C13: Conveyancing 2 Flashcards
What does it mean to “deduce” title?
Deducing title means that the seller produces documentation to the buyer, which demonstrates that they have good title to the property they are selling.
What does investigating title mean?
Investigating title means that the buyer examines the title and raises any queries, called requisitions on title or pre-contract enquiries on title.
When is title deduced by the seller?
In modern practice, the title is deduced prior to exchange of contracts/pre-contract stage, so at the beginning of the process. This is determined by the Standard Conditions of Sale (SCS) and the Law Conveyancing Protocol (if being used).
How is title deduced in unregistered conveyancing?
The seller’s conveyancer will produce an epitome of title for the buyer’s conveyancer. This is a chronological list of the documents of title which will demonstrate the seller’s ownership together with a photocopy of those documents attached.
For registered land, what do the SCS say about when title should be deduced by the seller?
The Standard Conditions of Sale (SCS) says that the title should be deduced prior to exchange of contracts and also investigated prior to exchange.
What does the Land Registration Act 2002 stipulate how title must be deduced? What documents must be included?
It does not stipulate how title must be deduced and therefore it is open for parties to make their own arrangements. However, the SCS govern proof of the registered title.
The effect of SCS 4.1.2 is that the proof must include:
- official copies of register
- official copy of the title plan
- copies of documents referred to on the register
The official copies are obtained from the Land Registry at an early stage and will be sent out with the contract.
When investigating the title, which documents (and consequent items) must be checked by the buyer’s conveyancer?
The property register:
Property description (e.g. 45 Mews or 45A Mews)
Title plan (boundaries as expected?)
Title number (same as in contract?)
Estate (freehold or leasehold)
Easements (right of way on foot/car, costs for buyers? E.g. maintenance of driveway)
Boundaries (e.g. neighbour fenced garden that isn’t theirs)
The proprietorship register:
Class of title
Names of proprietors (death/marriage certificate)
Restrictions (Form A)
The charges register:
Incumbrances (matter that burden the property, e.g. restrictive covenants and easements)
Past breaches of restrictive covenants (e.g. extension built two years ago on a covenant prohibiting building work)
Anticipated breach (e.g. client wants to set up business, but covenant not allowing business purposes)
What is the difference between a “latent” and “patent” defect? How does this relate to the seller’s duty of disclosure?
A latent defect is one that is not apparent from an inspection of the property. E.g. a dispute with a neighbour or a restrictive covenant period. A seller must disclose these.
A patent defect is one which is discoverable from inspection of the property. E.g. a right of way if it can be seen in the form of a path or driveway over the land. A seller does not need to disclose these. This is why a buyer is expected to do a survey for physical defects.
Why does a seller need to be careful in what they disclose to the buyer?
As what they are legally under a duty to disclose is very limited, there is a much greater risk for the seller when completing the property information form and answering the buyer’s pre-contract enquiries. If the seller misrepresents the situation, they buyer could sue them in misrepresentation.
Which forms does the seller’s conveyancer send the seller to fill out at the beginning of the transaction?
The TA6 property information form and TA10 Fittings and Contents form.
They must also remind them that they have to fill out the form honestly, even if the responses may be adverse to a buyer. The buyer can withdraw and sue the seller if they are dishonest.
What form does the contract for sale take?
It has a front page with all the details of the specific purchase:
Date
Details of seller and buyer
Property details (freehold/leasehold, incl address of property)
Title details (title number/root of title)
Specified incumbrances (restrictive covenants or easements)
Title guarantee (full or limited)
Completion date (put in on exchange)
Contract rate (usually 4% above base rate)
Purchase price
Deposit
Contents price (in the case of extra furnishings)
Balance (balance minus deposit and plus contents price)
Space for signature
Then the middle pages which contain the standard conditions of sale.
Finally, the back page with Special conditions, pre-printed and fillable:
Condition 3, regarding fixtures and fittings
Condition 4, regarding vacant possession
Condition 5, pre-printed, relating to time of completion (usually 2pm)
Condition 6, pre-printed, relating to misrepresentation
Condition 7, pre-printed, regarding standard occupiers’ consent.
What does s2 Law of Property (Miscellaneous Provisions) Act 1989 (LP(MP)A 1989) state in reference to the contract of sale?
S2 LP (MP) A 1989 outlines the way in which contracts of sale should be made and executed. It provides that a contract for the sale of land must be:
- in writing
- incorporate all terms agreed between parties and
- be signed by, or on behalf of, each party.
What are the “standard conditions of sale”?
Standard conditions of sale appear on the contract of sale, in the middle section. Any amendments to these appear in the special conditions on the final page, which override the standard conditions.
Make notes on SCS 1–7 from the standard conditions – what do they cover?
The - Terms
FreeDom - Formation/Deposit
Disguises - Disclosure
The - Title
Ringing - Responsibility/Insurance
Chain - Completion
Rattles - Remedies
SCS 1: Defines Terms - defines the terms used in the general conditions
SCS 2: Formation/Deposit - deals with the formation of the contract and deposit conditions
SCS 3: Seller’s duty to disclose - deals with the disclosure of incumbrances from the seller
SCS 4: Deducing/investigating Title - deals with lime limits for deducing/investigating the title and provisions about the requirements of proof of title and about title guarantees.
SCS 5: Pending completion/insurance - deals with responsibility of the property pending completion and insurance
SCS 6: Completion - deals with timing and mechanics of completion
SCS 7: Remedies - deals with available remedies of breach of contract
What happens if a buyer or a seller delays completion?
They may have to pay interest on the purchase price and incur a claim for damages.
If a seller delays, the buyer cannot rescind the contract.