Land 4

Question 1

What are the two methods of demonstrating ownership of land?

Answer 1

• Traditional system: unregistered system* Modern system: system of land registration introduced by the LRA 1925 repealed by the LRA 2002The two systems run in parallel

Question 2

What does it mean when a seller deduces title to the buyer?

Answer 2

They prove that they own the land they are contracting to sell* Traditionally: production of documents (good root of title and unbroken chain of 15 years minimum)Modern: download a copy of title from HMLR

Question 3

What is the traditional way of deducing title?

Answer 3

Producing documents commencing with a good root of title demonstrating an unbroken chain of ownership for a minimum of 15 years

Question 4

What are the four main documents that would make up unregistered title?

Answer 4

1. Conveyance on sale (transfer for valuable consideration)2. Deed of gift (no money exchanged)3. Mortgage deed4. Assent (transfer from a PR to a beneficiary)Note: each should be checked to ensure no defects e.g. it is properly signed and stamp duty is paid

Question 5

What are the four requirements of a good root of title?

Answer 5

1. At least 15 years old at the date of the contract for sale2. Deal with the whole legal and equitable interest in the property3. Contain adequate description of the property4. Do nothing to cast doubt on title

Question 6

What is the epitome of title?

Answer 6

A chronological list of all the documents, together with a copy of each

Question 7

What does the seller send to the buyer when deducing title?

Answer 7

The epitome of title (original deeds are only sent on completion when sale proceeds have been received)

Question 8

What is ‘investigating title’?

Answer 8

The process of checking the documentation provided to ensure that a seller owns what they are purporting to sell. The main task of investigating title falls to the buyer’s solicitor, and this is done prior to exchange of contracts. Any queries about the title are known as ‘requisitions’.

Question 9

What is a requisition?

Answer 9

A query made by buyer’s solicitor regarding title before exchange of contracts

Question 10

When does title to unregistered land pass?

Answer 10

Completion (when purchase price is paid and document of transfer and title documents are handed to the buyer’s solicitor)

Question 11

When does an application to HMLR for first registration of the buyer’s title need to be made?

Answer 11

Within 2 months of completion

Question 12

How are third party interests in unregistered land generally discovered?

Answer 12

• Investigating the title* Carrying out conveyancing searches* Advising the buyer client to physically inspect the land.

Question 13

Are buyers bound by the following third party interests:* Legal interests* Equitable interests capable of registration as land charges* Equitable interests not capable of registration as land charges* Unregistered interest which override first registration

Answer 13

• Legal: Yes, regardless of notice* Equitable interests capable of registration as land charges: only if registered* Equitable interests not capable of registration as land charges: Only if they have notice of them * Unregistered interest which override first registration: Yes, regardless of notice

Question 14

What will a buyer of a legal estate purchase it subject to?

Answer 14

Any legal interest which subsists, whether or not they were aware

Question 15

How are legal interests generally discovered?

Answer 15

Checking the deeds, or inspecting the propertyNote: the interest would have been created by deed so it would be in the epitome of title given to the buyer’s solicitor

Question 16

When is a buyer bound by equitable interests?

Answer 16

When they have notice of them

Question 17

What is required for most equitable rights and interests to be enforceable against subsequent buyers?

Answer 17

Registration with Land Charges Department of HM Land Registry

Question 18

What are the 8 most common charges in the Land Charges Register?

Answer 18

C* C(i) puisne mortgage i.e. a mortgage not protected by the deposit with the lender of the title deeds e.g. a second legal charge* C(ii) limited owners charge (rare)* C(iii) general equitable charge not covered in the other categories (rare)* C(iv) estate contract, e.g. a contract to purchase, an option agreement, right of pre-emption, or similar.D* D(i) Relates to tax paid on death (rare)* D(ii) Restrictive covenants* D(iii) Equitable easementsF* F statutory right of occupation of non-owning spouse/civil partner

Question 19

Barclays Bank holds a first legal charge over a piece of unregistered land. The unregistered title deeds to the land will be deposited with Barclays as security for the loan. If Halifax Bank is willing to lend more money to the landowner, how will their interest be protected?

Answer 19

Halifax Bank will have a second charge and will protect their interest by registering a C(i) land charge against the name of the landowner.

Question 20

A owns a piece of land and has contracted to sell it to B, but completion of the purchase will not take place for another three months. The risk to B in this situation is that A might try to sell the land to someone else. How can B protect his interest?

Answer 20

Registration of the contract between A and B as a C(iv) estate contract will put any other potential buyer of the land on notice that A has already contracted to sell the land to B.

Question 21

What are the two Class C land charges relevant to the SQE?

Answer 21

1. C(i): Puisne mortgage, i.e. a mortgage not protected by deposit of title deeds, e.g. a second legal charge2. C(iv): Estate contract, e.g. a contract to purchase

Question 22

What are the two Class D land charges relevant to the SQE?

Answer 22

1. D(ii): Restrictive covenant2. D(iii): Equitable easement

Question 23

A conveyance might contains a restrictive covenant on the land being sold stating that the land shall be used only as a residential dwelling. How can this covenant bind the buyer?

Answer 23

If the covenant is registered as a D(ii) land charge, this constitutes notice of the covenant and will bind a buyer of the land.

Question 24

What is the relevance of registration of these land charges?

Answer 24

They constitute notice

Question 25

What does a Class F land charge protect?

Answer 25

A non-owning spouse’s statutory right of occupation in the matrimonial home| Family Law Act 1996

Question 26

What is a land charge registered against, and who makes the application for it?

Answer 26

It is against the name of the estate owner at the time the land charge was created, not the address of the property, and is applied for by the person who claims the right

Question 27

Who takes the burden of a land charge?

Answer 27

The estate owner (the charge is registered against their name) not the land itself.

Question 28

Is registration of a land charge binding on subsequent owners, and why?

Answer 28

Yes, because registration is actual notice of the interest to all persons

Question 29

To what two things does the doctrine of notice apply, and under it, what four things must a buyer show to take free of any equitable interest?

Answer 29

Only applies to equitable interests pre-dating 1925 and beneficial interests under a trust.Buyer must show they:1. Acted bona fide (i.e. good faith) with ‘genuine and honest absence of notice’2. Were a purchaser for value (i.e. it was not a gift or assent)3. Acquired a legal estate or legal interest, not just an equitable interest4. Had no notice of the equitable interest

Question 30

What is the consequence of a land charge not being registered?

Answer 30

It is void against a purchaser for value i.e. if it is capable of being registered, it must be in order to be enforceable.

Question 31

Back to equitable interests generally, what are the three types of notice?

Answer 31

1. Actual2. Constructive3. Imputed

Question 32

When will a person be deemed to have constructive notice?

Answer 32

When they would have discovered something with reasonable enquiry

Question 33

A was interested in buying land from B. B’s neighbour C has for many years crossed over B’s property to get access to a road in such a way and for such a time that C now has an equitable right to continue crossing B’s land. C’s many years of driving her car over B’s land has left a visible dirt path from C’s garage, over B’s land, and to the road. Neither A nor her solicitor ever inspected B’s property and so never saw the dirt path. Is A likely to be bound by C’s equitable right?

Answer 33

Yes A will be deemed to have constructive notice of the path.

Question 34

What is imputed notice?

Answer 34

Notice given to an agent of a buyer is deemed to be given to the buyer(things an agent should have known can also be imputed to a principle)

Question 35

Why is notice irrelevant in the registered system?

Answer 35

Because interests are either registered (and therefore binding on the buyer) or protected as overriding interests (which automatically bind the transferee irrespective of registration or notice)

Question 36

When do interests which override arise, and what are four examples of them?

Answer 36

Unregistered interests which exists when unregistered land is first registered are deemed to override registration (i.e. are automatically binding on registration)1. Lease granted for seven years or less2. Legal easement3. Local land charge4. Interest belonging to a person in full occupation

Question 37

What is the difference between interests which override in the unregistered system and overriding interests (also called interests that override)?

Answer 37

Interests which override:- Unregistered system- Concerns unregistered interests which are essentially exempt from first registration of unregistered landOverriding interests- Registered system- Override subsequent registrable dispositionsHowever, they both do roughly concern the same things, e.g. lease for 7 years of less, legal easement, person in occupation.

Question 38

How does an interest which overrides cease to be overriding?

Answer 38

If the buyer is aware of it, they must disclose it to HMLR on application for first registration, after which it is protected by an entry on the register

Question 39

A is the sole owner of his house. A’s mother, O, lives with him. A sells the house to B. The title was unregistered. Is O’s interest in the house protected?

Answer 39

O’s actual occupation of the house is capable of being an interest which will override on B’s first registration. So, he may be bound by O’s occupation. This risk is why B’s solicitor will carry out extensive searches and enquiries prior to completing B’s purchase to try to establish whether there are any potential overriding interests.

Question 40

What is adverse possession?

Answer 40

The process of acquiring title to land by dispossessing the previous holder and occupying the landProcess depends on whether land is unregistered or registered

Question 41

Under the Limitation Act 1980, how long must the owner of an estate in unregistered land allow someone else to occupy it before the lose the right to recover the land?

Answer 41

12 years

Question 42

In which two situations is adverse possession most likely to arise?

Answer 42

• Deliberate Occupation of Land of Another* Mistake e.g. someone mistakenly occupies the land of another, perhaps on a boundary. More common

Question 43

In relation to unregistered land, what three things must an applicant for adverse possession show they have?

Answer 43

• They have actual physical possession of the land* Possession is exclusive to the applicant and * The possession is without the permission of the landowner.

Question 44

What is the reason for the requirement that the land be possessed without permission?

Answer 44

Because the point of adverse possession is that the applicant treat the land as theirs as of right, hence why the law should transfer it to them

Question 45

Where this 12 year period is met, does the legal owner lose the legal title?

Answer 45

No, but they hold the legal estate on trust for the squatter who can apply for registration

Question 46

A’s title to his garden is unregistered and (as is often the case) the plan attached to the root conveyance is very poor. A has occupied and maintained a strip of land at the bottom of his garden for the last 30 years in the genuine belief that the land was his. The strip of land is on A’s side of the fence and his neighbour has never mentioned the strip of land. A is now selling his house. The buyer’s solicitor checks the plan with the records held by HMLR and finds that the strip of land is not within A’s title. Can A do anything to ensure the strip of land is included in the sale?

Answer 46

If successful, a claim by A for title to the land by adverse possession will result in the title documents matching what is happening on the ground. If he had asked his neighbour whether he could fence in the strip of land, this would not comply with the requirements, and any claim for adverse possession of the strip of land would fail. The key is that the applicant for title to the land has treated it as their land ‘as of right: If A had not talked to his neighbour about the strip of land, but the land in question was not fenced or walled in, his application for adverse possession is also likely to fail as he will not have ‘exclusive’ possession

Question 47

If an application for adverse possession is successful, what type of title is HMRC likely to award?

Answer 47

Possessory title (possible to upgrade after an additional 12 years)