PLP workshop summaries
WORKSHOP 1: INTRODUCTION TO A FREEHOLD TRANSACTION
➔ Identification checks of client
➔ Authority to act (e.g., if you are being instructed by a couple, are both parties instructing you
or is one person claiming to speak for both/if you are being instructed by a company, can you
be sure that the person giving you instructions has the company’s authority- for instance, is
there a board resolution)
➔ Conflicts of interest
➔ Issues to raise to client: timescale (is there a related transaction?); costs; co-ownership
➔ Survey: solicitors do not advise on the physical condition of a property- this is the
responsibility of the surveyor
- Basic valuation: the essential minimum if a mortgage is being taken; identifies major
obvious defects but does not provide detail
- Homebuyer report: much more detailed; suitable for most properties in reasonable
condition, aged less than 150 years
- Full structural survey: especially suitable where the property is listed, has had
extensive renovations or where extensive alterations are planned; the most expensive
option
➔ Sources of finance:
RESIDENTIAL: cash (whether savings or an inheritance); money from the sale of another
property; mortgage
COMMERCIAL: syndicated loans (i.e., from a number of different lenders); equity finance;
development finance (the lender advances money to developer’s land who will have the
power to step in and complete the development if the borrower fails to do so)
➔ Taxation:
- Stamp Duty Land Tax (SDLT) or Land Transaction Tax (LTT) (Wales)
- Capital Gains Tax (paid by individuals, but not companies, who make a profit on the
sale of an asset); note residential relief
- Value Added Tax
➔ The principle of caveat emptor
It is for the buyer to identify any problems before exchange of contracts
Limited exceptions including misrepresentation (reliance not necessary under standard terms
of conditions)
WORKSHOP 2: TITLE INVESTIGATION (registered and unregistered property)
➔ The seller’s solicitor deduces title- responsible for providing proof of title
➔ The buyer’s solicitor investigates title; once the buyer’s solicitor has completed their
investigations, they will report on title to the buyer who will decide whether they wish to
proceed with the purchase
Pre-registration deeds and documents -> the Land Registry -> Official copies
➔ Investigating title means checking that the seller is able to sell the property, identifying the
extent of the property, and any rights that benefit or burden of the property
➔ Generally the registered title comprises the official copies + title plan
, ➔ The official copies are divided into:
(i) the property register:
- Freehold or leasehold
- Property address or description
- Refers to title plan
- Rights benefiting the property
If a right is shown on the register, four further issues must be considered:
(a) Adequacy (consider your client’s needs and how they wish to use the property)
(b) Maintenance (financial contribution from your client may be required)
(c) Adoption (private roads may have been ‘adopted’ by a local authority; the client could be
required to contribute to bringing the road up to adoptable standard)
(d) Burden registered in the charges register of the affected land; if not registered, a caution
against first registration should be lodged
- Exclusions (e.g., hunting or fishing rights that may belong to someone else)
(ii) the proprietorship register:
- Class of title: decided by the Land Registry; depends on how good the owner’s
evidence of title is on first registration;
- Registered proprietor: the owner’s full name and address is shown; if the RP is a
company, then the company’s registered number should also be included
- Restrictions: e.g., a tenancy in common restriction- where one tenant in common has
died, a second trustee will need to be appointed on the transfer so that the beneficial
interest can be overreached, and the restriction removed
Where there are two co-owners, and no such restriction exists, it can be assumed that
they hold the property as beneficial joint tenants, in which case producing the death
certificate will suffice
Another type of restriction is where the owner is prevented from dealing with the land without the
consent of the mortgage lender (separate from the registration of the charge)
- Indemnity covenants: if the current owner of the land gave an indemnity covenant
when they bought the property, this will be noted on the proprietorship register
Under the standard conditions, the buyer will be required to give a similar
indemnity covenant to the seller
(iii) the charges register (includes rights burdening the property)
- Charge/mortgage: usually accompanied by a restriction on the proprietorship
register (see above)
- Restrictive covenants: the buyer can assume that it binds the property
- Positive covenant: is there an indemnity covenant in the proprietorship register? If
yes, the buyer can assume that the positive covenant binds the property
Has the covenant been breached previously?
- If so, the seller should provide an indemnity policy at their expense
, If not, does it affect the value or the buyer’s proposed use?
- If so, is insurance available? An alternative option would be to obtain consent from the person
with benefit- this should only be pursued once it is clear that insurance is not available
An application to the Lands Tribunal (Upper Chamber) as a last resort- only available for
restrictive covenants
May well be more appropriate to reduce the purchase price or withdraw from the transaction entirely
- Registered leases of more than 7 years
- Easements burdening the property: e.g., a right of way over the property may
restrict the development of the property
➔ In relation to residential transactions, many homes can be accessed via an adopted highway
(maintained by the local authority and usable by the public); if searches and enquiries reveal
that this is not the case, there should be an appropriate right of way in the property register
➔ Investigating title of unregistered land is much more complex
➔ The seller’s solicitor prepares the epitome of title, which is a schedule of all relevant deeds
and documents
➔ The first document to identify is the root of title: the particular convenience that will be used
to show good title to the property (see requirements in s.44 LPA 1925):
- Adequately describes the land being conveyed (a postal address may suffice)
- Be dated more than 15 years ago
- Casts no doubt on the seller’s title (e.g., where a conveyance is executed under a
power of attorney, and it is unclear whether a power of attorney was in existence at
the relevant time)
- Deals with the legal and beneficial title to the property
➔ Note that the root of title will not be sufficient if the person to whom the property was
transferred in the conveyance is not the most recent owner: a chain of title will be needed
with each subsequent conveyance to establish title to the current owner (i.e., the seller)
➔ The buyer’s solicitor investigates unregistered title by checking the epitome of title and its
copy documents; he will wish to ensure that the seller is entitled to sell the property, and
identify any issues that could affect the value of the property/the buyer’s proposed use of the
property
The buyer’s solicitor also checks the root of title using the requirements in the LPA
For the chain of title, the buyer’s solicitor will need to check for any gaps in the chain; he will
also need to check that each deed in the chain has been:
(i) validly executed
- Clear on its face that it is a deed
- Signed as a deed (and witnessed)
- Sealed
- Delivered
(ii) stamped
- This indicates that the correct stamp duty was paid on the deed
- Deeds after 1931 should have a Particulars Delivered stamp (confirms that the deed
has been properly stamped)
WORKSHOP 1: INTRODUCTION TO A FREEHOLD TRANSACTION
➔ Identification checks of client
➔ Authority to act (e.g., if you are being instructed by a couple, are both parties instructing you
or is one person claiming to speak for both/if you are being instructed by a company, can you
be sure that the person giving you instructions has the company’s authority- for instance, is
there a board resolution)
➔ Conflicts of interest
➔ Issues to raise to client: timescale (is there a related transaction?); costs; co-ownership
➔ Survey: solicitors do not advise on the physical condition of a property- this is the
responsibility of the surveyor
- Basic valuation: the essential minimum if a mortgage is being taken; identifies major
obvious defects but does not provide detail
- Homebuyer report: much more detailed; suitable for most properties in reasonable
condition, aged less than 150 years
- Full structural survey: especially suitable where the property is listed, has had
extensive renovations or where extensive alterations are planned; the most expensive
option
➔ Sources of finance:
RESIDENTIAL: cash (whether savings or an inheritance); money from the sale of another
property; mortgage
COMMERCIAL: syndicated loans (i.e., from a number of different lenders); equity finance;
development finance (the lender advances money to developer’s land who will have the
power to step in and complete the development if the borrower fails to do so)
➔ Taxation:
- Stamp Duty Land Tax (SDLT) or Land Transaction Tax (LTT) (Wales)
- Capital Gains Tax (paid by individuals, but not companies, who make a profit on the
sale of an asset); note residential relief
- Value Added Tax
➔ The principle of caveat emptor
It is for the buyer to identify any problems before exchange of contracts
Limited exceptions including misrepresentation (reliance not necessary under standard terms
of conditions)
WORKSHOP 2: TITLE INVESTIGATION (registered and unregistered property)
➔ The seller’s solicitor deduces title- responsible for providing proof of title
➔ The buyer’s solicitor investigates title; once the buyer’s solicitor has completed their
investigations, they will report on title to the buyer who will decide whether they wish to
proceed with the purchase
Pre-registration deeds and documents -> the Land Registry -> Official copies
➔ Investigating title means checking that the seller is able to sell the property, identifying the
extent of the property, and any rights that benefit or burden of the property
➔ Generally the registered title comprises the official copies + title plan
, ➔ The official copies are divided into:
(i) the property register:
- Freehold or leasehold
- Property address or description
- Refers to title plan
- Rights benefiting the property
If a right is shown on the register, four further issues must be considered:
(a) Adequacy (consider your client’s needs and how they wish to use the property)
(b) Maintenance (financial contribution from your client may be required)
(c) Adoption (private roads may have been ‘adopted’ by a local authority; the client could be
required to contribute to bringing the road up to adoptable standard)
(d) Burden registered in the charges register of the affected land; if not registered, a caution
against first registration should be lodged
- Exclusions (e.g., hunting or fishing rights that may belong to someone else)
(ii) the proprietorship register:
- Class of title: decided by the Land Registry; depends on how good the owner’s
evidence of title is on first registration;
- Registered proprietor: the owner’s full name and address is shown; if the RP is a
company, then the company’s registered number should also be included
- Restrictions: e.g., a tenancy in common restriction- where one tenant in common has
died, a second trustee will need to be appointed on the transfer so that the beneficial
interest can be overreached, and the restriction removed
Where there are two co-owners, and no such restriction exists, it can be assumed that
they hold the property as beneficial joint tenants, in which case producing the death
certificate will suffice
Another type of restriction is where the owner is prevented from dealing with the land without the
consent of the mortgage lender (separate from the registration of the charge)
- Indemnity covenants: if the current owner of the land gave an indemnity covenant
when they bought the property, this will be noted on the proprietorship register
Under the standard conditions, the buyer will be required to give a similar
indemnity covenant to the seller
(iii) the charges register (includes rights burdening the property)
- Charge/mortgage: usually accompanied by a restriction on the proprietorship
register (see above)
- Restrictive covenants: the buyer can assume that it binds the property
- Positive covenant: is there an indemnity covenant in the proprietorship register? If
yes, the buyer can assume that the positive covenant binds the property
Has the covenant been breached previously?
- If so, the seller should provide an indemnity policy at their expense
, If not, does it affect the value or the buyer’s proposed use?
- If so, is insurance available? An alternative option would be to obtain consent from the person
with benefit- this should only be pursued once it is clear that insurance is not available
An application to the Lands Tribunal (Upper Chamber) as a last resort- only available for
restrictive covenants
May well be more appropriate to reduce the purchase price or withdraw from the transaction entirely
- Registered leases of more than 7 years
- Easements burdening the property: e.g., a right of way over the property may
restrict the development of the property
➔ In relation to residential transactions, many homes can be accessed via an adopted highway
(maintained by the local authority and usable by the public); if searches and enquiries reveal
that this is not the case, there should be an appropriate right of way in the property register
➔ Investigating title of unregistered land is much more complex
➔ The seller’s solicitor prepares the epitome of title, which is a schedule of all relevant deeds
and documents
➔ The first document to identify is the root of title: the particular convenience that will be used
to show good title to the property (see requirements in s.44 LPA 1925):
- Adequately describes the land being conveyed (a postal address may suffice)
- Be dated more than 15 years ago
- Casts no doubt on the seller’s title (e.g., where a conveyance is executed under a
power of attorney, and it is unclear whether a power of attorney was in existence at
the relevant time)
- Deals with the legal and beneficial title to the property
➔ Note that the root of title will not be sufficient if the person to whom the property was
transferred in the conveyance is not the most recent owner: a chain of title will be needed
with each subsequent conveyance to establish title to the current owner (i.e., the seller)
➔ The buyer’s solicitor investigates unregistered title by checking the epitome of title and its
copy documents; he will wish to ensure that the seller is entitled to sell the property, and
identify any issues that could affect the value of the property/the buyer’s proposed use of the
property
The buyer’s solicitor also checks the root of title using the requirements in the LPA
For the chain of title, the buyer’s solicitor will need to check for any gaps in the chain; he will
also need to check that each deed in the chain has been:
(i) validly executed
- Clear on its face that it is a deed
- Signed as a deed (and witnessed)
- Sealed
- Delivered
(ii) stamped
- This indicates that the correct stamp duty was paid on the deed
- Deeds after 1931 should have a Particulars Delivered stamp (confirms that the deed
has been properly stamped)
