Property (Freehold) - Pre-contract unregistered title investigation (4) Flashcards
Roughly what comprises investigation of unregistered title?
Investigation of Unregistered 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 unregistered, this will be the unregistered title deeds.
(1) Seller: Seller’s solicitor investigates title to draft contract (to identify burdens).
(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.
>Land will require registration on completion of purchase.
>Failure to properly advise clients on burdens and suitability of land may amount to negligence.
What pre-contract title searches need to be undertaken?
Pre-Contract Title Search: Once title is established (below), the buyer’s solicitor must make two prudent title searches.
(1) Index Map Search: A search of land to reveal whether the land is already registered under another title.
(2) Pending Caution Search: A search of the Land Registry to determine whether any cautions are lodged pending first registration. The cautioner is given a priority period to register these on registration, binding the land.
>Cautions have their own title number and register.
(3) Triggering Events: A search of existing deeds to determine whether property should have been registered already.
>Seller’s solicitor should have done this already, and registered prior to the sale procedure if necessary.
Which unregistered title documents need to be inspected?
Unregistered Title: Unregistered title refers to the bundle of paper deeds and documents relating to ownership of the property for its entire history.
(1) Bundle Documents: Bundle deeds include conveyances, mortgages, gifts, land charge searches, and assents.
(2) Bundle Holder: The bundle will be held by the landowner, or lender if subject to mortgage.
(3) Deducing Title: The seller must deduce copies of the bundle to the purchaser. They will provide the originals on completion.
>On completion, the copies and the originals must be certified as the same (‘Verification of Title’).
What is the epitome of title?
Epitome of Title: It is inefficient to search every document in the property’s history, so the buyer’s solicitor constructs an ‘epitome of title’ to investigate. This is a schedule of all documents from ‘good root’ to the present day.
How is good root of title identified?
Good Root of Title: Epitomes must begin with a good root of title, a document which meets the statutory criteria (s44 LPA):
(1) Entire Legal and Equitable Interest: The document must deal with or show the entire legal and equitable interest of the land being sold. This will be indicated in two paragraphs.
Legal: Paragraph beginning ‘WHEREAS’, stating seller is ‘seised of the property… for an estate in fee simple and is selling the same to the Purchaser’.
Equitable: Paragraph stating seller sells land as ‘beneficial owner… unto the Purchaser’.
(2) Recognisable Description of Land: Document must contain a recognisable description of the land.
(3) Objective Document: Document must cast no doubt on the seller’s right to title.
(4) 15 Years Old: Document must be at least 15 years old.
Double Guarantee: Conveyances are preferred as the previous purchaser would have gone through the statutory process, providing a ‘double guarantee’ of at 30 years soundness.
>Legal mortgages also do this, but will be less detailed.
>Gifts and assents are unlikely to involve an investigation, so do not provide a double guarantee.
(5) Most Recent: The document must be the most recent qualifying document.
How is the epitome of title investigated?
Constructing Epitome: Once root is established, the epitome is constructed as a schedule of relevant documents from root to present day (previously, solicitors would create abstracts of title, a summary of the documents).
(1) Format: Documents are numbered and listed chronologically on a schedule (with copies attached).
(2) Older Documents: Older documents are ignored, unless a relevant document refers to a right in an older document without detailing its contents (meaning the older document should be sought).
What are discoverable burdens?
Discoverable Burdens: Unregistered land is subject to all legal rights, and equitable rights (other than trusts) registered against a current or former owner at Land Registry. It is important to identify as many as possible.
How is ownership of unregistered land identified?
Chain of Ownership: There should be an unbroken chain of ownership from root of title to seller, clear on each deed. Where an assent is used, grant of probate must be confirmed to ensure land was properly passed.
Why is a description of land needed?
Description of Land: Deeds must be checked to ensure the description of the land is consistent. If not, it may indicate part of the land was sold, and therefore cannot be purchased from the seller.
What are the formalities of execution of a deed?
Formalities of Execution: All deeds must be validly executed to bind the property (s1 LPMPA).
(1) Clear: Must be clear on the face that it is a deed.
(2) Signed: Conveyor must sign the deed (and the receiver if entering an obligation or trust).
(3) Witnesses: Signatures must be attested by a witness who also signs.
(4) Sealed: Deeds preceding August 1990 must be sealed (red seal on document). Otherwise, invalid.
What needs to be done if there is co-ownership of unregistered land?
Co-Ownership: A deed may state that joint owners held the land as joint tenants or tenants in common in equity.
(1) Non-Severance: Purchasers can presume joint ownership in equity was not severed if:
- No Written Memorandum: No written memorandum of severance on the conveyance.
- No Bankruptcy: Neither tenant was subject to bankruptcy proceedings (Land Charges Registry).
- Statement on Transfer: Sale by a surviving joint tenant contained a statement that they were solely and beneficially entitled to the land.
(2) Severance: If land was severed or subject to tenancy-in-common, it is important to ensure it was overreached.
What incumbrances need to be looked out for?
Incumbrances: Deeds should be checked for incumbrances, which should be referred to in each subsequent conveyance as well. If equitable, ensure they were validly registered at the Land Registry.
(1) Easement: Identified by words EXCEPTING AND RESERVING.
>Corresponding burden for an easement identified by the words SUBJECT TO.
(2) Restrictive Covenant: Often appear on conveyances (must be registered).
(3) Positive Covenant and Indemnity: Often appear on conveyances, i.e. THE Purchaser hereby COVENANTS with the Vendor to observe and perform the covenants contained in the Conveyance and shall indemnify the Vendor from and against all action costs proceedings and claims in respect of any future breach thereof (must be registered).
(4) Unknown Covenant: Conveyance may refer to a covenant created in a previous covenant, but without detail, as previous conveyance was lost. Check the Land Charges Department for details (must be registered).
(5) Mines and Minerals: A right to mines and minerals may be reserved, i.e. THE Vendor RESERVES from the mines and minerals underneath the property together with the ancillary powers of working thereof.
(6) Mortgages: Mortgages will appear as their own deed. They are only a concern if not discharged. Discharge appears on the back of a mortgage deed, [Bank] hereby acknowledges to have received from [Borrower] all monies intended to be secured by the written deed.
(7) Leases: Legal non-parole leases are created by deed, so should be located in the epitome.
Why must a land charges search be undertaken
?
Land Charges Search: Equitable incumbrances must be registered against the landowner (at the time) at Land Charges Department in Plymouth.
(1) Land Charges: Common land charges include:
Estate Contract: C(iv).
Restrictive Covenant: D(ii).
Equitable Easement: D(iii).
Spousal Home Right: F.
(2) Search: Searches must be made against the name of any estate owner and lender revealed in the epitome of title and relevant older documents referred to in the epitome. Alternatively, they can rely on previous searches.
Form: Search made on Form K15 against owner/lender for period of ownership. If the period is unclear, search from 1926 onwards, as this is when charges were first created.
>Lenders are not owners and estate charges are not registrable against them, but they may have become owners by virtue of taking possession, so it can be prudent.
