Title investigation Flashcards
What is the role of the buyer/seller’s solicitor?
Seller’s solicitor deduces title
Buyer’s solicitor investigates title
What does investigation of title involve?
- checking seller is able to sell property
- identifying extent of property
- any rights which benefit or burden the property
This may affect the buyer’s intended use of the property and/or the value of the property
What is registered title? What are the title documents
- Land Registry official copies (abstracted covenants or easements to official copies)
- Land Registry title plan
- Filed documents (if relevant)
What do the official copies comprise of?
- Property register
- Proprietorship register
- Charges register
Checking rights that appear on property register (rights that benefit the property)
- Adequacy?
- Burden registered?
- Maintenance?
- Adoption?
What is the issue with whether the burden is registered?
If land affected by right is registered and right does not appear on charges register, it does not affect the land
- Need an Index Map Search to see if the land is registered
If affected land is not registered, need to lodge a caution against first registration. This will register the burden upon first registration
What is the issue of adoption
With private roads, need to advise the client on the risks that the local authority adopts the road
- they would be required to bring the road up to adopted standard which could be substantial
Proprietorship register - class of title
The class of title is decided by the land registry and depends on how good the owner’s evidence of title is on first registration
- Title absolute: this is the best class of title and no further action needs too be taken. It means the owner has satisfied the Land Registry that it is the true owner of the property
- Qualified title: this is where there is a specific defect in the title
- Possessory title: this is granted when the registered proprietor has shown they have physical possession of the property, but may not have full legal ownership
- Good leasehold title (leasehold only): granted when the leaseholder cannot provide evidence of the landlord’s title to the land. Can be upgraded if landlord has registered land since the grant of the lease
What do you need to do if there is a tenancy in common restriction for both beneficial and legal title (in the proprietorship register)?
Beneficial title:
- Assume property held as beneficial tenants in common
- Both need to execute the transfer
- If one has died, a second trustee needs to be appointed, so beneficial interest can be overreached and restriction removed
Legal title:
- Would want to see the death certificate, to confirm that the legal title has passed by survivorship to registered proprietor
What can you assume if there is no restriction as to beneficial title in proprietorship register?
Can assume that the owners hold as beneficial joint tenants
- Could accept just the death certificate
What does the seller need to do if there is a covenant which has already been breached?
(Covenant found in charges register)
Seller should provide indemnity policy at their expense
If there is a covenant in the charges register, what questions does the buyer’s solicitor need to consider? And what are the consequences?
- Does it affect the value or buyer’s proposed use?
- Has it been breached?
If no - report to the buyer client but probably ok to proceed with purchase
If yes - need to first consider if insurance is available?
- But difficult to ensure against future breaches
- Client needs to agree, as will be their cost
- Can approach the other party with the benefit to consent for the future breach (must be done after insurance option)
If consent is refused, consider application to Lands Tribunal (restrictive covenants only). This is expensive, time consuming and no guarantee of success
Advice on the consequences:
Buyer likely to consider price reduction or withdrawing from purchase (if proposed breach is fundamental)
Why do you need to look through the charges register?
Need to report charges listed to the buyer client
- charges / mortgages
- registered lease
- easements
- positive covenant
- restrictive covenant
What is the root of title?
The particular conveyance which shows good root of title (requirements set out in s44 LPA 1925)
a) Dated more than 15 years ago
b) Deals with both legal and beneficial title to property
c) Adequately describes the land being conveyed
d) Does not cast doubt on seller’s title
What to include in a chain of title?
- Power to sign (power of attorney / power as executor under grant of representation)
- death certificate of deceased co-owner
- mortgage deed (and vacating receipt which confirms lender has been repaid in full)
Investigating unregistered title
- buyer’s solicitor will want to ensure seller is entitled to sell
- any issues?
What does a caution against first registration indicate?
Indicates that someone believes they have a claim in the property
- found in index map search
Validly executed deed (requirements for deeds before LPMPA 1989 came into force)
- Clear that it is a deed
- Signed as a deed (and witnessed)
- Sealed
- Delivered
Issues arising with unregistered land
Similar issues to registered land
- Co-ownership (notice of severance or declaration of trust?)
- Land charges (search against names of previous owners for the period of ownership)
- Mortgages (check will be discharged on completion)
- Rights benefitting and burdening the land
- Covenants (restrictive covenants will bind the land if registered as a D2 land charge; positive covenants are not registrable as land charges, so need to check the deeds)
- Other interests
What is deducing title?
The process of seller proving ownership to a potential buyer (proof of ownership)
- takes place early on in pre-exchange
- seller’s solicitor gets title documents, checks them to ensure seller entitled to sell and sends them to buyer
What is investigating title?
Buyer’s solicitor investigates registered title by checking Land Registry official copies and title plan.
Purpose:
- check seller has legal right to sell property
- ensure property is adequate for intended use
- ensure there are no title defects that could affect value of property or ability to sell in the future
What should the buyer’s solicitor do if the property has qualified title, possessory title or good leasehold title?
- Report it to their client and explain what it means
- Check 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 possibility of upgrading to title absolute (e.g., in case of missing documents can be located)
In cases of co-ownership, how should the buyer’s solicitor check how the beneficial interest is held?
- Check proprietorship register –> if co-owners have notified the Land Registry that they hold as beneficial tenants in common, a restriction will be entered
- No restriction –> assume co-owners hold jointly
- Tenancy in common restriction –> assume this is correct but check as co-owners can change how they hold a property at any time during ownership
What must be done where a surviving beneficial joint tenant is selling a property (registered/unregistered)?
They must sign the contract and execute the transfer deed and provide a certified copy of the deceased joint tenant’s death certificate
What must be done where co-owners are living/in existence are selling a property?
All need to sign the contract and execute the transfer deed (consider in drafting context)
What must be done where a surviving beneficial tenant in common is selling the property (unregistered/registered title)?
- Need to appoint a second trustee (often seller’s solicitor) to sign the contract and execute transfer deed
- Also provide copy of deceased tenant in common’s death certificate
- This ensures buyer overreaches beneficial interests
What is an indemnity covenant?
A covenant given by a buyer to a seller to observe the positive covenants
What must buyer do to check epitome of title?
- Check land is not registered
- Check root of title meets 4 requirements
- Check chain of title is complete from root of title to seller’s title and each deed forming the chain is validly executed and stamped
- Check extent of land conveyed
- Check any rights benefitting or burdening the property
