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BPP University College Of Professional Studies Limited (BPP)
BPP University College Of Professional Studies Limited
Property Law & Practice
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INVESTIGATING TITLE CPSE replies reveal – if covenant:
1. The name of the PWB of the covenant
Title investigation questions will come up in relation to freehold 2. The covenant itself and the fact that the land was registered
properties. The scenario will have an existing or new client wanting to land and its title number;
purchase a freehold property. 3. Any breaches of the covenant and any complaints of the PWB
4. Whether any restrictive covenant insurance had been
In your question, highlight the following: purchased
1. How is the property currently being used? – eg. as a restaurant,
a public library or storage. CPSE replies reveal – if private/public road connected to property:
2. Any developments made to the land in the past? – eg. Seller 1. The name of the owner of the private lane
removed an old business name plaque from the property. 2. Whether the road connected to the property was a private road
3. Any developments Buyer wants to make? 3. Whether there were any adoption plans in relation to it
4. Only one Seller? Any co-owner Sellers? Death of a co-owner?
5. Will Buyer fund the purchase via a mortgage? Does Seller already CON 29 results:
have a mortgage that needs to be released?
The CON 29 results reveal:
1. Planning permission – eg. for a change of use from B8 to A1
CHECK ALL DOCUMENTS TO SPOT THE ISSUES: 2. Building regulations approval and certificate for the shed in the
yard
Go through each register as per the below making a note of what you 3. That no enforcement action taken to date by the local authority
find on the margin using a shorthand you will remember. 4. The private lane was not a public highway and there were no
current plans to adopt it.
Official copies:
LLC1 results:
When referring to information from the official copies in your answer,
always state the entry number so highlight that as well. The LLC1 results reveal:
Eg. Indemnity covenant as per the Proprietorship Register entry no. 2. 1. Planning permission
2. Change of use
The Official copies must be less than 1 year old, so check the date. 3. If the area is a Conservation Area
4. If the property is a listed building
Property Register reveals: 5. Any smoke control orders
1. Rights benefiting the property: right of way or right to lay pipes.
2. Any exclusions from the land eg. mines and minerals. Other documents to check:
Right of way: Inspect copies of conveyances referred to in Official copies if the extracts
State what type of right of way, as you see it set out in the register. of those documents have not already been included in the official copies.
– this may reveal unregistered third-party interests.
Right of way may be restricted:
1. On foot only
2. On foot and with bicycles down a lane at the side of the building IDENTIFY THE ISSUES – START YOUR ANSWER:
3. To pass and repass over the private lane with/without vehicles
4. For use only between 10am and 5pm 1. Right of way:
* Benefit of a right of way may be restricted as to time of
Proprietorship Register reveals: use, means of use – eg. on foot only and no vehicles are
1. Quality of title allowed
2. Owner of property with name and address (look out for co- * The right of way may not be adequate for buyer
ownership here: joint tenants) * Adoption
3. Any indemnity covenants
4. Any lender restrictions 2. Right to lay pipes:
5. Any tenants in common restrictions – if there is one, that * Same as above, but for adoption, discuss Water
means that the sellers held the property as tenants in common. industry Regs 2011
Lender restriction example: 3. Restrictive covenant:
Restriction: Except under an order of the Registrar no disposition by the * Past breach of the covenant
proprietor of the land is to be registered without the consent of the * Possible future breach of the covenant
proprietor of the charge dated 10 November 2014 in favour of Loits
Bank plc referred to in the Charges Register. 4. Positive covenant:
* Past breach of the covenant
Charges Register reveals: * Possible future breach of the covenant
Rights burdening the property
1. Restrictive covenants – eg. covenant not to erect or permit to 5. Mortgage:
be erected any additional building or structure. * Release of the seller’s mortgage.
2. Positive covenants – eg. covenant to maintain a boundary wall.
Hands in pocket test: a covenant is a positive covenant if 6. Planning consents:
fulfilling it requires the burdened land owner to spend money. * Local authority (planning) consents needed for the
3. Leases internal building works, change of exterior, change of use
4. Mortgages: always appears in two entries * Has the seller obtained planning permission for building
works/change of exterior or change of use?
Mortgages example:
* REGISTERED CHARGE dated 29 October 2022 to secure the 7. Proprietorship issues:
monies including the further advances therein mentioned. AND * Sale by a company
* Proprietor: LOITS BANK PLC of 3 Funny Place, London, EC3 6BC. * Sale by surviving joint tenant
* Sale by surviving tenant in common
And! A mortgage will also appear on the Proprietorship Register (and it
is very similar to the wording of the tenancy in common restriction: Right of way:
RESTRICTION: Except under an order of the Registrar no disposition by
the proprietor of the land is to be registered without the consent of the Spotting a right of way issue:
proprietor of the charge dated the 29 October 2022 in favour of Loits Check the Official copies – Property Register.
Bank Plc referred to in the Charges Register.
Right of way example:
Also review the title plan and look for: The Property benefits from a right of way with or without vehicles at all
1. Check if boundaries correspond with what Buyer is expecting reasonable times over the land shown coloured red on the plan.
2. Any churches nearby – to see if maintenance of the local parish
church would be payable by Buyer The right has been “extracted” in the Property Register if there is a
short extract detailing the nature, location of the easement (title plan)
CPSE replies: and any restrictions (eg. the right of way is on foot only). In this case,
no need for a copy of the document creating the right (original deed).
Instead of Vendor, use the term: PWB = person with the benefit.
PWB named in entry 1 of Charges Register. If died or sold land with Extracted right:
benefit, current PWB is his successors in title. The land has the benefit of the following right contained in a deed dated
13 August 1999: a right of way on foot only over the land coloured red
on the filed plan.
PLP – Revision notes | Page 1 of 25
,If the right has not been extracted, then ask for the copy of the Is the covenant enforceable?
document that has been filed from sellers’ solicitors. Tulk v Moxhay Restrictive covenants run with the land and will be
automatically binding on client, as they ‘touch and concern the land’.
Right not extracted:
The land has the benefit of the right contained in a deed dated 13 Past continuing/future breaches?
August 1999. Identify past continuing and/or future breaches. If covenant was a
restriction eg. cannot build without PWB’s consent, then check if
Adequacy: consent was obtained. If yes, no breach.
Is the right adequate for buyer’s
purposes? Eg. the right of way may be Remedies:
on foot only. If the client intends to use
the property as a shop they may need a Past Continuing Breach - Options: * List pros & cons of each *
right of way by vehicles as well, for (buyer will argue that this should be paid by the seller)
deliveries. 1. Best option:
Restrictive Covenant Insurance (special condition in contract)
Take into account: Cons: other side will not agree because it would be basically
* Foot/vehicles? telling them that there was a breach and they have a claim
* Certain times of day? against you, and in this case, insurance is unlikely/difficult to
* Physically adequate: Size, obtain. Also uninsurable if breach is too recent.
location, construction, e.g. wide/strong enough for type of Pro: effective for past old breach.
vehicles client intends to use?
2. Second best option:
Solution: Retrospective consent from the PWB (special condition in
If inadequate, Deed of Variation with servient owner for additional contract)
costs, otherwise cancel purchase. Cons: more expensive than insurance and PWB will usually
charge for this / refuse consent.
Maintenance:
By who, how much, Seller’s previous cost? 3. Last option:
Buyer may have an automatic obligation to contribute towards Upper Tribunal (Lands Chamber)
maintenance costs of the right of way under common law. Time consuming and expensive, no guarantee of success
Ask Seller if they have contributed towards maintenance of the private
road in the past and if so, how much and how often. Future Breach - Options: * List pros & cons of each *
(buyer pays for these as it is their choice to breach the covenant)
Solution: 1. Best option:
* If in disrepair, ask Seller to repair Restrictive Covenant Insurance (no need for special condition
* Ask Seller if they have paid maintenance payments and if so, ask in the contract as this is not something to agree with the seller)
for 3 years’ history of payments. Cons: Future breaches are not insurable/very expensive.
* Ask surveyor to check if maintenance is currently required. If
so, advise Buyer on likely costs 2. Second best option:
Release from PWB
Adopted/future adoption?
Private roads can be adopted by local authority (LA). At this point the 3. Last option:
LA will become responsible for maintaining the road. However, the cost Upper Tribunal (Lands Chamber)
of bringing the road up to an adoptable standard (i.e. so that it is suitable
to be a public highway by laying down tarmac, curbstones) will fall onto Financial Services and Markets Act 2000 (‘FSMA’):
the client. The solicitor can give advice on the merits of insurance provided they
are authorised or exempt.
Carry out CON 29 search to see if the LA has any current plans to adopt
the road. s.19(1) FSMA The carrying out of a regulated activity is prohibited unless
– If road is not mentioned, no current plans you are authorised (by the FCA or SRA) or exempt.
– In any event, plans to adopt or not, warn client of potential costs s.22 FSMA Regulated activity = a specified activity in relation to a
specified investment. Arranging or advising a client on the merits of
Registered burden on servient land? acquiring/investing in a particular insurance policy or regulated
Check that the burden is registered in the Charges Register of the third mortgage contract are both specified activities in respect of specified
party’s property to ensure that the right is enforceable. To check this, investments which are caught by the prohibition in s.19(1) FSMA.
carry out a search of the index map (SIM).
If not exempt, tell clients to contact an independent financial adviser or
If the burdened land is registered: get an official copy of the burdened an insurance broker for the necessary advice/for the relevant
land’s title to ensure that the right of way has been registered in the arrangements.
burdened land’s Charges Register. If it is not there, then make sure that
the seller gets the burden registered before completion. Positive covenant:
If the burdened land is unregistered: ask Seller’s solicitor to enter a Spotting a positive covenant:
caution against first registration against the burdened land, otherwise if Check the Official copies – Charges Register.
sold, new owner will not be bound by the burden of the easement. Find out PWB from CPSE replies/SIM search.
Right to lay pipes: Spot an indemnity covenant:
Check the Official copies – Proprietorship Register.
Use the same structure as you did for right of way above, but:
When discussing adequacy, don’t take into account whether it Indemnity covenant example:
can be used on foot/by vehicles, as it’s not relevant for water The Transfer to the Proprietors contains a covenant to observe and
pipes. You can continue on with the usual discussion as to size perform the covenants referred to in the Charges Register and of
and adequacy etc. indemnity in respect thereof.
When discussing adoption, instead of the above, mention: Is the covenant enforceable?
Water Industry Regs 2011 Cannot be adopted by LA if: Tulk v Moxhay Positive covenants don’t run with the land.
1. the drain located within the property’s boundary and Look for indemnity covenants in Proprietorship Register in which case
2. drain must only serve that property. positive covenant will be contractually enforceable as buyer will be
In any other case, pipes and drains can be adopted by LA and required to give an indemnity covenant to the seller.
will be transferred to statutory sewage undertakers. If no indemnity covenant in Proprietorship Register, not enforceable
Restrictive covenant: so no further action required.
If there is an indemnity covenant, warn the client and move onto the
next steps.
Spotting a restrictive covenant:
Check the Official copies – Charges Register. To ensure Buyer gives indemnity covenant on completion:
Find out PWB from CPSE replies/SIM search. • Incorporate into contract: SCS 4.6.4 or SCPC 6.6.4 Buyer enters
Restrictive covenant example: indemnity so it is bound by covenants in Charges Register, and
And the Purchaser hereby covenants with the Vendor and it assigns not • TR1 including the indemnity covenant
to make any external alterations to the Property.
PLP – Revision notes | Page 2 of 25
, Remedies: Joint tenants:
Past Breach: * List pros & cons of each * How to tell if joint tenants?
Is the breach remediable? If there is more than one registered proprietor i.e. joint owners, but no
If yes: Usually yes so get Seller to remedy (special condition in tenant in common Restriction appears on the Proprietorship Register,
contract) or seek price reduction. – eg. boundary fence can be then the joint owners hold both the legal and beneficial interest as joint
erected and this will remedy the breach. tenants.
If not:
• Best option: Covenant Insurance (special condition in Solution:
contract) If buying from one or more than one surviving joint tenant: Seller
• Second best option: Retrospective consent from PWB must supply: Official or certified copy of the Death Certificate
(special condition in contract)
• Tribunal is not available for positive covenants. Tenants in Common:
Future Breach: * List pros & cons of each * How to tell if tenants in common?
(if the buyer is concerned about enforcement) Joint owners are tenants in common if: there is a Tenants in Common
1. Best option: Restriction on the Proprietorship Register – eg: “no disposition by a
Covenant Insurance (no need for special condition in the sole proprietor of the registered estate under which capital money
contract as this is not something to agree with the seller) Cons: arises is to be registered unless authorized by an order of the court.”
Future breaches are not insurable/very expensive.
Make sure that you read the restriction as if the wording says anything
2. Second best option: else than the above, it is not a Tenant in common restriction!
Release from PWB
Solution:
Mortgage release: If buying from one surviving tenant in common: Seller must supply:
- Official or certified copy of the Death Certificate, and
If there is a mortgage on the property, this is an issue for the Buyer. The - Certified copy of deed of appointment of second trustee.
mortgage must be redeemed (paid off) by Seller and removed from the
Charges Register or client will buy the property subject to the mortgage. If buying from more than one surviving tenant in common: Seller
must supply: Official or certified copy of the Death Certificate
The charge can be removed by: Planning consents:
• Buyer’s solicitors obtaining Form DS1 from Seller on or
immediately after completion + submitting to Land Registry: the Please note: planning permissions may be subject to conditions that
DS1 and an application to register Buyer as the new owner or must be complied with. – read the planning permission to see if any
• Seller’s lender sending an e-DS1 direct to Land Registry when it additional conditions were added.
receives all money to pay off the loan on completion.
• Bank’s consent is needed for sale of part of a property but not Planning permission – building works:
for sale of the whole.
s.57(1) Town and Country Planning Act 1990 (TCPA) The client must
obtain planning permission for development.
Mortgage is removed from s.55 Development = building works and/or material changes of use.
Proprietorship Register automatically s.55(1A) Building works = demolition / rebuilding / structural alterations
on or immediately after completion or additions.
You must also ask for undertaking from Seller’s solicitors to: Exception: *No need for Planning permission*
• Send money to bank to discharge the mortgage once received
1. s.55(2)(a) Alterations to interior that does not materially
from the Seller (otherwise Buyer bound by the mortgage) and affect building exterior – eg. temporary partition.
• forward on to client the DS1 or evidence that an e-DS1 has been
2. Demolition, if not done in a conservation area, this will
filed at the Land Registry, once the DS1/such evidence has been not require planning permission.
received from the bank.
Common 3. GDPO 2015 General Permitted developments: planning
Buying whole property doesn’t require mortgagee’s consent. exception! permission is automatic, no need for formal application.
Buying part of property or other disposition (e.g. a lease) requires Sched 2 Part 1 Dwelling houses = permits enlargements
mortgagee’s consent as mortgage isn’t fully discharged. and improvements
Sched 2 Part 2 Commercial properties = permits minor
Proprietorship issues: works. – eg. fence, paint.
Article 4 Directions: if an Article 4 application is made
Check quality of title: within the area, GDPO exception doesn’t apply.
Best class of title: Title absolute - Land Registry is satisfied that Planning permission – material changes of use:
proprietor is rightful owner, (what we want to see on the
register). s.57(1) Town and Country Planning Act 1990 (TCPA) The client must
Report to client if: qualified title, possessory title or good obtain planning permission for development.
leasehold. Try to obtain title absolute from proprietor as banks s.55 Development = building works and/or material changes of use.
may withdraw funding without it. Town and Country Planning (Use Classes) Order 1987 (UCO 1987) Sets
out the rules in relation to material changes of use.
Check owner of property:
Ascertain name and address (look out for co-ownership here)! Find out if use has been changed:
* If owner is individual: Individual will need to sign the contract
+ transfer. Class: UCO 1987 sets out classes of use which are different categories.
These are shown with a letter and sometimes a number. – eg. Class E,
* If owner is a company: Ensure you do a Company search against Class B6 or Class F.1
the company number for any company name changes. Check if Sui generis: Where one specific use has its own category. The UCO 1987
the company is solvent. will set out these types of uses as follows: “No class specified in
Schedule 1 or 2 includes use – as a theatre […]” – here, theatre is a sui
* If co-ownership: all joint owners must sign the contract + generis use, it doesn’t fall into a class.
transfer.
2020 Amendment Order From 1 Sep 2020, changes were made to the
If co-ownership: UCO 1987 and between 1 Sep 2021 and 31 July 2021, transitional
provisions were put into place. The wording of GDPO 2015 has not been
Joint tenants Tenants in Common changed to reflect this.
If the joint owners owned the If one of them dies, the legal
property as beneficial joint estate passes onto the other but Check whether the changes of use took place:
tenants and one of the joint the beneficial interest will pass 1. Prior to 1 Sep 2020
owners dies, then the onto the deceased’s will. When 2. Between 1 Sep 2020 and (including) 31 Jul 2021
deceased’s legal and beneficial buying from a surviving tenant, OR
interest in the property will pass you must make sure that you 3. After 31 July 2021
automatically to the survivor(s). have overreached any beneficial
interest. In some cases, you may need to identify which use class a previous use
class now falls into. – eg. if you find a previous change of use in your
question allowing for Class A1 use, but now it is 2022 and you will need
PLP – Revision notes | Page 3 of 25
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