Summary
Summary SQE2 Property Law Notes
- Course
- Institution
Used these notes to achieve 70% on SQE2 the first time.
[Show more]
Seller
Follow
SQELawNotes
Content preview
Property Practice (Land Law)Investigating Title
Investigation of title is the process of establishing who owns the property and whether there are
any rights to rules which could affect the owner’s use and enjoyment of it.
A bank or building society considering lending money will have similar concerns to the buyer. The
lender will want to ensure that if the borrower defaults on the loan, the property can still be sold on
the open market for at least as much as the outstanding loan.
The seller’s solicitor will also need to investigate their client’s title; they will need to anticipate any
problems with the title and deal with them in advance. Moreover, the seller’s solicitor will need to
investigate the seller’s title in order to produce the first draft of the contact of sale. Under a typical
sale of contract the seller promises to sell ‘free from encumbrances’ unless the seller states
otherwise. Thus any encumbrances need to be identified and specified in the contact at the earliest
possible stage.
Distinguishing Between Registered & Unregistered Land
The Land Registration Act 1925 introduced a system in England and Wales which was designed to
ensure that ownership of land was registered in a central database - The Land Registry.
Since December 1990 it has been compulsory in every part of England & Wales to register an
unregistered title on a change of ownership so about 85% of land is now registered.
Investigating Title in Freehold REGISTERED Land
Freehold = (estate in fee simple) this is approximate to outright ownership. The freehold owner has
unlimited rights of enjoyment of the property.
To investigate a registered title, the seller’s solicitor needs to obtain copies of the register of title for
the property = Official Copies. They will also need to get copies of the Land Registry plan for the
property = Title Plan.
Deduction of title = seller’s obligation to prove to the buyer their ownership of the property they are
trying to sell.
Deduction of title is proved by providing documentary evidence of title to the buyer. In modern
practice the title is deduced before exchange of contracts and for the buyer to be prevented from
raising and objections to that title after exchange of contracts.
With registered land the evidentiary documentation should should be supplied at the seller’s own
cost and should consist of the Official Copies that are less than 6 months old.
The buyer’s solicitor has a duty to investigate whether there are any overriding interests affecting
the property. They will discover this information through various searches and enquiries.
Structure of Official Copies in Registered Land
The Official Copies show the title number to the property and an ‘edition date’, which is the date on
which the Land Registry last updated the title.
1
,They also show the ‘search from date’ = the specific date of the Official Copies showing entries
subsisting on the register at a certain time.
The Official Copies show the entires on three registers:
1. The Property Register
2. The Proprietorship Register
3. The Charges Register
1. Property Register
The Property Register will always contain a description of the land by reference to the postal
address and the title plan and also indicate whether the title is freehold or leasehold. The Property
register may, amongst other things, indicate that:
- there are easements or rights benefiting the land and, if so, that those easements/rights are
subject to obligations
- that certain things one might usually expect to come with the land (e.g. rights of light and air
over adjacent land) have been excluded from the title.
2. The Proprietorship Register
The Proprietorship Register will always identify the current owners and their address. It will also
always identify the class of title.
The State guarantees the title and compensation is payable in certain circumstances if a defect is
found in a registered land tittle.
The class of title is determined by the Land Registry when the property is first registered.
There are 3 possible classes of title for freehold land:
- Absolute Title = the most common and best class. The registered proprietor has vested in them
the legal estate subject only to entires on the register, overriding interests and where the
proprietor is a trustee, minor interests of which they have notice, such as beneficiaries under the
trust.
- Possessory Title = granted where the proprietor is in possession of the property but has lost the
title deed or is claiming through adverse possession, this means that the proprietor is also
subject to all adverse interests existing at the date of the first registration.
- Qualified Title = Granted where there is a specific identified defect which the register feels
cannot be overlooked or ‘cured’ by the grant of absolute title.
Although it is sometimes possible to upgrade a possessory or qualified title, the buyer will be
concerned if the class of title is not absolute as this may affect their ability to obtain a loan to
purchase the property and/or to sell it in the future.
The Proprietorship Register may also include the price paid for the land by the current owner (this
only applies if the land has been sold since 1 April 2000). It will also show if the owners gave an
indemnity covenant when they brought the land, which will be evidence of a chain of indemnity
covenants.
The Proprietorship Register will also contain any restrictions on the owner’s ability to sell. Since
13th October 2003, the Land Registry has provided only two types of entry for the protection of
third party interests - notices and restrictions.
2
,Prior to LRA 2002, it was possible to apply for two other types of entries known as cautions and
inhibitions and it is still possible to come across these types of entries on the Register, although it
is becoming increasingly rare.
If there is a restriction on the Proprietorship Register this is an indication that the proprietor’s ability
to deal with the property is limited or that a prior condition must be satisfied in order for the
disposition to be registered.
The protection afforded by the restriction may be permanent or for a specified period; it may be
absolute or conditional (.eg. a restriction requiring the consent of another party to a disposition).
A restriction is therefore a more powerful type of entry than a notice. An example of a restriction is
where a court makes an order requiring a restriction to be entered; this can be in the course of
litigation or family proceedings to prevent the property being sold.
3. The Charges Register
It is the job of the Charges Register to identify the encumbrances. In particular solicitors will be
looking for:
- Covenants affecting the property; which can be restrictive OR positive
- Easements affecting the land, such as right of way over the property
- Charges over the land, most commonly mortgages
- Leases granted per the whole or part of the property
- Notices registered by third parties claiming an interest in the property
Not all encumbrances will be a problem for the buyer, but others will. As such, the buyer’s solicitor
needs to be able to identify them to advise the client on what action to take in respect of different
entires.
Investigating Title in Freehold UNREGISTERED Land
In all cases appearing to involve unregistered land, the first step is to check whether the land is
already registered or is the subject of a pending application for first registration.
It is also possible that a third party has lodged a caution against first registration, warning any
person attempting to deal with the land that they themselves have an interest in the land i.e. an
easement.
When the application for first registration is lodged, the Land Registry will ‘warn off’ the cautioner,
i.e. give them a limited period to establish their rights over the land and if they cannot do so, the
registration will proceed and the cautioner will lose their rights. These checks can be done by an
Index Map search of the Land Registry, on Form SIM (Search of the Index Map) accompanied by a
plan for the property.
If the title has not been registered, then title is proved by title deeds. The seller provides the buyer
with copies of the title deeds (usually before exchange of contracts) and, if the sale is a sale of the
whole property, hands over the originals to the buyer on completion.
At completion, the buyer’s solicitor examines the original title deeds against the copies they
received prior to exchange of contracts to check they are the same; this process is referred to as
verification of title. A memorandum of the sale or part is marked on the original deed.
Deducing title in Unregistered Land
3
, Deducing title in unregistered land involves examining the paper deeds which have been used to
transfer ownership of property in the past. The seller’s solicitor will usually be able to obtain the title
deeds from the clients if the property is mortgage free, or from their mortgage lenders, if it is
subject to a mortgage.
The next task is to find the ‘root of title’. A good root of title is one that is dated before 1st
December 1990, the date on which compulsory first registration came into force across England &
Wales.
For a conveyance to be a root of title, the following conditions must all be met:
- It must be dated prior to 1st December 1990
- It must cast no doubt on the seller’s title to the land (for example, it should not be missing any
necessary powers of attorney).
- It must deal with the whole of the legal and beneficial interest in the land - requires it to have
been properly stamped and executed.
- It must include an adequate description of the land - either in the conveyance itself or in an
earlier conveyance which is referred to in that later conveyance and a copy of which is provided
in the Epitome of Title.
The buyer cannot require evidence of pre-root title to the property unless it is to see a deed that:
- Is executed under a pre-root power of attorney
- Refers to a description or plan in a pre-root deed
- Refers to covenants in a pre-root deed (s.45 LPA 1925)
- Creates a trust
Epitome of Title - a schedule of all the documents from and including the root up until the present
day. The documents should be numbered and listed in chronological order.
To establish whether a conveyance deals with both the legal and equitable interest in land, the
solicitor should look for a paragraph beginning with the word ‘WHEREAS’ stating that the vendor
(seller) is ‘seised of the property…. for an estate in fee simple and is selling the same to the
purchaser’. The conveyance child also state that the vendor conveys the land as ‘beneficial owner
… unto the purchaser’. Such a conveyance is dealing with the entire legal estate and equitable
interest in the land.
Once the root of title has been identified, that root and all subsequent title deeds must be checked
in a systematic and thorough manner. Solicitors focus on the following matters:
- The chain of ownership
- Description of the land
- Stamp Duties
- Encumbrances
- Execution
- Land Charges Searches
The Chain of Ownership - there should be an unbroken chain in ownership from the owner indicate
in the root of title up to the present seller. Since legal estates can only be transferred by deed,
there should be documentary evidence of every change of evidence.
If the owner has dies, the property will be vested in the personal representatives, in which case the
grant of probate identifying the PRs must also be produced to check it was them who transferred
the title in the next document in the chain.
4
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller SQELawNotes. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $27.45. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79835 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now