Registered Land Title Investigations

Question 1

what is deducing title?

Answer 1

by seller - seller solicitor:
- gathers title documents
- checks them to ensure seller is entitled to sell
- sends them to buyer solicitor

Question 2

what is investigating title?

Answer 2

by buyer

buyer solicitor
- checks Land Registry Official copies, title plan, and other docs referred to on the register
- aim to see if seller has right to sell
- ensure property is adequate for buyer’s intentions
- ensure there are no title defects that affect value of property, ability to mortgage, or ability to sell

Question 3

what docs does buyer solicitor check at Land Registry?

Answer 3

1) official copy
2) title plan
3) documents referred to on the official copy but not already extracted on the official copy

Question 4

what are the registers in the official copy?

Answer 4

1. property register = describes property and rights benefiting
2. proprietorship = describes owner, class of title, entries affecting ownership (restrictions/indemnity covenants), price paid
3. charges = rights burdening property (covenants, mortgages, easements, leases)

Question 5

what is the property register?

Answer 5

contains:

1. description of property = postal address and refers to title plan
2. rights benefitting property - which can be:

• extracted right (says ‘land coloured in blue’) = all relevant text is shown in title copy and no need to refer to document itself
• by reference to a filed document (says ‘note: copy filed’) = copy should be provided by seller solicitor

Question 6

if a right of way is shown on property register, what further actions buyer solicitor must take? (4)

Answer 6

1. legal or physical adequacy of the easement based on buyer’s intentions (advise inspection/survey)
2. maintenance = a person using a right of way is obliged under common law to contribute towards its maintenance (inspection and enquiries reveal how much and ask buyer if they are willing to pay)
3. check if the easement is enforceable against the burdened land

• conduct index map (SIM) search to see if servient land is registered or unregistered
• registered land = charges register shows if burden is registered
• unregistered land = easement must be visible on inspection of the land to be enforceable + caution of first registration must be lodged so burden can be registered

4. adoption = advise buyer of the risk that the local authority may adopt the private road into a public highway, in which case the owner of the land with the benefit of an easement may have to contribute high costs to bring the road to an adoptable standard (ask if buyer is willing to pay this)

Question 7

index map search - what does it show?

Answer 7

whether land is registered or not

nothing else

Question 8

what are the classes of title?

Answer 8

• on proprietorship register
• indicates how satisfied the land registry is of proof of ownership
• land registry GUARANTEES title with compensation
• types

1. absolute title = no issue with title
2. qualified title = specific defect with title e.g, deed missing on first registration
3. possessory title = registered proprietor shows they have physical possession but no title deeds / or is claiming through adverse possession (squatters rights)
4. good leasehold title = leaseholder cannot provide evidence of landlord title

Question 9

what should B’s solicitor do if there is no title absolute? (4)

Answer 9

• report to client and explain what it means
• check lender is okay with lower title (may require conditions)
• obtain title indemnity insurance to cover risks
• consider upgrading to title absolute by finding missing docs/requiring seller to remedy as a condition

Question 10

Registered Proprietor

Answer 10

• MAX 4 legal owners allowed
• hold legal title as joint tenants
• can be individual, company, LLP

Question 11

what are indemnity covenants?

Answer 11

• appear in proprietorship register if the current registered owner gave indemnity covenant to the transferor on acquiring the property
• The indemnity covenant is a personal obligation to observe positive covenants as positive covenants do not run with the land so subsequent owners are not bound to oberve them unless they gave an indemnity covenant
• If standard conditons of sale are used = if the seller gave an indemnity covenant, then the buyer must also give one against liability for an obligation which:

1. Affects the property and was disclosed to the buyer before contracts were exchanged
2. Will continue to bind the seller after completion.

Question 12

what are restrictions on proprietorship register?

Answer 12

Restriction prevents Land Registry from registering certain dealings against the title unless the terms of the restriction are complied with

1. tenancy in common restriction
2. mortgage restriction preventing buying land without mortgage lender’s consent

Question 13

how does a buyer know whether beneficial title is held as joint tenants or tenants in common? what does buyer solicitor do in each case?

Answer 13

• check if there is a tenant in common restriction on proprietorship register - important because buyer needs to satisfy that both legal and beneficial title has passed to it
• if all co-owners are living = all must sign contract and execute transfer deed
• if one co-owner died - problem = consider:

1. no restriction = assume co-owners hold as JT so surviving seller has full beneficial title and can pass it to the buuyer
   –> ask them to provide copy of deceased JT’s death certificate
2. restriction = assume co-owners held as tenants in common
   –> ask them to appoint a second trustee to sign and execute to overreach anyone else’s claim to beneficial entitlement + ask for death certificate

Question 14

what is overreaching?

Answer 14

• the buyer wants to ensure that full legal and beneficial title have passed to them
• so if a tenant in common dies, to ensure their beneficial share passes to B and not under their estate (i.e., that the deceased’s interest is overreached:

1. a second trustee must be appointed to execute the transfer deed with the surviving seller
2. the purchase price must be paid in good faith

Question 15

if there is a mortgage on the charges register with restriction on proprietorship register, what should buyer solicitor do? (3)

Answer 15

1. require seller solicitor to give an undertaking in replies to requisitions on title to discharge the mortgage on completion (undertakings are personal to the solicitor not the firm + enforced by the court)
2. ensure there is a term in the contract that the mortgage will be redeemed on completion
3. checking early on in pre-contract enquiries that seller has sufficient funds to clear mortgage

Question 16

how are mortgages registered?

Answer 16

valid legal mortgsge created by:

1. deed
2. registered in charges register (2 entries - date + name and address of lender)

ALSO there may be a restriction in the proprietorship register which prevents the mortgagor from selling without the lender’s consent (but NOT required to create a legal mortgage)

Question 17

why should the buyer be concerned about covenants in the charges register? (2)

Answer 17

1. if seller’s existing use of the property is in breach of the covenant, when the buyer becomes owner then the person with benefit can claim against any existing owner regardless of who actually breached the covenant
2. if the buyer’s proposed future use of the land would be in breach of the covenant

Question 18

what covenants are included in charges register?

Answer 18

1. restrictive = assume they are binding on new owner
2. positive = only binding on original covenantor unless there is a chain of indemnity - if there is no indemnity covenant in proprietorship register assume the chain of indemnity has been broken and buyer should refuse to provide an indemnity
3. unknown = report to client and obtain insurance

Question 19

what is the position on giving indemnity covenant where standard conditions are incorporated?

Answer 19

• if the seller gave an indemnity covenant - as evidenced in proprietorship register - the buyer will have to give one as well
• indemnity covenant will be given in the transfer deed at completion, not in the sale contract
• this is contractual (personal) between the buyer and the seller = if B breached the positive covenant, S can claim against B if S was claimed against under its own indemnity covenant

Question 20

what are the buyer’s options for dealing with covenants during investigation of title? (5)

Answer 20

1. indemnity insurance at seller’s expense
2. obtain written consent from the person with benefit
3. apply to Upper Tribunals (Land Chamber) to discharge or modify the covenant
4. stop the breach = good if buyer intends to reverse the breach
5. if options have been exhausted, ask seller to reduce price or withdraw from purchase if it is a big issue

Question 21

if the seller’s use of the land has been in breach of a covenant, what are the buyer’s options to protect itself?

Answer 21

1. stop or reverse the breach if it is not continuing and PWB has not complained (with contribution by the seller)
2. obtain indemnity insurance at the seller’s expense

Question 22

when is indemnity insurance not an option for covenants?

Answer 22

can be obtained for current breaches at the seller’s expense - but not an option where the risk of the PWB claiming is too high:

• B intends to breach it in the future
• the PWB has already been approached
• B requires planning permission as the breach will be publicised

+ if the seller’s breach was a past one-off and is not continuing, insurance may not be necessary unless the breach caused loss or damage

Question 23

if there is a covenant and the seller is in breach of it, when would it be appropriate for the buyer to deal with it by stopping the breach?

Answer 23

the buyer can stop the breach with a contribution from the seller where:

• the breach is capable of being reversed (e.g., take down a structure)
• the covenant does not impact the value of the land
• the covenant does not impact the buyer’s proposed use
• the PWB has not complained or claimed

Question 24

what should the buyer be aware of when considering approaching the PWB for their consent to breach or release covenants?

Answer 24

• PWB may require payment = check if this is acceptable to B
• PWB may refuse
• indemnity insurance cannot be obtained if PWB was approached = so if PWB refuses then this option is not available anymore
• PWB is alerted to breach = higher chance they may claim against it
• this may be difficult as the PWB may be difficult to trace or identify

Question 25

when can / should the buyer consider applying to the Upper Tribunal (Land Chamber) to discharge or modify covenants?

Answer 25

can apply:
- only for restrictive covenants (not positive covenants)

should apply:
- last resort
- advise the buyer that this is an expensive and time consuming process with no guarantee of success