Land charges and cautions should not be thought of as
interchangeable terms. They have wholly different effects and are
appropriate in completely separate circumstances. In essence, and
for reasons set out below, cautions are more commonly used for land
in Northern Ireland and we rarely apply them in England & Wales
cases.
A caution can only be applied against registered land. It is
registered in the Proprietorship Register and ensures that any
dealing with the land (i.e. gift, sale, mortgage etc.) can only be
registered with our consent. The caution will show up in any search
made by agents acting for an intending purchaser or mortgagee. On
the other hand, a land charge is registered in the Charges Register
and has the same status as a commercial mortgage in the sense that
it gives us an interest in the proceeds of sale (depending on where
we stand in the priority of charges and the amount of money
realised by the sale).
In addition to giving us less protection, a caution is more
problematic to register as the form needs to be witnessed by a
solicitor or commissioner of oaths. Also, if the house were
repossessed, we would not, as a cautioner, be entitled to any prior
notice unless we had registered a separate caution against any
dealings with that charge. With regard to Northern Ireland charges
and cautions where we cannot secure a debt by a charge or where it
is more desirable to know when there are dealings with the
property, a caution should be registered against the Proprietorship
Register see (
IHTM38155)
In England & Wales a land charge only needs to be entered
on the register of title held at the District Land Registry to be
effective. However, in Northern Ireland wherever appropriate the
debts should be secured by a charge in form 35 (see
IHTM38151) and entered on the land
charge certificate, which will be in the possession of the
registered proprietor or the first mortgagee. As we have limited
powers to comply delivery of the certificate to us, cautions are
more likely to be used for land in Northern Ireland (see
IHTM38155).
