REAL ESTATE REVISION NOTES
LPC (University of Law)
SALE & PURCHASE OF PROPERTY
Pre-Contract Stage
VAT
Exchange of Contracts
Pre-Completion Stage
Completion
Conduct Issues
LEASES
Grant of Lease
Leasehold Covenants
Assignment of Lease
Termination of Lease
All notes correct and Distinction worthy as of
academic year 2020/21
,PRE-CONTRACT STAGE
1. Take instructions from the client
2. Ensure the buyer client has enough money to meet the costs of the purchase
Most clients will already have submitted a mortgage application and a solicitor should not
interfere unless arrangements are clearly unsatisfactory
Solicitors cannot arrange or advise on a mortgage contract unless they are FCA authorised
3. Provide Deduction of Title – the seller’s solicitor must send the official copies of the seller’s title
to the buyer
4. Perform Investigation of Title – the buyer’s solicitor must investigate the title of the property
Pay particular attention to the description of the land, class of title, registered owner(s) of the
land, registered easements and covenants, any other incumbrances
Problem areas that could be identified at this point include:
• Covenant – the burden of a positive covenant cannot run with the land, but the burden of
a restrictive covenant will pass if it: touches and concerns the land, was entered into for
the benefit of the land and is capable of benefiting that land, the original parties intended
the burden to run, and it is registered (Tulk v Moxhay)
o If there is a corresponding benefit of an easement, then they will run together
(Halsall v Brizell)
o A buyer may consider obtaining insurance, approaching the person with the benefit
to ask for modification, or making an application to the Upper Tribunal (Lands
Chamber) for its removal
• Easement – benefits of easements automatically pass (s.62 LPA) and burdens of easements
that are registered will pass
• Co-ownership of land – if there is a tenancy in common and one co-owner has died, it is
preferable that another trustee be appointed but the survivor may deal with the
transaction alone if they can prove death of the other owner and that they are solely and
beneficially entitled to the whole interest
• Trustees – if land is in a trust, the beneficiaries’ interests will need to be overreached,
which would involve a second trustee being appointed
• PRs – the buyer must ensure all PRs join in the conveyance to ensure they obtain good title
• Charges – the buyer should raise a requisition to require the seller’s mortgage be removed
and proved by a DS1 Form
• Transaction at an undervalue – be aware that these can be set aside if an individual donor
is made bankrupt within 5 years (s.339 IA 1986), or corporate donor within 2 years (s.238)
Consider any issues using the following procedure:
• Identify the issue – and reference the register and entry it is contained in
• Describe the issue – what the entry in the register means legally
• Explain the implications of the issue and how these may affect the client
• Action – suggest the suitable course of action to take, e.g. always tell the client, may want
to raise enquiries of the seller or a further search, or take steps to resolve the issue such as
obtaining insurance, obtaining a covenant from the seller
5. Undertake searches and enquiries – due to the principle of caveat emptor it is the buyer’s
responsibility to find out as much as possible about the property before their client enters into the
contract
, • Local land charges search (LLC1) – will highlight any financial charges or restrictions on the
land imposed by the public authority that would bind the buyer, e.g. listed buildings
charges, planning charges, tree preservation orders
• Enquires of the local authority (CON29) – will reveal information about planning
permission, maintenance of the roads serving the property, any public paths on the land,
whether any new roads are planned within 200m etc
• Specialised enquiries of the local authority (CON29O) – which could include information
about common land (22), planning permission (6), noise abatement (10), urban
development areas (11), enterprise zones (12), flood defences (21)
• Enquiries of the seller (TA06 for residential property, CPSE for commercial property, LPE1
for leasehold property) – will elicit information from the seller that they are not bound by
law to disclose, e.g. boundaries, adverse rights, access issues, VAT status, disputes with
neighbours, alterations and extensions of the building
• Water and drainage enquiries – will reveal if the property has use of the public sewer,
mains water supply, name of water provider
• Environmental search – will reveal issues with potential contamination of the land, both
on-site and nearby off-site sources – important because the buyer could be liable for
decontaminating the land if they want to obtain planning permission
• Flood search – to determine the risk of flooding from rivers, ground water, etc and now
recommended for most properties because 1 in 6 are at risk
• Index map search (SIM Form) – will show whether the land is registered, and whether any
third parties have rights over the land, e.g. if mines/minerals are excluded from title, who
has the right to mine them
• Chancel repair search – will reveal whether a property may be liable to contribute to
repairing the chancel of the parish church (but unnecessary if there has been a transfer of
value since 13 October 2013 because should be protected by notice)
• Company search at Companies House – if the seller is a company, this will reveal issues
with solvency or undisclosed charges over the property
• Bankruptcy search (Form K16)– if the buyer’s solicitor is also acting for the lender then
should do this search (or company search if they are a company)
• Location specific searches – if there are any specific features of the property, e.g. search
for common land (Enquiry 22 on CON29O), mining search (CON29M), searches relating to
nearby waterways, railways
The results of searches must be checked to ensure they comply with the clients instructions and
unclear answers should be pursued – if not, the solicitor may be liable in negligence (Computastaff
Ltd v Ingledew Brown Bennison & Garrett)
6. Prepare Certificate of Title – after completing their searches and enquiries, one of the solicitors
must prepare and send a Certificate of Title to the lender which summaries all the relevant
information that they should be aware of
Most firms use the CLLS Certificate of Title formatting, confirming that the seller has good and
marketable title
LPC (University of Law)
SALE & PURCHASE OF PROPERTY
Pre-Contract Stage
VAT
Exchange of Contracts
Pre-Completion Stage
Completion
Conduct Issues
LEASES
Grant of Lease
Leasehold Covenants
Assignment of Lease
Termination of Lease
All notes correct and Distinction worthy as of
academic year 2020/21
,PRE-CONTRACT STAGE
1. Take instructions from the client
2. Ensure the buyer client has enough money to meet the costs of the purchase
Most clients will already have submitted a mortgage application and a solicitor should not
interfere unless arrangements are clearly unsatisfactory
Solicitors cannot arrange or advise on a mortgage contract unless they are FCA authorised
3. Provide Deduction of Title – the seller’s solicitor must send the official copies of the seller’s title
to the buyer
4. Perform Investigation of Title – the buyer’s solicitor must investigate the title of the property
Pay particular attention to the description of the land, class of title, registered owner(s) of the
land, registered easements and covenants, any other incumbrances
Problem areas that could be identified at this point include:
• Covenant – the burden of a positive covenant cannot run with the land, but the burden of
a restrictive covenant will pass if it: touches and concerns the land, was entered into for
the benefit of the land and is capable of benefiting that land, the original parties intended
the burden to run, and it is registered (Tulk v Moxhay)
o If there is a corresponding benefit of an easement, then they will run together
(Halsall v Brizell)
o A buyer may consider obtaining insurance, approaching the person with the benefit
to ask for modification, or making an application to the Upper Tribunal (Lands
Chamber) for its removal
• Easement – benefits of easements automatically pass (s.62 LPA) and burdens of easements
that are registered will pass
• Co-ownership of land – if there is a tenancy in common and one co-owner has died, it is
preferable that another trustee be appointed but the survivor may deal with the
transaction alone if they can prove death of the other owner and that they are solely and
beneficially entitled to the whole interest
• Trustees – if land is in a trust, the beneficiaries’ interests will need to be overreached,
which would involve a second trustee being appointed
• PRs – the buyer must ensure all PRs join in the conveyance to ensure they obtain good title
• Charges – the buyer should raise a requisition to require the seller’s mortgage be removed
and proved by a DS1 Form
• Transaction at an undervalue – be aware that these can be set aside if an individual donor
is made bankrupt within 5 years (s.339 IA 1986), or corporate donor within 2 years (s.238)
Consider any issues using the following procedure:
• Identify the issue – and reference the register and entry it is contained in
• Describe the issue – what the entry in the register means legally
• Explain the implications of the issue and how these may affect the client
• Action – suggest the suitable course of action to take, e.g. always tell the client, may want
to raise enquiries of the seller or a further search, or take steps to resolve the issue such as
obtaining insurance, obtaining a covenant from the seller
5. Undertake searches and enquiries – due to the principle of caveat emptor it is the buyer’s
responsibility to find out as much as possible about the property before their client enters into the
contract
, • Local land charges search (LLC1) – will highlight any financial charges or restrictions on the
land imposed by the public authority that would bind the buyer, e.g. listed buildings
charges, planning charges, tree preservation orders
• Enquires of the local authority (CON29) – will reveal information about planning
permission, maintenance of the roads serving the property, any public paths on the land,
whether any new roads are planned within 200m etc
• Specialised enquiries of the local authority (CON29O) – which could include information
about common land (22), planning permission (6), noise abatement (10), urban
development areas (11), enterprise zones (12), flood defences (21)
• Enquiries of the seller (TA06 for residential property, CPSE for commercial property, LPE1
for leasehold property) – will elicit information from the seller that they are not bound by
law to disclose, e.g. boundaries, adverse rights, access issues, VAT status, disputes with
neighbours, alterations and extensions of the building
• Water and drainage enquiries – will reveal if the property has use of the public sewer,
mains water supply, name of water provider
• Environmental search – will reveal issues with potential contamination of the land, both
on-site and nearby off-site sources – important because the buyer could be liable for
decontaminating the land if they want to obtain planning permission
• Flood search – to determine the risk of flooding from rivers, ground water, etc and now
recommended for most properties because 1 in 6 are at risk
• Index map search (SIM Form) – will show whether the land is registered, and whether any
third parties have rights over the land, e.g. if mines/minerals are excluded from title, who
has the right to mine them
• Chancel repair search – will reveal whether a property may be liable to contribute to
repairing the chancel of the parish church (but unnecessary if there has been a transfer of
value since 13 October 2013 because should be protected by notice)
• Company search at Companies House – if the seller is a company, this will reveal issues
with solvency or undisclosed charges over the property
• Bankruptcy search (Form K16)– if the buyer’s solicitor is also acting for the lender then
should do this search (or company search if they are a company)
• Location specific searches – if there are any specific features of the property, e.g. search
for common land (Enquiry 22 on CON29O), mining search (CON29M), searches relating to
nearby waterways, railways
The results of searches must be checked to ensure they comply with the clients instructions and
unclear answers should be pursued – if not, the solicitor may be liable in negligence (Computastaff
Ltd v Ingledew Brown Bennison & Garrett)
6. Prepare Certificate of Title – after completing their searches and enquiries, one of the solicitors
must prepare and send a Certificate of Title to the lender which summaries all the relevant
information that they should be aware of
Most firms use the CLLS Certificate of Title formatting, confirming that the seller has good and
marketable title
