Chapter 2: Pre-contract (1): deduction and investigation of title Flashcards
(104 cards)
1
Q
What is investigation of title?
A
Process where legal title to the property is checked/ examined to ensure that the seller is entitled to sell
2
Q
What is deduction of title?
A
Seller’s solicitor provides to the buyer’s solicitor proof of the seller’s title / ownership
3
Q
what is deduction of title for registered land?
A
Land registry:
Official copies of the registers of title, copy of title plan, documents referred to under title
4
Q
What is deduction of title for unregistered land?
A
Seller to buyer solicitor, epitome of title (copy paper title deed/ docs)
5
Q
What does the seller solicitor prepare for deduction of title?
A
Prepare for issues that might be raised by buyer solicitor
Include incumbrances in contract
Prepare solutions
6
Q
what does the buyer solicitor do to prepare for deduction?
A
Raise requisitions on title
Ensure seller S resolves any issues
Lender needs to be assured the title is good and marketable
7
Q
What is good practice to check?
A
If the title should have been registered previously
if yes - seller needs to registered before the transaction
8
Q
how is a registered freehold title deduced?
A
proved by official copies/ filed plan.
Provide register of title official copies of any documents referred to in the register/ filed but full details are not ready available at the register.
Law society conveying protocol - must be OFFICIAL COPIES
No more than 6 months old
9
Q
What is an OC1 for?
A
apply for official copies of registers of title
10
Q
what is an OC2 for?
A
apply for official copies of documents referred to
11
Q
when does a solicitor not need request a full copy?
A
If an entry on the HM land Registry refers to something already set out in full on the register
12
Q
what is an edition date?
A
When title was last updated
13
Q
which solicitor reviews (inv of title)?
A
buyer solicitor
check less than 6 months old & official copies.
14
Q
What is a search from date?
A
official date/ time official copies issued by land registry.
15
Q
when can a buyer not raise requisitions?
A
After exchange of contracts
Only raise requisitions about matters that appear on the LR after this date
16
Q
what is the property register?
A
describes property, its extent, rights benefitting the property:
Freehold or leasehold
Description (ref to title plan) e.g address
Exclusions or limitations on title
Benefitting rights
Burdening rights
Declarations light/ air
17
Q
What should a buyer solicitor review on the register?
A
Check tenure/ extent are the same on register and memorandum of sale & buyer/ lender expectations.
Exclusions pointed out
Buyer must confirm understanding on boundaries.
Check rights benefitting
Raise enquiries
Check property description is same as official copies
18
Q
What is the proprietorship register?
A
Ownership of property, class of title, restrictions on dealing (transfer):
name/ address registered owners
Dispositions after April 2000 - price paid by current owner
Indemnity covenant given by owner on purchase.
19
Q
What are restrictions?
A
restrict/ prevent dealings with title (transfers)
20
Q
What is a Form A restriction?
A
tenants in common restriction - need a certificate to comply with trust deed for sale or protection of mortgagee’s interest (sometimes an insurance policy)
21
Q
what is an indemnity covenant?
A
the new owner will cover any losses suffered by the seller if the new owner violates existing covenants on the property
22
Q
what are the classes of title?
A
absolute
possessory
qualified
goodleasehold title
23
Q
what is absolute title?
A
guaranteed title, subject only to entries on the registers of title/ overriding interests, leasehold (HM LR will have approved landlord title)
24
Q
what is an overriding interest?
A
binding on purchaser even if not registered: person in actual occupation, local land charges, legal easement (long use), short term legal lease.
25
What is a possessory title?
title deeds lost before registration/ adverse possession (occupied for period of time) .
Subject to adverse matters on the register that affect ownership e.g debts/ legal disputes, encumbrances - ownership can be challenged (only from date of first registration)
26
what is qualified title?
defect in / condition on title on the registers of title (missing information/ document or limited time period/ non-compliance with planning)
27
what is the charges register?
burdens on property:
mortgages/ charges
Covenants burdening the property
Easements over the property
Leases
Notices
28
How is title deduced for unregistered freehold titles?
seller solicitor providing epitome of title - copy paper title deeds/ documents
29
What is epitome of title?
list of deed docs set out in date order (root title/ other docs referred in ROT/ old land charge searches - buyer needs full info on past transfers/ rights
30
what must a seller solicitor do to inv title?
Step 1: get original title deeds
Step 2: investigate evidence of good root of title
Step 3: confirm property not previously registered (index map search).
31
When will a mortgagee provide title deeds?
subject to undertaking
(hold to order / not act without their consent / discharge of sums - mortgage repaid)
32
what are title deeds?
conveyances
deeds of gift
assents
mortgages
land charges searches
copy planning docs
old -pre contract searches
33
When are copies attached to epitome of title?
Deduction of title
34
When are original documents (epitome of title) given?
Completion (sale of whole land only)
35
what is good root of title?
chain of ownership) 15 years old, refers to all legal/ equitable interest, adequate/ identifiable description (identify land from another), nothing which casts doubt on title
(other doc not needed unless referred to in ROT)
36
What is the best document to show good root of title?
conveyance - double guarantee that investigation into title will have been carried out before previous purchase
37
What is the second best doc to show epitome of title?
Mortgage - not as good (does not have all information e.g restrictions)
38
What document is not desirable to show epitome of title?
Deed of gift/ assent (Transfer by PR): not the best because no double guarantee (no transfer for value)
39
what documents must be included in the epitome of title?
Documents cross referred to in relevant documents or root of title
40
What should a buyer solicitor do for inv of title?
Review the documents in epitome of title
Check good root of title
Check not already registered/ should be already registered?
No cautions against first registration
SIM - index map search
41
what are the steps for document examination of an unregistered freehold?
STEP 1: Clear unbroken chain of ownership to current seller
STEP 2: Property description must be clear and consistent
STEP 3: All documents properly stamped - conveyances of sale
Step 4: Proper execution of documents
Step 5: Check for ancillary rights/ encumbrances
Step 6: Check Land Charges searches
42
what are the 2 types of stamps in conveyances of sale?
Stamp Duty (tax on documents)
Stamp Duty Land Tax introduced 2003
43
what happens if a document is stamped incorrectly?
Seller needs to remedy/ pay and pay any interest/ penalties
44
What the types of physical stamps?
‘ad valorem’
‘Particulars delivered’
45
what is ad valorem stamp?
Pay tax on the value of a conveyance on sale.
Lower value exempt/ reduced (must have certificate of value)
Not on mortgages after 1971
Not on deeds of gift or assents after April 1987 (must have certificate of exemption)
46
what is particulars delivered stamp?
conveyances of sale from 1931 must be stamped with PD.
SDLT system changed this is 2003.
47
What are the rules on execution by deed before July 1990?
Signed
Sealed - red circle to execution clause.
Delivered
48
What are the rules on execution by deed after July 1990?
In writing
Clear on the face it is intended to be a deed (says it will be executed as a deed or say it is a deed)
Witness who attests
Delivered as a deed (signing party intends to be bound)
49
what are the rules on execution of deeds by companies?
sellers/ transferors must always execute transfers of land
Buyer only needs to execute when making new declaration
50
what is the rule on land charges after 1 January 2026?
registration of certain commercial rights in unregistered land
Must be registered against the burdened land/ owner to be enforceable/ binding:
C (iv) Estate contract
D (ii) Restrictive covenant
D (iii) Equitable easement
F Home rights
51
what is a form K15 and how is it used?
Land searches made against all owners mentioned in the documents for their years of ownership.
Do not need to search if documents are already provided in epitome of title
If dates are unclear - search back to the earliest date the estate owner could have owned the property OR
Search 1926 if there is no date (when system was introduced)
52
why should problems be reported?
report to buyer, mortgagee / surveyor as they could effect use/ market value.
53
mines/ minerals
excluded from the title
former mining areas are important
BS: conduct coal mining search and Index map search (SIM) - check mining rights/ who owns them
SS: enquires:
Who has the benefit of the rights?
Have rights been exercised? Any compensation payable?
Seller aware of proposals to exercise rights?
Structural problems?
54
Rights benefiting the property
Check sufficient, suitable, adequate
Rights of way, rights of support, rights to services/ utilities and drainage over private land
Benefit of legal easements will run with the land (check terms - all times, all purposes for reasonable enjoyment)
Sometimes subject to payment towards maintenance = buyer usually bound if they take the benefit (duality) - included in buyers survey.
Enquiries:
Previous problems/ disputes about right/ payments
Notices?
Contributions toward maintenance paid or requested? Costs anticipated?
55
Seller not the same as registered proprietor
death of co-owner / sale by PR / marriage (need proof)
need certificates/ grant of rep as proof
56
joint tenancy
Whole of interest together
Survivorship applies
Cannot leave beneficial share under a will - survivorship takes precedent
57
tenancy in common
Separate undivided shares of equitable interest (can be different size shares)
Survivorship does not apply
Beneficial share can pass in a will
58
if there is a death of a co-owner what must sellers check?
joint tenancy or tenants in common (how was beneficial interest held)
59
what is the default position for co-owners in registered land?
Equity follows the law
Co-owners hold equitable interest as joint tenants UNLESS form A restriction (proprietorship register).
60
what is a form a restriction?
reminder of overreaching (an appointment of another trustee if there is only 1 so the right is moved from the property itself to the sellers and becomes a personal claim).
61
what happens if there is a death of a co-owner pf joint tenants in registered land?
surviving co-owners can convey/ sell (no severance of equitable joint tenancy) - subject to Form A
62
what happens if there is a death of a co-owner pf joint tenants in unregistered land?
surviving co-owners can convey the property if (1964 act):
There is no memorandum of severance in the conveyance (ends joint tenancy by converting in tenants in common)
No bankruptcy proceedings registered in the land charges registry
Transfer by the surviving owner states the survivor is entitled to the legal/ beneficial ownership.
All 3 must be satisfied - if NOT and only 1 surviving co-owner (must appoint new trustee).
- Land charges searches for all joint tenants
- Conveyance to joint tenants inspected for memorandum of severance raise requisition for confirmation)
- Confirmation that conveyance will have statement that surviving owner holds legal/ equitable interest.
63
BS duties for death of co-owner: tenants in common
Copy of death certificate
1 surviving owner - must appoint another trustee to overreach interest of the deceased owner (by separate deed/ added provision)
Must be included in the contract as an obligation on the seller
64
what is the consequence of a form A restriction?
register shows form A - equitable interest held as tenants in common
65
what happens when the sale is by 1 surviving owner?
joint tenants:
registered land - seller gives good title
unregistered land - give good title but if not an additional trustee needs to be appointed
tenants in common:
appoint a second trustee of the legal estate to overreach equitable interest of the deceased owner
66
what is the rule for PRs to convey?
ALL PRs must be joined into the conveyance (death = need evidence).
67
PRs selling registered land
PRs can apply to be registered proprietors = no problems.
OR sell/ pass property under assent.
Assent - vesting legal estate in the beneficiary/ beneficiaries NOT sale to third party (even if sole proprietor / sole beneficiary)
Form AS1 (assent for whole of the land)
Form AS3 (assent part of the land)
PR not registered as proprietors - should not complete sale without grant of rep (no grant = no auth to deal with estate of deceased).
68
what is the risk of PRs selling unregistered land
Uncertainty of assentee (may not be entitled = buyer will not get good title).
69
when will a buyer get good title in the sale of unregistered land from a PR?
Certified copy of grant of rep
All PRs join in conveyance
No memorandum of previous conveyance on grant of rep
Conveyance to buyer - s36 statement & acknowledgement of production of original grant (good to raise specific requisition in case of incomplete copy)
70
what is a S36 statement?
Statement in the conveyance to the buyer confirming NO previous dispositions of the same land/ property by the PRs
71
what must happen if there is a disposition by a beneficiary as a beneficial owner?
Property must have been vested by assent:
In writing
Made by deed if assentee gives new covenants
72
what must present for an assent to PRs in unregistered land?
Cert copy of grant
All PRs are joined in
No memorandum of previous disposition on grant of rep
Assent contains acknowledgment for production of original assent.
73
What should a solicitor do if the title is less than absolute?
check lender requirements (e.g indemnity insurance)
74
when can a possessory title apply for absolute?
more than 12 years
75
how can a qualified title become an absolute title?
missing document - ask where located to apply for absolute
76
what should happen if title cannot be upgraded?
indemnity insurance paid for by the seller (protect buyer/mortgagee from defect in title)
77
what is indemnity insurance?
paid by seller to cover the risk of defect in title (buyer/ lender covered for any future issues).
Suitable limit = market value (must cover mortgagee/ successors on title).
78
what can you find restrictions on registered title? what is an example?
proprietorship register
form A restriction / restriction to protect a mortgage
79
what is an indemnity covenant?
One party will bear the loss (cover costs) or certain liabilities in specific circumstances.
80
what will the seller retain in sale of part land?
right to freely build/ rebuild (buyer will not be entitled to any rights of air/ light of this land).
81
Where will declarations be found for registered/ unregistered land?
property register (registered land)
epitome of title (unregistered land)
82
what enquiry should a BS raise for sale of part land?
Raise enquiry on the extent of retained land (not in title docs) & notify client (buyer).
83
what is an undischarged mortgage and where can it be found?
paid but not debt not officially released from title
charges register
84
what is good practice when a discharged mortgage is found?
raise requisition to give undertaking BEFORE completion to remove OR before completion provide evidence of discharge
85
When is a undischarged mortgage not a problem?
Undertaking in place to discharge on completion
Not included in list of specified incumbrances in the contract
86
Where/ how is a mortgage protected in registered land?
2 entries on charges register: date and proprietor of charge (mortgagee)
Restriction in proprietorship register (no disposition without consent of mortgagee)
87
Where/ how is a mortgage protected in unregistered land?
Copy of document in epitome of title
receipt/ acknowledgment of all debt paid = no problem for buyer
88
where are restrictive covenants found in registered/ unregistered land?
Registered land = charges register
Unregistered land = dated after 1 January 1926 (Class D (ii) Land Charge to be binding)
89
What steps should a BS take if there is a restrictive covenant?
Step 1: find out who benefits from the covenant & approach to ask for release/ change of terms/ deed of consent for one time use
Disadvantages: Not easy to find (especially for old covenants), covenantor might not be aware (counter productive), easier to find covenantor of new RC (less likely to change)
Step 2: application to upper tribunal for modification or discharge
Disadvantage: cost, uncertainty, time
Step 3: Ask seller to provide restrictive covenant indemnity for the buyer, their mortgagee and successors title - quick and easy.
Disadvantage: if it is recent, person with benefit is known, likely to take action on breaches.
90
what should you look out for in an exam if there is a RC?
age of covenant/ whereabouts of the person benefiting.
91
why should you always get the requirements of a mortgagee?
Indemnity insurance polices usually have conditions not to approach
92
how can a positive covenant be binding?
Burden does not run with the land in positive covenants
(but could be binding through a chain of indemnity covenants)
93
where would a solicitor find a binding positive covenant?
Registered land - proprietorship register
Unregistered land - in conveyance
94
when will a seller insist on a covenant?
chain of indemnity and the seller has given one when they bought the property
if there is no evidence of a covenant the buyer can refuse (burden will not run with the land)
95
what enquiries about covenants should be raised?
Covenants complied with? Enforced? Details?
Costs involved / anticipated costs?
Problems/ disputes/ payments made?
Contributions paid/ requested?
96
when should a buyer be informed of covenants?
signifiant potential liability/ onerous covenants (part of survey)
97
what happens if a covenant is missing?
included as an incumbrance in contract
(requisitions cannot be raised by the buyer after exchange of contracts).
Buyer should insist on indemnity insurance policy
98
what enquiries should be raised about easements?
Have rights been exercised?
Problems/ disputes?
Payments towards?
Notices?
Contributions towards maintenance? Anticipated costs?
99
are easements binding on successors?
Burden of legal easements runs with the land - must be checked & reported to buyer/ mortgagee/ surveyor.
100
are leases binding on successors?
More than 7 years - should be in charges register
Less than 7 years/ equitable lease (actual occupation) - overriding interest
enquiries about tenants/ third party occupants
101
where are notices registered?
charges register - registered title (protect third parties who are not owners but have an interest in property)
102
what are the 2 types of notices?
Agreed notice = consent of owner
Unilateral notice = no consent of owner
103
what should a buyer do if there are home rights/ where are these found?
class F land charge - buyer should seek removal (preferably before exchange of contracts) and interested party to waive rights in the contract.
104
what happens if a notice is obsolete or a buyer does not want it?
seller should be asked to remove on/ before completion (ideally before exchange of contracts). By way of contract/ undertaking.
