C12/14: Conveyancing 3 Flashcards
How does a buyer establish if the seller is entitled to sell in registered conveyancing?
If the title is registered at HMLR, the conveyancer will be able to download a copy of the register of title, usually via the HMLR portal. They will then need to inspect the register.
What does ‘investigating the title’ mean?
A buyer’s conveyancer must ‘investigate’ the seller’s title to ensure their client understands the extend of the land, their ownership of it and any restrictions in using and dealing with the land.
What are the property checks?
Check any discrepancies:
- property description
- title plan
- title number (same as contract)
- estate (freehold/leasehold?)
- boundaries
What are the proprietorship checks?
Check any discrepancies:
- class of title (absolute, possessory, good leasehold)
- names of proprietors
- restrictions (e.g. Form A restriction)
What are the charges checks?
Check any discrepancies:
- incumbrances (covenants/easements)
- mortgages (need to be paid off before)
What are the three types of registers?
The property register: description of land and title plan + freehold/leasehold or easements/covenants
The proprietorship register: class of title, extent of state guarantee, addresses (postal, DX, email)
The charges register: mortgages, restrictive covenants, adverse easements
What are overriding interests, give examples?
These do not appear on the register but may still bind a purchaser.
E.g. leases less than 7 years, or people in actual occupation.
How would covenants be laid out in the charges register?
Covenants may be set out in the register in full, or they may be referenced to the deed creating them if the wording is very extensive. In the latter case, the register will refer to the deed containing the covenants as being “copy filed”. The deed must then be obtained to see the actual wording of the covenants.
How does a buyer establish if the seller is entitled to sell if the land is unregistered?
Under the unregistered system, the title (ownership) of the seller is traced through title deeds belonging to the property and held either by the owner or by the owner’s mortgage lender.
The seller must demonstrate good title (called deducing title) by showing a good root (a sound legal starting point) of title which is at least 15 years old, and the title must then be proved from that root to the present. For instance, the seller could show that they bought the property in 1985 (over 15 years ago) and would produce the 1985 deed as the root of title, along with any later documents affecting the title such as mortgage deeds.
What is a “qualifying trigger” in relation to unregistered land?
From 13 October 2003, previously unregistered land must be registered when one of the following events take place (“triggering” events):
- a conveyance/transfer of the freehold, or a leasehold having more than seven years left to run – this includes transfers for value, by gift, by court order or by assent (on death);
- the grant of a new lease for more than seven years;
- the grant of a reversionary lease (a lease taking effect in the future) for a term commencing more than three months after the date of the lease, irrespective of the length of lease (e.g. a lease to a student for an academic year, granted in March to take effect in September); and
- the grant of a first legal mortgage.
What is the deadline to do first registration?
For compulsory first registration, the requirement is that the application must be made within two months of the relevant event (e.g. sale). The Registrar has power to extend this period if there is a good reason to do so.
Why is it important to obtain instructions from all co-owners?
In order to avoid a conflict of interest which would mean that you would have to stop acting for the client.
What is required from co-owners when they are wanting to sell?
As well as taking identification docs and carrying out due diligence, the conveyancer must get approval from each co-owner that they want to sell.
Once that happens, a single co-owner can take on responsibility on behalf of everyone, as long as that is in writing from everyone.
Is a surviving co-owner entitled to sell?
Yes, but the conveyancer must get the evidence of the death certificate and check. They can then make an application to HMLR using form DJP and the death certificate to have the name removed from the proprietorship register. Then the co-owner will end up being the sole holder of the legal estate.
What is a DJP?
A DJP is a death of joint proprietorship form that goes to HMLR with the death certificated to remove their name from the proprietorship register and make the surviving co-owner the sole holder of the legal estate.
What is overreaching?
This is the legal mechanism whereby if a second trustee is appointed in the transfer, this will have the effect of transferring the interests of any behind-the-scenes beneficiary from the land to the proceeds of sale. Thus, if a buyer pays their purchase money to two or more trustees, they will take the land free of any beneficial interests.
Does the second trustee need to be registered as a co-owner on the proprietorship register in order to sell?
The second trustee does not need to be registered as a co-owner on the proprietorship register. They simply need to be appointed as a second trustee in the transfer document, and they will sign the transfer along with the seller.
Remember that it will be necessary for the seller’s conveyancer to also obtain identification documents and carry out due diligence on the person who is to be appointed the second trustee.
What is an “attorney”?
An attorney is a person who is entitled to appoint others to “step into their shoes” from a legal point of view.
What is the person who is making the appointment of the attorney called?
The person making the appointment is called the “donor”, and the person/s who take some responsibility for dealing with the affairs of the donor is the attorney.
What was Enduring Power of Attorney (EPA)?
The key features of the EPA were first its simplicity, and second it could be used to enable the attorney to handle the affairs of the donor even if the donor still had mental capacity. In these circumstances the attorney could sign documents on the donor’s behalf and deal with their banking affairs with relatively little formality. If the donor became mentally incapable, it was then necessary to register the EPA with the Office of the Public Guardian (OPG).
When did it become impossible to make an EPA?
Since 1 October 2007. From then on, one can now make a Lasting Power of Attorney.
What are the two types of Lasting Powers of Attorney (LPA)?
A health and welfare LPA
A property and financial affairs LPA (e.g. for selling of land)
What is the OPG and what is the difference between the EPA and LPA concerning it?
Office of the Public Guardian (OPG). EPAs had to be registered with the OPG once the donor became mentally incapable. LPAs must be registered with the OPG before it can be used, unlike to EPA.
What does the conveyancer require if someone is acting as an LPA?
They must have a certified copy of the power of attorney and will return the original document.
What is the risk to the firm in relation to a beneficiary of an estate?
Beneficiaries will want to know the latest updates, as they will generally not receive their money until a property is sold. Beneficiaries are entitled to be kept up-to-date as to progress of the administration of the estate but this must be with the agreement of the personal representatives. A firm should not give information to beneficiaries without the consent of the personal representatives, otherwise the firm risks breaching their duty of confidentiality to their client.
What is the risk to the firm in relation to advising a non-owning occupier?
Conveyancers must not advise a non-owning occupier. This may cause a conflict of interest. A non-owning occupier will be asked to sign the sale contract to confirm that they will vacate the property on completion. The seller’s conveyancer must ensure that the occupier is advised to take their own independent legal advice.
What is the risk to the firm in relation to a gifting family member?
The conveyancer must make sure to comply with all regulatory and money-laundering requirements, which may bring up a gift from a family member. This is fine, as long as the gift is declared to any lender involved. The conveyancer mustn’t advise the gifter, due to the possibility of a conflict of interest.
What is the risk to the firm in relation to a lender?
Often, the conveyancer will also act for the lender as well as the buyer client. This is fine, as long as they maintain their duty of confidentiality to their buyer client and must be on their guard for potential conflict of interest. The lender will also be a client of the firm.
What is the risk to the firm in relation to a family member of an elderly/vulnerable client?
A conveyancer must look out for pressure or undue influence. Undue influence is the situation where a person has been pressured or coerced into taking a course of action which they did not want to take. A particular example of this is where a testator may have been pressured or coerced into changing their will in favour of the person/s applying the pressure.
What is the risk to the firm in relation to an aggrieved party?
Sometimes, the client on the other side of the transaction is not able to contact their own conveyancer and will try to contact other professionals involved in the chain. The conveyancer must not give any status updates due to the conflict of interest that would arise. In this circumstance, all you can do is politely, but firmly tell the caller that you are unable to help them and suggest that they contact their own conveyancing firm and/or any estate agent involved. Ensure that you keep a detailed attendance note of any such conversation and tell a more experienced colleague.
