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sqe 1 - property practice > Investigation of a registered or unregistered freehold/leasehold title > Flashcards

Investigation of a registered or unregistered freehold/leasehold title Flashcards

1
Q

Unregistered land

A

all land was originally unregistered, title was proved through production of deeds, conveyances and other proof of ownership
Some land remains unregistered having not been sold since compulsory first registration

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2
Q

Registered land

A

Registration of all land became compulsory on 1st Dec 1990
Compulsory first registration means that any previously unregistered land, sold on or after this date should have registered with the Land Registry once the sale was completed

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3
Q

Deducing title

A

Process of proving ownership to a would-be buyer

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4
Q

What is involved in deducing title

A

Seller’s solicitor gets together title documents, checks them to ensure that the seller is entitled to the property, and sends them to the buyer’s solicitor

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5
Q

What are the title documents

A
  • Land Registry official copies of the register
  • Land registry title plan
  • Copies of any documents referred to, but not already extracted in the official copies of the register
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6
Q

What information can you find in the Property register of an official copy?

A

The description of the land, reference to a plan and whether the title is leasehold or freehold.

Any easements or rights benefitting the land as well as references to indemnity chains.

Any exclusions or rights to light.

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7
Q

What information can you expect to find in the Proprietorship register of an official copy?

A

Current owners, titles and address.

The interest they have in the property. Absolute, possessory or qualified?

Any restrictions on the owner’s ability to sell - notices or restrictions.

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8
Q

What is the most desirable interest a person can have in an estate, absolute, possessory or qualified?

A

Absolute.

If the title is not absolute this will affect how the person can deal with the land.

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9
Q

What information can you expect to find in the Charges register of an official copy?

A

Covenants, easements, leases, mortgages and notices registered by third parties claiming and interest.

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10
Q

What are the issues surrounding a declaration that a third party an easement over certain mines and minerals?

A

The person has the right to come onto your land and extract the relevant minerals. Enquiries should be made as to whether there is any subsidence on the land.

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11
Q

What does this restriction indicate?

RESTRICTION: 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.

A

That the beneficial interest in the property is held as tenants in common.

This interest needs to be overreached on purchase. If there is only one trustee over the land remaining because the other has died you should request that another trustee is appointed and ask for the death certificate for the former co-owner.

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12
Q

What issues does a restrictive covenant on the title register cause in the conveyance of land?

A

The buyer can be bound by the covenant.

They should therefore ask the seller who owns the property to see if they can negotiate a release.

They could take out indemnity insurance.

Or apply to the Upper Tribunals (Lands Chamber) for a modification.

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13
Q

What issues do a positive covenant on the title register cause in the conveyance of land?

A

Obliges the covenantor to spend money on the covenant.

If there is a chain of indemnity the buyer can be bound. The seller is likely to request this if they gave one to the previous owner when they purchased the property as they will not want to be bound once they are no longer the owner.

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14
Q

What issues do unknown covenants on the title register cause in the conveyance of land?

A

When covenant is in place but the details are unknown. Safest option is to assume the covenant is restrictive and take out indemnity insurance.

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15
Q

What issues do mortgages on the title register cause in the conveyance of land?

A

Usually discharged on completion but the lender might put a restriction in the register. This should be discharged on completion so the buyer can be registered as the new owner.

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16
Q

What issues do leases on the title register cause in the conveyance of land?

A

Only an issue if the buyer is not expecting this.

A lease for 7 years or more is a registrable disposition so is only binding if it appears on the charges register of the landlord’s title.

If it is present it will be protected - should report to client and negotiate with the seller / tenant otherwise will be bound.

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17
Q

What issues do unilateral notices on the title register cause in the conveyance of land?

A

Used when the registered proprietor has refused consent to the entry or has not been asked about the entry.

The notice does not guarantee the interest is valid. The buyer should ask questions and negotiate over the notice to get the issue resolved.

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18
Q

Investigating title

A

Buyer’s solicitor investigates registered title by checking the Land Registry official copies, title plan and other documents

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19
Q

What is the aim in investigating title?

A

-To check that the seller has the legal right to sell the property

-Ensure the property is adequate for the buyer’s intended use

-Ensure that there are no title defects that could affect the value of the property or ability to sell in future

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20
Q

Why is the class of title on the Proprietorship register so important

A

Because the Land Registry guarantees its titles with compensation

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21
Q

Best class of title (as reflected on the proprietorship register)

A

Title absolute (freehold or leasehold)

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22
Q

What does absolute title mean

A

Indicates no issues - the proprietor has satisfied the Land Register that it is the true and proper owner

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23
Q

What does qualified title mean

A

There is a specific defect in the title

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24
Q

Example of qualified title

A

Where a deed known to contain covenants or easements was missing on first registration

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25
Q

What does possessory title mean

A

When the registered proprietor has shown that they have physical possession of the property, but no title deeds OR is claiming through adverse possession

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26
Q

What does good leasehold title mean

A

When the leaseholder cannot provide evidence of the landlord’s title to the land

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27
Q

Steps if a property has anything less than title absolute

A

Report it to client and explain what it means; check the mortgage lenders’ requirements; consider and advise on obtaining title indemnity insurance; consider the possibility of upgrading to title absolute if e.g. missing documents can be located

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28
Q

What will the proprietorship register show about a proprietor - Individual

A

Full name and address for service

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29
Q

What will the proprietorship register show about a proprietor - LLP

A

the LLP name, number and registered office address

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30
Q

What will the proprietorship register show about a proprietor - Company

A

Company name, number and registered office address

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31
Q

What extra step should a solicitor take if the registered proprietor is an LLP or Company

A

Verify the details with a Companies House search

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32
Q

How many co-owners may be registered proprietors

A

4

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33
Q

What else is recorded on the proprietorship register (other than details of the proprietor)

A

Paid or stated value of the land (if acquired after 1 April 2000); any indemnity covenant (to observe positive covenants); any restrictions on right to sell (such as a tenancy in common restriction)

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34
Q

Example wording of a tenancy in common restriction on an entry in the proprietorship register

A

RESTRICTION: 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 court

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35
Q

What needs to be done if there is a tenancy in common restriction on the register but one has died

A

A second trustee will need to be appointed on the transfer so that the beneficial interest can be overreached and the restriction removed; we would still want to see that the legal title has passed by survivorship to the registered proprietor

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36
Q

What else might mean there is a restriction in the proprietorship register

A

A mortgage - there may be a restriction against the owner dealing with the land without the consent of the mortgage lender

37
Q

Example of how an indemnity covenant would be reflected in the proprietorship register

A

The Transfer to the Proprietors contains a covenant to observe and perform the covenants referred to in the charges register and of indemnity in respect thereof.

38
Q

What does an indemnity covenant on the proprietorship register mean for the buyer/their solicitor

A

Under the standard conditions their client will be required to give a similar indemnity covenant to the seller - the client will be bound by the positive covenants that the original covenantor gave (seller or owner further back in time)

39
Q

Example of how an indemnity covenant would be reflected in the proprietorship register

A

The Transfer to the Proprietors contains a covenant to observe and perform the covenants referred to in the charges register and of indemnity in respect thereof.

40
Q

What does an indemnity covenant on the proprietorship register mean for the buyer/their solicitor

A

Under the standard conditions their client will be required to give a similar indemnity covenant to the seller - the client will be bound by the positive covenants that the original covenantor gave (seller or owner further back in time)

41
Q

5 things you might find on the Charges register

A

Charges, burden of restrictive covenants, burden of positive covenants, registered leases, easements

42
Q

Will there always be entries on the charges register

A

No not always

43
Q

Are charges/mortgages entered on Charges register or Proprietorship register

A

Both, charges will usually be accompanied by a restriction on the proprietorship register

44
Q

How is a chargee described on the Charges register

A

As the proprietor of the charge

45
Q

What is important for the client/their solicitor to note about the charges register

A

That the seller agrees to release it upon completion

46
Q

Where should the seller’s agreement to release charges be covered

A

BOTH the contract and pre-completion undertakings

47
Q

The …. of restrictive or positive covenants appear on the Charges register

A

Burden

48
Q

The … of restrictive or positive covenants appear on the Property register

A

Benefit

49
Q

What is a good rule of thumb test for distinguishing between positive and restrictive covenants

A

The hand in pocket test - if you were to comply with the covenant would you need to spend time, money or energy? If yes, then likely a positive covenant

50
Q

What do you need to look for if there is a restrictive covenant to determine if it binds the property

A

The burden on the Charges register only

51
Q

What do you need to look for if there is a positive covenant to determine if it binds the property

A

The indemnity covenant in the proprietorship register - can ignore the covenant if this isn’t present

52
Q

1st consideration if a covenant binds the property

A

Has the covenant been breached already?

53
Q

If the covenant has already been breached what needs to be done

A

The seller should provide an indemnity policy at their expense

54
Q

2nd consideration if a covenant binds the property

A

Is it a covenant that either affects value or the buyer’s proposed use?

55
Q

If a covenant doesn’t affect value or the buyer’s proposed use, do you need to tell the client

A

Yes you should report it but it is OK to proceed with the purchaser

56
Q

If a covenant does affect value/ proposed use what is the first solution

A

Insurance

57
Q

If a covenant does affect value/ proposed use what is the second solution

A

An approach to the person with benefit to ask for their consent

58
Q

If a covenant does affect value/ proposed use what is the third solution (restrictive covenant only)

A

An application to the Lands Tribunal (Upper Chamber) to discharge/modify the covenant

59
Q

If a covenant does affect value/ proposed use but not in a fundamental way what is a solution

A

Considering whether a reduction in price can be negotiated

60
Q

What must be considered when trying to get insurance for a proposed breach of a covenant

A

Difficult to insure; risk is greater if planning permission required because of publication; only available before approaching person with benefit

61
Q

What should be done with easements recorded in the charges register and why

A

Always reported - may restrict e.g. development

62
Q

How is title shown in unregistered land

A

By an epitome of title - first document is root of title

63
Q

What is an epitome of title

A

A schedule of title deeds and documents accompanied by copies of them

64
Q

How long might first registration take

A

Months

65
Q

Who deduces title in unregistered land

A

The seller’s solicitor

66
Q

Who is likely to hold the documents needed to deduce title

A

Owner, or by the mortgage lender

67
Q

Are copies or originals given to the buyer’s solicitor when deducing title to unregistered land

A

Originals are needed, copies may given but the seller’s solicitor will typically undertake to provide the originals on completion

68
Q

What is the most important document to identify when deducing title to unregistered land

A

Root of title

69
Q

Is the root of title just one document

A

Often yes, but there may be various candidates in the deeds bundle, if so it is usually the most recent deed that meets the requirements

70
Q

What are the four requirements for a good root of title

A

ABCD -
A - adequately describes the extent of the land being conveyed,
B - Be dated over 15 years ago;
C - casts no doubt on the seller’s title, D - deals with both legal and beneficial title

71
Q

How you should a document that could be root of title if it is silent on whether it deals with both legal and beneficial title

A

Beneficial title is assumed to pass with the legal title

72
Q

When might a root of title not need a plan

A

If it is a residential address and all the neighbouring house have identical footprints and the boundaries are clear

73
Q

What documents (aside from root of title) should a solicitor for seller of unregistered land provide

A

The power of attorney under which root of title or any deed has been executed; a death certificate or grant of representation and assent; any mortgages after root of title even if discharged

74
Q

What type of transfer is preferable for use as legal title and why

A

A legal mortgage or sale conveyance as they will have involved an investigation of title of a further 15 years back in time

75
Q

In unregistered land, one of the buyer’s solicitors main concerns will be to check

A

That the epitome of title will be sufficient to register the property with title absolute at Land Registry

76
Q

What should a buyer’s solicitor do as a first port of call in unregistered land

A

Check the land is not registered - carry out an index map search to look for any registered titles within the boundaries; any pending applications for registration; any cautions against first registration (i.e. someone claiming some kind of right against the property)

77
Q

What should the buyer’s solicitor check about the date of root of title

A

That it does not fall after the relevant date of compulsory first registration

78
Q

What does the buyer’s solicitor check about the chain of title

A

That each deed forming part of the chain is validly executed and stamped

79
Q

Why does LPMPA formalities for deeds not apply to most unregistered deeds

A

Because they were before LPMPA came into force

80
Q

Common law formalities for execution of deeds are … than LPMPA

A

More

81
Q

What is the key difference between common law and LPMPA requirements for deeds

A

Common law required sealing

82
Q

What does sealing involve

A

Sealing with red wax or red paper wafer

83
Q

What are the requirements needed for a deed both under LPMPA and common law

A

Clear on its face that intended to be a deed; signed; delivered as a deed

84
Q

Who signs a deed if it is an individual being bound

A

They do in the presence of a witness who also signs

85
Q

Who signs a deed if it is a company being bound

A

Two company directors or one director and the company secretary

86
Q

Each conveyance in the chain must also be … showing the correct amount of….

A

Stamped to show ad valorem stamp duty has been paid

87
Q
A
87
Q

If a stamp is missing

A

The buyer’s solicitor should insist the seller pays the outstanding stamp duty and provides proof this has been done - there will be interest and penalties for later payment

sqe 1 - property practice (12 decks)

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