2. Due Diligence 2 Flashcards
What is due diligence?
Investigation and research before making a decision.
What are planning law principles?
Legal principles related to planning matters.
What is planning permission?
Approval required for land development.
What does ‘run with the land’ mean in planning matters?
Responsibility for planning matters lies with the property owner.
Who is responsible for a breach of planning matters?
The owner of the property.
What could happen if there is a breach of planning matters?
Enforcement action could be taken against the buyer of the property.
What falls under the statutory definition of ‘Development’?
Building operations, material changes, change of use class.
What is included in building works?
Demolition, structural alterations, additions.
What does not constitute ‘Development’?
Maintenance work, internal alterations not affecting external appearance.
What are the two types of public planning permission?
Deemed permission, express permission.
Is either type of planning permission sufficient?
Yes.
What happens to planning permission?
It runs with the land forever and burdens the relevant land.
Is there a specific time limit for implementing planning permission?
Yes, usually 3 years in England and 5 years in Wales.
What can the Local Planning Authority do if planning permission is not implemented within a reasonable time?
Serve a completion notice.
What is deemed permission?
Permission to carry out development without applying for planning permission.
Under what circumstances does the owner have deemed permission?
Alterations to the interior that do not affect the exterior, demolition outside a conservation area.
What is the Town and Country Planning (General Permitted Development) Order 2015?
Regulations that allow certain developments without planning permission.
What are examples of general permitted developments?
Small home extensions, porches, fences.
What are the restrictions on size and position for conservatories?
N/A
What are examples of minor works on commercial properties?
Fence, paint
What does an Article 4 Direction do?
Disapplies deemed permission in conservation areas
What is required if deemed permission is disallowed?
Express planning permission
What can be applied for under s.192 of the TCPO 1990?
Certificate of Lawfulness of proposed use or development
What is required if the owner does not have deemed permission?
Express permission
What are the two types of express planning permission?
Outline permission, Detailed permission
What does outline permission entail?
Broad permission with reserved matters
What are reserved matters?
Developments that must be approved by the Local authority
What must the owner do if there are reserved matters in the outline permission?
Make an application within 3 years
What does detailed permission involve?
More expensive and detailed application with full plans
When must development start for detailed permission?
Within 3 years of the permission date
What is the Town and Country Planning (Use Classes) Order 1987?
Sets rules for material changes of use and use classes
What are the different categories of use under UCO 1987?
Classes of use with letters and sometimes numbers.
What is the purpose of specifying the use of property in a lease?
To ensure compliance with planning laws.
What are common use classes?
Categories of use under UCO 1987.
What does s.55(2) of UCO 1987 exclude?
Change of use within the same class of use.
Give an example of a residential use class.
Class C, with C1 being hotels and C3 being dwelling houses.
When does a change of use not require planning permission?
When it is within the same use class.
B2 to B3 those are different classes
E(a) to E(b) same class
What types of developments are permitted without planning permission?
Limited size extensions within the curtilage of a dwelling house and minor operations.
When is planning permission required for a change of use?
When it is from one class to another or to/from a ‘sui generis’ use.
What can the local planning authority do if there is a breach of planning permission?
Take enforcement action against the current owner/occupier.
How can a breach of planning permission be identified?
By exercising the right to entry and issuing a planning contravention notice.
What is a planning contravention notice?
A notice requiring the recipient to provide information about operations, use, or activities.
What can the local planning authority do after receiving a planning contravention notice?
Decide to take action.
What is an enforcement notice?
A notice served by the local authority to start an enforcement action.
What must the enforcement notice state?
Nature of the breach, steps to remedy, time limit
When does the notice become effective?
28 days after service
What does a stop notice do?
Brings activities in breach of planning control to an end
What is a breach of condition notice?
Notice for breaching a specific condition
What is an injunction?
Court order to restrain a breach
What is the enforcement period?
Time limit for taking action
What is the time limit for serving enforcement notices for building works?
4 years from substantial completion
Ifts before 25 april 2024
What is the time limit for serving enforcement notices for other breaches?
10 years
Usually the case now
Who is held responsible for breaches?
Current owner
What does Building Regulation Control cover?
How works are carried out and building safety
Is permission fr building regulations oalways needed for building works?
Yes even if u dont need planning permission
What are the enforcement options for Building Regulation Control?
Prosecution, Enforcement Notice, Injunction
What is the enforcement deadline for Building Regulation Control?
Unlimited
Before oct 1?2023 it was six months.
What are the options for breach in Building Regulation Control?
Indemnity policy, Regularisation Certificate
Is it necessary to apply for Building Regulation Control even if no planning permission is required?
Yes
What are self-certification schemes for Building Regulation Control?
Regulated by trades and professions, no separate application required
What does the LPA do in relation to Building Regulation Control?
Inspects and issues certificate of compliance
Give examples of works that need building consent.
Installing windows, electrical works, boiler installation
Is there a time limit on enforcement for breaches?
No
What can the LPA prosecute for?
Breach of regulations
When must proceedings be brought for a breach?
Within 2 years of work completion
When can the LPA issue an enforcement notice?
Within 12 months of the breach
When can injunctions be applied?
At any time to force property compliance
How can a buyer check if BRs have been complied with?
Through searches and enquiries before contract exchange
What can a buyer do if no consent is granted?
Ask seller to obtain regularisation certificate or get insurance
What should a client be advised to obtain?
Necessary building regulations approval
What are the enforcement deadlines for local authority?
No permission: 4 years, Change of use w/ no permission: 10 years, Change of use to dwelling w/o permission: 10 years, Breach of condition: 10 years from date of breach
What are listed buildings?
Buildings of special historical or architectural merit
What are the grades of listing?
Grade 1, 2* and 2
What should be advised if a building is listed?
To have a full structural survey before purchase
What are the requirements for listed buildings?
Planning permission and listed building consent for exterior and interior works
What are the sanctions for listed building consent?
No time limit for enforcement action, criminal sanctions against perpetrators and subsequent owners
What are Conservation Areas?
Areas with broader protection for buildings.
What is the requirement for work on trees in a conservation area?
Notification to LPA 6 weeks in advance.
What is the status of unregistered land in the Land Registry?
No Official Copies available.
What should be checked before investigating an unregistered title?
Registration status, root of title, chain of ownership, correct stamping, seller’s ability to sell, third-party rights.
When is registration of title compulsory?
Only if a transaction occurs.
What does the Register provide?
Conclusive evidence of ownership.
Why do people avoid registration?
Expense.
What triggers compulsory first registration?
Sale, gift, assent, grant of lease, assignment of lease, first legal mortgage.
What is the time limit for registration?
2 months from triggering event.
Can the Registrar grant an extension for registration?
Yes, for a good reason.
What is an epitome of title?
Summary of the property’s ownership history.
What is a good root of title?
A single document chosen by the solicitor as the basis for proving ownership.
What is the purpose of registering land?
To establish ownership and the right to deal with the land.
What is the benefit of registering land?
Conclusive evidence of ownership.
What is the downside of registering land?
Expense.
What is the purpose of notification for work on trees in a conservation area?
To inform the Local Planning Authority.
What is the consequence of unregistered land in the Land Registry?
No Official Copies available.
What is the purpose of investigating an unregistered title?
To establish ownership and any third-party rights.
What is the purpose of an epitome of title?
To provide a summary of the property’s ownership history.
What is the purpose of compulsory first registration?
To establish ownership and create an official record.
What is the epitome of title?
Schedule of relevant deeds and documents.
What is the root of title?
Specific conveyance showing good title to the property.
Conveyance best and usually better than mortgage because has description of property.
If not then gift or assent
Must show:
Recognisable descrip of land
At least 15 yrs old
Shows entire legal nd equitable interest being sold
Doesnt cast any doubts
Who prepares the epitome of title?
Seller.
What does the buyer do?
Buyer conducts Index Map Search.
What does the seller do with relevant documents?
Selects and prepares the epitome of title.
What is included in the epitome of title?
Root of title, conveyances, seller’s current mortgage, name changes, death certificates.
Are pre-root documents visible to the buyer?
No.
What does the epitome of title consist of?
Front sheet and actual documents.
What must the seller give to the buyer on completion?
Actual copies of the documents.
What must the seller give to the buyer on completion?
Original title documents.
What should be checked for all documents?
Proper execution (in writing, clear on the face, signed with a witness, delivered as a deed).
What does the seller always execute?
Conveyance to pay the legal estate in the land.
What is the purpose of a Central Land Charges Search (CLC Search)?
To find missing names in the epitome.
What should be done with possible family names from the epitome?
List them out and deal with them separately.
Who should the CLC search be carried out against?
Every estate owner from the epitome, including parties to pre-root documents.
What form should the CLC search be done on?
Form K15.
Who do we not need to search for in the CLC search?
Banks (lenders).
What is the name of the current seller?
Search Land Charges Act 1972.
What is the period of search?
Period of ownership, complete years only.
What if ownership started before 1926?
Sufficient as register starts from 1926.
Can the buyer rely on the seller’s search if correct?
Yes.
What is a valid root of title?
Describes land, dated 15+ years ago, no doubt on seller’s title, deals with legal and beneficial title.
Is a Power of Attorney a valid root of title?
No, it casts doubt.
Does silence on beneficial title cover both legal and equitable interest?
Yes, unless expressly excluded.
What if the property was a gift?
Look through all transfer deeds to find the root of title.
What are the requirements of a good root of title?
Adequate description of land, conveyance preferable, consistent description, deals with legal and equitable interest, no doubt on seller’s title, at least 15 years old.
How should subsequent title deeds be checked?
Systemic and thorough manner.
What are the formalities for deeds?
Not specified.
Pre-1990: What are the requirements for a valid deed?
Clear deed, signed, witnessed, sealed, dated.
Transfer by Company: How many directors need to witness the deed?
2 directors or 1 director + CoSec.
Stamps: What must a deed have to be stamped?
Particulars Delivered + COT or Ad Valorem.
Invalid: Who should rectify an invalid deed?
Seller at their own expense.
Post-1990: What should the seller do with the land?
Register it with Land Registry.
Missing Covenants: What type of title will the buyer get?
Qualified Title.
STAMPING: What should conveyances contain to show stamp duty payment?
Ad valorem stamps and/or certificate of value.
STAMPING: What is the purpose of ad valorem stamps?
To show payment of stamp duty.
STAMPING: What is the purpose of a certificate of value?
To show consideration below stamp duty threshold.
STAMPING: What should conveyances contain if the purchase price is above the nil-rate band?
Both ad valorem stamps and a certificate of value.
STAMPING: What should be affixed even if no ad valorem stamp duty was payable?
Particulars Delivered Stamp.
STAMPING: What are valid variations of Particulars Delivered stamps?
Particulars Delivered, PD, Particulars Produced, or reference to Finance Act 1931.
STAMPING: What is the consequence of not properly stamping the root of title?
It is not properly stamped if PD stamp and/or ad valorem stamp duty is missing.
CHECK IF THERE ARE PROBLEMS AFFECTING UNREGISTERED LAND: What should be checked?
Problems affecting unregistered land.
MCQ - Advise of nature and purpose of positive covenants.
Not binding without chain of indemnity covenants.
RESTRICTIVE COVENANTS: What should the Central Land Charge search result show?
Creation of restrictive covenants and valid registration against original covenantors.
RESTRICTIVE COVENANTS: What happens if a covenant is validly registered?
It is binding on all successors in title.
RESTRICTIVE COVENANTS: Does a covenant need to be registered to be binding?
No, it does not need to be registered to be binding.
Restrictive covenant
Does not run with the land.
Existence of covenants
Apparent on the face of the conveyance.
Easements
Excepting and reserving or “subject to”.
Charges Register
Part of the land registration system.
Property Register
Part of the land registration system.
Halsall v Brizell
Law relating to easements.
Unregistered land
No need to register easements created by deed.
Index map search
Search of the Index Map.
Registered title
Check burden in Charges Register.
Unregistered title
Register caution against first registration.
Discharge of mortgages
Issue for the Buyer.
Undertaking from Seller’s solicitor
Redeem mortgage and provide evidence of discharge.
Unregistered land
Listed in the epitome of title.
Mines and minerals exceptions
Seller may reserve rights to extract valuable substances.
What is a mining exception?
Seller cannot transfer mines/minerals to buyer.
Where does a mining exception appear?
In the property Register or conveyance.
What is the purpose of declaring rights of light and air?
Restricts building/blocking light to windows.
Where does the declaration of rights of light and air appear?
On the Proprietorship register.
What is the issue with leases and vacant possession?
Buyer may not get vacant possession.
What is the requirement for a lease of 7+ years?
Registration and separate title number.
Are leases under 7 years enforceable?
Equitable leases may be enforceable as overriding interests.
How is a legal lease created in unregistered land?
By deed, scheduled in the epitome of title.
What is a parol lease?
Lease made orally or in writing (not by deed).
When does a parol lease become effective?
Immediately after it was made.
What is the period requirement for a parol lease?
Less than 3 years.
What is the requirement for a parol lease?
Full market rent.
What is an entry in the Charges register?
Entry regarding burden of an interest on a registered estate or charge.
What are the types of notices?
Unilateral and agreed notices.
What is an agreed notice?
Notice put in the register with the agreement of the registered proprietor.
What is a unilateral notice?
Notice used when the registered proprietor refuses consent.
Does an entry in the register guarantee validity or existence?
No, it does not.
Do notices give rights over the property?
No, they do not.
What step should be taken to inquire about a notice?
Ask the seller’s solicitor about the notice.
When should the buyer advise the client?
Either advise your client to walk away from the transaction or refuse to proceed further with the transaction until the seller deals with the unilateral notice.
What should the buyer require the seller to do?
Require the seller to get the notice cancelled by the Land Registry before exchange of contracts.
What is a home right?
Right of a non-owning spouse or civil partner to occupy the family home.
Does a home right create an interest in land?
No, it does not create an interest in land.
How is a home right binding on a buyer in registered land?
Home right will bind buyer if it is protected by a notice in the Charges Register by the date when the transfer of the property to the buyer is registered.
How is a home right binding on a buyer in unregistered land?
Home right must be protected as a Class F land charge in order to be binding on a buyer.
What should the seller obtain from a non-owning occupier?
Seller should obtain from non-owning occupier a release of all rights in the property and agreement to vacate on or prior to completion.
What types of occupiers are there?
Types: people holding home rights + tenants.
What should the seller obtain from the occupier?
Seller should obtain from the occupier a release of all rights in the property and agreement to vacate on or prior to completion.
When are pre-contract searches and enquiries carried out?
Enquiries cannot be raised after exchange so solicitors will carry this out before.
When are pre-contract searches and enquiries completed?
Completed early on in the transaction to ensure that parties can get out of the transaction with no penalty.
Where are the results of searches/enquiries sent to?
Searches/enquiries results are sent to the client in the Report on Title.
Who drafts the Report on Title?
Buyer’s solicitor drafts the Report on Title.
What is the purpose of the Report on Title?
To summarize title investigations, search results, and replies to enquiries.
What is the duty of CCS regarding the Report on Title?
CCS has a duty to disclose all material information in an accessible way.
What is the confidentiality of the Report on Title?
Use only for the client and need consent to disclose.
How can searches be carried out?
Searches may be carried out directly, with the entity involved (e.g. local authority or water company) or using an online search provider.
What is a professional survey?
A thorough inspection of the property by a professional.
What is a valuation?
An assessment of the property’s value.
When might a full structural survey be advised?
If there are concerns about the state of the property.
What is a less expensive alternative to a full structural survey?
A homebuyers valuation and survey.
What does a homebuyers valuation and survey provide?
Advice on necessary repairs and maintenance requirements.
What does it mean if something is adopted?
It becomes the responsibility of the statutory undertaker.
What is a Local Land Charges search (LLC1)?
A search that gathers information held by the local authority.
What does a Local Land Charges search reveal?
General and specific financial charges, restrictions on land, planning charges, and listed building charges.
What is the purpose of a Local Authority enquiries (CON 29)?
To obtain standard local authority information about the property.
What does a Local Authority enquiries search reveal?
Information about planning permission, building regulations, road adoption, contamination, conservation areas, and public rights of way.
CON29 doesnt reveal planning permission for adjoining land just ur land. U need Con29O
What information is provided about highways and roads adjoining the property?
Information about maintenance and adoption.
How can you obtain information about highways and roads via NLIS?
Use form CON29.
How can you obtain information about highways and roads via Gov.uk?
Send a CON29 search request to the Local Authority.
What are Commercial Property Standard Enquiries (CPSEs)?
A standard set of questions.
What are some extra info known to the Seller that may affect the Buyer’s plans?
Owner breached covenants, non-owner occupiers, unregistered 3rd party rights, barriers to access, physical condition.
What questions are usually included in CPSEs?
Unregistered third party interests and Energy Performance Certificate.
What does a Drainage and Water Search determine?
If land is connected to mains water supply, mains sewer, or public foul drainage system.
How can you obtain a Drainage and Water Search via NLIS?
Use the relevant water service company.
What does an Environmental Search determine?
Risk and liability of contamination on the property.
What is another name for an Environmental Search?
Desktop search.
What can a local authority do if the property is found to be contaminated?
Serve a notice on the current owner to clean up the contamination.
How can you obtain an Environmental Search via NLIS?
Use other search providers like Site check.
What does a Flood Search determine?
Risk of flooding if the property is close to a river or the coast.
What insurance scheme is available for most residential properties in case of flooding?
Flood Re.
What should be considered when determining if the property can be insured at normal rates?
Look out for any factors that may affect insurance rates.
What does a Canal & River Trust search determine?
Information about canals and rivers near the property.
What should the buyer be aware of if the property is adjacent to a river or canal?
Liability for repairs due to waterway maintenance.
What does a physical inspection/survey reveal?
Physical defects, occupiers, boundary disputes.
When should a Companies House search be used?
If the seller is a company.
What does a Companies House search check for?
Company solvency, existence, name changes, fixed/floating charges.
When should a bankruptcy search be used?
If the seller is an individual. K16
What does a bankruptcy search ensure?
That the property is not subject to bankruptcy proceedings.
When should a search of the Index Map (SIM) be conducted?
If the land is unregistered.
What does a search of the Index Map reveal?
Whether the title is fully or partially registered.
Reveal also if mines and mineral are registered under separate title
When should a chancel repair search be conducted?
If the land is unregistered or referred in title deeds.
What does a chancel repair search reveal?
Liability to contribute to church maintenance.
Check 13 oct 2013
How can insurance be obtained against chancel repair liability?
Via a search provider (Chancel Check) or personal search of the National Archives.
When should a coal mining search be conducted?
If mining area apparent from title plan/scenario.
What does a coal mining search check for?
Chance of property being structurally unsound due to mining.
What are the two options for conducting a coal mining search?
Coal mining search of the Coal Authority or CON29M form.
When should a common land or village greens enquiry be made?
As an optional local authority enquiry.
Common land search relates to ur land tht ur buying u need to make further enquiries to local authorities about other land
What does a common land or village greens enquiry check for?
Existence of common land or village greens in the area.
What is common land?
Land that cannot be built on and affects land use.
How can you obtain information about public land in the area?
Use form CON29O or send a CON29O search request to the Local Authority.
What is the purpose of raising enquiries?
To identify issues or defects and ask questions to the Seller.
When should the exchange of contracts proceed?
After all questions have been answered.
What form is used for raising enquiries in residential transactions?
Property Information Form.
What form is used for raising enquiries in commercial transactions?
Commercial Property Standard Enquiries (CPSEs).
What is the National Land Information Service (NLIS)?
A service that provides accurate and comprehensive information about land.
How can a firm save time when using NLIS?
By being a member and using a licensed NLIS channel.
What may affect a Buyer’s plans if there is public land in the area?
Public footpaths, rights of access/grazing, rights to walk cattle on property.
Can you build on common land?
No, it cannot be built on.
What is the purpose of using NLIS?
To provide a quicker and easier solution for obtaining land information.
How can u find about TPO
Via LLC1
How can u find about TPO
Via LLC1
Is company searxh needed if no mortagge
No
Is company searxh needed if no mortagge
No
Is seller obliged to respond to pre contract enquiries
No as long as they dont mislead u
