#3246 - Sale Of Part - Property Law and Practice

Establishing the plot to be sold:

• Important to provide a new, accurate description of the property that is being sold.

• Describe the land in the “particulars of sale”. Set out the extent of land being sold and the extent of land being retained.

• Terminology:

• Go to land – have a scaled map / plan drawn up.

• Buyer and seller should sign and agree boundaries.

• Plan: Clear and to metric scale

• TP1 Written description: “To the north of [insert address] - more particularly shown edged red on plan

• Plan prevails over written description

Plot on building estate:

• Land is registered

• Seller can deposit a “site plan” at the Land Registry and the official copies which are issued will give a certificate in Form C1 in lieu of the title plan [i.e. this is what buyer gets]

• C1 states that the plot lies within the boundaries of the site plan deposited at the registry but it does NOT specifically identify the plot.

• It will also highlight if any of the matters in the Charges Register [easements / covenants] affect that particular plot.

Easements

Creating Easements

• Can be express of implied!

• IMPLIED easements granted in favor of the buyer [gives him certain rights over the land retained by the seller for the benefit of the part being sold]. These can include:

1. Easements of necessity

2. Intended Easements

3. Rule from Wheeldon v Burrown; The buyer’s rights must be

Therefore – rights that do not already exist cannot be implied through W v B.

4. S.62 LPA 1925 [applies ONLY if, at the time of sale, the two tenements are in separate occupation – i.e. there must be separate occupation already!]

• Clause negating implied right:

• WHY: to exclude the event that buyer does not get what he thinks he will get / seller goes not give away what he does not whish to give away.

• Exclude the implied grant rules by EXPRESS special condition in the contract.

“This transfer will only operate to grant those easements expressly referred to and will not operate or be construed to imply the grant of any other easements”

• Therefore easements can be tailored to fit the particular case. Buyer must be careful that he is getting all easements necessary to his enjoyment of the land.

Common easements Granted to buyer:

1. Use and enjoyment of plot

2. Rights of way to gain access to the property [ensure this is for all times, for all purposes, and allows access both on foot and by motor vehicles]

3. A right for services to reach the property [drains, water, gas, electricity, telephone]

4. A right to maintain all these

5. A right to light

6. A right to support: of the land with a building on it. Also – right to get people to come in and repair any damage done to the property.

7. If rights are shared [e.g. drainage / water / driveway] – a covenant to maintain or contribute to the maintenance [and make good the damage caused] may be appropriate.

8. A right to enter to effect maintenance.

• Common easements Reserved by the seller

Nb. S.62 and WvB cannot operate for reservations]

Consider – what rights will seller need over his land / land being sold?

1. Befit of retained land

2. Similar to those rights granted to buyer

• Possibility of granting a FUTURE easement –e.g. drains have not yet been laid down]. Granting a future interest in land. Since 6^th April 2010 the rule against perpetuities has not applied to grant of future easements.

• Special consideration of easements of LIGHT and AIR!

Rights to light and air can be passed by either S.62 or WvB.

Could have serious ramifications for seller – his property value may go down as he cannot extend / build without consent of new plot owner

Therefore – expressly exclude buyer’s right to easements of light and air by express condition in the contract [which will provide for an insertion to this effect in TR1]

SCPC 3.3 already provides for this – but better to be certain and make it an express condition.

Fall-back provision:

• SCPC 3.3: allows each party to have their implied right turned into an express right in the transfer – but it does not specify / limited on what those rights are.

• Exclusion of rights of light and air

• Inadequate to deal with parties needs on sale of part – see only as fall back provision!

Consent of lender

• New plot must be sold free of the any charge over the land.

• Look at the Charges Register [official copies] – what matters will the sale of the plot effect:

Is there is Mortgage? Consent from mortgagee will be needed

‘Release of Part”

Seller may have to offer up payment to obtain consent likely!

Has the value fallen – by any new encumbrances on the retained land? Is property still “good and marketable”?

Covenants

Existing covenants

• Registered land – can be found on the Charges Register enforceable!! The covenants will be incorporated in the new title of the new plot.

• Consider usual covenant issues:

New Covenants

• Must be expressly provided – nothing can be implied

• Purpose: For the protection of retained land (e.g. property to be used as a dwelling house only)

• Best to draft negatively so burden passes [burden runs with the land]

Common covenants:

• Restriction of use

• Restrictions on building

• Not to cause a nuisance

• To erect and maintain boundary fence / wall

• To contribute to maintenance of shared facilities

Drafting covenants:

• Best to draft negatively - so burden passes with the land!

Procedure for sale of part:

Seller’s solicitor:

1. Draft contract and TP1 (can be in same document – comply with S.2 LPMPA)

2. Land Registry search 0S2 – gives priority over new plot only

• Un-registered land = original deeds are retained by seller and buyer is provided with copies. The buyer should verify his epitome against the original deeds and mark his epitome as examined against the original. The transaction will trigger the first registration. A notice of any restrictive covenants imposed by the conveyance to the buyer should be retained by the seller – otherwise he will not have any evidence of those covenants when he comes to sell his own land at a later stage. New restrictive covenants will be automatically entered on the register of the new title on first registration.

Matters exclusive to sale of a new property:

1. Developer’s concerns

1. Title

• Is it registered or unregistered [registered is better!!]

2. Describing the land

• Detailed description in contract – verbal & plan

3. Approved estate layout plan

• Identified new plots.

4. Pre-contract information

• Pre-empts what buyer will want to know. Send to all prospective buyers.

5. Planning permission

• Check to see if planning permission has been granted.

• Have conditions been complied with?

• Enforcement period for building works in breach of planning control is 4 years – so if property is within 4 years of its construction then any breach can be enforced against the new owner. Do checks on planning matters if this is the case.

6. Building Regulation

• Has consent been granted? If not – this may suggest that the building has not been built to proper standards. Advise client to get a surveyor.

• 3 years expiry date from when permission was granted.

7. Structural defects cover

• Structural guarantee – protection against defects in design / construction of the structure of the new building.

• Need this to get a Mortgage!

• If problems go wrong at a later date – buyer may be unable to get compensation from the builder (who could be out of business by this point)

• RESIDENTIAL:

1. National House Building Council (NHBC): 10 year insurance policy.

First 2 years = initial guarantee period (guarantee by builder to remedy ALL defects + insurance from NHBC against failure). Possible to sue builder.

Further 8 year :Structural Guarantee Period (i.e. not all defects covered – only structural) – cover by NHBC only. Sue NHBC directly.

Acts as a Building Reg. Certificate.

NHBC cover is free to buyer upon exchange.

2. Consumer Code for Home Builders [Residential] – provides additional consumer...