Title investigation - Unregistered land

Question 1

Compulsory first registration

Answer 1

• only triggered on a dealing with the property: land that is not sold, given away or mortgaged may remain unregistered (e.g. elderly people who have never moved, land belonging to family farms or the aristocracy)
• Compulsory first registration for sales: 1 December 1990
• Compulsory first registration for gifts: 1 April 1998

On a sale or gift of a property now land must be registered

Question 2

Who pays for registration?

Answer 2

If a transaction triggers compulsory first registration, then the buyer’s solicitor should insist that the seller register their title at their expense before proceeding

Question 3

How unregistered title is deduced

Answer 3

• Title is shown by an epitome of title (a schedule of title deed and documents accompanies by the 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

Question 4

Process of deducing an unregistered title

Answer 4

• As with registered land, the seller’s solicitor deduces title. Rather than simply ordering Land Registry documents, 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

Question 5

Requirements for good root of title

Answer 5

1. Must be dated more than 15 years ago
2. Deals with both the legal and beneficial title to the property
3. Adequately describes the extent of the land being conveyed
4. Does not cast doubt on the seller’s title

Question 6

The chain of title

Answer 6

The seller’s solicitor:
- identifies the root of title
- establishes a chain from that deed to the seller
- would not need to include anything earlier unless they contain covenants or easements that are referred to in the root of title

Question 7

What other documents must be included?

Answer 7

• Power of attorney under which the root of title or any deed in that of title has been executed
• For transfers of ownership by death, a death certificate if the property has passed by survivorship OR grant of representation and an assent if the property has passed under a will or intestacy
• Any mortgages created after the root of title even if discharged

Not needed:
- docs that only affect the beneficial interest
- expired leases
- Land Charges searches, correspondence, architects plans etc

Question 8

What is the epitome of title?

Answer 8

An epitome is a set of copies of relevant title documents with a front sheet setting out details of the documents.

Question 9

First thing buyer’s solicitor should do when investigating unregistered title

Answer 9

Carry out an index map search.

Question 10

What does an index map search reveal?

Answer 10

• Any registered titles within the boundaries
• Any pending applications for registration
• A caution against first registration which would need to be investigated further - means person lodging the caution is claiming some kind of right against the property

Question 11

What does the buyer’s solicitor need to look for on each deed when investigating an unregistered title?

Answer 11

That each deed is validly executed and stamped.

Question 12

Validly executed deed

Answer 12

1. Clear on its face that it is intended to be a deed - usually will say deed
2. Signed - individual: signed in presence of a witness who also signed, company: two company directors or one director and the company secretary
3. Delivered - means an acknowledgement that the person executing the deed intends to be bound by it. In practice this means inserting a date.

Sealed - pre 31 July 1990 - deed must have a seal (wax or paper disc)

Question 13

Stamping of conveyances

Answer 13

Each conveyance as well as being validly executed must be correctly stamped.

Pre 1 December 2003 subject to stamp duty (replaced by SDLT) - so all unregistered land will have stamp duty.
- conveyance was stamped with the value of the stamp duty paid. If not subject to stamp duty, had to contain a certificate of value that confirmed this.

After 1931 should have a “particulars delivered” stamp.

Question 14

What if stamp duty is missing?

Answer 14

The buyer’s solicitor should insist that the seller pays the outstanding stamp duty and provides proof this has been done.
There will be interest and penalties for late payment of stamp duty.

Question 15

How do you check how the beneficial interest is held in unregistered land?

Answer 15

Joint tenancy: can assume where:
- 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 their interests into a beneficial tenancy in common written on to or attached to the conveyance to the seller; and
- there is no bankruptcy petition registered against the seller

If the above conditions are not met then seller should be treated as a surviving tenant in common.

Question 16

What should you ask for is a surviving sole JT/T-in-C?

Answer 16

Surviving sole JT: If the seller is a surviving joint tenant, then the buyer’s solicitor should ask for certified copies of the deceased JT’s death certificate.

surviving sole T-in-C: If the seller is a surviving tenant in common then the buyer’s solicitor should ask for a second trustee to be appointed in the conveyance to the buyer to overreach the beneficial interest of the deceased tenant in common or their estate.

Question 17

Land charges

Answer 17

Some rights burdening the property will only bind unregistered land if they are registered at the Land Charges Department of the Land Registry.

c(i) puisne mortgage
c(iv) estate contract
d(ii) restrictive covenant
d(iii) equitable easement
F home right

Question 18

Land Charges search

Answer 18

• must complete a land charges search
• historically form K15, now through online portal
• search is by years of ownership and full name - care needs to be taken over the possibility that names are spelt differently or middle names omitted
• the search should be carried out against each owner of the land in the chain of title

Question 19

Mortgages

Answer 19

If a mortgage has been discharged there should be a vacating receipt on it or attached to it and signed on behalf of lender confirming.

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.

Second or third mortgages are registered as c(i) land charge.

Question 20

When do positive covenants bind unregistered land?

Answer 20

Only if there is a chain of indemnity covenants. Buyer’s solicitor must check each deed in the chain. Not registrable as land charges.

Question 21

When do restrictive covenants bind unregistered land?

Answer 21

Will only bind if burden is registered as a d(ii) land charge.

Question 22

When do unknown covenants bind unregistered land?

Answer 22

These may arise if there is a missing deed containing covenants referred to in the chain of title.

This should be raised with the seller and if necessary indemnity insurance should be taken out and reported to the buyer and lender.

Question 23

Other interests on unregistered land:

Answer 23

Legal easements: not registrable by land charge. This is because they should be apparent from the epitome of title or if acquired by prescription, by inspection.

Equitable interests: are registrable as d(iii) land charges as these are not necessarily apparent from the epitome of title or inspection

Leases: not registrable and any ongoing should be included in the epitome of title

Estate contracts: may be protected as c(iv) land charges. This can be useful to protect the buyer’s interest if there is likely to be a long period between exchange and completion

Home rights: protect the right of a spouse or civil partner to occupy the home.