Property Chapter 1

Question 1

Explain the three sections of the Title Register

Answer 1

The official copies of the register actually comprise three separate registers:
A: Property Register: describes the extent of the property and rights benefiting the
property;
B: Proprietorship Register: gives the class of title, the owner’s name and
address and entries affecting the owner’s right of disposal; and
C: Charges Register: lists “charges” burdening the property i.e. third
party rights over the property (e.g. mortgages, positive covenants and
restrictive covenants, leases or the burden of easements).

Question 2

The buyers solicitor provides a Report on Title with a view to……

Answer 2

Reporting that the property has good and marketable Title.

To fully investigate the Title, the buyer’s solicitor should also check for any unregistered third part interests

Question 3

Where a right of way is included in the Property Register, the buyer’s solicitor
must consider and advise their client on all of the following:

Answer 3

Adequacy: adequate for client’s purposes
Maintenance: the buyer as a result of common law will be required to contribute towards maintenance
Adoption: buyer needs to be advised of the potential future costs of adoption to ensure it is an “adoptable standard”
Registration: Both the benefit of the right and the burden of the right need to be registered on respective registers.

Question 4

The benefit of the right to lay pipes for water and sewerage

Answer 4

The October 2011 Water Industry Regulations.

Question 5

Right to light
&
How to establish a right to light.

Answer 5

An easement to enjoy the natural light that passes over someone else’s land and then enters through a defined aperture in a building (e.g a widow)

an express grant by deed (which is rare in practice); or
 (more commonly) acquired by prescription under the Prescription Act
1832 (‘PA 1832’). To succeed in claiming a right under the PA 1832, the
light has to have been enjoyed without interruption for a period of at
least 20 years from the date on which the action asserting the right was begun and the light has to have been enjoyed without any written
consent.

On the sale of part the right to light can be expressly excluded from the land being bought.

Question 6

If a right of light has been established the owner of the dominant land (i.e. the land benefitting from the right of light), what are they entitled to?

Answer 6

An uninterrupted flow of sufficient light for the comfortable use and enjoyment of the building: Colls v
Home and Colonial Stores Limited [1904] AC 179.

Question 7

What is the remedy for the disturbance of the right to light?

Answer 7

An action of nuisance.
The court may grant an injunction preventing the continued nuisance or it may award damages instead. This could mean that a development may be prevented due to the enforceable right to light even if planning permission has been granted by a local authority.

Question 8

Remedy for obstruction of an easement?

What do they need to prove

Answer 8

The remedy for the obstruction of an easement is an action for nuisance.
In such an action, the claimant will have to prove:
 title to the easement (e.g. by way of express grant);
 the scope of the easement; and
 that there has been a substantial interference of the right.

(SSS)

In the case of the obstruction of an easement conferring a private right of way, the obstruction is only actionable if it is considered to be substantial. One of
the tests the court will consider in establishing this is: does the obstruction mean the right cannot be substantially and practically exercised as
conveniently as before? If the answer is yes, an injunction may be granted preventing the obstruction of the easement.

Question 9

In Guest Estates Ltd v Milner’s Safes Ltd (1911) 28b TLR 59

In Pettey v Parsons [1914] 2 Ch 662

Answer 9

In Guest Estates Ltd v Milner’s Safes Ltd (1911) 28b TLR 59: it was held that a locked gate blocking a private right of way would be a substantial obstruction giving rise to actionable interference of the easement.

In Pettey v Parsons [1914] 2 Ch 662 the erection of a gate across a private right of way was held to be no interference with the right [provided] “proper
facilities [had] been given to the dominant owner

Question 10

How many classes of title are there?

Name them

Answer 10

Title Absolute
Qualified Title
Possessory Title
Good Leasehold

Question 11

Name four groups with the right to sell land

Answer 11

1. an Individual
2. A company
3. A limited Liability Partnership
4. joint owners
5. Someone with the power to sell e.g a bank / personal representative

Question 12

Sale by an individual (execution) what is the individual required to do?

Answer 12

The individual must sign the contract and execute the purchase deed.

Question 13

Sale by a company (execution) - what is the company required to do?

Answer 13

The company must sign the contract and execute the purchase deed.

Question 14

How does a company which owns property is registered overseas execute a deed?
What must the solicitor check?

Answer 14

If the company which owns the property is registered overseas, the overseas company has to sign the contract and execute the purchase deed.
You must check the person or persons signing has, or have respectively, the authority of the company to sign for that company – you would need to get a legal opinion from a lawyer in that jurisdiction confirming this.
The Proprietorship Register should contain the registered proprietor’s company number. Companies may change their corporate name and will not
necessarily inform the Land Registry each time they do so. However, the company number will remain the same.

Question 15

A companies search is carried out on the seller prior to exchange of contracts on the seller.
What does the search check for/ ascertain?

Answer 15

The search is against the registered proprietor’s company number and will ascertain the
correct and current name and address of the registered proprietor, to ensure that this matches with the company purporting to sell the property.
Additionally, the company search will check that:
a) the company has been registered and still exists; and
b) the company is not subject to winding up proceedings.
A company formed under the Companies Act 2006 (‘CA 2006’) has an implied
power to sell property unless the company has restricted this in its Articles.
The vast majority of companies formed prior to the commencement of CA
2006 will also have power to sell property, but you should check that their
objects (found in their Memorandum) do give the company such power.
If the company selling is an overseas company, you would ask a lawyer
registered in that jurisdiction to carry out similar checks

Question 16

What Act gives companies the implied power to sell property?

Answer 16

Companies Act 2006 unless restricted in it’s Articles.
The vast majority of companies formed prior to the commencement of CA 2006 will also have the power to sell property, but you should check that their objects (found in their Memorandum) do give the company such powers.

Question 17

Sale by Limited Liability Partnerships - (execution) - what is the LLP required to do?

Answer 17

The LLP must execute the contract and purchase deed. It will need to executed by two members and a witness.

Question 18

How can you hold property as joint/ co-owners?

Answer 18

Where the property is owned by more than one owner, the legal estate must be held by the owners as joint tenants, but the owners can choose to hold the
beneficial interest either as joint tenants (or as tenants in common.
Joint tenants have an equal share.
If the joint owners owned the property as beneficial joint tenants and one of the joint owners dies, then the deceased’s legal and beneficial interest in the
property will pass automatically to the survivor(s).

Tenants in common - (think commoners, stingy, so have taken separate shares) However, if the joint owners owned the property as beneficial tenants in common and one of the joint owners dies, then whilst the legal estate in the property will pass automatically to the survivor(s), the deceased’s beneficial interest in the property will pass via the deceased’s will or, if the deceased does not have a will, according to the rules of intestacy.

Question 19

Why would the law step in to sever a joint tenancy?

Answer 19

One of the owners is declared insolvent (if the joint owner is a company) or declared bankrupt (if the joint owner is an individual). The difference between the two is relevant if one of the joint owners has died, or if the joint owners are companies, if one of the companies has been wound up.

Question 20

What does Section 20 Partnership Act 1890 say?

Answer 20

The land owned by partners in a partnership is held on trust for the partnership. There is a (rebuttable) common law presumption that partnership property is held by the partners as tenants in common (because survivorship holds no place in business).

Question 21

When can a company hold property on trust?

Answer 21

If it has the constitutional power to do so. The position is the same for an LLP. If two LLPs or two companies own the property for business purposes, they will be partners so, by analogy, the presumption they hold as tenants in common will apply.

Question 22

How can you tell from the Proprietorship Register whether the registered proprietors are beneficial tenants in common?

Answer 22

For both business tenants in common and individual tenants in common, the Land Registry places a “Restriction” on the Proprietorship Register if the
owners have chosen to be tenants in common.

Question 23

Why does a lender put a Restriction on the Proprietorship Register?

Answer 23

To prevent any dealings with the land (e.g lease being registered) without it’s consent.

Question 24

How can you tell from the Proprietorship Register whether the registered
proprietors are beneficial joint tenants?

Answer 24

If they are joint owners, but no tenant in common Restriction appears on Proprietorship Register, then the joint owners hold both the legal and beneficial interest in the property as as joint tenants.

Question 25

Tenants in common:
What happens when you want to sell and there are more than one surviving individual tenant in common.

Evidence required

Answer 25

All of the surviving tenants in common must execute the contract and purchase deed. As there is more than one surviving tenant in common, there are still at least two trustees. Therefore, the beneficial interest in
the deceased tenant in common’s interest will be overreached when the purchase monies are paid to the surviving tenants in common.

Evidence required by the Land Registry (when registering a purchase of land from more than one surviving tenant in common) will be an official
or certified copy of the death certificate(s) of the deceased tenant(s) in common (to confirm the death(s))

Question 26

What happens when you want to sell and there are more than one surviving individual tenant in common.

Evidence required

Answer 26

All of the surviving tenants in common must execute the contract and purchase deed. As there is more than one surviving tenant in common, there are still at least two trustees. Therefore, the beneficial interest in
the deceased tenant in common’s interest will be overreached when the purchase monies are paid to the surviving tenants in common.

Evidence required by the Land Registry (when registering a purchase of land from more than one surviving tenant in common) will be an official
or certified copy of the death certificate(s) of the deceased tenant(s) in common (to confirm the death(s))

Question 27

What happens when you want to sell and there is only one surviving individual tenant in common.

Evidence

Answer 27

Legally, ownership vests in the surviving tenant in common by survivorship, because legally all co-owners hold the property as joint tenants.
Beneficially, the deceased tenant(s) in common’s interest needs to be overreached by the appointment of a second trustee and payment of the purchase monies to the trustee and the one surviving tenant in common.

The trustee is appointed by means of a deed of appointment and usually the seller’s solicitor will be appointed and act as this second trustee.
Both the trustee and the one surviving tenant in common will need to execute the contract and the purchase deed.
Evidence required by the Land Registry (when registering a purchase of
land from only one surviving tenant in common):
 an official or certified copy of the death certificate(s) of the deceased tenant(s) in common (to confirm the death(s)); and
 the deed of appointment of the second trustee (whose name
will appear on the purchase deed along with that of the one surviving tenant in common).

Question 28

More than one surviving joint tenant

Evidence

Answer 28

All of the surviving joint tenants must execute the contract and purchase deed. Legal and beneficial ownership vests in the surviving joint tenants
under the doctrine of survivorship.

Evidence required by the Land Registry (when registering a purchase of
land from more than one surviving joint tenant):
 an official or certified copy of the death certificate of the
deceased joint tenant(s) (to confirm the death(s)).

Question 29

Only one surviving joint tenant

Evidence

Answer 29

The surviving joint tenant must execute the contract and purchase deed. Legal and beneficial ownership vests in the surviving joint tenant under the doctrine of survivorship.
 Evidence required by the Land Registry (when registering a purchase of land from the surviving joint tenant) will be an official or certified copy of the death certificate of the deceased joint tenant(s) (to confirm the death(s))

Question 30

Where do tenants in common record their contributions to purchase

Answer 30

Separate declaration of trust ( deed of trust/ trust deed)

Question 31

What is the liability of co-owners who enter into a joint mortgage

Answer 31

Joint and several liability - each co-owner is fully liable for the outstanding mortgage

Question 32

What is involved in a transfer of equity.

With and without a mortgage

Answer 32

if co-owners no longer wish to co-own property then they sell it, the property is transferred to remaining co-owner.
If mortgaged, the mortgage would have to consent to the transfer of equity. The mortgagee would need to be joined in the transfer deed so that outgoing co-owner is released from their covenants under the mortgage. Mortgagee needs to consent and the remaining co-owner will then covenant with the mortaggee and they become solely responsible.

Question 33

In the event that the co-owners cannot agree either a sale, or a transfer of equity, what option does the law provide.

Answer 33

Section 14 Trusts of Land and Appointment of Trustees Act 1996 (‘TOLATA’) enables a trustee of land or any person with an interest in the property to apply to the court to order a proposed course of action – e.g. a sale

Section 15 TOLATA provides guidance for the court on matters it must
consider when determining an application under s.14 which includes
considering:
a) the intention of the person(s) who created the trust;
b) the purpose(s) for which the property subject to the trust is held;
c) the welfare of any minor who occupies or might reasonably be expected
to occupy any land subject to the trust as his home; and
d) the interests of any secured creditor of any beneficiary.

The court has power to order sale of property held by trustees where the
original purpose of the trust has come to an end.

Question 34

Explain the case of Re Buchanan-Wollaston’s Conveyance [1939] Ch 217,

Answer 34

There was a joint purchase of land by four parties for the purpose of preventing development of land and keep it as open space. One party applied for an
order for sale. The court would not order the sale because the purpose for which the land had been bought was still being satisfied by retention of the
property.

Question 35

In Jones v Challenger [1961] 1QB 176 CA

Answer 35

A husband and wife co-owned property. The wife left the home and the husband remained in the former
matrimonial home. The couple subsequently divorced. The court ordered a sale as the purpose of the trust (using the property for a matrimonial home) had ended. This would also apply to co-owners who were not married if the purpose for the purchase was to live together.

Question 36

What is a Personal Representative responsible for?

Answer 36

For administering the estate of an individual who has died.

Question 37

Where does the PRs power to deal with the estate come from?

Answer 37

The PR will normally be appointed in the will of the deceased, but a PR’s power to deal with the estate of the deceased comes from the Grant of Representation, which is issued by the Probate Service.

Question 38

What does a buyer need to see when acquiring a good title from someone who has died?

Answer 38

Official copy of Grant of Representation - ensuring they have actually been appointed as PR.
Don’t need death certificate.

Question 39

What does a PR have to execute when selling a property?

Answer 39

Sign the contract and execute the purchase deed.

Question 40

Explain the PR exception to overreaching?

Answer 40

The payment of monies to a sole PR overreaches all beneficial interests. This is an exception to the general rule that to overreach beneficial interests, the monies on sale have to be paid to two trustees.

Evidence required by the Land Registry will be an official or certified copy of the Grant of Representation.

Question 41

Charges Register: Sets out any third party rights which burden the property.
Explain the interest which will bind a buyer of registered freehold land (s.29(2) LRA 2002):

Answer 41

a) interests registered on the Charges Register; and
b) interests overriding registered dispositions – a list is set out in
Schedule 3 LRA 2002 (but note that there are also some overriding
interests contained in the Transitional Provisions in Schedule 12 of the
LRA 2002). (These overriding interests are discussed at paragraph 6
below.)

Question 42

What is a Mortgage

How is it created

Answer 42

Deed
Mortgage needs to be registered
Mortgage protected by two entries on the register.
Then most lenders will place a restriction will be places on the register.

Question 43

How does a buyer know the seller’s mortgage has been discharged?

Answer 43

The Land Registry will require a proof of discharge from the seller’s mortgage lender.

Question 44

Difference between the lenders consent on the sale of part or the sale of whole?

Answer 44

The sale of whole - no consent needed
The sale of part - the lenders consent is needed for a sale of part because the sellers mortgage will remain in place over the remainder of the property.

Question 45

How are restrictive covenants protected on the Charges Register

Answer 45

Fully set out in the register
By reference to a document filed at the Land Registry
Provided the criteria laid down in Tulk v Moxhay are complied with, the burden of correctly registered restrictive covenants run with the burdened land and will therefore bind the purchasers of the burdened land once they own it.
(See s.79 LPA 1925)
s.78 LPA 1925, the benefit of the covenant attached to the benefited land and passes to whoever for the time being owns the land with the benefit.

Question 46

How does a buyer’s solicitor identify issues when reviewing restrictive covenants on the Charges Register?

Answer 46

 check whether there have been any past breaches of the covenant which are continuing as the buyer will be liable.
 check whether any of the buyer’s proposed plans for the property will constitute possible breaches of the covenant in the future as the buyer will be liable for any future breach(es).

Question 47

What should the buyers solicitor ask the seller’s solicitor if there have been past breaches?
What evidence does the sellers solicitor produce?

Answer 47

The first step is for the buyer’s solicitor to ask the seller’s solicitor to confirm whether or not the consent of the PWB was obtained prior to “breaching” the covenant as, if it was, then there would not actually have been any breach at all.
The seller’s solicitor should provide a copy of the PWB’s consent prior to exchange of contracts. If the PWB’s consent was not obtained by the seller before they breached the covenant, then this is an issue that must be addressed (a clause in the contract may be necessary) or the buyer will inherit liability for the breach on completion of their purchase.
The buyer’s solicitors should first ask the seller’s solicitors to obtain restrictive covenant insurance.

Question 48

What if there have been previous past breaches of a restrictive covenant and insurance is not available at all costs?

Answer 48

The seller approaches the PWB for retrospective consent.
This is likely to come at a charge.
They should not be approaches as first option because this would tip off the PWB.
If the PWB cannot be found, or is being unreasonable, then the third and final option is to apply to the Upper Tribunal (Land Chamber) under s.84 Law of Property Act 1925 - time consuming and expensive. Impractical option.

Question 49

What do you do if your client (the buyer) intends to carry out a future breach?

Answer 49

First advise them to obtain a quote for a restrictive covenant insurance policy.
If the insurance is too expensive the PWB should be approached to request a release of the covenant, in consideration for which PWB will usually ask for a payment as well as it’s legal fees.
The Upper Tribunal is the last and least attractive, option due to the problems.

Question 50

Remedies for breach of a restrictive covenant?

Answer 50

1) Right to obtain an injunction against a breach of a restrictive covenant will pass to any PWB. This is a discretionary remedy.
2) a prohibitory injunction which requires a party to stop a particular act; or 

3) a mandatory injunction requiring a party to perform a specified act; or 
4) an interim injunction which prevents the person in breach from taking any further steps in connection with the works they are doing.

The longer the breach, the less likely an injunction will be awarded.

The court has the power to grant damages in lieu of an injunction under the Supreme Court Act 1981

Question 51

Restrictive covenant breach.

When is the court more likely to award damages (4 things)

Answer 51

is small; 
is capable of being estimated in money; 
can be adequately compensated by a small money payment; and 
it would be oppressive to the developer to award an injunction.
SEAD

If an applicant has delayed bringing proceedings and, in doing so, lost the right to obtain an injunction, the right to damages will also be lost because damages are awarded in lieu of an injunction.

Question 52

If a firm is advising a client on the merits of acquiring a particular insurance policy or arranging an insurance policy for a client, the firm must ensure it does not breach what?

Answer 52

s.19(1) Financial Services and Markets Act 2000 (“FSMA”) which prohibits the carrying out of a regulated activity unless you are authorised (directly by the Prudential Regulation Authority or the Financial Conduct Authority, or indirectly by the SRA) or exempt.

A “regulated activity” (defined in s.22 FSMA) is a “specified activity” in relation to a “specified investment”.

Insurance policies and certain mortgage contracts (“regulated mortgage contracts”, as defined in FSMA) are both examples of specified investments. Arranging or advising a client on the merits of acquiring/investing in a particular insurance policy or regulated mortgage contract are both examples of specified activities in respect of specified investments which are caught by s.19(1) FSMA.

Question 53

Why do Positive covenants not run with the land?

Answer 53

it is deemed inequitable to require someone to incur expense in complying with a covenant to which they were not originally a party.

Question 54

Do positive covenants appear on the Land Registry Title?

When and why?

Answer 54

Technically speaking it is deemed inequitable for positive covenants to run with the land, such covenants should not appear on the Charges Register, although in practice the Land Registry will put them on.
This is because it is possible for a subsequent buyer of the land to become contractually bound to observe the positive covenant if the buyer promises its seller that it will comply with the positive covenant when it buys the land

Question 55

What is an indemnity covenant?

Answer 55

A seller who will remain liable in respect of a positive covenant (e.g. because he was the original covenantor or because he promised to comply with the covenant when he bought the property), will make sure that they request this promise to comply with the covenant from the new buyer of the property. These promises are known as “indemnity covenants” because the buyer will also agree to indemnify the seller (i.e. cover any costs) if the seller suffers any loss as a result of the buyer’s breach of covenant. So although the burden of positive covenants does not run with the burdened land, positive covenants can bind buyers contractually through a chain of indemnity covenants.

Question 56

Where do you find out on the register if there is an indemnity covenant?

Answer 56

Proprietorship register

Question 57

If the seller gave an indemnity covenant upon purchase of the land ….

Answer 57

the buyer must also given an indemnity covenant to the seller at completion (SCPC 7.6.5)

Question 58

When the buyer will be contractually bound by a positive covenant due to an indemnity covenant, then what should the buyers solicitor check for?
and what steps should be taken to remedy?

Answer 58

1) continuing past breaches of the positive covenant;
Remedied by the seller taking action to perform the covenant prior to completion of the purchase. (Buyer can put a condition on the contract to require the seller to remedy the breach or by a price reduction of the amount necessary to spend remedying the sellers breach)
2) intended future breaches by the buyer

If past breach not remedies of it there is an intended future breach - Option Insurance and consent/ release from PWB. But no Upper tribunal is available.

Question 59

Unregistered rights: which burden the property - where can you find the list of unregistered which override on a sale of registered land.

Answer 59

Schedule 3 of the Land Registration Act 2002 (‘LRA 2002’) lists the unregistered interests which will override on a sale of registered land.
A limited number of further overriding interests are set out in Schedule 12 of the LRA 2002

Question 60

Name three commonly encountered overriding interests –

Answer 60

easements, leases and the interests of persons in actual occupation.

Question 61

Unregistered: Where it is discovered that the burden of an easement and/ or lease exists and/ or non-owners are in actual occupation what should the buyers solicitor do?

Answer 61

The buyers solicitor will need to ascertain whether the interest will bind the purchaser when It buys the land even though it is not registered in the Charges Register of the property.

Question 62

How can a legal easement arise

Answer 62

Through prescription, necessity, implication or the rule in Wheeldon v Burrows
They are overriding on a sale of registered land

Question 63

If an easement is created by a deed, where should be registered ?
If it is not registered there - what happens.
Exceptions

Answer 63

Charges Register of the servient land.
The easement will merely be equitable and will not override.
Exception: equitable easement may overiride if it was created before the LRA 2002 came into force. - the old defention of an overriding interest will apply Celsteel limited v Alton House holdings Limited

Question 64

What type of unregistered lease is overriding?

Exceptions

Answer 64

Leases of not more than seven years will be overriding.
Exception: Paragraph 12 of Schedule 12 of the LRA 2002 states that where a lease was granted prior to 13 October 2003, it will be subject to the old definition of an overriding interest (as per s.70(1)(k) LRA 1925). This provided that leases of not more than 21 years will be overriding.

Question 65

Unregistered interest: Are Interest of persons in actual occupation overriding.

Answer 65

Paragraph 2 of Schedule 3 of the LRA 2002 provides that the interests of persons in actual occupation will be overriding. By this it means a beneficial interest of a non-owning occupier.

Question 66

If there are non-owning occupiers, which does the buyer require the occupier to do?

Answer 66

If there are non-owning occupiers, the buyer will require the occupier to sign a document waiving any possible interest in the property and agreeing to vacate the property on or before completion of the purchase.
The non-owning occupier should obtain independent legal advice prior to signing the waiver, confirming that they understand the nature and effect of doing so.

Question 67

When the buyers solicitor reports to client on the resulst of its title investigation and searches and enquires, what must the client be made aware of?

Answer 67

The extent of the investigation carried out and in particular any limitations on this or matters which were not covered.

Question 68

What code are solicitor bound by and what does it contain?

Answer 68

Solicitors are bound by the SRA Code of Conduct 2011 (the ‘Code’) which contains both principles and mandatory outcomes. Outcome (4.2) of the Code requires you to ensure that the client is made aware of all information of which you have personal knowledge which is material to your retainer. By fully reporting to your client (i.e. in respect of the material facts and issues, the implications of those issues and the range of solutions available), you will also achieve Outcome (1.12) of the Code, which requires that clients are in a position to make informed decisions about the options available to them.