Title investigation MCQs Flashcards
A buyer is buying an unregistered freehold property. The epitome reveals the following information: Company A sold the property in 1945 to Company B and Company B sold the property in 2003 to Company C. Company C is the current owner and seller of the property.
Which one of the following best sets out the Central Land Charges searches (Form K15) (‘CLC searches’) which the buyer’s solicitor should carry out pre-exchange?
CLC searches against: (1) Company A for the period 1925 – 1945; (2) Company B for the period 1945 – 2003; (3) Company C for the period 1945 – 2003.
CLC searches against: (1) Company A for the period 1926 –present date; (2) Company B for the period 1926 – present date; (3) Company C for the period 1926 – present date.
None. These are pre-completion searches.
CLC searches against: (1) Company A for the period 1926 – 1945; (2) Company B for the period 1945 – 2003; (3) Company C for the period 2003 – present date.
CLC searches against: (1) Company A for the period 1926 – 1945; (2) Company B for the period 1945 – present date; (3) Company C for the period 2003 - present date.
CLC searches against: (1) Company A for the period 1926 – 1945; (2) Company B for the period 1945 – 2003; (3) Company C for the period 2003 – present date.
Correct. CLC searches are carried out against previous owners of the property for their periods of ownership.
You would need a CLC search against Company A. As you don’t know when they bought the property, you would carry out the search from 1926, the year when the CLC register was started. However, you do know that Company A sold the property in 1945, so you only need search up to then.
The CLC search against Company B will be for the period 1945 to 2003, as you know that this is the period that they owned it.
The CLC search against Company C will be for the period of their ownership, being 2003 to the current year.
Note that the searches against companies A and B can be relied upon whenever they are dated, so if the seller’s solicitor provides them, the buyer’s solicitor need not carry out fresh searches. However, the search against Company C will need to be carried out again just before completion to confer priority.
A solicitor is acting for a lender which is lending 80% of the purchase price to the buyer of a registered commercial property. The buyer has agreed to the lender taking a first ranking fixed charge over the property after completion. The buyer has also agreed not to deal with or dispose of the property during the term of the loan without X Bank’s consent and for all relevant entries to be made in the Land Registry official copies.
What will the lender’s solicitor look for when examining the Land Registry official copy of the title to the property after completion to confirm the relevant entry or entries relating to X Bank have been correctly registered?
An entry referring to a restriction on dealings in the Proprietorship Register and an entry referring to X Bank’s charge in the Charges Register.
An entry referring to X Bank’s charge in the Charges Register.
An entry referring to a restriction on dealings in the Property Register and an entry referring to X Bank’s charge in the Charges Register.
A restriction on dealings in the Proprietorship Register.
An entry referring to a restriction on dealings in the Charges Register and an entry referring to X Bank’s charge in the Proprietorship Register.
An entry referring to a restriction on dealings in the Proprietorship Register and an entry referring to X Bank’s charge in the Charges Register.
This is correct. Charges such as mortgages are recorded in the Charges Register and any entries restricting the current proprietor’s ability to deal with the property are recorded in the Proprietorship Register.
You are acting for the buyers of a property. The seller is Mark Arthur. The seller’s solicitor tells you that Philip Arthur recently died. You review the official copies, which contain the following entry:
Proprietor(s): PHILIP ARTHUR and MARK ARTHUR of 35 Yewdale Road, Leeds, LS3 8QP
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.
Which one of the following statements best explains what you need to do in respect of this entry in the Proprietorship Register?
You do not need to do anything, the right of survivorship will apply so Mark Arthur can sell as a sole proprietor.
You need to ensure another trustee is appointed to pay the purchase money to so the restriction will not apply.
You do not need to do anything as Philip Arthur has died so the restriction is no longer relevant.
You do not need to do anything, this is for the seller’s solicitors to deal with.
You need to see a certified copy of the death certificate and then Mark Arthur can sell as a sole proprietor.
You need to ensure another trustee is appointed to pay the purchase money to so the restriction will not apply.
This is correct. This restriction tells us Mark and Philip are beneficial tenants in common and prevents a sale by a sole owner. This means a sale by Mark alone is not permitted and would not be registered by the Land Registry. A second trustee needs to be appointed in order to comply with the restriction. This will overreach Philip’s beneficial interest, which will have passed under his estate because the right of survivorship will not have applied on his death.
You are acting for the buyer of a residential house on a plot of registered freehold land which is part of a new development so the buyer is buying part of a larger plot. The buyer has agreed to enter into the following covenants: (1) “not to use the Property for anything other than a private residence” and (2) “to erect and hereafter maintain a fence of no less than 2 metres in height along the northern and western boundaries of the Property”.
What types of covenants are these and on which of the registers at Land Registry for the title to the Property would you expect to see the two covenants registered?
(1) is a restrictive covenant and (2) is a positive covenant and only (1) would be registered on the Charges Register.
1) is a restrictive covenant and (2) is a positive covenant and both would be registered on the Charges Register.
(1) is a positive covenant and (2) is a restrictive covenant and both would be registered on the Proprietorship Register.
(1) and (2) are both restrictive covenants and both would be registered on the Charges Register.
(1) and (2) are both positive covenants and would be registered on the Charges Register.
1) is a restrictive covenant and (2) is a positive covenant and both would be registered on the Charges Register.
Correct. Both restrictive and positive covenants are registered on the Charges register at the Land Registry. The Proprietorship Register deals with restrictions on the owner of the land’s ability to deal with it rather than restrictions over the land.
Restrictive covenants are contracts entered into between the covenantor (the owner of the burdened land) and the covenantee (the owner of the land taking the benefit) which restrict the right of the covenantor and their successors in title to freely use the burdened land eg a restrictive covenant not to use the property for anything other than a dwelling house. The covenant could be worded positively but still be a restrictive covenant eg a covenant to use the property only as a residential dwelling.
Positive covenants are contracts entered into between the covenantor (the owner of the burdened land) and the covenantee (the owner of the land taking the benefit) which require the covenantor to do something with / on / to the property e.g. to build and maintain a fence along the boundary of the property. The covenant could be worded restrictively but still be a positive covenant e.g. not to allow the boundary fence to fall into disrepair.
An aid to working out whether a covenant is restrictive or positive (regardless of whether it is worded negatively or positively) is the ‘hand in the pocket test’. If you have to ‘put your hand in your pocket’ i.e. pay out money to comply with the covenant then it is a positive covenant (one obliging you to do something).
Your firm is investigating title on behalf of a client who is buying a commercial property. The seller’s solicitor has deduced title. There is a restrictive covenant in the Charges Register of the Official Copies for the Property not to make any alterations to the property. In the CPSE Replies the seller admits that they have breached this restrictive covenant by building an extension to the rear of the property. There is no indemnity covenant in the Proprietorship Register.
Which one of the following options is the best advice for your client?
Restrictive covenants bind successors in title so the seller should obtain restrictive covenant insurance to cover liability for breach of covenant.
Your client should not proceed with the purchase as the title is defective.
Restrictive covenants bind successors in title so the buyer should obtain restrictive covenant insurance to cover liability for breach of covenant.
Restrictive covenants do not bind successors in title so no further action is required.
Restrictive covenants do not bind successors in title unless there is an indemnity covenant on the Proprietorship Register.
Restrictive covenants bind successors in title so the seller should obtain restrictive covenant insurance to cover liability for breach of covenant.
Correct. The burden of restrictive covenants bind successors in title as long as they are correctly registered, which is likely, as the restrictive covenant referred to is in the Charges Register of the Official Copies. As restrictive covenants run with the land and bind successors in title, they do not require an indemnity covenant in the Proprietorship Register to make them binding unlike a positive covenant.The seller has breached this restrictive covenant, and as a past breach it is the seller who is responsible for obtaining restrictive covenant insurance. While the other answer options might sound plausible, they are each incorrect. Note also that a firm of solicitors cannot arrange an insurance policy under section 19(1) FSMA 2000 unless they are authorised or exempt.
You act for a client company who is buying a piece of registered, undeveloped land that only has access to adopted highway via a private right of way. The burden of the right of way is registered against the registered title of the servient land. The wording of the right is as follows: “… to pass and repass with or without motorcars over the lane coloured blue …”
The lane coloured blue is just large enough to allow one car at a time to drive along it. The client intends to develop the land as an office for the client’s business with just two car parking spaces for the company directors.
Is the right likely to be sufficient for the client’s plans for the property?
Yes. It is legally sufficient and physically adequate.
No. It is legally sufficient, but not physically adequate.
No. It is neither legally sufficient nor physically adequate.
No. It is not legally sufficient, but it is physically adequate.
Yes. It is legally sufficient and physically adequate. However, the right should additionally be checked on the CON29 replies.
No. It is neither legally sufficient nor physically adequate.
Correct. Although the lane may be sufficient for the ultimate intended use of the property, it will not be sufficient for the construction of the office. Construction requires heavy vehicles such as dumper trucks and cement mixers. They will not be able to access the site due to both the physical and legal constraints of the right of way.
Question 1
A solicitor is acting for the seller on the sale of freehold property with an unregistered title.
The solicitor is preparing for deduction of title to the property to the buyer’s solicitor and
has examined the deeds and documents relating to the property.
Which of the following documents is the best candidate for a good root of title?
A A Conveyance of the property dated 10 August 1982.
B A Mortgage of the property dated 10 August 1982.
C A Deed of Gift dated 25 December 1990.
D A Grant of Probate dated 30 July 2019.
E An Assent of the property dated 8 August 2019.
Answer
Option A is correct.
Under s 44 of the Law of Property Act 1925, a root of title must be at least 15 years old so the
Grant of Probate and the Assent (options D and E) are too recent to be good roots of title.
Option C is not the best answer. The Deed of Gift is old enough and will probably fulfil
the other criteria set out in s 44, but as it was not a transaction between third parties for
valuable consideration, it will not offer the double guarantee like the Conveyance and the
Mortgage (ie that title has been investigated for at least 30 years).
Both the Conveyance and the Mortgage are capable of being good roots of title and offer
the double guarantee, but the Conveyance is preferable to the Mortgage as it is likely to
contain a more detailed description of the property by reference to a plan and details of
the incumbrances that burden the property and deal expressly with the legal and equitable
interest in the property. Therefore, option B is not the best answer.
Question 2
A husband and wife are the registered proprietors of a freehold property. The husband
died six months ago and the wife is selling the property. The Proprietorship register
contains a restriction stating that no disposition by a sole proprietor of the land (not being
a trust corporation) under which capital money arises is to be registered except under an
order of the registrar or of the Court.
What is the best advice to the buyer as to whether the wife can sell the property on
her own?
A The wife is the sole legal owner of the property and can sell it on her own as she and
her late husband held the legal title as joint tenants.
B The wife is the sole legal and equitable owner of the property and can sell it on her
own as she and her late husband held the legal and equitable title as joint tenants.
C The wife needs to appoint another person to act as a legal owner alongside her in the
sale of the property.
D The wife cannot sell the property until probate has been granted and she can show
that her late husband’s equitable interest in the property has been transferred to her by
an assent from her late husband’s personal representatives.
E It is safe to buy the property from the wife on her own as long as the buyer is provided
with a certified copy of her late husband’s death certificate.
Answer
Option C is the best answer in these circumstances. The husband and wife held the legal title
to the property as joint tenants because that is the only way the legal title can be held by
co- owners. However, the restriction in the Proprietorship Register indicates that they held the
equitable title as tenants in common. Consequently, the wife cannot sell the property alone.
In the light of this, options A, B and E are not good advice, although it is the case that the
husband’s death certificate will need to be produced.
Where the equitable title to a property is held by co- owners as tenants in common and one
of those co- owners dies, another legal owner (also referred to as a trustee) needs to be
appointed to overreach the equitable interest of the deceased co- owner before completion.
In relation to option D, although it is possible that the husband’s equitable interest has
passed to the wife by will or under the intestacy rules, the buyer would not need to wait for
confirmation of this as long as the second trustee is appointed, thereby satisfying the wording
of the restriction.
Question 3
A solicitor acts for a buyer of a registered freehold property. The official copies have
revealed that there is a covenant in the charges register not to use the property for any
commercial purpose. The covenant was created in 2015 for the benefit of land then and
now owned by the district council. The buyer wants to use the property as a cake shop.
What is the best advice to the buyer as to how to proceed with the purchase?
A The buyer should withdraw from the purchase immediately to save wasted
conveyancing fees.
B The buyer should proceed with the purchase as it is unlikely that the district council will
take any action if the covenant is breached.
C The buyer should not exchange contracts until there has been a successful application
to have the covenant modified or discharged by the Upper Tribunal (Lands Chamber).
D The buyer should obtain a restrictive covenant insurance policy for the breach of
covenant.
E The buyer should ask the seller to approach the district council to see if they will
release the covenant or consent to the proposed use.
Answer
This is a difficult question as it is a matter of professional judgment.
Option A is not the best advice as the problem is relatively common and may have a
solution. Unless the buyer feels very strongly on the matter, it is probably too early to
withdraw from the transaction altogether.
Option B is a very high- risk strategy: the covenant is relatively new and imposed by a
statutory body, presumably for a good reason. It is unlikely that a breach of this covenant
will go unnoticed.
Option C is also high risk in that the application will take some time and may not be
successful as a covenant imposed so recently may be addressing a current and valid
concern.
That leaves option D and E, which are mutually exclusive. Given that the covenant is very
recent and imposed by a statutory authority, the chances of enforcement must be high so a
restrictive covenant insurance policy may not be available at a reasonable cost. Therefore,
in these particular circumstances, option E is the best advice.
A solicitor is acting for the buyer of a freehold property with registered title.
The seller’s solicitor tells the buyer’s solicitor that the property benefits from a legal right of way on foot, across a neighbour’s registered freehold property, to reach a road.
What will the buyer’s solicitor look for when examining the Land Registry official copy of the title to the property to confirm that the right of way is properly registered?
A. An entry referring to an easement in the Property Register.
B. An entry referring to an easement in the Proprietorship Register.
C. An entry referring to an easement in the Charges Register.
D. A restriction on dealings in the Proprietorship Register.
E. An entry referring to a restrictive covenant in the Charges Register.
A - An entry referring to an easement in the Property Register.
A solicitor is acting for the seller of a freehold property with unregistered title.
The solicitor is preparing for deduction of title to the property to a solicitor acting for the buyer. He examines the deeds and documents relating to the property.
Which of the following is the best candidate for a good root of title when deducing title to the property?
A. A conveyance of the property, dated 10 March 1984.
B. An assent of the property, dated 30 April 1988.
C. A planning permission for the property, dated 15 May 2015.
D. A will devising the property, dated 20 May 1984.
E. A land charges search certificate, dated 8 March 1984.
A - A conveyance of the property, dated 10 March 1984.
A woman owns a registered, freehold house. Within the last year, a property developer requested that the woman enter into an option agreement with him. In return for an option fee, the woman agreed to grant the property developer the option to buy her house at any time within five years of the option agreement. The option agreement has recently been exchanged.
Which of the following represents the best way for the property developer to protect the option agreement?
A. Registration as a notice.
B. Registration as a C(iv) land charge.
C. Registration as a D(ii) land charge.
D. Registration as an interest overriding a registered disposition.
E. Registration as a registrable disposition.
A - Registration as a notice.
