A property developer bought and developed land financed by commercial lenders. It sold off various parts of that land “off plan” as proposed apartments, before they were built. A company was formed and granted security to protect the interest of the purchasers.
The lending was refinanced and the company entered into an intercreditor agreement, where the company’s security ranked behind that of the new commercial lender.
The developer then went into administration, having failed to build all of the apartments.
The purchasers, in respect of the non-finished apartments, registered UN1s at the Land Registry and argued that they had interests in the land, above and beyond the second ranking security.
The judge confirmed that the UN1s offered no protection as they did not create an interest in land, only protected it.
The judge also found that the purchasers had no interest in land above and beyond the second ranking security.
While the purchasers were entitled to a lien on exchange of contracts for the deposit held, the judge held that they had exchanged that lien for the security, and the security ranked behind that of the commercial lender.
The judge also held that those purchasers did not have any other equitable interest in the land that could be protected by the UN1s.
The judge therefore ordered directions in the terms of the administrators’ application accordingly.
In the matter of KDM Tabley Street Limited and KDM Hurst Street (both in administration) [2026] EWHC 1919 (Ch)
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