Ch 1: Title investigation

Question 1

What are the 3 documents for registered land?

Answer 1

1. The official copies of the register
2. title plan
3. Copies of any documents referred to in the official copies of the register where relevant extracts have not already been included in the official copies

Question 2

What are the 3 registers in the official copies of the register?

Answer 2

1. Property Register: describes the property and rights benefiting the property
2. Proprietorship register: gives the class of title, the owner’s name and address and entries affecting the owner’s right of disposal
3. Charges register: lists ‘charges’ burdening the property i.e third party rights over the property (e.g. mortgages, positive covenants and restrictive covenants, leases or the burden of easements)

Question 3

What should the buyer’s solicitor with the description of the property in the Property Register?

Answer 3

Must forward a copy of the title plan to the buyer to ensure that the boundaries correspond with the buyer’s understanding of the size/location of the land in question

Question 4

Where a right of way is included in the Property Register, the buyer’s solicitor must consider and advise their client on all of the following:

Answer 4

1. Adequacy
2. Maintenance
3. Adoption
4. Registration

Question 5

What does the Water Industry (Schemes for Adoption of Private Sewers) Regulations 2011 give rise to?

Answer 5

Ownership of all private sewers serving more than one property and lateral drains that are connected to the public sewerage system was transferred to the various statutory sewerage undertakers (e.g. Thames Water)

Question 6

Why are some rights stated to be excluded from the Property Register?

Answer 6

This may occur where a previous seller of the land retained the right e.g. to fish or hunt on the property or to extract mines and minerals from the ground under the property.

Question 7

What should the solicitor do with excluded rights on the Property Register?

Answer 7

Report to the buyer in case it affected the buyer’s proposed use of the land.

Question 8

What should you do when you see no rights in a property’s Property Register?

Answer 8

It’s not necessarily a problem.

You should check with your client, your enquiries of the seller and your search results that no rights, such as a right of way over someone’s private land, are required.

Question 9

What does a claimant have to prove for an obstruction of an easement?

Answer 9

1. title to the easement (e.g. by way of express grant)
2. the scope of the easement
3. that there has been a substantial interference of the right

Question 10

What is the test for an obstruction to be considered as substantial?

Answer 10

Does the obstruction mean the right cannot be substantially and practically exercised as conveniently as before?

If the answer is yes, an injunction may be granted preventing the obstruction of the easement.

Question 11

What is a Title Absolute?

Answer 11

The best class of title and the most commonly encountered.

Indicates that the proprietor satisfied the Land Registry that it was the true and proper owner of the property.

Question 12

What is a Qualified Title?

Answer 12

Where the proprietor’s ownership has been established only for a limited period, or is subject to reservations which cannot be disregarded – e.g certain title documents were missing when the land was registered.

Question 13

What is a Possessory Title?

Answer 13

Where the proprietor is in actual possession or in receipt of the rent and profits, but has no further documentary evidence of how it obtained ownership – e.g. a squatter

Question 14

What do you have to do if the property is owned by an overseas company.

Answer 14

1. You must check the person or persons signing has, or have respectively, the authority of the company to sign for that company
2. You would need to get a legal opinion from a lawyer in that jurisdiction confirming this.

Question 15

What is a buyer’s solicitor checking in a company search?

Answer 15

1. The company has been registered and still exists

2. The company is not subject to winding up proceedings

Question 16

What else do you need to check when it’s a sale by a company?

Answer 16

A company under the Companies Act 2006 has an implied power to sell property unless the company has restricted this in its Articles.

The vast majority of companies formed prior to the commencement of CA 2006 will also have power to sell property, but you should check that their objects (found in their Memorandum) do give the company such power.

Question 17

What are the requirements for a sale by a limited liability partnerships?

Answer 17

The LLP must execute the contract and purchase deed. It will need to be
executed by two members or one member and a witness.

Question 18

What is the common law presumption of partnership property?

Answer 18

It is held by the partners as tenants in common - because survivorship holds no place in business.

Question 19

What happens to a tenants in common ownership when an individual joint owner died?

Answer 19

1. The legal estate in the property will pass automatically to the survivor(s).
2. The deceased’s beneficial interest in the property will pass via the deceased’s will
   OR
3. if the deceased does not have a will, the beneficial interest will be pass according to the rules of intestacy.

Question 20

How can you tell from the Proprietorship Register whether the registered proprietors are beneficial tenants in common?

Answer 20

For both business tenants in common and individual tenants in common, the Land Registry places a “Restriction” on the Proprietorship Register if the owners have chosen to be tenants in common

Question 21

What does ‘no disposition by a sole proprietor’ mean in a Restriction and why?

Answer 21

Tenant in Common.

This is because survivorship does not apply to tenants in common.

Question 22

What other Restriction could be on a Proprietorship Register?

Answer 22

When a lender puts a Restriction on the Proprietorship Register to prevent any dealings with the land (e.g. leases being registered) without its consent.

Question 23

How can you tell from the Proprietorship Register whether the registered
proprietors are beneficial joint tenants?

Answer 23

If there is more than one registered proprietor i.e. joint owners, but no tenant
in common Restriction appears on the Proprietorship Register

Then the joint
owners hold both the legal and beneficial interest in the property as joint
tenants.

Question 24

What happens when there is more than one surviving individual tenant in common?

Answer 24

• All of the surviving tenants in common must execute the contract and
  purchase deed.
• There are still at least two trustees
• The beneficial interest in
  the deceased tenant in common’s interest will be overreached when the
  purchase monies are paid to the surviving tenants in common

Question 25

What evidence is required by the Land Registry when registering a purchase of land from more than one surviving tenant in common?

Answer 25

An official | or certified copy of the death certificate of the deceased tenant in common to confirm the death.

Question 26

What happens when there is only one surviving individual tenant in common, legally?

Answer 26

Ownership vests in the surviving tenant in common by survivorship, because legally all co-owners hold the property as joint tenants.

Question 27

What happens when there is only one surviving individual tenant in common, beneficially?

Answer 27

The deceased tenant(s) in common’s interest needs to be overreached by the appointment of a second trustee and payment of the purchase monies to a second trustee and the one surviving tenant in common.

Question 28

What happens when there is only one surviving individual tenant in common, practically?

Answer 28

The surviving tenant in common will sign the contract and may include a special condition in the contract agreeing to appoint a second trustee on completion. The trustee is appointed by means of a deed of appointment (usually by including a provision in the purchase deed (TR1)) and the seller’s solicitor will normally be appointed to act as this second trustee.

Question 29

What evidence is required by the Land Registry when registering a purchase of land from only one surviving tenant in common?

Answer 29

* An official or certified copy of the death certificate of the deceased tenant in common (to confirm the death) * The deed of appointment of the second trustee - this may be the purchase deed.

Question 30

Why should co-owners contributed differing amounts to the purchase price record on a Deed of Trust?

Answer 30

On a sale of the property, the parties would want to receive back a share of the sale proceeds which is linked by a specified formula to the proportions of their respective initial contributions.

Question 31

What are the financial liabilities for co-owners on residential purchases?

Answer 31

1. Most residential purchases are funded to some extent by mortgage finance. 2. Co-owners who enter into a joint mortgage have joint and several liability. 3. Each co-owner is fully liable for the outstanding mortgage. This will remain so until the mortgage is either redeemed, or one of the co-owners is formally released from the mortgage.

Question 32

What is a transfer of equity?

Answer 32

When one of the co-owners wishes to remain at the property whilst the other one wishes to leave and a transfer of equity transfer the property to the remaining co-owner. The transfer will need to be registered at the Land Registry.

Question 33

How to transfer the property to the remaining co-owner if the property is mortgaged?

Answer 33

1. The mortgagee would have to consent to the transfer of equity. 2. The mortgagee would need to be joined in to the transfer deed so that the outgoing co-owner is released from their covenants under the mortgage. 3. The remaining co-owner will then covenant with the mortgagee that they will be entirely responsible for the mortgage for the remainder of the mortgage term.

Question 34

What is the condition for a mortgagee to consent for a transfer of equity?

Answer 34

If it considers that the remaining co-owner has sufficient financial standing to service the mortgage payments on their own. If they cannot, the property may have to be sold.

Question 35

What happens when the co-owners cannot agree either a sale, or a transfer of equity?

Answer 35

s.14 TOLATA enables a trustee of land or any person with an interest in the property to apply to the court to order a proposed course of action.

Question 36

What must the court consider when determining an application under s.14 TOLATA? (co-owners failing to agree)

Answer 36

1. the intention of the person who created the trust 2. the purpose for which the property subject to the trust is held 3. the welfare of any minor who occupies or might reasonably be expected too occupy any land subject to the trust as his home 4. the interests of any secured creditor of any beneficiary The court has the power to order sale of property held by trustees where the original purpose of the trust has come to an end.

Question 37

The court will decide the proceeds of sale - what happens when the co-owners hold the beneficial interest as joint tenants?

Answer 37

The proceeds of sale will be divided equally

Question 38

If the beneficial interest is held as tenants in common in a court decision, what happens?

Answer 38

The proceeds of sale will be divided in accordance with the proportions as set out in any deed of trust entered into by the parties when the property was purchased.

Question 39

What is an indemnity covenant?

Answer 39

Seller's ongoing liability - it's a positive covenant. If a seller of land is personally subject to an ongoing liability or burden after completion of the transfer, it can protect itself by obtaining a covenant from its buyer to the effect that the buyer and its successors in title will indemnify the seller against the liabilities to which the seller is subject.