Title Investigation Flashcards
What are the official copies
- A. Property register: describes the property and any rights benefiting the property (eg, covenants or easements)
- B. Proprietorship register: gives the registered proprietor’s (owner’s) name and address, the class of title and entries affecting ownership
- C. Charges register: lists rights burdening the property (eg, mortgage, covenants, easements and leases)
Who is responsible for investigating title?
The buyer’s solicitor investigates registered title by checking the Land Registry official copies, title plan and other documents referred to on the register. The aim is to:
- check that the seller has the legal right to sell the property
- ensure the property is adequate for the buyer’s intended use
- ensure that there are no title defects that could affect the value of the property or the ability to sell in future
Key word or definition:
- The seller’s solicitor deduces title.
- The buyer’s solicitor investigates title
What is in the property register?
Property description
- States whether the property is freehold or leasehold.
- Describes the property by its address and reference to the title plan (usually ‘edged red’).
- The buyer’s solicitor should always send the buyer a copy of the title plan so that the buyer can confirm it agrees with their understanding of the size and location of the land they are buying.
Rights benefiting the property
- Rights benefiting the property will be set out in the property register, e.g. right of light, right of way, right to run services, excluded rights, etc.
- They may be extracted, meaning that all the relevant text is shown, and there is no need to refer to the document itself.
- Alternatively, the property register may refer to a bundle of rights contained in a document which is filed. The seller’s solicitor should provide a copy of any filed documents (either from the pre-registration deeds or from the Land Registry).
What must be considered if a property has a right of way?
Registration of the burden
We know that the benefit of the right of way is registered if it appears on the property register.
To be enforceable, the burden must also be registered against the land over which the right of way passes (the servient land).
Adequacy
Adequacy may be legal or physical. For example, a right of way by car only would not suitable for a warehouse that requires lorry deliveries.
On the other hand, a right of way for all vehicles does not help if it is too narrow to be negotiated by a lorry, so inspection is advisable.
Maintenance
Even if the right does not say so, a person using a right of way is obliged in common law to contribute towards its maintenance.
Inspection and enquiries should assess how this is likely to affect the buyer.
Adoption
An adopted highway is a public highway maintainable by the local authority at its expense.
If a private road is adopted, then the frontagers are required to pay the costs of bringing the road up to adoptable standard.
What is included in the proprietorship register?
the registered proprietor’s (owner’s) name and address, the class of title and entries affecting ownership
- the price paid or stated value of the land if the seller acquired the land on or after 1 April 2000 (with limited exceptions)
- if the registered proprietor gave an indemnity covenant to the transferor on acquiring the property (to observe positive covenants), then it will appear as a numbered entry
- Any restrictions on the registered proprietor’s right to sell the property
If co-owners have notified the Land Registry that they hold as beneficial tenants in common, then the Land Registry will add a restriction to the proprietorship register.
What should the buyer’s solicitor do if the title is not absolute freehold?
- should report it to their client and explain what it means
- check the mortgage lenders’ requirements – they may not accept inferior title classes, or may only accept them with certain conditions being met
- consider and advise on obtaining title indemnity insurance to cover risks
- consider the possibility of upgrading to title absolute if, for example, missing documents can be located
What should the buyer’s solicitor do when purchasing a property that is co-owned where one party has died?
- If dealing with a surviving beneficial joint tenant, then the buyer’s solicitor needs to see a certified copy of the deceased joint tenant’s death certificate
- If dealing with a surviving beneficial tenant in common, then the buyer’s solicitor needs to see a certified copy of the deceased tenant in common’s death certificate and will also need a second trustee to be appointed
What is included in the charges register?
Interests burdening the property
Mortgage in favour of a lender
Usually, an undertaking is given on completion to discharge this so that the buyer takes free of mortgage
Leases
These would normally be expected from the agent’s property description, but should always be reported, together with their terms.
Easements
We looked at the benefit of easements in the property register – conversely, the land may be subject to rights of way, rights of light, rights of service media (pipes, cables, etc)
These should always be reported to the client
Covenants (restrictive or positive)
Either restrictive or positive covenants may be listed in the charges register – the important point is that it is their burden, not the benefit.
These should always be reported to the client, with advice on appropriate action.
What registers are mortgages entered on?
Mortgage entry on the proprietorship register
The restriction will prevent the property being sold even if subject to mortgage to a third party.
B: Proprietorship register
This register specifies the class of title and identifies the owner. It contains any entries that affect the right of disposal.
Title absolute
Mortgage entry on the charges register
Each mortgage usually takes two entries in the charges register. The first is the date of the mortgage, and the second is the name and address of the mortgagee.
C: Charges register
This register contains any charges and other matters that affect the land.
What is an indemnity covenant?
An indemnity covenant in this context means a covenant given by a buyer to seller to observe the positive covenants.
If the conveyance is missing, how do the Land Registry know the date of the conveyance and parties, and that it contains covenants?
Subsequent deeds and other title documents may have referred to the conveyance by its description (which is usually the type of document, the date and the parties)
How can buyers deal with covenants?
Where the land’s current use is in breach of the covenant, but no objection has been received, it is simplest to obtain an indemnity insurance policy (usually at the seller’s expense).
Approach the person with benefit (PWB) for consent to the breach of covenant.
May be difficult to identify/trace the PWB and they may refuse or require payment.
If the covenant meets certain grounds, then an application can be made to the Upper Tribunal (Lands Chamber) to discharge the covenant.
This is expensive and time consuming and rarely practical.
This is covered in more detail in your Land Law module.
It is usually more of a problem when the buyer’s proposed use would breach the covenant.
It is then more difficult to get insurance, as the risk that an objection will be received is less ascertainable.
Approaching the PWB may be an option, but insurance should be tried first, as insurers usually require that no contact has been made with the PWB.
How are registered and unregistered title different?
REGISTERED TITLE:
Title shown by official copies and title plan
Official copies neatly categorise property, proprietorship and charges
Title plan shows extent of property
Other deeds and documents extracted on the official copies or filed at the Land Registry
Change of registered proprietor is usually quick at the Land Registry (within a week or two)
UNREGISTERED TITLE:
Title shown by an epitome of title (a schedule of title deeds and documents accompanied by copies of them)
Property description, benefit and burden of rights, and ownership may be distributed amongst multiple documents
May need to trace back to first title document that defines land (subsequent documents may define by reference to earlier documents)
Should have originals of all relevant deeds and documents – if any missing, may cause issues.
First registration may take some months at the Land Registry
How is unregistered title deduced?
- As with registered land, the seller’s solicitor deduces title. Rather than simply ordering Land Registry documents, however, this means examining the bundle of deeds and documents for the property.
- The deeds and documents may be held by the owner, or by their mortgage lender if they have outstanding borrowing.
- The seller’s solicitor must identify which deeds are relevant, and list them in the epitome of title.
- Copies of the listed documents are provided to the buyer’s solicitor, and the seller’s solicitor will typically undertake to provide the originals to the buyer’s solicitor on completion.
- Although only the listed documents are needed, in practice, the seller’s solicitor will often send the entire bundle of deeds and documents to the buyer’s solicitor (as there is no reason to hold on to them).
- The most important document to identify is the root of title
What makes a root of title?
The root of title means that the deed can be relied upon as proving the title.
There may be various candidates in the deeds bundle, but it is usually the most recent deed that meets the requirements.
A good root of title meets four requirements:
Legislation: The requirements of a root of title are set out in section 44 of the Law of Property Act 1925
Must be dated more than 15 years ago – as the date for compulsory first registration is over 15 years, this should always be the case.
A sale conveyance or legal mortgage is preferable to a gift or assent, because there is an assumption that the title for that deed was investigated for 15 years, giving a total of 30 years’ title.
Deals with both the legal and beneficial title to the property – if the conveyance is silent on this point, then beneficial title is assumed to pass with the legal title.
A conveyance that deals with ‘bare legal title’ or ‘legal title only’ or a declaration of trust (which only deals with beneficial title) is not a good root of title.
Adequately describes the land being conveyed – the conveyance will usually incorporate a scale plan.
Sometimes a plan is not needed if, for example, it is a residential address, and all the neighbouring houses have identical footprints, and the boundaries are clear.
