How Are Overage Agreements Secured at HM Land Registry? (Form L Restriction)

Because positive covenants (such as the obligation to pay clawback money) do not run with freehold land under the rule in Rhone v Stephens [1994], sellers cannot enforce overage simply by writing it into a deed. Instead, overage is legally secured at HM Land Registry by entering a standard Form L (or Form N) restriction on the proprietorship register of the title. The restriction legally forbids the Chief Land Registrar from registering any disposition (transfer, lease, or mortgage) of the property to a new buyer without a formal written certificate signed by the overage beneficiary or their conveyancer confirming compliance.

How Are Overage Agreements Secured at HM Land Registry? (Form L Restriction)

Because positive covenants (such as the obligation to pay clawback money) do not run with freehold land under the rule in Rhone v Stephens [1994], sellers cannot enforce overage simply by writing it into a deed. Instead, overage is legally secured at HM Land Registry by entering a standard Form L (or Form N) restriction on the proprietorship register of the title. The restriction legally forbids the Chief Land Registrar from registering any disposition (transfer, lease, or mortgage) of the property to a new buyer without a formal written certificate signed by the overage beneficiary or their conveyancer confirming compliance.

How Are Overage Agreements Secured at Land Registry? [Form L Guide]

The Common Law Problem: Rhone v Stephens [1994]

Under English common law, while restrictive covenants (agreements not to do something) can bind successors in title under Tulk v Moxhay [1848], positive covenants (agreements to perform an act or pay money) do not run with the land.

If Seller A sells to Buyer B with an overage clause, and Buyer B sells to Buyer C without paying, Seller A has no legal standing to sue Buyer C for the money.

To bypass this limitation, conveyancers deploy the 'Chain of Direct Covenants & Restriction' mechanism:

1. Direct Covenant: Buyer B covenants that they will not transfer the land unless the new buyer executes a direct Deed of Adherence with Seller A.

2. Form L Restriction: Seller A registers a statutory restriction in the Land Registry title register:

'No disposition of the registered estate by the proprietor of the registered estate... is to be registered without a certificate signed by [Seller] or their conveyancer that the provisions of [the Overage Deed] have been complied with.'

How Are Overage Agreements Secured at HM Land Registry? (Form L Restriction)

Quick Answer: How Are Overage Agreements Secured at HM Land Registry? (Form L Restriction)

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The Common Law Problem: Rhone v Stephens [1994]

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