1. Taking Instructions & Title Investigation Flashcards
(27 cards)
Freehold
A right of absolute ownership of land, for life.
Leasehold
A right to own land for a fixed period of time e.g. 999 years
Registered land
The land has been registered with HM Land Registry and details of the property will appear on the Land Register and are available for public inspection
Easements
An easement is a right that one landowner has to do something, or prevent something from happening, on land belonging to someone else
In what 3 ways may easements be created?
Expressly (in writing), Impliedly (by virtue of necessity) or by Long User (prescription - which requires 20 years uninterrupted use)
Easement Example: A right of way - what does this mean?
This allows the person with the benefit of the easement to travel over another person’s land, which is burdened by the easement. The person with the burden of the right of way will be unable to build on this land for example.
Easement Example: A right of light - what does this mean?
This entitles the person with the benefit of the easement to receive light through defined doors and windows, across land which is burdened by the easement. The existence of an easement can limit what the person with the burden can do with their land. E.g., building high structures if these block light.
Covenants
A covenant is an enforceable promise to either do something or to avoid doing something.
A positive covenant
Requires a person to do something e.g., keep a fence in good repair
A restrictive covenant
Prevents a person from doing something e.g., the land must not be used for offices
Does the burden of the covenant run with the land?
The burden of a positive covenant DOES NOT RUN WITH THE LAND.
The burden of a restrictive covenant will always run with the land IF THE RESTRICTIVE COVENANT APPEARS ON TITLE.
Joint Tenancy
Both tenants own 100% of the property jointly and do not hold distinct shares. In the event of sale, the joint tenants will split the proceeds equally. When one tenant dies, the remaining tenant will automatically inherit the deceased share (right of survivorship)
Tenancy in Common
Both tenants own distinct shares in the property. When a tenant in common dies, their share of the property will pass under their will or intestacy rules (if no will)
What is a Form A restriction? What does it show?
“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”
That land is being held as tenants in common.
This alerts third parties dealing with the land that a trust in land is in existence, meaning that the sale of the legal estate will need to be effected by two trustees.
What happens where one tenant in common dies and the surviving co-owner wishes to sell the property?
They will need to appoint a second trustee before completion of the transaction (because the sale must be effected by two trustees)
Caveat Emptor
“Buyer Beware”
It falls to the buyer to satisfy themselves that the property is free from any defects and / or issues.
A buyer will have no redress against a seller if they discover, subsequent to the purchase, issues with the property which they could have discovered prior to completion (even if the seller knew and stayed silent). The buyer has responsibility to find out all of the information which they need about the property before committing to the purchase.
What is an undertaking?
An enforceable promise
Any statement made by a solicitor to do or not do something, whether given to a client or other third party (such as another solicitor) may be a what?
An undertaking
How does the SRA define an undertaking?
A statement given orally or in writing…
Whether or not it includes the word “undertake” or “undertaking”….
To someone who reasonably places reliance on it…
That you or a their party will do something or cause something to be done, or refrain from doing something…
A solicitor must perform all undertakings within…
an agreed timescale or a reasonable amount of time (reasonable depends on the facts of the case)
Para 1.3 of the Code for Firms
What are the consequences when an undertaking is breached?
- Personal liability
- Disciplinary action against the solicitor
- Disciplinary action against the firm
When is VAT charged?
(commercial property transactions)
Sales of “new” freeholds are charged at the “standard rate” for VAT = 20%
VAT must be charged if the sale occurs within 3 years of the property’s construction
If the property was constructed MORE than 3 years ago the seller HAS DISCRETION to charge VAT
What is overreaching?
The process of transferring the beneficial interests under a trust from land itself to the capital money received from the purchaser of the legal estate
How does a buyer overreach the beneficial interests?
The interests of the beneficiaries under the trust will be overreached only if the trustees convey the legal estate to a purchaser in good faith for valuable consideration and give a receipt for any capital money
