Registered property: title investigation

Question 1

What constitute the title docs for registered land?

Answer 1

• Official copies of the register
• Title plan
• Copies of any docs referred to in the official copies not inc in OCs

Question 2

How does the buyer’s solicitor properly investigate title?

Answer 2

• Checks official copies
• Checks any docs referred to in OCs
• Raises queries with seller’s sol to further investigate
• Check for any unregistered 3rd party interests

Question 3

What constitutes defects in title?

Answer 3

????

Question 4

Name the three sections of the OCs and what they describe.

Answer 4

• Property register: describes property and the rights benefiting it
• Proprietorship register: class of title; owner’s name and address and any entries affecting right of disposal ??…
• Charges register: burdens on the property; third party rights such as mortgages, covenants, leases and easements

Question 5

What are the main rights benefiting a property you’d expect to find on prop reg?

Answer 5

• Right of way
• Right to lay pipes
• Right to light
• No rights reg’d

Question 6

What must you report on to buyer re a right of way?

Answer 6

• Adequacy (how will the buyer use it?)
• Maintenance (costs involved? will either be expressly set out in the extracted right or must be investigated under common law obligation - how usually paid for if at all)
• Adoption (does the LA plan to ‘adopt’ for use as public highway and if so what costs would be incurred to get it to an ‘adoptable’ standard? CON 29)
• Registration (must be reg’d as benefit but moreover as burden on servient land)

Question 7

How do you check to see if a right of way is properly registered against servient land?

Answer 7

Undertake a SIM search to determine if land registered, then check Land Registry to see if burden in charges of that title.

Question 8

When might the right to light be an issue for a developer?

Answer 8

If a right of light has been established then the dominant land is entitled to uninterrupted flow of sufficient light for comfortable use and enjoyment of the building. Thus even if planning permission granted the enforceable right can prevent development as threat of action for nuisance.

Question 9

What is the remedy for obstruction of an easement/ right benefiting the property, and how established?

Answer 9

• Action for nuisance

Claimant must prove: title; scope; and ‘substantial interference’

Question 10

What must be proven for an obstruction of right of way to be actionable?

Answer 10

That the right cannot be substantially and practically exercised as conveniently as before? (Locked gate vs gate case law)

Question 11

What are the four possible classes of title and what are the implications of each?

Answer 11

• Title absolute indicates the proprietor satisfied the LR that they are true and proper owner. Best class of title.

The following will preclude a buyer from borrowing from a mortgage lender to purchase:

• Qualified: ownership est only for ltd period or reservations against title due to missing docs when reg’d.
• Possessory: actual possession or in receipt of rents but has no legal proof.
• Good leasehold: leaseholder cannot provide proof of LL’s title.

Question 12

Who has the right to sell the land? i.e. who can be a registered proprietor?

Who can sell even if not the RP?

Answer 12

• An individual
• A company (inc a Special Purpose Vehicle)
• An LLP
• Joint owners

A bank that has repossessed after default on mortgage.
Or personal representative following death of RP.

Question 13

What act governs the correct execution of a purchase deed?

Answer 13

s.1 Law of Property (Misc) Provisions Act 1989

Question 14

What must an RP do in order to sell?

Answer 14

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

Question 15

What must the buyer’s solicitor do in relation to verifying RP if buying from a company and why?

Answer 15

Carry out a company search at Companies House prior to exchange of contracts. This verifies the company still exists, if the name is the same and if the co is solvent.

Question 16

If more than one owner how must the legal and beneficial interests be formalised?

Answer 16

The legal estate must be held as joint tenants but the beneficial interest can be JT or TIC.

Question 17

What does section 20 of Partnership Act 1890 state about land owned by partnership?

Describe other scenarios (companies and LLPs, and two of each?)

Answer 17

Rebuttable presumption ben int is TIC as law of survivorship does not apply in business. Prop held on trust for partnership.

Co can hold prop on trust as can LLP, if 2 cos or LLPs hold prop together they will be partners and thus hold as TIC.

Question 18

If individuals own as JT what happens on death of one JT to legal and equitable title?

Answer 18

Legal - passes to survivor

Ben - passes to survivor

Question 19

If individuals own as ben tenants in common what happens on death of one to legal and equitable title?

Answer 19

Legal - passes to survivor

Ben - passes via deceased’s will or intestacy

Question 20

How can you tell from Prop’ship Reg if RPs are ben tenants in common?

Answer 20

A ‘restriction’ will be placed in the Prop Reg.

Question 21

In the event of a surviving tenant wanting to sell the land what would they need to do if a TIC restriction is on the Prop’ship Reg - explain why have to do this?

When else might you see a restriction like this?

Answer 21

A ‘sole proprietor’ cannot dispose of the registered estate. Survivorship does not apply in TICs so ben interest does not pass to legal JT. The survivor needs to appoint a second trustee thereby overcoming the restriction.

A lender will put an R on the RP to prevent dealings w/o its consent.

A TIC can arise where a ben JT was first created but one Jtenant becomes bakrupt - either JT can apply to put a TIC restriction on the register.

Question 22

What is the process called by which a beneficial interest, that otherwise would inhibit disposal by remaining tenants, cannot restrict disposal of a property?

Answer 22

The interest is ‘overreached’.

Question 23

What interests bind a buyer per s29(2) LRA 2002?

Answer 23

• Interests registered on the Charges Register.

- Interests overriding registered dispositions - Schedule 3 LRA 2002 and Schedule 12!

Question 24

What must happen in order for a legal mortgage over a reg’d property to be created?

Answer 24

• Must be created by deed.
• Must be reg’d in the charges register (otherwise mortgagee will not obtain a legal interest and 3rd parties will take free of the mortgage)
• Protected by two entries in Charges Register - 1st = date of mortgage deed and reg 2nd = name and address of mortgagee
• will also add restriction to Prop’ship Reg to the effect no disposition can be made w/o their consent

Question 25

What is the abbreviation that describes the original covenantee, their heirs and assigns and why is this significant?

Answer 25

The PWB (or the original party to the covenant). In restrictive covenants the terms will bind any purchaser of the land b/c the RC runs with the land. Thus past breaches can be enforced against new owners, and continuing breaches or future breaches may require the PWB to agree to release or variation of the covenant.

Question 26

The PWB should never be confused with or described as what?

Answer 26

The ‘vendor’.

Question 27

If there is an RC in the charges register that is not fully set out but instead refers to another document, what must the seller’s sol do in order to fully deduce title?

Answer 27

They must not only send OCs, the title plan but also the documents referred to, to the buyer’s solicitor.

Question 28

s.79 LPA 1925 states what?

Answer 28

The burden of RCs will run with the land if correctly registered.

Where a purchaser has actual notice of a restrictive covenant, they will be bound by it

This requirement has now been replaced with a requirement of registration for covenants created after 1925

    Unregistered land – record as a class d(ii) land charge under the Land Charges Act 1972

    Registered land – record as a notice on the charges register of the burdened land

Question 29

What should a buyer do if RC are found on the register to ensure buyer’s interests are protected?

Answer 29

• Check if there are any past breaches which are continuing and which the buyer may at first have desired to continue as the buyer would be liable for breach. (e.g. use as betting shop that breached an RC, buyer wants to continue use as betting shop?)

If past breach will cease upon sale then no liability.

Check if proposed plans might constitute a future breach.

Question 30

Discuss the steps required to resolve potential issues with RC past breach that will continue post sale.

Answer 30

• Buyer’s sol ask seller’s sol if consent was obtained from PWB prior to ‘breach’. If so no breach has occurred. Seller provides evidence.
• If PWB consent not obtained: buyer sol asks seller’s sol to obtain RC insurance.
  One off premium and covers both buyer and buyer’s successors in title. Buyer insists seller pays premium argues ‘title defective’.
• If breach too recent or cov not v old insurance may not be available. Seller approaches PWB for retrospective consent. H/e cannot do this before seeking insurance b/c = ‘tipping off PWB’
• Last resort = Upper Tribunal (Lands Chamber) for waiver, discharge or modification.

Question 31

What are the remedies for breach of a restrictive covenant?

What does the Supreme Court Act 1981 allow for?

Answer 31

The PWB (on proving has benefit) can apply for any one of the following injunctions:

• prohibitory injunction (stop action in breach)
• mandatory injunction (requiring performance of specific act)
• interim injunction (prevents any further steps by person in breach)

The Supreme Court Act 1981 allows power to grant damages in lieu of an injunction where:

• damage is small
• can be estimated in money
• can be adequately compensated in money
• and it would be oppressive to the developer to award an injunction

Question 32

In what case is an applicant for breach of RC unlikely to succeed?

Answer 32

If PWB has delayed bringing proceedings they will lose right to obtain an injunction or damages.

Question 33

What must you ensure you abide by when discussing options for buyer re continuing or future breach?

Answer 33

The general prohibition under s.19(1) Financial Services and Marketing Act 2000, forbidding carrying out of a ‘regulated activity…[of a specified kind’ (s.22)] unless an ‘authorised’ or ‘exempt’ person.

s.22 states an activity is a regulated activity of a specified kind if; relates to an investment of a specified kind [part III .75 contract of insurance or .88 reg mortgage contract] or an activity…carried on in relation to property of any kind.

Specified activities are described in the Regulated Activities Order 2001:

Article 25: Arranging deals in investments which are a security or a contractually based investment = spec activity.

Art 53: advising on investments - (b) advising on merits….

Art 53A: advising on reg mortgage

Question 34

In what way can a buyer be bound by a positive covenant?

And how should this be visible from the official copies?

What does SCPC 7.6.5 stipulate?

Answer 34

If a chain of indemnity covenants are in existence - then the seller will seek to ensure the chain is maintained by the buyer as otherwise they will remain liable for the performance of the covenant.

Thus the indemnity covenant should be lodged in the proprietorship register.

SCPC 7.6.5 states that the buyer will also indemnify the seller upon completion.

Question 35

What are the actions required for buyer’s sol in respect of past and future breaches of positive covenants?

Answer 35

Continuing past breach? usually remediable by requiring the seller to perform the positive covenant. e.g. erect fence. Or price reduction of contract.

Otherwise if past breach not remediable and intended future breach by buyer the options are the same as for RC breach.

Question 36

What are the 7 types of local land charges that could affect the property?

What search would you need to do?

Answer 36

• planning permissions
• listed buildings
• conservation areas
• tree preservation orders
• improvement and renovation grants
• smoke control zone conditions
• light obstruction notice conditions

LLC1

Question 37

What does schedule 3 of the Land Registration Act 2002 deal with?

What does schedule 12 LRA 2002 deal with?

Answer 37

Schedule 3 of the LRA 2002 lists the unregistered interests that will override on a sale of registered land post 13 October 2003.

Sch 12 serves to allow interests that overrode in the old regime to continue to do so even though not in sch 3.

Question 38

What are the unregistered interests at Sch 3 LRA 2002 that override on a disposition of registered land?

Answer 38

• Leasehold estates
• Interests of persons in actual occupation
• Easements
• Customary and public rights
• Local land charge

Question 39

Para 3 of Sch 3 of LRA 2002 provides that legal easements will override - describe how a ‘legal’ easement is created?

Answer 39

• Prescription e.g. long use or enjoyment
• Implied grant - where an owner disposes of part of their land:
• Necessity
• Common intention of the parties
• Rule in Wheeldon v Burrows - where quasi-easements can become easements on disposition of part of the land, or simultaneous disposition of parts of the land. For the quasi-easements to be granted as legal easements they must be: necessary to enjoy the dom land; in use at time of disposition and continuous or apparent. e.g. right of light or right of way over a road.

Question 40

What is the exception to the rule in para 3 of Sch 3 LRA 2002?

Answer 40

That per para 9 sch 12 an equitable easement (i.e. one created only at equity via a contract and not a deed?!) may override if created before 13 October 2003. The requirement being that the right was openly enjoyed.

Question 41

If created by deed, what must be the case in order for the easement to be legal?

Answer 41

It must be registered in the Charges register of the servient land otherwise it will be only equitable and not bind a purchaser. s.27(2)(d) LRA 2002.

Question 42

What does sch 3 and sch 12 of LRA 2002 say about leases?

Answer 42

Para 1 of Sch 3 says that leases of not more than 7 years will be overriding.

Para 12 of Sch 12 provides that leases granted before 13 October 2003 and not more than 21 yrs long will override.

Question 43

As non-owning persons in actual occupation have an overriding beneficial interest per para 2 of sch 3 LRA 2002, how is this discovered and what does a sol need to do?

Answer 43

Non-owning persons in actual occupation can be discovered via pre-contract enquiries, and inspection of the property.

The occupier should be asked to sign a waiver to all rights and agreeing to vacate on or before completion.

Question 44

What outcomes of the SRA Code of Conduct does reporting to the buyer client the results of pre-contract enquiries and searches achieve?

(Confidentiality and disclosure - achieving client care)

Answer 44

O(4.2) you must ensure the client is made aware of all info of which you have personal knowledge and is material to your retainer.

doing this achieves:

O(1.12) clients must be in a position to make informed decisions about their options.

Question 45

What does the first line in the header of an official LR copy refer to? What should you consider as sol for the buyer?

Answer 45

The date that the OC was issued. This is also the ‘search from’ date that must be used for an OS1 search.

Check that the OCs are less than 2 months old…at least less than 1 year old from proposed date of completion.

Question 46

What does the edition date mean on an OC?

Answer 46

It refers to the last date that an amendment or entry was made to the OC.

Question 47

What third aspect of the header needs checking?

Answer 47

The title number - must correspond correctly to that on the contract!

Question 48

What information is provided in the property register and what documents should you check to ensure clarity re the property throughout docs?

Answer 48

• Date prop first registered
• Identifies whether freehold or leasehold
• Description of the property with reference to the plan and with address
• Easements benefiting the property (in property register b/c runs with land!)

Must check if the description in the register matches that in the contract and the TR1!

Question 49

What does s.9(2) of the LRA 2002 state?

Answer 49

s. 9 deals with titles to freehold estates
s. 9(2) states that in order for a person to be registered with title absolute the registrar must be satisfied that their title is such that ‘a willing buyer could be properly advised by a competent professional to accept’.

Question 50

What should be checked in the Proprietorship register?

Answer 50

• Class of title - check title absolute
• Registered proprietors - is seller in contract also RP? If not who is? Bank, or personal rep? Or names different? Or if seller company check co’s house for name change.
• Indemnity covenants.
• Restrictions against right of disposal - only need to know mortgage and TIC restrictions.

Question 51

What is contained in the Charges register?

Answer 51

Charges and matters that affect the land.

• Easements burdening the property? e.g. RoW?
• RCs and PCs
• Mortgages
• Registered leases

How will the above affect the intended use of the land?

Question 52

Why should you look at the title plan?

Answer 52

Check any colouring/hatching etc that may indicate boundary responsibility, easements or land prev removed from the title.

Question 53

What must you also be mindful of in terms of what is and isn’t extracted in the register?

Answer 53

If there are docs referred to in the register but not extracted then you will need to seek out official copies of these. e.g. details of pcs and rcs….

Question 54

Difference between legal and equitable conveyance?

Answer 54

A legal estate in land can only be created by deed, therefore if a contract at hand has arisen but not been also created by deed then ownership will only be equitable and at the discretion of the courts to enforce. Thus any implied rights that run with the land will also only be equitable rather than capable of being implied into a legal title.