W2

Question 1

What is the purpose of deducing and investigating registered title?

Answer 1

The purpose of deducing and investigating registered title is to ensure that the seller has the right to sell the property, that the title is adequate for the buyer’s purposes, and that there are no title defects that could affect the value or ability to sell the property.

Question 1

When does the process of deducing and investigating registered title typically occur?

Answer 1

The process of deducing and investigating registered title usually happens early on in the pre-exchange stage of a property transaction.

Question 2

What are the key components of Land Registry official copies?

Answer 2

Land Registry official copies comprise three registers within one document: the property register, the proprietorship register, and the charges register. The property register describes the property and any rights benefiting it, the proprietorship register gives information about the registered proprietor(s), and the charges register lists rights burdening the property.

Question 3

What is the role of the buyer’s solicitor in investigating the title to a property?

Answer 3

The buyer’s solicitor investigates the title to ensure that the seller has the right to sell the property, that the title is adequate for the buyer’s purposes, and that there are no title defects that could affect the value or ability to sell the property.

Question 4

What is the process of deducing registered title?

Answer 4

Deducing registered title involves the seller’s solicitor gathering the title documents, checking them to ensure that the seller is entitled to sell the property, and sending them to the buyer’s solicitor. The title documents include Land Registry official copies of the register, the title plan, and copies of any referred documents.

Question 5

What does it mean to deduce title in the context of property transactions?

Answer 5

In the context of property transactions, deducing title means the process of proving ownership to a potential buyer. It involves providing proof of ownership through the title documents.

Question 6

What are the three separate registers within the Land Registry official copies?

Answer 6

The three separate registers within the Land Registry official copies are the property register, the proprietorship register, and the charges register. The property register describes the property and any rights benefiting it, the proprietorship register provides information about the registered proprietor(s), and the charges register lists rights burdening the property.

Question 7

What is the purpose of investigating registered title?

Answer 7

The purpose of investigating registered title is to check that the seller has the legal right to sell the property, ensure that the property is suitable for the buyer’s intended use, and identify any title defects that could affect the value or future sale of the property.

Question 8

What does the property register in Land Registry official copies describe?

Answer 8

The property register in Land Registry official copies describes the property and any rights benefiting it. It includes details such as the property description, whether it is freehold or leasehold, and the rights that may be listed.

Question 9

What are some examples of rights that may be listed in the property register?

Answer 9

Rights that may be listed in the property register include rights of way, rights to run services (such as gas or water pipes), rights of light, and excluded rights. These rights can have different implications and may require further investigation or consideration.

Question 10

What is the significance of the class of title in the proprietorship register?

Answer 10

The class of title in the proprietorship register indicates how satisfied the Land Registry is with the registered proprietor’s proof of ownership to the property. Title absolute is the best and most common class of title, indicating no issues. Other classes of title may have specific defects or limitations that need to be reported to the client and may affect a lender’s requirements.

Question 11

Who is usually the registered proprietor of a property?

Answer 11

The seller is usually the registered proprietor of a property. However, there may be exceptions, such as when the seller is the executor of a deceased person’s estate. The registered proprietor can be an individual, a company, a limited liability partnership (LLP), or a combination of these up to a maximum of four legal persons.

Question 12

What are some matters recorded on the proprietorship register?

Answer 12

Other matters recorded on the proprietorship register include the price paid or stated value of the land, indemnity covenants, restrictions on the registered proprietor’s right to sell the property, and co-ownership details.

Question 12

What actions should be taken if the property has qualified title, possessory title, or good leasehold title?

Answer 12

If the property has qualified title, possessory title, or good leasehold title, the buyer’s solicitor should report it to their client and explain what it means. They should also check the mortgage lender’s requirements, consider obtaining title indemnity insurance to cover risks, and explore the possibility of upgrading to title absolute if missing documents can be located.

Question 13

What is the difference between beneficial joint tenants and beneficial tenants in common?

Answer 13

Beneficial joint tenants hold equal shares in the property and have the right of survivorship, while beneficial tenants in common can hold unequal shares and do not have the right of survivorship.

Question 14

What is the purpose of a tenancy in common restriction on the proprietorship register?

Answer 14

A tenancy in common restriction on the proprietorship register indicates that the co-owners hold the property as tenants in common. It prevents certain dealings with the property unless the terms of the restriction are complied with.

Question 15

What happens to the legal and beneficial title in the event of the death of a joint proprietor?

Answer 15

In the event of the death of a joint proprietor, the legal title passes to the surviving joint proprietor. The beneficial title depends on whether the joint tenants held the property as joint tenants or tenants in common.

Question 16

What is the purpose of a mortgage entry on the charges register?

Answer 16

A mortgage entry on the charges register indicates that the property is subject to a mortgage. It ensures that the mortgagee (lender) has a legal interest in the property and may require a restriction in the proprietorship register.

Question 17

How can a buyer ensure that a property is sold free of mortgage?

Answer 17

To ensure that a property is sold free of mortgage, the buyer’s solicitor should check early on that the seller will have sufficient funds to clear the mortgage. It should also be made a term of the contract that the mortgage will be redeemed on completion, with an appropriate undertaking from the seller’s solicitor.

Question 18

What are some options for dealing with covenants that appear on the charges register?

Answer 18

Options for dealing with covenants include obtaining indemnity insurance, seeking consent from the party with the benefit of the covenant, or making an application to the Upper Tribunal (Lands Chamber). Unknown covenants should always be reported, and appropriate action should be taken.

Question 19

What is the effect of restrictive covenants appearing on the charges register?

Answer 19

Restrictive covenants appearing on the charges register are binding on the property. They may restrict the existing use of the land or the buyer’s proposed use of the land.

Question 20

What is the difference between a legal mortgage and a legal charge?

Answer 20

Historically, a legal mortgage involved a transfer of ownership to the lender, while a legal charge is a security interest only. Modern mortgages no longer involve a transfer of ownership, and the terms ‘charge’ and ‘mortgage’ are used interchangeably.

Question 21

What does it mean for a buyer to overreach the beneficial interests in land?

Answer 21

Overreaching means transferring the beneficial interests in land to the money that the buyer has paid. This frees the land from beneficial interests, and the buyer does not need to worry about them.

Question 22

What does the charges register contain?

Answer 22

The charges register lists rights burdening the property, such as mortgages, covenants, easements, and leases. It shows the interests burdening the property and provides information on mortgages, leases, easements, and covenants.

Question 23

What is the purpose of a restriction on the proprietorship register?

Answer 23

A restriction on the proprietorship register prevents certain dealings with the property unless authorized by the party specified in the restriction. It ensures that the terms of the restriction are complied with before any registered disposition takes place.

Question 24

What happens to the beneficial interest in a tenancy in common when a joint proprietor dies?

Answer 24

In a tenancy in common, the right of survivorship does not apply. The surviving joint proprietor/beneficial tenant in common only takes their share of the property, while the other share passes to the deceased person’s beneficiaries under their will or the intestacy rules.

Question 25

What is a restrictive covenant and how is it recorded?

Answer 25

A restrictive covenant is a covenant that limits the use of a property. It is recorded on the charges register and can be extracted from there. An example of a restrictive covenant is a covenant to use the property only as a residential dwelling.

Question 26

What is the purpose of the charges register?

Answer 26

The charges register contains any charges and other matters that affect the land. It is where restrictive covenants and other important information about the property are recorded.

Question 27

What is a positive covenant and how is it different from a restrictive covenant?

Answer 27

A positive covenant is a covenant that requires certain actions to be taken, such as maintaining a fence. Unlike restrictive covenants, the appearance of positive covenants in the charges register does not necessarily mean that they are binding on the property. The effect of the covenant, rather than its wording, determines whether it is positive or restrictive.

Question 28

How does the chain of indemnity work for positive covenants?

Answer 28

The chain of indemnity ensures that the original owner, subsequent owners, and buyers are bound by the positive covenant. If the covenant is breached, the original owner can sue the subsequent owners who have given an indemnity covenant. This chain continues with each subsequent sale of the property.

Question 29

What is the purpose of an indemnity covenant in relation to positive covenants?

Answer 29

An indemnity covenant is a covenant given by a buyer to a seller to observe the positive covenants. It ensures that the buyer is bound by the positive covenant and can be sued by the original owner if the covenant is breached. The indemnity covenant appears on the proprietorship register.

Question 30

What are the options for dealing with unknown covenants?

Answer 30

Unknown covenants could be positive or restrictive. If there are positive covenants, it is unlikely that a chain of indemnity exists. The buyer’s solicitor should assume that some of the unknown covenants are restrictive and take appropriate action. This may involve obtaining indemnity insurance or seeking consent from the person with the benefit of the covenant.

Question 31

How does the buyer deduce title to unregistered land?

Answer 31

The buyer’s solicitor deduces title to unregistered land by examining the bundle of deeds and documents for the property. They identify the relevant documents, list them in an epitome of title, and provide copies to the buyer’s solicitor. The most important document to identify is the root of title, which proves the title to the property.

Question 32

What is the difference between registered title and unregistered title?

Answer 32

Registered title is shown by official copies and a title plan, neatly categorizing property, proprietorship, and charges. Other relevant deeds and documents are extracted on the official copies or filed at the Land Registry. Change of registered proprietor is usually quick. Unregistered title is shown by an epitome of title, which includes a schedule of title deeds and documents. Ownership and property description may be distributed among multiple documents. First registration may take some months at the Land Registry.

Question 33

Why does unregistered land still exist despite compulsory first registration?

Answer 33

Unregistered land may still exist because compulsory first registration is only triggered on a dealing with the property, such as a sale or gift. Land that is not being sold, given away, or mortgaged may remain unregistered. Compulsory first registration was imposed in phases, and now any sale or gift of property requires registration.

Question 34

What is the role of the buyer’s solicitor in deducing unregistered title?

Answer 34

The buyer’s solicitor investigates the unregistered title by examining the bundle of deeds and documents for the property. They identify the relevant documents, list them in an epitome of title, and provide copies to the seller’s solicitor. The buyer’s solicitor is responsible for registering the buyer’s title after completion.

Question 35

What is the root of title and why is it important?

Answer 35

The root of title is the most recent deed that proves the title to the property. It is important because it provides a starting point for deducing unregistered title and ensures that the seller’s title can be relied upon. A good root of title meets four requirements: it is dated more than 15 years ago, deals with both legal and beneficial title, adequately describes the extent of the land, and does not cast doubt on the seller’s title.

Question 36

What are the buyer’s options for dealing with covenants?

Answer 36

If the land’s current use is in breach of a covenant but no objection has been received, obtaining an indemnity insurance policy is the simplest option. If the covenant meets certain grounds, an application can be made to the Upper Tribunal (Lands Chamber) to discharge the covenant. Approaching the person with the benefit of the covenant may also be an option, but insurance should be tried first. Discharging a covenant through the Upper Tribunal is expensive and time-consuming.

Question 37

What is the risk of unknown covenants and how can it be managed?

Answer 37

Unknown covenants could be positive or restrictive. If there are positive covenants, it is very unlikely that a chain of indemnity exists. The buyer’s solicitor should assume that some of the unknown covenants are restrictive and take appropriate action. This may involve obtaining indemnity insurance or seeking consent from the person with the benefit of the covenant. Insurers look at the risk involved, including the age of the covenant and evidence of breach.

Question 38

What are the requirements for a valid root of title?

Answer 38

A valid root of title must be dated more than 15 years ago and before the 1st date of compulsory registration. It should deal with both the legal and beneficial title to the property, be executed validly, adequately describe the extent of the land being conveyed, and not cast doubt on the seller’s title.

Question 39

Why is a sale conveyance or legal mortgage preferable to a gift or assent as a root of title?

Answer 39

A sale conveyance or legal mortgage is preferable to a gift or assent as a root of title because there is an assumption that the title for that deed was investigated for 15 years, giving a total of 30 years.

Question 40

What does a conveyance need to include to be considered a good root of title?

Answer 40

A conveyance needs to include both the legal and beneficial title to the property. If the conveyance is silent on this point, then beneficial title is assumed to pass with the legal title. Additionally, the conveyance should adequately describe the land being conveyed and usually incorporate a scale plan.

Question 41

What is the purpose of the chain of title in investigating unregistered land?

Answer 41

The chain of title establishes a complete and uninterrupted history of ownership from the root of title to the seller’s title. It ensures that each conveyance or deed in the chain of title is validly executed and stamped, and it provides a clear record of ownership for the buyer’s solicitor to review.

Question 42

What are the requirements for a conveyance to be considered validly executed?

Answer 42

A conveyance must be signed by the relevant parties in the presence of a witness. For a company, the conveyance should have the company seal affixed in the presence of two directors or one director and the company secretary. Additionally, the conveyance should be delivered as a deed, indicating the intention to be bound by it.

Question 43

What is the significance of stamping conveyances in investigating unregistered land?

Answer 43

Conveyances in the chain of title must be correctly stamped to show that the appropriate ad valorem stamp duty has been paid. This ensures that the conveyance is valid and legally enforceable. The buyer’s solicitor should check for the presence of a Particulars Delivered stamp and a certificate of value or ad valorem stamps.

Question 44

What factors should be considered when investigating the extent of land conveyed in unregistered title?

Answer 44

The extent of land conveyed should be adequately described in the conveyance and may include a scale plan. If the conveyances in the chain of title do not agree or if the land has been divided, the extent of the land conveyed may become complicated. In some cases, a plan may not be needed if the residential addresses have clear boundaries and identical footprints.

Question 45

What is the purpose of investigating co-ownership, mortgages, and rights in unregistered land?

Answer 45

Investigating co-ownership, mortgages, and rights in unregistered land aims to ensure that the seller has the legal right to sell the property, that the property is suitable for the buyer’s intended use, and that there are no title defects that could affect the value of the property or future saleability. The buyer’s solicitor must check the root of title, the completeness of the chain of ownership, the extent of the land conveyed, and any rights benefiting or burdening the property.

Question 46

What is the purpose of a land charges search in investigating unregistered land?

Answer 46

A land charges search is necessary to identify certain interests binding unregistered land. It helps ensure that the buyer is aware of any claims or rights against the property that could affect their ownership. The buyer’s solicitor should include co-ownership, mortgages, leases, and rights benefiting and burdening the property in the investigation of unregistered land.

Question 47

What are the requirements for a conveyance to be considered validly executed under common law?

Answer 47

Under common law, a conveyance must be signed by the relevant parties in the presence of a witness. For a company, the conveyance should have the company seal affixed. Additionally, the conveyance should be delivered as a deed, indicating the intention to be bound by it. The Law of Property (Miscellaneous Provisions) Act 1989 introduced changes to the formalities for executing deeds.

Question 48

What is the significance of stamp duty in investigating unregistered land?

Answer 48

Stamp duty was a tax imposed on property transactions for value until 1 December 2003. Conveyances subject to stamp duty needed to be properly stamped with the ad valorem stamp duty paid. The stamp duty rates and rules varied over the years, so the buyer’s solicitor should research the requirements for any questionable conveyance based on the relevant date.

Question 49

What are the key considerations when investigating the extent of land conveyed in unregistered title?

Answer 49

When investigating the extent of land conveyed in unregistered title, the buyer’s solicitor must check that the root of title adequately describes the land being conveyed. This may include a scale plan or reference to a plan in a pre-root document. The extent of the land conveyed may become complicated if the conveyances in the chain of title do not agree or if the land has been divided.

Question 50

What is the purpose of the Land Charges Department of the Land Registry?

Answer 50

The Land Charges Department of the Land Registry is responsible for registering rights burdening unregistered land. It is separate from the Land Registry registers, which concern registered land.

Question 51

What are land charge classes and how are they categorized?

Answer 51

Land charge classes categorize different types of charges and the corresponding type of interest protected. Examples include C(i) for puisne mortgage, C(iv) for estate contract, D(ii) for restrictive covenant, D(iii) for equitable easement, and F for home right. The class types can be found in section 2 of the Land Charges Act 1972.

Question 52

How are land charges searches conducted?

Answer 52

Land charges searches are conducted to investigate unregistered titles. Historically, a search was requested on a Form K15, but now it is more frequently carried out using the Land Registry’s online portal. The search is done by years of ownership and full name, and should be carried out against each owner of the land in the chain of title.

Question 53

What should be done if there are mortgages associated with unregistered land?

Answer 53

Similar to registered conveyancing, mortgages associated with unregistered land are usually not a matter of concern as long as the seller agrees to discharge them on completion. The mortgage deed should be listed on the epitome of title, and if the mortgage has been discharged, there should be a vacating receipt indicating that it has been repaid.

Question 54

What types of covenants may burden unregistered land?

Answer 54

Covenants may burden unregistered land and can be positive, restrictive, or unknown. Positive covenants only bind unregistered land if there is a chain of indemnity covenants. Restrictive covenants will only bind unregistered land if the burden is registered as a d(ii) land charge. Unknown covenants may arise from missing deeds referred to in the chain of title.

Question 55

Are legal easements registrable as land charges?

Answer 55

Legal easements are not registrable as land charges because they should be apparent from the epitome of title or acquired by prescription through inspection. However, equitable easements are registrable as d(iii) land charges as they may not be apparent from the epitome of title or inspection.

Question 56

How can estate contracts be protected for unregistered land?

Answer 56

Estate contracts can 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

Question 57

What is the purpose of CLC searches and how are they conducted?

Answer 57

CLC searches are carried out against previous owners of the property for their periods of ownership. The search is done by years of ownership and full name. For example, if Company A bought the property in 1946 and sold it in 1973, a search would be conducted against the name ‘Philomena Clegg’ for the period 1946 to 1973. The searches against previous owners can be relied upon whenever they are dated, but the search against the current owner should be carried out again just before completion to confer priority.

Question 58

What is the significance of vacating receipts in relation to mortgages?

Answer 58

ANSWER

A vacating receipt is wording written on or attached to the mortgage deed, confirming that the mortgage has been repaid and signed on behalf of the lender. If there is a vacating receipt, it indicates that the mortgage has been repaid and is not of concern. A 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.

Question 59

Why are positive covenants not registrable as land charges?

Answer 59

Positive covenants are not registrable as land charges. All covenants that burden the land are put on the charges register, regardless of whether they are positive or negative. Positive covenants only bind unregistered land if there is a chain of indemnity covenants.

Question 60

What should be done if there are unknown covenants in the chain of title?

Answer 60

If there are unknown covenants arising from missing deeds referred to in the chain of title, it should be raised with the seller. If necessary, indemnity insurance should be taken out and reported to the buyer and the lender.

Question 61

Are leases registrable as land charges for unregistered land?

Answer 61

Leases are not registrable as land charges because any leases that have not ended should be included in the epitome of title.