Property (Freehold) - Pre-contract investigation of registered title (3) Flashcards
What is an overview of the title investigation procedure of registered land?
Investigation of Registered Title: Both parties will investigate title pre-contract, to inform the draft contract and reveal certain burdens over the land. If the land or lease is registered, this will be the registered title.
(1) Seller: Seller’s solicitor investigates title to draft contract (to identify burdens that must be disclosed).
(2) Buyer: Buyer’s solicitor ensures seller can sell, identifies burdens, and may need to give details to lender.
>Overriding interests will not appear - these are found in searches and enquiries.
How is title deduced?
Deducing Title: The seller has an obligation to deduce proof of title to a prospective purchaser prior to exchange.
(1) Proof of Title: The seller provides the ‘Official Copies’ (title registers) and ‘Title Plan’ (map) at their own expense.
(2) Age of Copies: These copies must be less than 6 months old.
What can be found on the property register of the official copies?
Property Register: The Property Register records descriptions and rights of legal title to the land.
(1) Title Plan: Reference to a map demarcating the land under the title (guaranteed by the state).
(2) Type of Property: Whether the title is freehold or leasehold.
(3) Rights: Rights benefiting the land (and any corresponding burdens).
(4) Deprivations/Reservations: Deprivations/reservations of the land (i.e. to light or mines and minerals).
What generally can be found on the official copies?
Overview
The Official Copies: The Official Copies contain the title number, latest search date, and three registers of title.
What information can be found in the proprietorship register of the official copies?
Proprietorship Register: The Proprietorship Register records ownership and class of title.
(1) Ownership: The registered owner of the property (maximum four).
>Individual (Full Name and Address); Company/LLP (Full Name, Reg Number, and Office).
(2) Class of Title: The Class of Title (guaranteed by the state). Affects lending/security, but can be upgraded.
Absolute: Owner has full ownership subject to registered interests, trusts, and overriding interests.
Possessory: (As above) + any rights that existed on first registration (deeds were lost).
Qualified: Title has a specific defect which could not be remedied at time of registration.
Good Leasehold: Leaseholder could not provide absolute freehold title on registration.
(3) Purchase Price: Purchase price of property (since 1 April 2000).
(4) Indemnity Covenants: Indemnity covenants given by buyer to seller for both positive and restrictive covenants.
(5) Restrictions on Sale: Restrictions on right to sell (co-ownership/trusts, or subject to mortgage).
What information can be found on the charges register of the official copies?
Charges Register: The Charges Register records the majority of rights burdening the land.
(1) Registrable Dispositions: Legal rights requiring registration, such as: a) leases exceeding 7 years; b) legal charges (in two entries); c) express legal easements/profits.
(2) Minor Interests/IAREs: Equitable rights requiring registration, such as: a) contracts of exchange; b) marital home rights; c) equitable easements/profits; d) covenants; e) equitable leases.
What are mines and mineral rights?
Mines and Minerals: The Property Register may ‘except’ registration of, or ‘reserve’ right to, mines and minerals on the land.
(1) Wording: There is excepted from the registration the mines and minerals underneath the property together with ancillary powers of working thereof.
>Excepted: Seller does not own the mines and minerals.
>Reserved: Original seller has sole right to access and use mines and minerals.
(2) Effect: Purchaser would be liable for trespass on any mine, and land is prone to subsidence (see S+Es).
What are personal rights of land and air?
Light and Air: The Property Register may ‘declare’ a deprivation of the land’s right to light and air.
(1) Wording: It is hereby agreed and declared that the Purchaser shall not be or become entitled to any easement or any right of light or air which would restrict or interfere with the free use of the Vendor’s retained property for building or any other purpose.
(2) Effect: Purchaser would be restricted from developing land in a way that restricts rights of neighbouring land.
What is co-ownership?
Co-Ownership: The Proprietorship Register may indicate the land is co-owned in equity.
(1) Wording (TiC): No disposition by a sole proprietor of the registered estate (except a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court.
(2) Effect: Purchaser may have to overreach the interest in equity if there is only one legal owner, by having a second legal owner appointed. Common where an original legal co-owner has died, to overreach estate.
(3) Unilateral Sale: A unilateral sale is possible on death of an original co-owner if owned as joint tenants in equity, by providing death certificate. If TiC, a second trustee is required (in contract of sale/separate deed of appointment).
How are mortgages investiagted?
Mortgages: Both the Proprietorship and the Charges register may indicate that the land is subject to a mortgage.
(1) Charges: Two entries: a) date of creation; b) identity of lender.
(2) Proprietorship: There may be a restriction requiring lender’s permission to sell the land.
(3) Effect: Seller must undertake to discharge the mortgage on completion.
How are easements investigated?
Easements: Easements may appear in the Property or Charges Register.
(1) Property: Easements that benefit the land (plus any corresponding burdens).
(2) Charges: Easements that burden the land.
(3) Effect: A survey of the condition of easements should be conducted. Purchases can wholly accept or wholly reject easements with corresponding burdens.
How are positive covenants investigated?
Positive Covenants: The Charges Register may note positive covenants over the land. These may be in the Property Register if tied to a benefiting easement. These are covenants that oblige the landowner to make expenditure (i.e. repairing a fence).
(1) Effect: Positive covenants do not run with the land, and the original covenantor remains subject (unless subject to mutual benefit-burden).
(2) Indemnity Covenant: The purchaser will typically be required to enter an indemnity covenant in the Proprietorship Register, in order to indemnify the original covenantor for breach. This ensures compliance.
Wording: The transfer to the proprietor contains a covenant to observe and perform the covenants referred to in the Charges Register and of indemnity in respect thereof.
How are restrictive covenants investigated?
Restrictive Covenant: The Charges Register may note restrictive covenants over the land. These are covenants that restrict the landowner from certain actions (i.e. developing the land).
(1) Effect: Restrictive covenants run with the land, so will bind the purchaser (but original parties are also bound).
(2) Solutions: Purchasers may attempt to bypass restrictive covenants, especially if obsolete.
Negotiate: Negotiate release with the benefitting land (may alert them).
Insurance: Insure against breach (do not alert owner first or at all). Best option.
Upper Tribunal: Upper Tribunal of Lands Chamber can remove covenant if obsolete/unused, confers no public benefit, and compensable by money - expensive option (s84 LPA).
How are unknown covenants investigated?
Unknown Covenants: The Charges Register may refer to an unknown covenant (a covenant that existed on first registration but the details of which are unknown).
(1) Wording: A conveyance of the land dated [date] contains covenants but neither the original conveyance nor a certified copy or examined abstract thereof was produced on first registration.
(2) Effect: Purchasers should presume the covenant is restrictive and binding, and seek a solution (same as above).
How are registered leases investigated?
Registered Leases: The Charges Register may refer to leases that bind the land, meaning leases that exceeded seven years on creation or assignment.
(1) Registered Effect: Purchasers are subject to registered leases, but may be able to negotiate.
(2) Unregistered Effect: Leases less than seven years old will bind the land as an overriding objective or, otherwise, may bind the land if evidence of ‘actual occupation’ exists on purchase (see S+Es).
