Part 1: Registration of Overseas Entities Schedule 3: Land ownership and transactions: England and Wales Part 1: Amendments to Land Registration Act 2002 Restrictions on disposal
Paragraph 3(1) of the new Schedule 4A sets out that HMLR is required to enter a restriction in the register in relation to a qualifying estate if it is satisfied that (i) an overseas entity is the registered proprietor and (ii) that entity became the registered proprietor in pursuance of an application made on or after 1 January 1999. This is the date from which HMLR began recording the jurisdiction in which overseas entities were based, when registering as proprietors of estate in England and Wales. Paragraph 3(1) therefore applies to overseas entities that become registered proprietors of a qualifying estate in pursuance of an application made on or after the commencement date, as well as those overseas entities that are proprietors of a qualifying estate before the commencement date and have acquired title to the qualifying estate in pursuance of an application made on or after1 January 1999 (but before the commencement date). Part 2 of Schedule 3 sets out the transitional regime in respect of those overseas entities that are existing proprietors at the commencement date.
	The effect of the restriction under paragraph 3(1) is set out in paragraph 3(2): the restriction must prohibit the registration of certain dispositions in relation to a qualifying estate. These dispositions are found in section 27(2)(a) LRA 2002 (transfer of freehold), (b)(i) (lease lasting longer than 7 years) and (f) (grant of a charge over the property, e.g. a mortgage).
	Should the overseas entity not be a registered overseas entity (or exempt) at the time of the disposition, it will not be possible to register that disposition subsequently. Paragraph 3(2) sets out six exceptions to the prohibition on registration of certain dispositions (listed in the paragraph above). These are
where the entity is a registered overseas entity or exempt overseas entity at the time of disposition;
where the disposition is made in pursuance of a statutory obligation, court order, or by the operation of law;
where the disposition is in pursuance of a contract made before the restriction was entered in the register;
where the disposition occurs in the exercise of a power of sale or leasing conferred on the proprietor of a registered charge over the estate, or a receiver appointed by the chargeholder,
where the Secretary of State gives consent to registration of the disposition (see paragraph 5); or
where the disposition is made by a specified insolvency practitioner in specified circumstances. (It is for the Secretary of State to specify both the insolvency practitioners and the circumstances in regulations.)
	The duty under paragraph 3(1) to enter a restriction in the register applies regardless of whether the overseas entity is exempt or not. The restriction will however not "bite" if an overseas entity makes a disposition at the time it is an exempt overseas entity.