Do forms DS1 and DS3 operate to release charge?

The answer to this is that they do not. They are Land Registry documents required to remove the reference to the charge from the relevant registered title. Panel 6 in form DS1 is drafted as follows:-

“The lender acknowledges that the property identified in panel 2 is no longer charged as security for the payment of sums due under the charge”

The phrasing of the form makes it clear that the form can only be completed once the charge has actually been released. However, in a recent case Garwood The Bank of Scotland PLC [2012] EWHC 415 (Ch) the court considered that filing a form DS1 can operate as both evidence of discharge and an application to alter the register. In that case, the charge was considered capable of reinstatement on the title on the grounds that form DS1 had been submitted due to a “mistake”.

Here are some practical points which follow from this:-

1. Release of a charge may not be delayed by not dating the form DS1/DS3 as it should already have been released.
2. The fact that a DS1/DS3 has not been executed or supplied or registered does not necessarily mean that a charge has not been released.
3. Release of the charge might be contingent on something happening such as completion of a transfer but should not be contingent on completing form DS1/DS3.
4. Where a charge has been discharged prior to completion but form DS1/DS3 has been delayed or lost in the post then it might be possible to provide other evidence of discharge in order to allow the matter to proceed on the basis that the seller’s solicitor can still provide an undertaking to forward form DS1/DS3 once received.