INVESTIGATING TITLE (STAGE 2)

Question 1

Registered Land

Answer 1

a.Header Section
b.The Property Register
c.The Proprietorship Register
d.The Charges Register

Question 2

Head Section

Answer 2

*The title number (this is a unique HMLR reference num-ber for the property and must be quoted in the contract and transfer when the property is being sold);

*The edition date, which is the date when the register of title was last updated by HMLR;

*The date and time of the official copy, which is the time when the copy was produced (this is important because this is the date which should be quoted as the ‘search from’ date when applying for an official search against the title (see below)); and

*The Land Registry office which deals with that title.

Question 3

3

The Property Register

Answer 3

1. The Property Register identifes the property by its postal address and reference to the title plan.
2. It specifes the legal estate held, and, if a leasehold, it will give brief details of the lease (date, parties, term, rent, and so on).
3. If any rights beneft the property, such as a right of way over neighbouring land, these rights will appear as** a notice** on the Property Register. A typical entry in the register might say: ‘TOGETHER WITH the beneft of a right of way over the land coloured brown on the title plan.’

Question 4

The Proprietorship Register

Answer 4

The Proprietorship Register specifes the class of title held
and the name of the current holder or holders of the legal
estate. If there is a restriction afecting the title, it will appear on the Proprietorship Register.

Question 5

The Charges Register

Answer 5

The Charges Register contains details of encumbrances on the land, that is, entries which adversely affect the land. For example, restrictive covenants or mortgages will appear as a notice on the Charges Register. If there are no encumbrances, there will be no Charges Register–but this is rare.

Question 6

UNREGISTERED TITLE

Answer 6

The unregistered title system requires a person to prove ownership of property
they are contracting to sell by producing certain documents that show** a good root of title** and an unbroken chain of ownership for a minimum period of 15 years.

Question 7

Documents in an Unregistered Title

Answer 7

• A conveyance on sale which transfers the ownership from seller to buyer in exchange for money.
• A deed of gift for which no money changes hands.
• A mortgage deed which evidences the fact that a lender has lent money to the current owner and has taken a charge over the land as security for the loan.
• An assent which transfers the land from the personal representatives of an estate to the beneficiary of the land in question.

Question 8

3

The Root ofTitle

Answer 8

To be a good root, the document must:
*Deal with the whole legal and equitable interest in the property;
*Be at least 15 years old at the date of the contract; and
*Do nothing to cast doubt on the title.

A conveyance on sale is usually the best document to be a root of title, as the title would have been investigated at the time of that transaction. This is in contrast to a deed of gift, where the title is unlikely to have been investigated at the time of the gift.

Question 9

The Epitome ofTitle

Answer 9

Recall that the seller’s solicitor won’t send the original title
deeds to the buyer. Instead the solicitor will send an ‘epitome of title’, which is a chronological list of the documents with a
copy of each document attached to the epitome. The seller
will send the original title deeds to the buyer on completion
of the sale once the sale proceeds have been received.

Question 10

Compulsory Registration

Answer 10

England and Wales became subject to compulsory registration on 1 December1990. This means that all land must be registered on theoccurrence of a triggering event if that event took placeafter 1 December 1990. Therefore, it is important to checkthat there has been no event since the root of title whichwould have triggered frst registration. If there is, the sell-er’s solicitor would have to make an application to HMLR to register the title before drafting the contract.

Question 11

5

Buyer’s Process of Investigating
Unregistered Title

Answer 11

1. To investigate an unregistered title, a buyer’s solicitor will examine the documents in the epitome to spot any defects in title that will need to be remedied.
2. Among other things, the buyer’s solicitor will be looking to see whether the land should have been registered with the Land Registry, whether there is a good root of title and an unbroken chain of own-ership from the root to the current seller,
3. whether the docu-ments have been stamped correctly (indicating any relevant stamp duty was paid),
4. whether the seller has the ability to sell the property, and
5. whether any third parties might have rights in relation to the land.

Question 12

Timing of Pre-Contract Searches

Answer 12

Once the buyer’s solicitor has sent the client care letter to their client, obtained client identifcation, and carried out due diligence regarding the buyer’s funds, the solicitor will usually ask the buyer to pay a sum of money on account for
searches and other disbursements.

Question 13

General Purpose of Pre contractual searches

Answer 13

The purpose of the searches is for the buyer’s solicitor to gather practical information about the property. This informa-tion, as well as information on matters of title, will be included in a report to the buyer. The buyer can then make an informed decision as to whether they wish to purchase the property.

Exam Tip
The buyer’s pre-contract searches may reveal matters affecting the property, for example, a covenant in the title or a planning restriction, which mean thatthe buyer cannot use the property for their intended purpose and must therefore withdraw. Remember that the transaction is still at the preexchange of contracts stage. This means that the transaction is not legallybinding on the seller or the buyer. Accordingly, eitherparty can withdraw from the transaction without penal-ty to the other.

Question 14

5

pre contractual searches

Answer 14

1. local search
2. drainage and water search
3. environmental search
4. TRANSACTION-SPECIFIC SEARCHES
5. location specific search

Question 15

definition of local search

Answer 15

The local search is a search that gathers information held
by the local authority in which the property is situated.

Question 16

3

contents of local searches

Answer 16

1. local land charges
2. Enquiries of Local Authority
3. Optional Enquiries of Local Authority

Question 17

3

local land charges

Answer 17

1. General and Specifc Financial Charges
2. planning charges
3. Listed Building Charges

Question 18

2

General and Specifc Financial Charges

Answer 18

1.general and specif-ic fnancial charges might include an improvement grant or a situation in which the local authority has paid fees for a homeowner to go into local authority care pending the sale of the property.
2.Cure
If a buyer’s solicitor notes entries of general and specifc fnancial charges in the results of the local land charges search, they should raise this as an enquiry and ask the seller’s solicitor to undertake to repay the charges from the sale proceeds and procure the removal of the charges from the local land charges register.

Question 19

2

Planning Charges

Answer 19

1. The planning charges part of the register will reveal any planning agreements and entries against the property relating to development of the property, such as ex-tensions.
2. This part of the register also reveals any Tree
   Preservation Orders (‘TPOs’) affecting the property. TPOs are important because, as the name implies, such orders protect against the lopping or falling of a protected tree without local authority consent. Contravention can lead to a fne and is a criminal ofence.

Question 20

Listed Building Charges

Answer 20

The listed building charges part of the register will reveal any ‘listed building’ status in relation to the property. A ‘listed building’ typically is a building of historic signif-cance, and the ability to make changes to a listed proper-ty is restricted.

Question 21

2

local land charges reg-
ister vs. land charges register

Answer 21

1. Do not confuse the search of the local land charges reg-ister with the search of the land charges register, which we have seen in relation to unregistered conveyancing. Irritatingly, they have very similar names but are com-pletely diferent in form and purpose.
2. Remember: the search of the local land charges registeris conducted by** the buyer’s solicitor** as a pre-contract
   search to gather practical information about the proper-ty.
3. The search of the** land charges registe**r is conductedby the buyer’s solicitor during the pre-contract stage asa means of investigating title and determining whetherthere are any third-party rights to the land.

Question 22

7

Enquiries of Local Authority

Answer 22

*Roads: Whether the road fronting a property is adopted by the local authority (in which case the user has an auto-matic right of way over it, and the road will be maintained by the local authority);

*Public Rights of Way: Any public rights of way across the property enjoyed by members of the public (in which case the owner cannot refuse access to the public); and

Planning**: Detailed planning information, including plan-ning entries and buildings regulations consents.*

The enquiries will also reveal additional information which may be relevant to a buyer, such as whether:
*There are any proposed road, rail, or trafc schemes which might impact on the property;
*There are any outstanding planning or enforcement notices;
*The property falls in a conservation area; or
*The property is subject to compulsory purchase (that is, subject to being acquired by a local authority without consent of the owner).

Question 23

5

Optional Enquiries of Local Authority

Answer 23

The optional enquiries are questions which the local author-ity will answer if requested by the solicitor and an additional fee is paid. The most common optional enquiries include
whether:**
*Any road proposals have been made by private bodies, that is, whether a private company rather than the local authority is proposing to alter or improve an existing road in the locality;
*Any major gas pipelines afect the property;
*The property is a house in multiple occupation;
*Any environmental pollution notices have been served; or
*The property abuts common land and town or village green.

Question 24

The property abuts common land and town or village green.

Answer 24

1. A common land and town or village green enquiry should be made if the land abuts or is adjacent to land that has been designated common land or a town or village green.
2. This is important for a buyer to know because there maybe restrictions on access over common land in addition to restrictions on developing or enclosing common land.
3. This designation also may give people in the locality the right to use the land for recreational purposes. Such re-strictions on the land would be of great signifcance to a buyer or lender and must be reported

Question 25

Drainage and Water Search

Answer 25

1. Whether a property is connected to the public water supply and public foul drainage system is of great signifcance to the use and enjoyment of that property. \ 2. Therefore, the buyer’s ****solicitor will send a drainage and water search to the local **water company **which enables the buyer’s solicitor to estab-lish details about water supply, metering, and the proximity of a public sewer. 3. If the property is not connected to these services, the buyer’s solicitor should raise this issue as an enquiry of the seller’s solicitor.

Question 26

Environmental Search

Answer 26

Landowners are responsible for paying the clean-up costs for any contaminated land they own. This is the case even if the current landowner did not cause the contamination. As a result of these responsibilities, an environmental search should be carried out.

Question 27

# 5 TRANSACTION-SPECIFIC SEARCHES

Answer 27

1. Search of the Index Map 2. bankrupcy search 3. company search 4. Land charge search 5. Chancel liability search

Question 28

Search of the Index Map

Answer 28

If the title is unregistered, the buyer’s solicitor will carry out a search of the index map. This search is made by sending the property’s address or plan identifying the property via the HMLR’s online portal for a fee.** The search result reveals whether the property is fully or partially registered**.

Question 29

Bankruptcy Search

Answer 29

1. If the buyer is getting a mortgage, the buyer’s solicitor will often carry out an online bankruptcy search against the full name of the buyer/s as part of the solicitor’s pre-contract searches usually via the HMLR’s online portal. 2. This will reveal any pending or actual bankruptcy orders against the buyer. Such a result must be reported to the lender and the transaction will probably fail

Question 30

Company Search

Answer 30

If the seller is a company, a company search (conducted via Companies House) is necessary. This reveals whether the company is subject to any winding up or liquidation proceed-ings and whether the company is authorised to deal in the sale and purchase of land.

Question 31

LOCATION-SPECIFIC SEARCHES

Answer 31

1. coal mining search 2. Chancel Liability Search

Question 32

Coal Mining Search

Answer 32

If the property is in an area where coal mining is or has been carried out, this search reveals whether there is (or has been) any such work within the locality of the property. This is im-portant because coal mining shafts could seriously affect the stability of the property and might cause a buyer to withdraw from the purchase

Question 33

Chancel Liability Search

Answer 33

A property might be subject to an ancient obligation to con-tribute to the upkeep of the chancel of a church in the locality (the chancel is the part of a church which contains the altar). This potentially very costly liability can still attach to prop-erties even after many years. As a result, a buyer’s solicitor may decide to carry out a chancel search. This is a desktop search which will identify whether the property is at risk of the charge. If a property is found to be at risk of this liability, indemnity insurance is usually the solution.

Question 34

PHYSICAL INSPECTION OF PROPERTY

Answer 34

As noted earlier, the buyer’s solicitor will advise the buyer to have a survey of the property carried out at the beginning of the transaction. In addition to the survey, the buyer’s solicitor will advise the buyer to carry out a physical inspection of the property.

Question 35

PROPERTY INFORMATION FORM ALSO A ‘SEARCH

Answer 35

Note that the Property Information Form (‘PIF’) provided by the seller’s solicitor as part of the contract package is also treated as part of the buyer’s pre-contract searches and enquiries.

Question 36

RAISING ENQUIRIES

Answer 36

1. If the buyer’s solicitor identifes any questions, requires a title defect to be remedied, or if the buyer wishes to clarify issues contained in the title, PIF, and search results, the buyer’s solicitor will put these questions and issues to the seller’s solicitor. The process of asking these questions is known as ‘raising enquiries.’ 2. The buyer’s solicitor should not proceed to exchange of contracts until all enquiries have been answered to their satisfaction. This is because once exchange of contracts has taken place, the buyer will not be able to withdraw from the transaction without penalty

Question 37

Commercial: Commercial Property Standard Enquiries

Answer 37

The Commercial Property Standard Enquiries (‘CPSE’) is the commercial equivalent of the PIF. They can be used for commercial freehold or leasehold transactions.

Question 38

Key Issues Covered in the CPSE The CPSE are designed to provide practical and detailed information about a commercial property and the transaction. They are more comprehensive in scope than the PIF and cover issues such as:

Answer 38

*Boundaries; *Rights benefting and burdening the property; *Physical condition of the property; *Utilities and services; *Fire safety and means of escape; *Planning and building regulations; *Environmental issues; *Occupiers and employees; *Insurance; and *Any disputes regarding the property.