What is Conveyancing?
= buying of land!
Whether property is registered or unregistered, everyone needs to go through the following steps
Stage 1; Preliminary Negotiations - go view property, ask questions, start discussing costs and other terms
and conditions
Stage 2; exchange of contracts - once the terms are formalised, the contract is formally binding, can’t go back
Stage 3; transfer of ownership
Stage 4; registration of ownership - now registration of unregistered property is forced
Stage 1
What happens here?
- Viewings of the property
- Inspections
- Important enquiries
- The principle of caveat emptor always applies to purchasing land - buy but beware - it is up to you to
make the investigations and ask these difficult questions
Any agreements reached still have no legal effect. Merely the gentlemen's agreement
Known as the heartbreak stage
- Goding v Frazer [1967] 1 WLR 286 Sachs LJ;
Merely hoping ‘the other party will act like a gentleman’ when in reality neither of them will do so, ‘if it is against
his material interests’
You will want to ask loads of important questions about the property
Does the seller have to answer your questions truthfully?
- Depends how you ask
Contrast
- Direct Questions; Yes! Must answer truthfully
McMeekin v Long (2003) 29 EG 120
FACTS; the buyer was told there have been no disputes with the neighbours, whereas in fact there were
DECISION; breached the legal obligation to answer questions truthfully
- Open ended questions;
Sykes v Taylor Rose [2004] 2 P & CR 30
FACTS; seller failed to disclose that the house was a scene to a horrific murder
DECISION; Not asked directly, so under no obligation to disclose. Don't ask, dont tell
Stranger terminology
Gazundering - the potential purchaser, after reaching an agreement with the seller, decides to reduce their
offer - or even withdraw all together - common where there is a drop in the market
Gazumping - the seller of the land accepts a different offer from another purchaser who has come along,
because they are offering more money prior to the exchange of contracts
Problems with these
Aside from being extremely frustrating, the purchaser might have incurred considerable cost in relation to the
property, which they will not be able to recover
- E.g; inspections
The courts acknowledged; Pitt v PHH asset management Ltd. [1994] 1 WLR 327. Sir thomas bingham
Why are we allowing Gazumping?
- The main reason for not legally binding anyone
- It allows people to inspect the property
- Ask all the important questions
, - Allows the flexibility without committing themselves legally
However the sottish system reformed this, and you’re forced to commit in a much earlier stage. Legal
consequences much earlier on.
Stage 2;
Subject to contract - a lot of time you hear this phrase - but when it comes to buying a property all that matters
is the exchange of contracts
Archaic System - you might have seen people exchange keys and it has to happen at the same time
Formal, Binding agreement to sell and transfer the land
After this you can no longer change your mind - legal liability ensues
Stage 3;
Contracts are exchanged and then the transfer of ownership can happen
This then also becomes linked to stage 4 and the registration of ownership
Stage 4;
Final stage of notifying the land registry of the purchase and being entered onto the central land registry
Paperwork
And then the process is completed
We need to remind ourselves of the distinction
History….
Historically no national record of ownership in england and wales
No one unified system - bit of a mess
Pre stamp duty - there was not even a requirement of writing
Many people were illiterate back then
A lot of uncertainty - no evidential trial
The writing trial only came about as a result of taxation
Problem?
Yes
- Fraud and unconscionable behaviour
- How do you protect your rights when you cannot prove ownership?
- Registration needed to restore certainty
Aside from the form of registration, unregistered and registered land is governed by different legislation
- Registered land
Land of property act 1925 - bought in a lot of reform, made it a lot less messy
The common law
Land registration act 2002 - modernising system of how we register land
- Unregistered land
The law of property act 1925
The common law
Land charges act 1972 - this is the confusing on so you will need to pay attention
Unregistered land
The old system of demonstrating title
Although only 14% of land is unregistered, because there is still some land unregistered, unfortunately we also
have to cover this and learn how acquisition works for unregistered land
A lot of it is owned by the crown or the church - localized by these large entities which do not regularly sell and
transfer the ownership to the land
= buying of land!
Whether property is registered or unregistered, everyone needs to go through the following steps
Stage 1; Preliminary Negotiations - go view property, ask questions, start discussing costs and other terms
and conditions
Stage 2; exchange of contracts - once the terms are formalised, the contract is formally binding, can’t go back
Stage 3; transfer of ownership
Stage 4; registration of ownership - now registration of unregistered property is forced
Stage 1
What happens here?
- Viewings of the property
- Inspections
- Important enquiries
- The principle of caveat emptor always applies to purchasing land - buy but beware - it is up to you to
make the investigations and ask these difficult questions
Any agreements reached still have no legal effect. Merely the gentlemen's agreement
Known as the heartbreak stage
- Goding v Frazer [1967] 1 WLR 286 Sachs LJ;
Merely hoping ‘the other party will act like a gentleman’ when in reality neither of them will do so, ‘if it is against
his material interests’
You will want to ask loads of important questions about the property
Does the seller have to answer your questions truthfully?
- Depends how you ask
Contrast
- Direct Questions; Yes! Must answer truthfully
McMeekin v Long (2003) 29 EG 120
FACTS; the buyer was told there have been no disputes with the neighbours, whereas in fact there were
DECISION; breached the legal obligation to answer questions truthfully
- Open ended questions;
Sykes v Taylor Rose [2004] 2 P & CR 30
FACTS; seller failed to disclose that the house was a scene to a horrific murder
DECISION; Not asked directly, so under no obligation to disclose. Don't ask, dont tell
Stranger terminology
Gazundering - the potential purchaser, after reaching an agreement with the seller, decides to reduce their
offer - or even withdraw all together - common where there is a drop in the market
Gazumping - the seller of the land accepts a different offer from another purchaser who has come along,
because they are offering more money prior to the exchange of contracts
Problems with these
Aside from being extremely frustrating, the purchaser might have incurred considerable cost in relation to the
property, which they will not be able to recover
- E.g; inspections
The courts acknowledged; Pitt v PHH asset management Ltd. [1994] 1 WLR 327. Sir thomas bingham
Why are we allowing Gazumping?
- The main reason for not legally binding anyone
- It allows people to inspect the property
- Ask all the important questions
, - Allows the flexibility without committing themselves legally
However the sottish system reformed this, and you’re forced to commit in a much earlier stage. Legal
consequences much earlier on.
Stage 2;
Subject to contract - a lot of time you hear this phrase - but when it comes to buying a property all that matters
is the exchange of contracts
Archaic System - you might have seen people exchange keys and it has to happen at the same time
Formal, Binding agreement to sell and transfer the land
After this you can no longer change your mind - legal liability ensues
Stage 3;
Contracts are exchanged and then the transfer of ownership can happen
This then also becomes linked to stage 4 and the registration of ownership
Stage 4;
Final stage of notifying the land registry of the purchase and being entered onto the central land registry
Paperwork
And then the process is completed
We need to remind ourselves of the distinction
History….
Historically no national record of ownership in england and wales
No one unified system - bit of a mess
Pre stamp duty - there was not even a requirement of writing
Many people were illiterate back then
A lot of uncertainty - no evidential trial
The writing trial only came about as a result of taxation
Problem?
Yes
- Fraud and unconscionable behaviour
- How do you protect your rights when you cannot prove ownership?
- Registration needed to restore certainty
Aside from the form of registration, unregistered and registered land is governed by different legislation
- Registered land
Land of property act 1925 - bought in a lot of reform, made it a lot less messy
The common law
Land registration act 2002 - modernising system of how we register land
- Unregistered land
The law of property act 1925
The common law
Land charges act 1972 - this is the confusing on so you will need to pay attention
Unregistered land
The old system of demonstrating title
Although only 14% of land is unregistered, because there is still some land unregistered, unfortunately we also
have to cover this and learn how acquisition works for unregistered land
A lot of it is owned by the crown or the church - localized by these large entities which do not regularly sell and
transfer the ownership to the land
