Property (Title Investigation) Flashcards
What is deducing title in the context of registered land?
Deducing Title involves the seller’s solicitor gathering title documents to verify the seller’s entitlement to sell the property and sending them to the buyer’s solicitor.
What documents are included in the deducing title process?
- Land Registry Official Copies
- Land Registry title plan
- Copies of documents referred to in the register.
What are the three registers that appear in the official copies of registered land?
- Property Register
- Proprietorship Register
- Charges Register
What does the Property Register show?
It describes the property and rights benefitting the property
For example, benefit of an easement
What does the proprietorship register show?
It gives the registered proprietor’s name and address, class of titles and entries affecting ownership
For example, absolute title.
What does the charges register show?
It lists rights burdening the property
For example, burden of a morgage or covenant
What is the purpose of investigating title?
The buyer’s solicitor investigates the registered title to
* Check the seller’s legal right to sell
* Ensure the property is adequate for its intended use
* Confirm there are no title defects affecting value.
What does the Property Register describe?
- Whether the property is freehold or leasehold
- Describes the property by address and reference to the title plan
- Shows the size and location of the land.
What types of rights can be associated with a property according to the Property Register?
The property register concerns benefitting rights
- Rights of way
- Rights to run services
- Rights to light
- Excluded Rights
What must be checked regarding a property with the benefit of a right of way?
- Registration of the burden (is it registered against land over which the right passes?)
- Adequacy of the right of way (is it legally and physically adequate?)
- Maintenance obligations (Inspect to assess condition)
- Whether the highway is adopted (Is it adopted by the council or will it need private funding?)
What are the classes of title in the Proprietorship Register?
- Title Absolute (best title)
- Possessory Title
- Qualified Title
- Good Leasehold Title.
What is Title Absolute?
(Freehold or Leasehold)
The best title. No issues.
The proprietor has satisfied that it is the true and proper owner of the property.
What is Possessory Title (Freehold or Leasehold)?
Granted when the registered proprietor shows that they have physical possession but has no title deeds, or is claiming through adverse possession
What is Qualified Title?
(Freehold or Leasehold)
Where there is a specific defect in the title.
For example, where a deed known to contain a covenant was missing on first registration.
What is Good Leasehold Title? (Leasehold Only)
Granted where the leaseholder cannot provide evidence of the landlord’s title to the land.
It is often upgraded if the landlord’s title has been registered since the grant of the lease.
What actions are needed if the property has qualified, possessory, or good leasehold title?
The buyer’s solicitor should
* Report to the client
* Check mortgage lender requirements
* Consider obtaining title indemnity insurance
* Explore the possibility of upgrading to title absolute (e.g. try finding the missing document)
Who is usually the registered proprietor of a property?
The seller is usually the registered proprietor, except when the seller is the executor of a deceased person’s estate.
What is required for co-ownership in registered land?
Hint: Who must sign the contract?
The buyer’s solicitor needs to satisfy the Land Registry that both legal and beneficial title has passed to the buyer
All living co-owners must sign the contract and transfer deed.
What if the Land Registry are notified that owners hold the beneficial interest as tenants in common?
Land Registry will add a restriction to the proprietorship register
“RESTRICTION: no disposition by a sole proprietor of the registered estate under which capital money arises is to be registered unless authorised by an order of the court..”
If you see this, you know it is a tenancy in common!!!!
What doers the following restriction mean?
“RESTRICTION: no disposition by a sole proprietor of the registered estate under which capital money arises is to be registered unless authorised by an order of the court..”
Tenancy in Common
What happens to the legal title upon the death of a joint proprietor?
- Survivorship operates
- Surviving joint proprietor to take legal title
- The Land Registry will register them as the sole legal owner.
What is the impact of death on the beneficial title for joint tenants?
- Survivorship operates
- The surviving joint tenant can take beneficial title without restriction against the register.
What must happen if a beneficial tenant in common dies?
- The surviving tenant in common only takes their share
- If a surviving beneficial tenant in common is selling the property, they will need to appoint a second trustee (often their solicitor) to sign the contract and execute the transfer deed.
- They should also provide a certified copy of the deceased tenant in common death certificate. The requirement of a second trustee is due to overreaching.
If there are two people who own a property as tenants in common, hiw many people are needed to sell the property?
The surviving beneficial tenant in common will need to appoint a second trustee
This is due to overeaching
What does the Charges Register list?
It lists interests burdening the property, including mortgages, easements, leases and covenants.
What are the requirements for a legal mortgage?
- Created by deed
- Entered into the Charges Register
… without this, a buyer takes the property free of mortgage.
Where will you find a burden of a morgage in the official copies?
It will usually appear in both the proprietorship register, and charges registrer
“RESTRICTION:… no disposition by the proprietor of the land is to be registered without the consent of the proprietor of the charge dated…. In favour of [Redminster Bank] ….”
Charges register:
“REGISTERED CHARGE:….. to secure the monies including the further advances therein mentioned…. PROPRIETOR: Redminster Bank….”
What should a buyer ensure regarding mortgages when purchasing property?
Usually, the parties intend to sell free of mortgage, but the buyer needs to be certain this will happen:
- Check that the seller will have sufficient funds to clear the mortgage
- Ensure it is a term of the contract that the mortgage will be redeemed
- Obtain an undertaking from the seller’s solicitor.
What does it mean if a covenant appears on the charges register?
The property has the burden of the covenant. Covenants may be restrictive, positive or unknown.
If there is a restrictive covenant on the charges register, what does this mean?
You can assume they are binding on the property.
Example: “… contains a covenant with intent to bind the land on the part of the Purchaser his heirs and assigns with the Vendor its heirs executors administers and assigns not to make any external alterations to the premises without written consent…”
What if, as a buyer, there is a covenant in the proprietorship register stating that they will “observe and perform the covenants referred to in the Charges Register and of indemnity in respect thereof.’ - what must the buyer do?
The buyer will need to give the seller an indemnity covenant at completion if the Standard Commercial Property Conditions are incorporated into the contract.
What are positive covenants and their implications?
Positive covenants are not necessarily binding
The first step is to examine whether the covenant affects the property by considering whether there is a chain of indemnity
If a positive covenant is breached, the general owner can still be sued. However the chain only goes as far as the last person to give an indemnity covenant.
Have a look if the following appeats in the propriotorship register: “The transfer to the proprietors contains a covenant to observe and perform the covenants referred to in the charges register and of indemnity in respect thereof…” = if so, the positive covenant is binding
What does this entry in the proprietorship regsiter mean?
“The transfer to the proprietors contains a covenant to observe and perform the covenants referred to in the charges register and of indemnity in respect thereof…”
Positive covenants burdening the land are binding
What are unknown covenants?
The register contains a covenant but neither the original conveyance nor a certified copy or examined extract was produced on first registration.
Unknown covenants may require the buyer’s solicitor to take out indemnity insurance and report to the buyer and lender.
The land’s current use is in breach of a covenant, but no objection has been received - what should the buyer do?
Obtain an indemnity insurance policy at the seller’s expense.
If this is refused, approach the person with the benefit for consent to breach the covenant (PWB).
It is posisble to make an application to the Upper Tribunal to discharge the covenant. However, this is expensive and should be avoided. Further,the UT is not available for positive covenants
The buyer’s proposed use of land would breach a covenant and the land hasn’t been used in breach of it in the past - what should the buyer do?
Obtain an Insurance Quote
The PWB should not be approached prior to an insurance quote being obtained as once the PWB is approached insurance will not be available.
Alternatively, for a negative covenant, you could go to the Upper Tribunal for discharge. However, the Upper Tribunal is not available for positive covenants
What triggers Compulsory First Registration (CFR) for unregistered land?
CFR is triggered on dealings with the property such as sales or gifts
Unregistered land must be registered upon sale (1994) or gift (1998).
What does deducing title in unregistered land involve?
It requires examination of a bundle of deeds and identifying relevant deeds to create an epitome of title.
The most important document is the root of title.
What is the root of title?
It is a deed that proves title, meeting specific criteria such as
- Dated more than 15 years ago
- Deals with both legal and beneficial title
- Adequately describes extent of land being conveyed
- Does not cast doubt on the seller’s title.
What documents are needed for deducing title in unregistered land?
- Power of Attorney under which Root of Title or Deed was executed under
- Death certificate or grant of representation
- Mortgage deeds created after the root of title.
What must a buyer’s solicitor check when investigating unregistered title?
They must check the
* Root of title
* Completeness of the chain of ownership,
* Extent of the land
* Rights benefitting/burdening the property.
What search should the buyers solicitor carry out prior to starting the process of purchasing unregistered land?
Index map search (SIM)
This will reveal…
* Any registered titles within the boundary
* Pending applications
* Caution against first registration
What search should you do if the unregistered land you are buying benefits from a right of way granted over neighbouring property?
SIM Search to check whether the neighbouring land is registered.
What requirments must be met for deeds forming the chain of title?
They each must be validly executed ….
- Pre 31 July 1990: signed, sealed, delivered - Sealed with was or paper disc.
- Post 31 July 1990: Signed and Delivered. No requrment for a seal.
They must be stamped (Stamp Duty)
- For both, each conveyance must have been stamped showing the correct amount of proportionate value stamp duty has been paid.
- If exempt from stamp duty, there should be a certificate of value for those conveyances post 1931, they should have “Particulars Delivered” stamp.
- If stamp is missing, the buyer solicitor should insist the seller pays the outstanding stamp duty with proof.
How do we deal with co-ownership in unregistered land?
Assume the seller who is a surviving co-owner was a beneficial joint tenant if…
- The conveyance states that the seller is beneficially entitled to the whole;
- There is no memorandum of severance
- There is no bankruptcy order or petition registered against the seller.
- If so, the buyer’s solicitor should ask for certified death certificates
If the above are not met, the seller should be treated as a surviving tenant in common - ask for a second trustee to be appointed in the conveyance to overreach the beneficial interest.
When will a morgage bind unregistered land?
The mortgage deed should be listed on the epitome of title.
If the mortgage has been discharged, there should be a vacating receipt.
A first legal mortgage is not a registrable as a land charge. However, a second or third (pusine) mortgage can be protected by a c(i) land charge.
When will a covenant bind unregistered land?
Restrictive covenants will only bind unregistered land if the burden is registered as a d(ii) land charge.
Positive covenants only bind unregistered land if there is a chain of indemnity.
When will an eastment bind unregistered land?
Legal easements are not registrable by land charge. These should be apparent from the epitome of title or inspection.
Equable easements are registrable as d(iii) land charges.
When will a lease bind unregistered land?
Leases that are still in force on unregistered land are not required to be registered but must be included in the epitome of title
When dealing with unregistered land, how do we find land charges?
Search of the Land Charges Department registers.
The search is by years of ownership and name and should be carried out against each owner of the land in the chain of title.
