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Summary Taking Instructions

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LPC - Legal Practice Course

Institution
LPC - Legal Practice Course

LPC Notes - Real Estate (Taking Instructions) Distinction level notes for Real Estate - WS1 The University of Law specific (2023) Notes on: - Taking Instructions - Property law basics - Preliminary Questions Disclaimer - may contain typos, user is advised to make appropriate and s...

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property law
property law and practice
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lpc notes
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LPC Notes - Real Estate Distinction level notes for Real Estate The University of Law specific (2023) WS1 to WS15 Disclaimer - may contain typos, user is advised to make appropriate and suitable updates. Not for resale and/or distribution.

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Summary
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by Jayceexs •
uploaded 2024

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LPC - Legal Practice Course • LPC - Legal Practice Course

REAL ESTATE EXAM NOTES

Taking Instructions

Outcomes
❖ Analyse a buyer client’s initial instructions and identify and follow up issues arising at the
instruction stage.
❖ Identify and resolve issues of PROFESSIONAL CONDUCT that may arise when you are instructed
on a new commercial property transaction.

Workshop Tasks
❖ Analysing initial instructions.
❖ Acting for seller and buyer.
❖ Acting for borrower and lender.
❖ Mortgage Fraud.
❖ Contract races and undertakings.

Property Law Basics

Freehold ❖ A right of absolute ownership of land, for life.

Leasehold ❖ A right to own land for a fixed period of time (e.g., 999 years).
❖ It is granted by way of legal agreement with the freehold owner.
❖ The property reverts to the freehold owner of the land after the lease period expires or
otherwise terminates.
❖ Parts of the buildings on the land may be retained by the freeholder (e.g., common areas in
blocks of flats/structural elements of a building).

Registered Land ❖ Property rights in England and Wales are either:
vs. Unregistered
Land ➢ Registered: Meaning the land has been registered with HM Land Registry, and details of
the property will appear on the Land Register and are available for public inspection.

➢ Unregistered: All other land that has not yet been registered with HM Land Registry will
be “unregistered”.

❖ It has been compulsory to register land on the happening of certain “trigger events” (such as
a sale of the land) since 1925. As a result, Registered Land is now thought to make up more
than 88% of the land mass of England and Wales.

Easements What are they?
❖ An easement is a right that the landowner has to do something, or prevent something from
happening, on land belonging to someone else.

Examples:
❖ A right of way: This allows the person with the benefit of the easement to travel over another
person’s land, which is burdened by the easement. The person with the burden of a right of
way will be unable to cause a “substantial interference” to this (e.g., by building across it).

❖ A right of light: This entitles the person with the benefit of the easement to receive light
through defined apertures (doors and windows), across land which is burdened with the
easement. The existence of the easement can limit what the person with the burden can do
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, REAL ESTATE EXAM NOTES

with their land. For example, a right of light may prevent them from building high structures
if these block light into the apertures.

How are they created?
❖ Easements can be created:
o Expressly (i.e., in writing, on the sale of land).
o Impliedly (e.g., by virtue of necessity or by long user prescription which requires 20
years of uninterrupted use).

Covenants What are they?
❖ Covenants are an enforceable promise.

❖ They can be promises to either do something, or to avoid doing something.
✓ Positive covenant = Requires a person to do something (e.g., to paint a fence every 5
years).
 Negative covenant = Prevents a person from doing something (e.g., the land must not be
used for offices).

Does the burden of the covenant “run with the land”?
❖ In relation to Positive covenants:
o The burden of a positive covenant DOES NOT run with the land.

❖ In relation to Restrictive covenants:
o The burden of a restrictive covenant can run with the land if the rule in Tulk v
Moxhay applies.

NB:// For the purpose of the LPC, all that is required is to understand that the consequence of this
is that the burden of a restrictive covenant over registered freehold land will always run with land
if the restrictive covenant appears on the Register of Title.

Co-ownership Trusts in land arising from co-ownership:
❖ Co-owned land will always be held on trust. The co-owners hold the land as trustees for each
other as beneficiaries.
❖ There are two types of trust of land in English Law:
o Joint Tenancy: Both tenants here own 100% of the property jointly. They do not hold
distinct shares. Rule of survivorship applies.
o Tenancy in Common: Tenants in common each own distinct shares in the property.
When a tenant in common dies, their share of the property will pass under their will
or pursuant to the intestacy rules (if there is no will).

Form A Restriction
❖ Where co-owners wish to hold the land as Tenants in Common, the Land Registry will place a
restriction on the proprietorship register of the title, known as a “Form A Restriction”: “No
disposition by a sale 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”.

❖ A Form A restriction alerts third parties dealing with the land that a trust of land is in
existence, meaning that any sale of the legal estate will need to be effected by two trustees.
If one tenant in common dies and the surviving co-owner wishes to sell, they will need to
appoint a second trustee before completion of the transaction (because the sale must be
effected by two trustees).

❖ If there is no restriction on the register, the buyer is entitled to assume that the co-owners
were joint tenants and will take a good title from the survivor.

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, REAL ESTATE EXAM NOTES

Mortgages ❖ A mortgage is a legal agreement where a bank lends money to the borrower. In exchange the
borrower agrees to:
o Repay the loan;
o Pay interest on the loan; and
o Grant the lender title to their property as security until the debt is discharged.

❖ The mortgage must be registered as a registered charge in the charges register of the
borrower’s title.
❖ When acting for a buyer, we need to bear in mind that the mortgage will be inherited by the
buyer unless the seller takes specific steps to discharge this before sale.

Overview of the Conveyance Process
Ch 2.2 p10
Step 1 ❖ The seller puts the property on the market and looks for a buyer, normally with the help of an
– estate agent.
Marketing ❖ When a buyer is found and a price agreed, the conveyancing process can begin.
The Property ❖ Here, although the buyer and seller have reached an agreement in principle, they have not
yet entered a legally binding relationship and either party can still walk away.

Step 2 ❖ The solicitor takes the client’s instructions and verifies the client’s identity (to comply with
– Anti-Money Laundering Regulations).
Taking
Instructions

Step 3 The Buyer and Seller’s solicitors investigate title:
– ❖ The buyer’s solicitor will investigate the seller’s title to the property.
Pre-Contract ❖ The title to the land is what a seller actually sells in a property transaction. For Registered
Stage Land, title is investigated by reviewing documents available from the Land Registry,
principally the Register of Title and Title Plan.
❖ It is of essential importance that a buyer’s solicitor investigates the title to:
o Ensure that the seller is able to transfer what he has contracted to sell, and
o Identify whether there are any defects or problems with the land which could
adversely affect the interests of the buyer, and on which they need to be advised.
❖ The maxim of “caveat emptor” applies to conveyancing.
o This means “let the buyer beware” essentially stating that it is for the buyer to make
sure of his bargain and to satisfy themselves that the property is free from defects
and/or issues.
❖ When a title has been investigated, the buyer’s or seller’s solicitor may need to prepare a
certificate of title, which is a report on the property given to the buyer’s lender. The intention
is to enable the recipient to be able to avoid carrying out their own title investigation and
avoid duplicating work.

The Buyer’s solicitor conducts searches
The buyer’s solicitor will also normally conduct searches before the buyer enters into the
contract. These essentially amount to requests for certain information from the seller, and public
bodies such as the Local Authority, and The Land Registry to discover as much information about
the property as they can.

Step 4 ❖ After title has been investigated and searches conducted, the draft contract will be prepared,
– by convention, by the seller’s solicitor.
Exchange of
Contracts

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