Topic 5 - Practical aspects of property and mortgage law Flashcards
What is the purpose of land registration?
Land registration is used to provide an accurate, up‑to‑date and continuing
record of ownership of land
Who is responsible for land registration in Scotland?
In Scotland, land registration is the responsibility of the
registers of Scotland
What details does the Land Registry hold for registered land?
The Land Registry holds details across 3 separate registers for registered land:
These are:
1) The property register - contains details about the land, a plan of the property including any easements that are beneficial to the property
2) The proprietorship
register - contains details various details, such as things about the owner and tenure type
3) The charges register- contains info regarding any charges over the property, including any negative easements or restrictive covenants or the rights of any mortgagee (lender)
Tell me the various classes of title in relation to property ownership
1) Absolute (best)
2) Good leasehold
3) Possessory
4) Qualified title (worst)
If I were to say the following, what do I mean:
It’s best to buy a property ‘with good title’
IE, I own my property freehold with good title
‘Good title’ means the property has a clear and legally sound ownership history
Prospective buyers will obviously want this because it means they don’t have to worry about any issues down the line such as legal challenges about ownership or something else.
Buying real estate with good title ensures a smooth and secure transfer of ownership
Tell me the various classes of title in relation to property ownership in order from best to worst and briefly explain each
1) Absolute (best)
The following is classed as ‘Absolute’:
-Freehold with good title
-Leasehold with good title (the lease must be at-least 21 years and both the leaseholder and freeholder have ‘good title’ )
2) Good leasehold
The following is classed as a ‘good leasehold’:
-The lease is longer than 7 years
-The leasehold is fine but the freeholder’s title is not (ie the freeholder has not supplied the land registry with evidence of ownership perhaps because the title deeds are destroyed or lost)
3) Possessory
The applicant is unable to produce the title deeds or other proof of title when the property is first registered. Applies the same to freehold and leasehold property
Possessory title means the owner is registered as the owner, but it does not provide protection from a claim from another person asserting that they owned the land before it was registered. Lenders will therefore avoid unless they have indemnity insurance, which will obvs cost more for the borrower
4) Qualified title (worst)
This is rare
Occurs when there is some defect in the title as registered, and so absolute or good leasehold title cannot be guaranteed. A defect might be legal issues or errors in property records and so on.
What are the title deeds of a property?
The title deeds are the documents that prove ownership of the property and show the history of ownership
You show the land registry these documents and they will then allocate your ownership title. IE, if the title deeds are full and correct you will be given absolute title or if you cant supply the documents because they are destroyed for instance (which is what happened a lot during WW2) you may be given possessory title and so on
What are squatters rights when it comes to:
Unregistered Land
Registered land
For unregistered land:
If a squatter has been in intentional occupation of the land for 12 years with no objection from the legal owner they may apply for possessory title.
Once possessory title has been held for 12 years without counter claims, the Land Registry will usually allow the title to be upgraded to absolute title
Registered Land:
If occupied for 10 years without objection from the registered owner, the occupier can claim title to the land.
They will get absolute title if there is no objection from the owner
If the owner does object the applicant will be rejected unless they can:
Show that it’s unreasonable to
deprive them of the property
Show they have a valid claim on the property (eg they had paid for the property but it was not registered in their name)
Can show they had occupied the property reasonably believing it is their own.
What is a squatter
An individual who intentionally lives in a property without permission and lives there
It is known as ‘adverse possession’
A squatters right when it comes to registered land is as follows:
If registered land has been intentionally occupied for 10 years without objection from the registered owner, the occupier can claim title to the land.
They will get absolute title if there is no objection from the owner
What happens if the owner does object after the squatter making an application:
If the owner objects the squatter’s application will be rejected unless they can:
Show that it’s unreasonable to
deprive them of the property
Can show they have a valid claim on the
property (eg they had paid for the property but it was not registered in their name)
Can show they had occupied the property reasonably
believing it is their own.
What is a conveyancer ?
Person whose job is to manage the process of transferring legal ownership of property
Transfers of registered land should be
registered within 30 days of completion
Is this a legal requirement?
What is the 30 day period known as?
What issues can arise if the transfer takes longer than 30days?
Not a legal requirement
The 30 days is referred to as the
‘priority period’ . Its called this because the new owner has priority over other claims and charges.
Failure to register within 30 days could mean other interests may be registered and take higher priority
Is registration of land compulsory?
Yes it is
What is classed as unregistered land?
Unregistered land is land that has not, since the introduction of compulsory registration:
Been legally transferred;
Had a lease exceeding seven years granted;
Had a legal mortgage created upon it;
Had rights entered over
Land registration is compulsory nowadays. How is it possible there is unregistered land still?
It was unregistered before the introduction of compulsory registration and it has remained so since
When a new owner is registering a property, what is the timeframe and what happens if they dont meet this timeframe?
An application for registration must take place within two months of the
transfer;
If the timeframe is missed, the title reverts to the previous owner, who will hold it on trust for the new owner
What does the term ‘root of the title’ refer to?
When a conveyancer is looking to establish good title they search back the last 15 years (known as root of the title)
An unregistered property makes it more difficult to do this
Easements and Restrictive Covenants are said to ‘run with the land’
What does this mean?
It means they remain in place and are passed on to future owners
Ie they stay on the land
What is an easement?
An easement is a right that one property has over the land of another
Common examples include: rights of way, rights to light or prospect (the view), rights to hang a sign on another person’s house and so on
It must involve two properties, that are close together, with two separate owners
What is a Dominant Tenement?
What is a Servient Tenement?
Both refer to easements
An easement is a right that one property has over the land of another
The land that enjoys the right over the other is called the dominant tenement
The land which is subject to the right is called the servient tenement
What is the difference between a positive easement and a negative easement?
Positive easements give the landowner a right himself to do something on, or to his
neighbour’s land
Negative easements give the landowner a right to stop his neighbour doing something on his (the neighbour’s) own land’
One type of positive easement is ‘right of way’
Explain what right of way is
Why is it is a positive easement?
Right of way allows someone to cross someone else’s land without breaking the law
You may need it so you can get access to your own property. For example, you have to walk through your neighbour’s field to get to your land
Many lenders will only lend money to prospective buyers of flying freeholds if there is an existing easement in place which allows right of way through the property that the flying freehold is situated in. This is the case because otherwise , there is no guarantee the flying freehold can be maintained resulting in more risk for the lender
Positive easements gives the owner of land a right himself to do something on or to his
neighbour’s land (ie walk across it as with right of way) hence positive easement
What is right of light?
Why is this a negative easement?
A right of light is established when
one person wants to build a property adjacent to another.
The occupant of the existing property can take action to secure their right of light, forcing the developer to build a certain distance away from the existing property
Negative easements give a landowner a right to stop his neighbour doing something on their (the neighbour’s) own land.
What is an easement by necessity?
This type of easement is one that is created automatically because it is necessary for the landowner in order to
do something essential.
ie, A landowner might sell a small part of their farm land, like a barn, which is surrounded by their other land. An easement will be automatically created which allows the buyer to walk across the landowner’s land so they can gain access to their land. This is an easement by necessity is it is necessary for the new land owner to do something essential.. gain access to their land
Can an easement be removed?
What is the term for this?
If an easement is removed it is said to be ‘extinguished’
The main reasons an easement is extinguished are:
The same person takes ownership of both the dominant and servient pieces of land.
The easement expires
The owner of the dominant piece of land expressly terminates the easement by deed, after negotiating with the other parties
