Pre-contract - deduction and investigation of title

Question 1

How is title deduced for a registered property?

Answer 1

The seller’s solicitor provides the buyer’s solicitor with official copies of the registers of title as well as a copy of the title plan and official copies of any document referred to and filed under the title.

Question 2

How it title deduced for an unregistered property?

Answer 2

The seller’s solicitor provides the buyer’s solicitor with an epitome of title, which is comprised of copy paper title deeds and documents and which must evidence good root of title

Question 3

What is investigating title?

Answer 3

Seller’s solicitor - precursor to deduction, it allows them to pre-empt any potential issues that might be raised by the buyer’s solicitor and specify the relevant incumbrances in the contract

Buyer’s solicitor - raising requisitions & checking the official copies

Question 4

When did it become compulsory throughout England and Wales to register title to land on sale or change of ownership?

Answer 4

December 1990

Question 5

How old can official copy documents be?

Answer 5

No more than 6 months from when issued

Question 6

What is the property register?

Answer 6

It describes the property, its extent and rights benefiting the property. It includes information such as
- whether the property is freehold or leasehold
- a description/full postal address
- exclusions or limitations of the title
- rights benefiting and burdening the property
- Declarations as to light and air

Question 7

What should be done if an unregistered property is being sold and the title should have already been registered due to a previous transaction?

Answer 7

The seller’s solicitor should be asked to do everything necessary to procure registration before the transaction proceeds

Question 8

How are official copies and filed plan applied for?

Answer 8

Through the H M Land Registry using form OC1 and OC2 for official copies of documents referred to

Question 9

What does the proprietorship register contain?

Answer 9

Details as to the ownership of the property, the class of title, and any restrictions on dealings. It includes:
- name and address of the registered proprietors
- after 1 April 2000 the price paid by the current owner
- whether an indemnity covenant was given by the owner on the purchase

Question 10

What are the three classes of title that apply to both freehold and leasehold titles and the one that only applies to leasehold titles?

Answer 10

Both:
- absolute title - the best and most widespread
- possessory title - usually if deeds are lost prior to first registration or owner’s title based on adverse possession
- Qualified title - where there is a specific defect in title referred to in the registers of title

Leaseholds:
- good leasehold title - where H M Land Registry approves the leasehold title but not the landlord’s title

Question 11

What are overriding interests?

Answer 11

Interests that can bind a purchaser. They include interests of persons in actual occupation, local land charges, legal easements arising by virtue of long user (prescription) and legal leases of 7 years or less

Question 12

How are the existence of overriding interests usually ascertained?

Answer 12

Through pre-contract searches and enquiries

Question 13

What is the charges register?

Answer 13

It contains adverse matters affecting the property (incumbrancers or things that burden it). It includes:
- mortgages and charges
- covenants burdening the property
- easements burdening the property
- leases
- notices

Question 14

How is the root of title ascertained in an unregistered property?

Answer 14

The seller’s solicitor investigates title by obtaining the original title deeds and documents and confirming the property has not already been registered by conducting an index map search. They then need to establish a good root of title and prepare an epitome of title

Question 15

What is meant by good root of title?

Answer 15

• is at least 15 years old
• deals with the whole of the legal and equitable/beneficial interest in the property (refers to the transfer of the fee simple by the transferor as beneficial owners)
• provides an adequate and identifiable description of the property
• does not cast doubt on the title

Question 16

What is the best document for a root of title?

Answer 16

A conveyance as it is usually been transferred for value often between unconnected parties and therefore will be a double guarantee that the title will have been investigated before

Question 17

What other documents can be used if there is not a conveyance for the root of title?

Answer 17

• mortgage
• deed of gift or an assent

Question 18

What should the buyers solicitor check on receiving the epitome of title?

Answer 18

• check there is a good root of title
• check the property is not already registered - SIM
• check if the property should have been registered
• check the documents have been properly stamped & executed
• check for incumbrancers and ancillary rights
• check land charges searches

Question 19

What does it mean by ‘properly stamped’?

Answer 19

The conveyances need to be stamped for both:
- ad valorem stamp duty
- particulars delivered

Question 20

What must all conveyances be made by?

Answer 20

Deed otherwise they are void

Question 21

What are the requirements for a deed to be valid?

Answer 21

After 31 July 1990:
- in writing and clear it is intended to be a deed
- signed in the presence of a witness
- delivered as a deed
Before 31 July 1990:
- also needs to be sealed

Question 22

What are the most common rights found in a Land charges search?

Answer 22

• C(iv) estate contract
• D(ii) restrictive covenant
• D(iii) equitable easement
• F home rights

Question 23

What form is used for land charges searches?

Answer 23

K15

Question 24

Who must be included on land charges searches?

Answer 24

All estate owners mentioned in the documents within the epitome of title for their years of ownership

Question 25

When should there be an expressly granted right of way referred to in the property register or within the epitome?

Answer 25

If the property does not immediately abut a highway maintainable at public expense

Question 26

Does the benefit of legal easements run with the land?

Answer 26

Yes

Question 27

How would you know if co-owners hold the equitable interest as joint tenants or tenants in common?

Answer 27

Co-owners will hold the equitable interests as joint tenants unless there is a Form A restriction in the proprietorship register or in express words in the conveyance if unregistered

Question 28

If there is the death of a co-owner what action should be taken by the buyer’s solicitor if the seller is beneficial joint tenant?

Answer 28

• obtain death certificate
• registered - surviving co-owner can convey the property. It can be assumed no severance unless there is a form A
• unregistered - three conditions to satisfy for the co-owner to convey the property:
  1. no memorandum of severance
  2. no bankruptcy proceedings
  3. transfer by surviving joint owner states the survivor is solely and beneficially entitled to the land
  If the three are not satisfied an additional trustee must be appointed

Question 29

If there is the death of a co-owner what action should be taken by the buyer’s solicitor if the seller is beneficial tenants in common?

Answer 29

• obtain death certificate
• registered or unregistered - if acquiring from a sole surviving co-owner a second trustee needs to be appointed to overreach the equitable interest of the deceased co-owner

Question 30

What is an assent?

Answer 30

Vesting the legal estate in the beneficiary rather than the sale or transfer of it to a third party

Question 31

What is a s36 statement?

Answer 31

A statement in the conveyance to the buyer confirming that there have been no previous dispositions of the same land made by the PRs

Question 32

When can a property registered with possessory title make an application to upgrade to title absolute?

Answer 32

If it has been at least 12 years

Question 33

If it is not possible to upgrade the title to absolute, what must be provided?

Answer 33

An indemnity insurance policy at the seller’s expense to protect the buyer

Question 34

What needs to be provided in relation to existing undischarged mortgages entered in the charges register or referred to in the epitome?

Answer 34

• an undertaking to discharge them on completion
• they are not included in the list of specified incumbrances within the contract

Question 35

Does the burden of a restrictive covenant run with the land?

Answer 35

Yes so they are normally binding on the buyer following completion

Question 36

Where do you find restrictive covenants?

Answer 36

Registered land - charges register
Unregistered - need to be registered as a Class D (ii) land charge to be binding on the buyer

Question 37

What happens if the restrictive covenant is likely to be problematic for the new buyer?

Answer 37

They have three options:
1. approach the person who has benefit of the covenant and request to release or vary the covenant or provide one-off consent
2. make an application to the Upper Tribunal for modification or discharge
3. ask the seller to provide a restrictive covenant indemnity policy for the benefit of the buyer, the buyer’s mortgagee and successive buyers

Question 38

Does the burden of positive covenants run with the land?

Answer 38

No but may be indirectly binding through a chain of indemnity covenants

Question 39

Where is the indemnity covenant for a positive covenant found in the sale documents?

Answer 39

It will be provided for in the contract and the covenant itself will appear in the Transfer

Question 40

Does the burden of legal easements run with the land?

Answer 40

Yes