Lecture 1: Registered Property: Title Investigation
1. IDENTIFY the issue (matters that will restrict the buyer from doing what it wants on the property)
2. EXPLAIN why it is an issue to this client (the law and the facts of the scenario)
3. Provide ADVICE and suggest solutions
Deducing Title to registered land
- the seller provides the title documents to the seller’s solicitor. Deducing title is the process of putting the title documents for
the property together, copying them and sending them to the buyer’s solicitor
What constitutes title to registered land?
- Official Copies of the register (OCs)
- Title Plan – must encompass everything that the client thinks they are buying, must be sent to the buyer ASAP
- Copies of documents referred to (but not extracted) in OC’s
Official Copies are split up between THREE REGISTERS
- Property Register
- Proprietorship Register
- Charges Register
The official copy must be recent, under 1 year old
Property Register
- describes the property
- describes rights benefitting the property
Looking to:
- ensure buyer can access and use the land as they intend
- check that the boundaries correspond with what the buyer is expecting
Right of Way – benefitting the property to give you the right to access the highway from your property
1. Is the right of way ADEQUATE for the client? For what purpose will the client be using this right?
- if the right of way is not adequate, the buyer should negotiate a deed of variation to vary the description of the right of way to
permit use for the purpose that the buyer wishes to use it for.
2. CON 29 Search: Check whether the right of way in question was ADOPTED or whether the local authority intends to adopt the
right of way.
- this would mean that the right of way would become a public road. Should the local authority choose to adopt the pathway,
the local authority could reclaim the cost from the frontagers, which could mean that the buyer may have to contribute to the
costs of bringing it up to a public standard before the local authority adopts the pathway.
3. MAINTENANCE
- Is the buyer going to be responsible for contributing to the maintenance of the costs of the private road which the right of way
is over?
- Obtain the last 3 year history of maintenance contributions by the seller. You should warn the client that there is a possinility
of maintenance contributions being demanded from them in the future.
- if the right of way is maintainable at public expense, it has been adopted and there is no requirement therefore to obtain a
right of way over the pathway/ highway.
3. Is the right of way REGISTERED?
- Check the Search of the Index Map to see whether the land of the right of way over the property of a third party’s property is
registered. If so, check the title number to check that the burden of the right of way is noted in the Charges Register of the third
party’s property.
Registration of Burden
- if the third party’s property is unregistered, the best course of action is to register a caution against first registration against
that land at the land registry – application to the land registry that if an application is made to register the third party’s land, the
charges register notes that the right of way burdens that third party’s land
Water Industry Regulations 2011
Private sewers and lateral drains are the responsibility of and maintained by the statutory sewerage undertakers
, The Proprietorship Register
- shows the class of title that the property has
- identifies who the proprietor is and any restrictions affecting the owner’s rights of disposal
- any indemnity covenant will appear here
Class of title
- Title Absolute: best class and most common
• Means Land Registry is satisfied that the proprietor is the rightful owner
• Concerning if any other titles are on the register (qualified, possessory, good leasehold) – the Land Registry is less
convinced that the seller is actually the owner of a property. funding for a mortgage may be withdrawn if Title Absolute
cannot be obtained
An individual
- if an individual is selling a property, their name will be in the Proprietorship register
- must sign contract and transfer
• Company
• Joint Owners – joint tenant
• Joint owners – tenants in common
• A personal representative
Company selling a property
- the company name and number will be in the register
- do a company search of the company number because the name may have changed but the number will stay the same. The
new name should be on the contract and transfer deed. When sent to the land registry post completion, you must also send a
certified copy of the change of name certificate so that the land registry will be satisfied that the right company has executed
the contract and transfer.
- you should do a company search against the company number of the company selling the property to check their name and
their solvency.
Joint Owners
- the name of the owners will be on the proprietorship register
- if they are alive they must all sign the contract and transfer
if there is a restriction in the proprietorship register, reading “no disposition by a sole proprietor of the registered estate (except
a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court” à tenants
in common in equity
Tenants in Common
- if they are both alive, they must all sign the contract and transfer. If one has died, because the legal estate is owned as tenants
in common, the legal estate will automatically pass through rules of survivorship to the surviving owner. The equitable interest
will pass through the deceased’s will.
- ISSUE: When buying from the sole surviving tenant in common, you must make sure you have overreached any beneficial
interest in the property which belongs to the now deceased tenant in common.
- HOW?
• The seller must supply an official copy of the Death Certificate of the deceased joint owner
• Certified copy deed of appointment of a second trustee – the way of overreaching the deceased’s tenant in common’s
beneficial interest is to appoint a second trustee (often the seller’s solicitor). If the purchase money for the property is
paid to two trustees (ie the surviving tenant in common and a second trustee who will be appointed for this purpose), it
will overreach any beneficial interest of the deceased’s tenants in common
• After signing the contract and transfer, It is then up to the surviving tenant in common and the second trustee to make
sure that the money goes to the right people – the seller’s issue rather than the buyer’s
• The land registry will also want to see the death certificate and the deed of appointment of the second trustee to make
sure that the right people have signed the contract and transfer deed
Joint Tenants
- if there is no tenant in common restriction in the proprietorship register, they are joint tenants in equity as well as legally
- if both tenants are alive, they both have to sign the contract and transfer and there is no beneficial interest to overreach.
- the legal estate will pass to the sole surviving owner and the beneficial interest will also pass to the sole survivor
- to buy from a sole survivor, all the seller needs to supply is the death certificate of the deceased joint tenant
,Documents required when buying from a personal representative
As a buyer’s solicitor check:
- Official Copies (to confirm the identity of the registered proprietor)
- Official Copy of the Grant of Representation: The document that appoints the PR
• Not necessary to see the death certificate because a grant of representation is only given once a death certificate has
been produced
• The PR will execute the contract and the transfer deed.
Charges Register
The buyer will be bound by:
- interests registered on the Charges Register; and
- interests overriding registered dispositions
Most common entries
- Mortgages
- Restrictive covenants
- Positive covenants
- Easements and Leases
Mortgages
- There will also be a restriction relating to mortgages in the proprietorship register.
1. The fact that there is a charge and the date
2. Who the proprietor of the charge is
- Should ask the Seller to pay back the mortgage prior to completion.
Restrictive Covenants – needs to attach the land to be binding
Issue: restrictive covenant burdening the land
Likely to be an issue: If consent for restrictive alteration is not obtained from the person with the benefit of the covenant
(PWB), then this would constitute a future breach of the restrictive covenant and the PWB could sue whoever owns the
burdened land. The buyer could also be held liable for a past breach of a restrictive covenant.
Three courses of action to solve the issue: - Solutions:
1. The buyer obtain and pay for restrictive covenant insurance;
2. The buyer should obtain consent or a deed of variation from the person with the benefit; or
3. The buyer can apply to the Upper Tribunal (Lands Chamber) for a discharge or a variation of the covenant (s.84 LPA
1925)
1. INSURANCE
- The firm must comply with s.19(1) FSMA by ensuring that the insurance advise is given by an authorised person permitted to
advise on an insurance policy given that this practice is a regulated activity.
- restrictive covenant insurance is advisable if it is likely that the person with the benefit of the covenant would bring
enforcement actions. The general rule is that the older the covenant, the less likely it is that an enforcement action will be
brought by the person with the benefit of the covenant
- for a future breach it is harder for an insurance company to estimate whether a PWB will sue, the insurance company may
insure for a high premium.
2. CONSENT
- it may be difficult to trace down the person with the benefit if the covenant was given in the past.
- if the person is traced down, they may charge for consent
- if the PWB has been ‘tipped off’ after being asked for consent, insurance will be invalid. It is important to ensure that the
remedies for both past and future breaches are identical.
3. UPPER TRIBUNAL LANDS CHAMBER
- expensive and time consuming which could delay the purchase of the property and there is not guarantee that a decision will
be reached on the matter
- unnecessarily burdensome for the client and is unlikely to be advised.
, Positive Covenant
1. Is there a positive covenant in the charges register?
2. is there an indemnity covenant in the Proprietorship Register?
• “The Transfer of the Proprietors contains a covenant to observe and perform the covenants referred to in the Charges
Register and of indemnity in respect thereof”.
3. If the answer is yes then your buyer client will have to give an indemnity covenant to the seller when they buy the property,
which will make the positive covenant binding on the buyer
Under English Law, positive covenants are personal and do not bind the land. So when Buyer 1 sells their land to Buyer 2, Buyer
1 retains the obligation for the positive covenant that it gave to A (the seller to Buyer 1). Standard Condition 7.6.5: If after
completion the seller is going to be bound by any obligation affecting the property ad disclosed, the buyer is to covenant to
indemnify the seller against any liability for any future breach of obligation.
INDEMNITY COVENANT: Where a piece of land burdened by covenants is sold it is usual for the seller to require that a clause be
included in the transfer to the buyer whereby the buyer agrees to indemnify the seller against any claims for breach of any of
the covenants.
BREACH OF POSITIVE COVENANT?
Existing breach by the seller?
- require Seller to remedy
- price deduction to cover cost of compliance
- if the breach is not capable of remedy, consider obtaining insurance for the breach.
Future breach by buyer?
- warn buyer of possibility of enforcement
- insurance
Overriding Interests and Reporting to the Client
Unregistered interests which override sales of registered land – buyer should also inspect the land and not just rely on the title
- burdens not on the charges register but still bind the buyer (LRA 2002, schedules 3 and 12)
Easements – overriding on the sale of registered land. If created by deed it is only legal if the burden has been registered in the
charges register of the serviant land.
- only legal easements acquired by prescription etc that will be overriding – still bind, despite not being registered, on the sale of
the servient land
• Sch 12: things that were created before the LRA came into force and which were overriding interests then to remain
overriding
• Equitable easements can override if they were created before the LRA came into force and are openly enjoyed
Leases
Paragraph 1, Sch 3 LRA: leases of not more than 7 years will be overriding, it will bind a purchaser of that land even if not
registered at the land registry and not noted in the charges register of the freehold land purchased
- Paragraph 12, Sch 12 (transitional provisions): Leases of not more than 21 years, granted before the LRA came into force, will
also override sales of registered land.
Interests of persons in actual occupation
- made overriding by Paragraph 2 of Sch 3
- interests of people who are not owners of the property sold but are in occupation of it
- in such cases, the occupier must sign a waiver of their rights and agree to leave the property on or before completion of the
purchase of the property.
Reporting to Buyer Client
- fulfils mandatory outcomes of SRA Code of Conduct 2011 O(4.2) and O(1.12)
CCS 6.4 requires solicitors to ensure that the client is made aware of all information material to the matter of which the solicitor
has knowledge.
CCS 8.6 requires solicitors to give clients information in a way that they can understand, ensure they are in a position to make
informed decisions about the services they need, how their matter will be handled and the options available to them
1. IDENTIFY the issue (matters that will restrict the buyer from doing what it wants on the property)
2. EXPLAIN why it is an issue to this client (the law and the facts of the scenario)
3. Provide ADVICE and suggest solutions
Deducing Title to registered land
- the seller provides the title documents to the seller’s solicitor. Deducing title is the process of putting the title documents for
the property together, copying them and sending them to the buyer’s solicitor
What constitutes title to registered land?
- Official Copies of the register (OCs)
- Title Plan – must encompass everything that the client thinks they are buying, must be sent to the buyer ASAP
- Copies of documents referred to (but not extracted) in OC’s
Official Copies are split up between THREE REGISTERS
- Property Register
- Proprietorship Register
- Charges Register
The official copy must be recent, under 1 year old
Property Register
- describes the property
- describes rights benefitting the property
Looking to:
- ensure buyer can access and use the land as they intend
- check that the boundaries correspond with what the buyer is expecting
Right of Way – benefitting the property to give you the right to access the highway from your property
1. Is the right of way ADEQUATE for the client? For what purpose will the client be using this right?
- if the right of way is not adequate, the buyer should negotiate a deed of variation to vary the description of the right of way to
permit use for the purpose that the buyer wishes to use it for.
2. CON 29 Search: Check whether the right of way in question was ADOPTED or whether the local authority intends to adopt the
right of way.
- this would mean that the right of way would become a public road. Should the local authority choose to adopt the pathway,
the local authority could reclaim the cost from the frontagers, which could mean that the buyer may have to contribute to the
costs of bringing it up to a public standard before the local authority adopts the pathway.
3. MAINTENANCE
- Is the buyer going to be responsible for contributing to the maintenance of the costs of the private road which the right of way
is over?
- Obtain the last 3 year history of maintenance contributions by the seller. You should warn the client that there is a possinility
of maintenance contributions being demanded from them in the future.
- if the right of way is maintainable at public expense, it has been adopted and there is no requirement therefore to obtain a
right of way over the pathway/ highway.
3. Is the right of way REGISTERED?
- Check the Search of the Index Map to see whether the land of the right of way over the property of a third party’s property is
registered. If so, check the title number to check that the burden of the right of way is noted in the Charges Register of the third
party’s property.
Registration of Burden
- if the third party’s property is unregistered, the best course of action is to register a caution against first registration against
that land at the land registry – application to the land registry that if an application is made to register the third party’s land, the
charges register notes that the right of way burdens that third party’s land
Water Industry Regulations 2011
Private sewers and lateral drains are the responsibility of and maintained by the statutory sewerage undertakers
, The Proprietorship Register
- shows the class of title that the property has
- identifies who the proprietor is and any restrictions affecting the owner’s rights of disposal
- any indemnity covenant will appear here
Class of title
- Title Absolute: best class and most common
• Means Land Registry is satisfied that the proprietor is the rightful owner
• Concerning if any other titles are on the register (qualified, possessory, good leasehold) – the Land Registry is less
convinced that the seller is actually the owner of a property. funding for a mortgage may be withdrawn if Title Absolute
cannot be obtained
An individual
- if an individual is selling a property, their name will be in the Proprietorship register
- must sign contract and transfer
• Company
• Joint Owners – joint tenant
• Joint owners – tenants in common
• A personal representative
Company selling a property
- the company name and number will be in the register
- do a company search of the company number because the name may have changed but the number will stay the same. The
new name should be on the contract and transfer deed. When sent to the land registry post completion, you must also send a
certified copy of the change of name certificate so that the land registry will be satisfied that the right company has executed
the contract and transfer.
- you should do a company search against the company number of the company selling the property to check their name and
their solvency.
Joint Owners
- the name of the owners will be on the proprietorship register
- if they are alive they must all sign the contract and transfer
if there is a restriction in the proprietorship register, reading “no disposition by a sole proprietor of the registered estate (except
a trust corporation) under which capital money arises is to be registered unless authorised by an order of the court” à tenants
in common in equity
Tenants in Common
- if they are both alive, they must all sign the contract and transfer. If one has died, because the legal estate is owned as tenants
in common, the legal estate will automatically pass through rules of survivorship to the surviving owner. The equitable interest
will pass through the deceased’s will.
- ISSUE: When buying from the sole surviving tenant in common, you must make sure you have overreached any beneficial
interest in the property which belongs to the now deceased tenant in common.
- HOW?
• The seller must supply an official copy of the Death Certificate of the deceased joint owner
• Certified copy deed of appointment of a second trustee – the way of overreaching the deceased’s tenant in common’s
beneficial interest is to appoint a second trustee (often the seller’s solicitor). If the purchase money for the property is
paid to two trustees (ie the surviving tenant in common and a second trustee who will be appointed for this purpose), it
will overreach any beneficial interest of the deceased’s tenants in common
• After signing the contract and transfer, It is then up to the surviving tenant in common and the second trustee to make
sure that the money goes to the right people – the seller’s issue rather than the buyer’s
• The land registry will also want to see the death certificate and the deed of appointment of the second trustee to make
sure that the right people have signed the contract and transfer deed
Joint Tenants
- if there is no tenant in common restriction in the proprietorship register, they are joint tenants in equity as well as legally
- if both tenants are alive, they both have to sign the contract and transfer and there is no beneficial interest to overreach.
- the legal estate will pass to the sole surviving owner and the beneficial interest will also pass to the sole survivor
- to buy from a sole survivor, all the seller needs to supply is the death certificate of the deceased joint tenant
,Documents required when buying from a personal representative
As a buyer’s solicitor check:
- Official Copies (to confirm the identity of the registered proprietor)
- Official Copy of the Grant of Representation: The document that appoints the PR
• Not necessary to see the death certificate because a grant of representation is only given once a death certificate has
been produced
• The PR will execute the contract and the transfer deed.
Charges Register
The buyer will be bound by:
- interests registered on the Charges Register; and
- interests overriding registered dispositions
Most common entries
- Mortgages
- Restrictive covenants
- Positive covenants
- Easements and Leases
Mortgages
- There will also be a restriction relating to mortgages in the proprietorship register.
1. The fact that there is a charge and the date
2. Who the proprietor of the charge is
- Should ask the Seller to pay back the mortgage prior to completion.
Restrictive Covenants – needs to attach the land to be binding
Issue: restrictive covenant burdening the land
Likely to be an issue: If consent for restrictive alteration is not obtained from the person with the benefit of the covenant
(PWB), then this would constitute a future breach of the restrictive covenant and the PWB could sue whoever owns the
burdened land. The buyer could also be held liable for a past breach of a restrictive covenant.
Three courses of action to solve the issue: - Solutions:
1. The buyer obtain and pay for restrictive covenant insurance;
2. The buyer should obtain consent or a deed of variation from the person with the benefit; or
3. The buyer can apply to the Upper Tribunal (Lands Chamber) for a discharge or a variation of the covenant (s.84 LPA
1925)
1. INSURANCE
- The firm must comply with s.19(1) FSMA by ensuring that the insurance advise is given by an authorised person permitted to
advise on an insurance policy given that this practice is a regulated activity.
- restrictive covenant insurance is advisable if it is likely that the person with the benefit of the covenant would bring
enforcement actions. The general rule is that the older the covenant, the less likely it is that an enforcement action will be
brought by the person with the benefit of the covenant
- for a future breach it is harder for an insurance company to estimate whether a PWB will sue, the insurance company may
insure for a high premium.
2. CONSENT
- it may be difficult to trace down the person with the benefit if the covenant was given in the past.
- if the person is traced down, they may charge for consent
- if the PWB has been ‘tipped off’ after being asked for consent, insurance will be invalid. It is important to ensure that the
remedies for both past and future breaches are identical.
3. UPPER TRIBUNAL LANDS CHAMBER
- expensive and time consuming which could delay the purchase of the property and there is not guarantee that a decision will
be reached on the matter
- unnecessarily burdensome for the client and is unlikely to be advised.
, Positive Covenant
1. Is there a positive covenant in the charges register?
2. is there an indemnity covenant in the Proprietorship Register?
• “The Transfer of the Proprietors contains a covenant to observe and perform the covenants referred to in the Charges
Register and of indemnity in respect thereof”.
3. If the answer is yes then your buyer client will have to give an indemnity covenant to the seller when they buy the property,
which will make the positive covenant binding on the buyer
Under English Law, positive covenants are personal and do not bind the land. So when Buyer 1 sells their land to Buyer 2, Buyer
1 retains the obligation for the positive covenant that it gave to A (the seller to Buyer 1). Standard Condition 7.6.5: If after
completion the seller is going to be bound by any obligation affecting the property ad disclosed, the buyer is to covenant to
indemnify the seller against any liability for any future breach of obligation.
INDEMNITY COVENANT: Where a piece of land burdened by covenants is sold it is usual for the seller to require that a clause be
included in the transfer to the buyer whereby the buyer agrees to indemnify the seller against any claims for breach of any of
the covenants.
BREACH OF POSITIVE COVENANT?
Existing breach by the seller?
- require Seller to remedy
- price deduction to cover cost of compliance
- if the breach is not capable of remedy, consider obtaining insurance for the breach.
Future breach by buyer?
- warn buyer of possibility of enforcement
- insurance
Overriding Interests and Reporting to the Client
Unregistered interests which override sales of registered land – buyer should also inspect the land and not just rely on the title
- burdens not on the charges register but still bind the buyer (LRA 2002, schedules 3 and 12)
Easements – overriding on the sale of registered land. If created by deed it is only legal if the burden has been registered in the
charges register of the serviant land.
- only legal easements acquired by prescription etc that will be overriding – still bind, despite not being registered, on the sale of
the servient land
• Sch 12: things that were created before the LRA came into force and which were overriding interests then to remain
overriding
• Equitable easements can override if they were created before the LRA came into force and are openly enjoyed
Leases
Paragraph 1, Sch 3 LRA: leases of not more than 7 years will be overriding, it will bind a purchaser of that land even if not
registered at the land registry and not noted in the charges register of the freehold land purchased
- Paragraph 12, Sch 12 (transitional provisions): Leases of not more than 21 years, granted before the LRA came into force, will
also override sales of registered land.
Interests of persons in actual occupation
- made overriding by Paragraph 2 of Sch 3
- interests of people who are not owners of the property sold but are in occupation of it
- in such cases, the occupier must sign a waiver of their rights and agree to leave the property on or before completion of the
purchase of the property.
Reporting to Buyer Client
- fulfils mandatory outcomes of SRA Code of Conduct 2011 O(4.2) and O(1.12)
CCS 6.4 requires solicitors to ensure that the client is made aware of all information material to the matter of which the solicitor
has knowledge.
CCS 8.6 requires solicitors to give clients information in a way that they can understand, ensure they are in a position to make
informed decisions about the services they need, how their matter will be handled and the options available to them
