Property Practice Revision Notes
Pre-Exchange
Initial Advice & Types of Finance
Contract Race – Where a seller decides to deal with more than one prospective buyer.
Solicitor’s Obligations – A seller’s solicitor must inform all buyers immediately of the seller’s
intention to deal with more than one buyer. To not breach confidentiality, the solicitor must
seek consent before disclosure is made. If refused, the solicitor must cease to act.
Commercial Funding – Funding may come from (a) a lending syndicate, (b) equity finance, (d)
debt finance, (d) a mortgage, and / or (e) the proceeds of any related sale.
Residential Mortgages
Capital Repayment Mortgage – Where the borrower repays the capital sum by monthly
payments, together with interest.
Interest Only Mortgage – Where the borrower only pays the interest on the loan and capital is
repaid on disposal.
Endowment Mortgage – An interest only mortgage that is topped up with a payment that is
invested in an endowment policy.
Caveat Emptor
Caveat Emptor – A seller is under no obligation to provide a buyer with all the relevant
information that they may require; it is on the buyer to investigate as thoroughly as possible.
Misrepresentation
Misrepresentation – A false statement which induces a buyer into a contract.
Liability – A seller cannot mislead a buyer by concealing physical defects or answering questions
dishonestly.
Disclosure Obligations – There is no onus on a seller to disclose any physical defects.
Reliance – Where responses are made in response to enquiries, a buyer must have read and
relied on the responses to plead a claim for misrepresentation.
Course of Action – Where a buyer is induced by a statement, they will have recourse under the
Misrepresentation Act 1976 or common law. It is common to rely on the sale contract as the
standard conditions do not require the buyer to prove that they were induced to rely on the
conduct or statement; it is sufficient to prove that there was an error or omission.
Latent Encumbrances & Title Defects
Disclosure Obligations – A seller must disclose latent incumbrances and / or any defects in title.
Latent Incumbrance – Something which is not apparent, or cannot be discovered, on inspection.
Disclosure – A seller must disclose latent incumbrances of which it is aware or of which it
has the means to know, acting reasonably and diligently.
Extent – A seller need not look for “a needle in a haystack where there is no apparent
reason to believe that a needle has been lost”.
Defect in Title – A matter that brings into question the seller's ownership of the property, or the
rights and burdens that affect the property.
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,Deducing & Investigating Title: Registered Land
Property Register
Property Description – The Property Register will (a) state whether the property is freehold or
leasehold and (b) describe the property by its address and reference to the title plan.
Benefitting Rights – Benefitting rights may be “extracted”, meaning all shown on the Property
Register, or the Register may refer to a bundle of rights contained in a document, which should
be provided by the seller’s solicitor.
Rights of Way – 1) Registration 2) Adequacy 3) Maintenance 4) Adoption.
Registration – If a benefit appears on the Property Register, it is registered. To be
enforceable, the burden must also be registered against the servient land.
Adequacy – A right of way must be legally and physically adequate, meaning it is
physically suitable for the buyer’s intended use and nothing the buyer intended to do in
respect of the right is prohibited.
Maintenance – Even if not stated, a person benefitting from a right of way is obliged, in
common law, to contribute towards its maintenance. Inspection and enquiries should
assess how this is likely to affect the buyer.
Adoption – An adopted highway is a public highway maintainable by the local authority
at its expense. If a private road is adopted, the frontagers are required to pay the costs
of bringing the road up to adoptable standard.
Frontagers – The land that adjoins the land that benefits from / is burdened by the
right of way. The cost is proportionate to the extent to which a piece of land
adjoins the land in question.
Proprietorship Register
Class of Title – An indication as to how satisfied the Land Registry is with the proof of ownership
of the registered proprietor.
Title Absolute – The Land Registry is satisfied that the registered proprietor is the true and
proper owner of the property.
Qualified Title – The Land Registry has recognised a specific defect in the title.
Possessory Title – Where the registered proprietor has shown that they have physical
possession but no title deeds or is claiming through adverse possession.
Good Leasehold Title – Where the leaseholder cannot provide evidence of the landlord’s
title to the land.
Next Steps – Where class of title is anything other than Title Absolute, the buyer’s solicitor
should (a) report it to their client and explain what it means, (b) check the mortgage
lenders’ requirements, (c) consider and advise on obtaining title indemnity insurance, and
(d) consider the possibility of upgrading to title absolute, if possible.
Registered Proprietor – The registered proprietor can be an individual, a company, an LLP, or any
combination up to a maximum of 4 legal persons.
Individual – The Register will set out the individual’s full name and address for service.
LLPs & Companies – The Register will set out the LLP / company name, number, and
registered office address. These should be verified with a Companies House search.
Co-Owners – All co-owners will be required to sign the contract and execute the purchase
deed and thus will appear on the Proprietorship Register.
Price Paid – The Register will state the price paid or stated value of the land if the seller acquired
the land after 01 April 2001.
Indemnity – The Register will state if the registered proprietor gave an indemnity covenant to
the transferor on acquiring the property.
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, Restrictions – The Register will state any restrictions on the right of the registered proprietor to
sell the property.
Co- Ownership – If co-owners notify the Land Registry that they hold as tenants in common,
there will be a restriction to the Proprietorship Register. Without such a restriction, it can be
assumed that they are joint beneficial tenants.
Death of Proprietor – The Land Registry will register a surviving joint tenant as the sole owner.
Any tenancy in common restriction will remain in place unless the owner proves that they have
become beneficially entitled to the whole property.
Surviving Joint Tenant – A surviving joint tenant should sign the land contract, execute the
transfer deed, provide a certified copy of the deceased’s death certificate.
Surviving Tenant in Common – A surviving tenant in common must appoint a second
trustee to sign the land contract and execute the transfer deed to overreach the beneficial
interests. They should provide a certified copy of the deceased’s death certificate.
Charges Register
Mortgages – Legal mortgages must be (a) created by deed and (b) registered on the Charges
Register.
Restriction – The mortgagee will usually register a restriction on the Proprietorship Register
to prevent the mortgagor from selling the property without their consent.
Dealing with Mortgages – The buyer’s solicitor should (a) check that the seller will have
sufficient funds to clear the mortgage, (b) ensure that it is a term of the contract that the
mortgage will be redeemed on completion, and (c) obtain an appropriate undertaking from the
seller’s solicitor to redeem the mortgage on completion.
Restrictive Covenant – It is assumed that restrictive covenants in the Charges Register are
binding on the land.
Positive Covenant – A positive covenant on the Charges Register is not necessarily binding on the
land. If it is, it is prudent to consider a chain of indemnity.
Indemnity Covenant – A covenant given by a buyer to a seller to observe a positive
covenant. Such a covenant should be recorded on the Proprietorship Register.
Breaking the Chain – All indemnity covenants should appear on the Proprietorship Register.
If one does not, the chain has likely been broken and the buyer should not provide an
indemnity covenant.
Unknown Covenant – A covenant that could be positive or restrictive. If positive, it is very
unlikely that a chain of indemnity exists. A buyer’s solicitor should assume unknown covenants
are restrictive.
Buyer’s Options – A buyer may (a) obtain indemnity insurance, (b) seek consent to breach the
covenant, or (c) Upper Tribunal (Lands Chamber) to modify or discharge the covenant (if
restrictive).
Proposed Use – Where a buyer’s proposed use of land would breach a covenant, it is best to
obtain indemnity insurance. This must done before approaching / contacting the person
with benefit.
Deducing & Investigating Title: Unregistered Land
Compulsory Registration – Upon the transfer of unregistered land, the purchaser must register it
at the Land Registry. This must be done within two months. The buyer’s solicitor should insist
that the seller registers title, at their expense, before proceeding.
Epitome of Title – Where the seller’s solicitor selects the most useful documents, containing
relevant details about the property, from a larger mass of old title deeds.
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Pre-Exchange
Initial Advice & Types of Finance
Contract Race – Where a seller decides to deal with more than one prospective buyer.
Solicitor’s Obligations – A seller’s solicitor must inform all buyers immediately of the seller’s
intention to deal with more than one buyer. To not breach confidentiality, the solicitor must
seek consent before disclosure is made. If refused, the solicitor must cease to act.
Commercial Funding – Funding may come from (a) a lending syndicate, (b) equity finance, (d)
debt finance, (d) a mortgage, and / or (e) the proceeds of any related sale.
Residential Mortgages
Capital Repayment Mortgage – Where the borrower repays the capital sum by monthly
payments, together with interest.
Interest Only Mortgage – Where the borrower only pays the interest on the loan and capital is
repaid on disposal.
Endowment Mortgage – An interest only mortgage that is topped up with a payment that is
invested in an endowment policy.
Caveat Emptor
Caveat Emptor – A seller is under no obligation to provide a buyer with all the relevant
information that they may require; it is on the buyer to investigate as thoroughly as possible.
Misrepresentation
Misrepresentation – A false statement which induces a buyer into a contract.
Liability – A seller cannot mislead a buyer by concealing physical defects or answering questions
dishonestly.
Disclosure Obligations – There is no onus on a seller to disclose any physical defects.
Reliance – Where responses are made in response to enquiries, a buyer must have read and
relied on the responses to plead a claim for misrepresentation.
Course of Action – Where a buyer is induced by a statement, they will have recourse under the
Misrepresentation Act 1976 or common law. It is common to rely on the sale contract as the
standard conditions do not require the buyer to prove that they were induced to rely on the
conduct or statement; it is sufficient to prove that there was an error or omission.
Latent Encumbrances & Title Defects
Disclosure Obligations – A seller must disclose latent incumbrances and / or any defects in title.
Latent Incumbrance – Something which is not apparent, or cannot be discovered, on inspection.
Disclosure – A seller must disclose latent incumbrances of which it is aware or of which it
has the means to know, acting reasonably and diligently.
Extent – A seller need not look for “a needle in a haystack where there is no apparent
reason to believe that a needle has been lost”.
Defect in Title – A matter that brings into question the seller's ownership of the property, or the
rights and burdens that affect the property.
1
,Deducing & Investigating Title: Registered Land
Property Register
Property Description – The Property Register will (a) state whether the property is freehold or
leasehold and (b) describe the property by its address and reference to the title plan.
Benefitting Rights – Benefitting rights may be “extracted”, meaning all shown on the Property
Register, or the Register may refer to a bundle of rights contained in a document, which should
be provided by the seller’s solicitor.
Rights of Way – 1) Registration 2) Adequacy 3) Maintenance 4) Adoption.
Registration – If a benefit appears on the Property Register, it is registered. To be
enforceable, the burden must also be registered against the servient land.
Adequacy – A right of way must be legally and physically adequate, meaning it is
physically suitable for the buyer’s intended use and nothing the buyer intended to do in
respect of the right is prohibited.
Maintenance – Even if not stated, a person benefitting from a right of way is obliged, in
common law, to contribute towards its maintenance. Inspection and enquiries should
assess how this is likely to affect the buyer.
Adoption – An adopted highway is a public highway maintainable by the local authority
at its expense. If a private road is adopted, the frontagers are required to pay the costs
of bringing the road up to adoptable standard.
Frontagers – The land that adjoins the land that benefits from / is burdened by the
right of way. The cost is proportionate to the extent to which a piece of land
adjoins the land in question.
Proprietorship Register
Class of Title – An indication as to how satisfied the Land Registry is with the proof of ownership
of the registered proprietor.
Title Absolute – The Land Registry is satisfied that the registered proprietor is the true and
proper owner of the property.
Qualified Title – The Land Registry has recognised a specific defect in the title.
Possessory Title – Where the registered proprietor has shown that they have physical
possession but no title deeds or is claiming through adverse possession.
Good Leasehold Title – Where the leaseholder cannot provide evidence of the landlord’s
title to the land.
Next Steps – Where class of title is anything other than Title Absolute, the buyer’s solicitor
should (a) report it to their client and explain what it means, (b) check the mortgage
lenders’ requirements, (c) consider and advise on obtaining title indemnity insurance, and
(d) consider the possibility of upgrading to title absolute, if possible.
Registered Proprietor – The registered proprietor can be an individual, a company, an LLP, or any
combination up to a maximum of 4 legal persons.
Individual – The Register will set out the individual’s full name and address for service.
LLPs & Companies – The Register will set out the LLP / company name, number, and
registered office address. These should be verified with a Companies House search.
Co-Owners – All co-owners will be required to sign the contract and execute the purchase
deed and thus will appear on the Proprietorship Register.
Price Paid – The Register will state the price paid or stated value of the land if the seller acquired
the land after 01 April 2001.
Indemnity – The Register will state if the registered proprietor gave an indemnity covenant to
the transferor on acquiring the property.
2
, Restrictions – The Register will state any restrictions on the right of the registered proprietor to
sell the property.
Co- Ownership – If co-owners notify the Land Registry that they hold as tenants in common,
there will be a restriction to the Proprietorship Register. Without such a restriction, it can be
assumed that they are joint beneficial tenants.
Death of Proprietor – The Land Registry will register a surviving joint tenant as the sole owner.
Any tenancy in common restriction will remain in place unless the owner proves that they have
become beneficially entitled to the whole property.
Surviving Joint Tenant – A surviving joint tenant should sign the land contract, execute the
transfer deed, provide a certified copy of the deceased’s death certificate.
Surviving Tenant in Common – A surviving tenant in common must appoint a second
trustee to sign the land contract and execute the transfer deed to overreach the beneficial
interests. They should provide a certified copy of the deceased’s death certificate.
Charges Register
Mortgages – Legal mortgages must be (a) created by deed and (b) registered on the Charges
Register.
Restriction – The mortgagee will usually register a restriction on the Proprietorship Register
to prevent the mortgagor from selling the property without their consent.
Dealing with Mortgages – The buyer’s solicitor should (a) check that the seller will have
sufficient funds to clear the mortgage, (b) ensure that it is a term of the contract that the
mortgage will be redeemed on completion, and (c) obtain an appropriate undertaking from the
seller’s solicitor to redeem the mortgage on completion.
Restrictive Covenant – It is assumed that restrictive covenants in the Charges Register are
binding on the land.
Positive Covenant – A positive covenant on the Charges Register is not necessarily binding on the
land. If it is, it is prudent to consider a chain of indemnity.
Indemnity Covenant – A covenant given by a buyer to a seller to observe a positive
covenant. Such a covenant should be recorded on the Proprietorship Register.
Breaking the Chain – All indemnity covenants should appear on the Proprietorship Register.
If one does not, the chain has likely been broken and the buyer should not provide an
indemnity covenant.
Unknown Covenant – A covenant that could be positive or restrictive. If positive, it is very
unlikely that a chain of indemnity exists. A buyer’s solicitor should assume unknown covenants
are restrictive.
Buyer’s Options – A buyer may (a) obtain indemnity insurance, (b) seek consent to breach the
covenant, or (c) Upper Tribunal (Lands Chamber) to modify or discharge the covenant (if
restrictive).
Proposed Use – Where a buyer’s proposed use of land would breach a covenant, it is best to
obtain indemnity insurance. This must done before approaching / contacting the person
with benefit.
Deducing & Investigating Title: Unregistered Land
Compulsory Registration – Upon the transfer of unregistered land, the purchaser must register it
at the Land Registry. This must be done within two months. The buyer’s solicitor should insist
that the seller registers title, at their expense, before proceeding.
Epitome of Title – Where the seller’s solicitor selects the most useful documents, containing
relevant details about the property, from a larger mass of old title deeds.
3
