Title investigation Flashcards
Deducing title?
Seller deduces title
Deducing registered title – process of providing ownership to buyer.
- Seller’s solicitor gets together the title documents and checks that seller is entitled to sell property. These include:
- Land registry official copies of the register
o A. Property register: describes the property and any rights benefitting the property, e.g., easements
o Proprietorship register: gives the registered owners name and address and class of title
o Charges register: lists rights burdening the property, e.g., mortgages.
- Land registry title plan
- Copies of any documents referred to but not already extracted in official copies
Investigate title?
buyer investigates title.
Buyers’ solicitor investigates registered title by checking land registry official copies.
Aim is to ensure property is suitable for buyers’ intentions
The property register?
Firstly, sets out what the property comprises – whether its freehold or leasehold. A description of the property by its address and reference to the title plan.
Rights benefiting the property -these may be extracted – so all relevant text is shown. An example is – ‘) The land has the benefit of the following right contained in a deed dated 13 February 1955: a right of way on foot only over the land-coloured blue on the filed plan. ‘
or may refer to a bundle of rights. ‘The land has the benefit of the right contained in a deed dated 13 February 1955. Note. Copy filed’
examples of right – (right of way, right to run services, right of light, excluded rights)
If a property has a right of way there are 4 issues to be considered
- Registration of the burden
o Burden must also be registered against the land
- Adequacy
- Maintenance
o A person using a right of way is obliged in common law to distribute towards its maintenance
- Adoption
The proprietorship register?
Different classes of title
Title absolute: freehold or leasehold
- Best and most common
- Indicates no issues and proprietor has satisfied the land registry that’s it’s the true and proper owner
Qualified title: freehold or leasehold
- Where there is a specific defect in title – an example is where a deed known to contain covenants or easements was missing on first registered
Possessory title: freehold or leasehold
- Where they have physical condition but no title deeds so squatters.
Good leasehold title (leasehold)
- When leaseholder cannot provide evidence of landlord’s title to the land
The registered proprietor – person named on proprietorship register
Could be an individual company (buyer should verify these details with companies’ house), limited liability partnership, or co-ownership.
Proprietorship register - co-ownership?
Where it’s owned by more than one owner – a trust of land exists, which is often expressly created by making a declaration of trust in the TR1 form.
Checking how the beneficial interest is held – if held in tenants in common then land registry will add a restriction to the proprietorship register.
- Could look like: RESTRICTION: 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.
there is a tenancy in common restriction then the land registry will leave it in place unless owner proves they have become beneficially entitled to the whole of the property as well. If one dies, a second trustee would need to be appointed so their beneficial entitlement could be overridden.
Implications for buyers solicitors title investigation?
- If co-owners are living – all should be asked to sign contract and execute transfer deed
- If a surviving beneficial joint tenant is selling the property – should be asked to transfer deed AND provide a certified copy of the deceased’s joint tenants death certificate.
- If a surviving beneficial tenant in common is selling – they will need to appoint a second trustee to sign contract and execute transfer deed with them. The buyer then overreaches the beneficial interest.
The charges register and mortgages?
Interest burdening the property
- Mortgage in favour of a lender – usually an undertaking is given on completion to discharge this so the buyers take free of mortgage
o A legal mortgage must be created by deed and entered in the charges register.
o so, a buyer’s solicitor will be able to see from the charges register if the property is subject to a legal mortgage. Registering the mortgage means that whoever buys property will take it subject to mortgage, but lenders want to clear it before its transferred to prevent property from being sold subject to mortgage.
o Mortgage entry on the proprietorship register – restriction will prevent property being sold without lenders consent.
o RESTRICTION: Except under an order of the Registrar no disposition by the proprietor of the land is to be registered without the consent of the proprietor of the charge dated 17 June 2005 in favour of Redminster Building Society referred to in the Charges Register
o Mortgage entry on charges register – two entries. First is date of mortgage and second is the name and address of the mortgagee.
o (b) (01.07.2005) Proprietor: Redminster Building Society of 28 High Street, Redminster RD6 9AR.
o In nearly all cases party’s intention is for property to be sold free or mortgage but have to check.
The charges register and covenants?
o If covenants appear on charge register it means property has burden of those covenants.
o May be restrictive or positive or unknown. From buyers POV problems caused by covenants are
o Exiting use of land is in breach of a covenant
o The buyers propose use of the and would be a breach of covenants.
Restricted covenants – for conveyancing purposes you can assume restrictive covenants appearing are binding on the property. Whether its restrictive is dependent on its wording. (Like – to only use a property as a residential dwelling.
Positive covenants – it does not necessarily mean they are binding on property. This depends on its effect not its wording. ‘Not allow a fence to fall into disrepair’ is a positive covenant as it requires time and money to be spend on maintaining fence.
HAND IN POCKET TEST
o Indemnity covenant – a covenant given by buyer to seller to observe the positive covenants.
o IF NO INDEMNITY SHOULD IGNORE THE POSITIVE COVENANT
o The chain of indemnity.
o Unknown covenant – could be either positive or restrictive –
o (a) (08.03.1952) A Conveyance of the land in this title dated 20 February 1929 made between Stanley Clegg its heirs executors administrators and assigns (‘Vendor’) and Georgina Bartholomew (‘Purchaser’) contains covenants but neither the original conveyance nor a certified copy or examined abstract thereof was produced on first registration.
IF COVVENANT DOES AFFECT – RESTRICTIVE COVENANT
FIRST – has it been breached?
If so – seller should provide indemnity covenant at sellers own expense.
If NO – then does it affect value or the buyers proposed use?
If not – reported to client but it might be okay
If yes – insurance is available? - client needs to agree to this if insurance CAN be insured, consent from person with benefit. If person with benefit is approached and refuses consent, consider lands tribunal, reduction in price.
Unregistered land - deducing title?
Compulsory first registration:
Triggered by a dealing with the property. Land not being sold or given away may remain unregistered
Shown by epitome of title.
Seller does this, however in this instance it means examining the bundle of deeds and documents for the property.
Seller’s solicitor must identify which deeds are relevant and list them in the epitome of title. Copies are provided to buyer’s solicitor and sellers solicitor will typically undertake to provide originals on completion.
Most important document to identify – Root of title. – as that is the deed to be relied upon for proving the title. More than one deed may qualify for this, but must meet requirements.
- Must be dated more than 15 years ago – ideal for transfer rather than a gift of title, as this would mean another 15 years of title has been investigated.
- Deals with both legal and beneficial title – if the document is silent on beneficial title It is assumed to pass with legal title.
- Adequately describes the extent of the land
- Does not cast doubt on seller’s title.
Seller’s solicitor – identified root of title- establishes a chain of title from that deed to the seller.
Other documents to send – the power of attorney under which the root of title or any deed has been executed, for transfers of ownership by death certificate.
Investigation of title? Unregistered?
investigates title by checking epitome of title and copy of documents provided. They have to make sure the epitome of title is enough to register property with title absolute at the land registry.
Even before starting – it’s worth carrying out an index map search – as this will reveal any registered titles within the boundaries, any pending applications for registration,
Checking the root of title – buyers solicitor checks that it meets aforementioned requirements. It must also be validly executed:
- Deeds executed now must comply with the formalities under s1 of the Law of Property (Miscellaneous Provisions) Act 1989 (‘LPMPA1989’)
- However, most unregistered deeds were dated before LPMPA1989 came into force (31 July 1990) and their validity is subject to the common law formalities, which are more restrictive.
As long a being validly executed – must be correctly stamped – correct amount of ad valorem (stamp duty) has been paid
- Each conveyance should be checked to ensure it has:
- A certificate of value or be properly stamped with the ad valorem stamp duty
- Have a particulars delivered stamp.
- If a stamp is missing – the buyer’s solicitor should insist seller pays the outstanding stamp duty and provides proof that this is done.
Title issues?
an issue if all co-owners are able to sign the contract and execute the purchase deed. However, if the seller is a surviving co-owner then it is necessary to identify whether the seller has obtained the full beneficial title by co-ownership or was a surviving beneficial tenant in common
You can assume that a seller who is a surviving co-owner was a beneficial joint tenant if
- The conveyance from the seller to the buyer states that the seller is beneficially entitled to the whole of the property
- There is no memorandum of severance converting interests into a beneficial tenancy in common
- There is no bankruptcy order against the seller
In which case the byers solicitor should ask for certified copies of deceased’s joint tenants death certificate.
Tenancy in common –
- If above conditions are not meant then the seller should be treated as surviving tenant in common
In which case the buyer’s solicitor should ask for a second trustee to be appointed in conveyance so the buyer to overreach the beneficial interest
Land charges search - is only relevant to UNREGISTERED LAND?
Some rights burdening the property will only bind registered land if they are registered at the land charges department of the land registry.
The land charges register is only relevant to unregistered properties.
An investigation of unregistered title is incomplete without appropriate searched of the land charges department register. Frequently carries out on land registry online portal.
Mortgages
Mortgage deed should be listed on the epitome of title – if mortgage has been discharged then there should be a vacating receipt.
A first legal mortgage is not registrable as a land charge, because the mortgage lender will not release the original deeds until the mortgage has been repaid. This offers sufficient protection.
Rights benefitting and burdening unregistered land
In the epitome of title should be able to identify any rights benefiting or burdening the land.
