#3235 - Freehold Unregistered Land - Property Law and Practice

Freehold Un-Registered Land

Pre-exchange searches and enquiries

(Buyer’s solicitor)

Index Map search

Form S.I.M + large scale plan + Fee
Send to Land Registry
No priority period however
Results reveal whether land is already registered, or is subject to a pending application or caution against first registration.

K15 – Land Charges Search to Land Charges Department in Plymouth. Search against all relevant estate owners for relevant period of ownership.

The person owning the land with the BENEFIT of the incumbrance should have registered the land charge against the name of the person owning the land with the BURDEN in the incimbrance.
Provides Priority period of 15 working days within which to complete the transaction.
Land Charges Registry set up in 1926 – so don’t search further back than this date.
Even if there is a death – search beyond date of death

CPSEs (Commercial Property Standard Enquiries)
All other searches (same as registered land):

LLC1
Con29R
Drainage & water
Environmental
Pre-contract enquiries to seller

Investigation of title

Good Root of Title

Contract should specify what document is to form the root of title.

S.44 LPA 1925 – root of title must:

Be at least 15 years old
Deal with and / or show who owns the whole legal & equitable interest being sold to current owner.
Contain recognizable description of the land
Do nothing to case doubt on the seller’s title.

Examples:

Conveyance on sale
Legal Mortgage
Deed of gift
Assent of land to beneficiary under the will.

Root of title cannot be:

Grant of probate (this transfers INTEREST in land – but won’t identify the deceased’s estate.

Top Tip: Therefore what is the most convenient root of title to choose? Select the latest root that is at least 15 years old – easier to get an unbroken chain of ownership. [the most recent document which satisfies all 4 requirements of a good root of title.

Buyers are bound by matters revealed by a title beginning with the good ROOT, but NOT by matters that would have been revealed by an earlier root.
If buyer accepts a “short root” – buyer risks being bound by earlier conveyances. This is risky / dangerous as he wont know what he is bound by.

Epitome of title: [part of “deducing title” process in conveyance transaction]

Provided by seller’s solicitor. Lists documents (from root of title onwards to present day) which affects ownership of the land.
List is set out in chronological order.
Copies of conveyances are attached (not originals)
‘Good Root’ checklist (is there unbroken chain of ownership from root to current owner)

Documents relevant for Epitome	Documents which need NOT be included
Conveyances on sale and by gift Deaths Grants of representation to deceased’s owners’ estates Changes of name of estate owners Leases Mortgages Discharge of legal mortgages	documents of record – e.g death & marriage certificates expired leases documents which pre-date root of title

Things to consider:

1	a) Root of title [see above] b) Link in the chain Unbroken chain of ownership [beginning with seller in root document and ending with present seller. There must be no apparent break in the chain. If chain is broken the title will be defective. Are there any defects in the title = this will adversely affect the interests of buyer / lender. [e.g. on equitable] Links in the chain – require documentary evidence of: Every change of ownership Change of names of owners [marriage certificate]
2	Stamp duty: Confirms correct stamp duty has been paid Documents PRIOR to ^1st December 2003 = have they been stamped correctly? Unstamped or incorrectly stamped documents are neither good title nor good links in the chain. They cannot be produced in evidence in civil proceedings, neither will they be accepted at Land Registry on an application to register the title. If there is a problem – buyer can insist that seller rectifies the deficiency at seller’s own expense. Any contractual provision saying otherwise is void [S.117 Stamp Act 1891] Ad valorem duty [stamp duty prior to 1/12/03 – rate of duty changed with value of property – some lower valued properties were exempt or subject to a lower rate. This could only be claimed if “prescribed form of certificate” was included in the conveyance [so make sure purchase price is below figure stated in certificate of value]. If conveyance does not have a certificate of value in it and does not bear the ad valorem stamp – then the conveyance has not been correctly stamped. If there is no certificate = the highest rate of duty was payable. ALWAYS CHECK: minimum threshold for that year – maybe no tax was due? PD (Particulars delivered) stamp – placed on the deed. Sent to the Inland Revenue. [Only some conveyances – not all].
3	Parties – are any discrepancies explained?
4	Description of property Does it relate to the land being sold Is description in conveyance adequate? Is the PLAN drawn to scale? Are there any discrepancies?
5	Execution of documents – formalities S.1 LP(MP)A 1989 Deeds prior to 31^st July 1990 = signed, sealed delivered! Deeds executed by a limited company prior to 31^st July 1990 Execution by a Attorney – must have certified copy of document giving power to that attorney
6	Endorsements and acknowledgements Sale of part? Severance? Mortgage receipt?
7	Easements All necessary rights recorded?
8	Incumbrances Seller should disclose in the contract. Are all details correlating? Any restrictive covenants – solicitor should check if it has been registered as a Class D(ii) Land Charge. It will not be binding on the purchaser if not registered. Does the covenant / easement affect the client? [Apply normal registered principles]
9	Land charges search [K15] Search of all previous owners, including the current owner (the seller) Incumbrances will only bind unregistered land if they’re correctly registered in Plymouth. The person owning the land with the BENEFIT of the incumbrance should have registered the land charge against the name of the person owning the land with the BURDEN in the incimbrance. Possible to rely on VALID searches done by others in the past - but beware = Was the transaction that followed the search completed within the priority period of the search [compare date on search and date on conveyance]. If transaction has not been completed within the priority period, there is a danger that other entries could have been on the register which would not have been revealed by the search but which would be binding on the buyer. Therefore it will be necessary to repeat the searches. b) Names / dates are all correct? [Search should be for full period of person’s ownership – if in doubt go back to 1926 (year of land charges system being introduced) In the case of changing names – (e.g. on marriage) – is there a search against both old and new versions of the name.
10	Date of compulsory registration Should property have been registered already?

Contract for sale Same as registered transaction.
Exchange Same as registered transaction.

Exchange

Same as registered transaction.

Pre-Completion Searches / tasks

(Buyer’s solicitor) [Follow the registered notes – but with these additions]

Prepare TR1
K15: Land Charges Search. Repeat search against current owner.

Priority period = 15 working days

If acting for lender.

Bankruptcy search (if buyer is individual) against name of buyer - K16 [Land Charges search]
Alternatively, Company search if buyer is a company.

All other steps are the same as Registered.

Standard requisitions on title – to shift burden of representation onto seller.
Is SELLER a company – do a company search against seller.

Send Report on Title to lender [if acting on behalf of mortgagee] - “good and marketable”. This will trigger bank releasing the money.
Prepare completion statement and bill of costs

Transfer

TR1

Prepared by buyer’s solicitor
Send to seller’s solicitor [seller holds until money is transferred
Triggers first registration
Seller’s solicitor holds TR1 until money is transferred.

Completion

Same as registered transaction.

Seller

Executed TR1 – date when money is received.

Buyer

Acting for lender – Date the Mortgage deed on day of completion.

Seller

Pay off mortgage / give undertaking if not possible do pay off immediately.

Send receipt of mortgage deed to Buyer
Send TR1 to Buyer
Send epitome and all original documents (the ‘title deeds’) to Buyer

On completion – the original documents that make up the Epitome will be handed over to the new owner. [SCPC 6.13]. Buyer will send this to Land Registry

Post-completion

Discharge Legal Mortgage. [SELLER]

Original mortgage will be receipted and returned by lender
Seller will give undertaking to reflect this.

Stamp Duty Land Tax: to be paid within 30 days of completion (Form SDLT5) [BUYER]
Registration: Forms FR1 and DL [BUYER]

DL lists the forms to support registration – all those on Epitom etc.

Application must be made within 2 months of completion.

New mortgage = MG01 to companies house (to register mortgage). Done on behalf of lender. Within 21 days of completion. If not done then mortgage is not valid against third parties. Mortgage will become repayable to bank. [BUYER]

Problem areas!

Trustees of Land

Trustee has same power of disposition as sole beneficial owner
If Deed indicates consent if required – need consent of at least 2 trustees [trustees must have mental capacity].
Buyer must...

#3235 - Freehold Unregistered Land - Property Law and Practice

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