Form B Restriction
Key Takeaways
- All Form B Restrictions relate to a property held under Trust
- They are only required if the Deed or disposition creating the Trust limits the powers of the Trustees
- The restriction requires the consent of the beneficiaries in order for the trustees to register a disposition
- For example, the beneficiaries would have to give their consent if the trustees were to sell the property.
What is a Form B Restriction?
If a property is held in a trust which limits the trustee's power (this just means that they can't do whatever they like with the property without the agreement of the beneficiaries to the trust), a Form B restriction will be required. It will stipulate that one or all of the beneficiaries are required to give consent in order to register a disposition. This might be any disposition, or a specific disposition(s) as per the provisions in the Deed or disposition creating the Trust.
The underlying rule is that all trustees of land have all the powers of an absolute owner to exercise their functions as trustees. This can be overruled; a disposition creating a trust of land can contain provisions limiting the trustees’ powers.
This is legal speak for 'the trustees have to ask the beneficiaries if it's okay, before they do something important with the property'.
This restriction must be registered to protect the rights of the beneficiaries. Without it, the trustees could sell the property to a buyer, who would not need to check whether the beneficiaries had consented and simply register themselves as the new proprietor. The new owner's position can't then be questioned, even if the trustees have broken the terms of the trust by selling the property without the beneficiaries' consent.
Form B Restriction Declaration of Trust Example
Clare makes her partner the beneficial owner of 50% of Clare's property, using a Declaration of Trust, executed as a Deed. Clare remains the sole legal proprietor.
Her partner is now entitled to 50% of any rental income or sale proceeds. In order to ensure that Clare can't just sell the property and take all the money, they apply a form B restriction, meaning that any new owner would be unable to register their possession without Clare's partner's consent, which she can withhold until Clare pays her her share.
Wording of Form B Restriction
(Form B, Schedule 4 of the Land Registration Rules 2003).
No disposition [or specify details] by the proprietors of the registered estate is to be registered unless one or more of them makes a statutory declaration or statement of truth, or their conveyancer gives a certificate, that the disposition [or specify details] is in accordance with [specify the disposition creating the trust] or some variation thereof referred to in the declaration, statement or certificate.
Instead of 'disposition' the wording can specify 'transfer', 'lease' or 'charge'.
When do I need to apply a Form B Restriction?
Trustees must apply for a Form B restriction:
- When a declaration of trust imposes limitations on the powers of the trustees
- When a change in the trusts on which a registered estate is held imposes limitations on the powers of the trustees
- On an application for first registration of a legal estate held on a trust of land, when the powers of the trustees are limited
This still applies when the estate is held by a representative of a sole or last surviving trustee.
The application only needs to be made by one of multiple trustees, as long as it is made as an application by a 'person with sufficient interest in the making of the entry' and they provide evidence of that interest.
Beneficiaries can apply for a Form B restriction
Any beneficiary can apply for this restriction. If they don't provide consent from the trustees alongside the application, the registrar will serve notice of application on the trustees, giving them 15 days to object.
This restriction does not cancel out the need for a Form A restriction. If you need a Form B restriction and the proprietors are tenants in common, you will still need to apply both restrictions.
Apply or remove a Land Registry restriction
We can help you with an application to the Land Registry.
- Applying the restriction with a Form RX1,
- Removal of the restriction with a Form RX3, or
- Filing a Cancellation of restriction statement of truth with a Form ST5 at the Land Registry; and
- The disbursement costs such as ID fee, office copies and Land Registration charges.
Get in touch for a fixed fee quote.
You can't apply a Form B Restriction if:
- it would result in there being more than one Form B restriction on the property.
- the restriction refers to more than one trust, or
- the trust referred to in the restriction is not the trust of the registered legal estate, or does not contain provisions limiting the trustees’ powers
How do I comply with a Form B restriction?
Usually all that is required is a certificate from the proprietor's conveyancer. You'll only need to make a statutory declaration if the conveyancer is unwilling to provide a certificate.
Frequently Asked Questions
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