overrides a registered disposition whether or not Amara is in occupation.
THE RULE TO REMEMBER
A legal lease granted for seven years or less (and not otherwise a registrable disposition) is an overriding interest under LRA 2002 Sch 3 para 1 and binds a registered purchaser regardless of occupation or knowledge.
Legal leases of seven years or less as overriding interests (LRA 2002 Sch 3 para 1)
Under s.29 of the Land Registration Act 2002, a registered disposition for valuable consideration postpones prior interests unless their priority is protected, and s.29(2)(a)(ii) protects any interest falling within Schedule 3. Schedule 3 para 1 lists "a leasehold estate in land granted for a term not exceeding seven years from the date of the grant", subject to exceptions for leases that are themselves registrable dispositions or fall within s.4(1)(d), (e) or (f). Amara's six-year lease was granted by deed and took effect in possession immediately, so it is a legal lease and not a registrable disposition: s.27(2)(b)(i) requires registration only for terms of more than seven years. It therefore overrides the transfer to Callum. Para 1 does not depend on actual occupation, on the purchaser's knowledge, or on whether the lease was discoverable on inspection.
Why B is wrong: An interest within Schedule 3 keeps its priority under s.29(2)(a)(ii) without being noted on the register.
Why C is wrong: Para 1 protects short legal leases independently of actual occupation; occupation matters under para 2.
Why D is wrong: The knowledge and inspection qualifications belong to paras 2 and 3, not para 1.
Why E is wrong: Under s.27(2)(b)(i) only leases of more than seven years must be completed by registration.
That's today's practice done. Another featured question tomorrow.
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