#4822 - Unregistered Transactions - Property Law and Practice

The seller’s solicitor collates all of the title documents to be included in the epitome and examines them to insure the seller’s ownership of the property is good, and that he is entitled to sell it.

• The conveyance to the current seller (will be at least 15 years old as still unregistered – s.44 LPA).

• Copies of any documents referred to in the root of title (e.g. power of attorney document)

• Copies of other documents relating to land (e.g. deeds of easement, leases affecting the land etc.)

• Copies of legal mortgages

Documents that DON'T need to go into the epitome include documents relating to equitable interests overreached on completion, copies of expired leases, pre-root documents etc.

Investigating Title

The buyer’s aims when investigating title are to identify the extent of the property, the rights benefiting the property, ensuring the seller has good title to the property (including the right to sell), identifying the extent of other people’s rights and ensure the buyer can use the property for the intended purpose.

Use the acronym SCRAPPED to investigate title with unregistered land:

This will be an issue where two/more people buy and 1 person sells (usually a death).

• Buying from Joint Tenants:

  • All of the joint tenants alive must execute the contract and purchase deed in order to pass the legal estate. If there is a sole surviving tenant the doctrine of survivorship applies.

  • In unregistered land the buyer is given protection by s.1 LP(Joint Tenants)A 1964 - i.e. it can assume that the tenancy hasn't been severed if the following are satisfied:

    1. The buyer has a clear bankruptcy search against all joint tenants for their period of ownership (form K15). However, the CLC search will include a bankruptcy search so just check no charges come up.

    2. There is no memorandum of severance on the conveyance

    3. In the purchase deed to the new buyer, the surviving joint tenant sells as beneficial owner or as ‘solely legally and beneficially entitled’.

Must get an official copy of death certificate

• Buying from Tenants in Common:

  • All tenants alive must execute

  • If there is a sole surviving tenant a second trustee must be appointed to overreach any beneficial interest. Ask for official copies of a death certificate and a deed of appointment of second trustee.

• You must always start by finding a ‘good root’ of title.

• Common law has deemed this to be a CONVEYANCE dated pre-1 December 1990, containing a description of the property and casting no doubt on the seller’s title (this may happen when there is a missing power of attorney when the seller/buyer executed under power of attorney).

• It must also be by deed and validly executed/stamped (see below).

• There must be adequate description of the property – if it is a sale of part need to see the plan!

• As the conveyance will be 1990 or earlier, it won’t have stamp duty attached. All conveyances should EITHER have an ad valorem stamp or a certificate of value (if consideration below 0% threshold) – (TOP RIGHT).

  • It is required where no certificate of value. A certificate of title is along the lines of “It is hereby certified that the transaction…does not form part of a larger transaction…which the amount of…exceeds fifteen thousand pounds” – it essentially means it is not open to SDLT.

  • It will look like a bunch of coins in the top right corner.

• All conveyances should ALSO have a Particulars Delivered stamp (PD stamp) evidencing the fact the conveyance was submitted to HMRC within 30 days of completion (TOP LEFT).

A conveyance not property stamped will not have good root of title and breaks the link in the chain of title. Therefore, the buyer should arrange for the stamping od the conveyance and the paying of the penalty BEFORE the completion (insert special condition to that effect).

• Covenants – do they bind?

  • Restrictive covenants – must be registered as a D(ii) Central Land Charge against original covenantor. The covenant doesn't need to be registered against subsequent ower.

    • If not registered as D(ii) charge it may still bind if there has been an indemnity covenant by the seller when purchased.

  • Positive covenants – may bind subsequence owners if an indemnity covenant was given by seller when purchased.

    • If the seller did give one, it can require inclusion of a special condition in the contract that the buyer also gives one in the purchase deed under SCS 4.6.4/SCPC 6.6.4.

• Easements or leases:

  1. Is it a benefit or burden?

  2. Is it binding?

     • Leases of not more than 7 years are overriding interests (subject to s.4(1)(d)-(f) LRA 2002) or unless they were registered pre-2003 in which case leases of more than 7yrs also overriding.

     • Legal easements are overriding on first registration. It must be created by deed.

  3. If binding, check with the client whether the benefit is adequate and for any maintenance/adoption costs and whether the burden is acceptable.

• The buyer must see the Grant of Representation/Probate if buying from a PR.

  • The PR must also state no previous disposal and there must be no memo of previous disposal on the grand of probate.

• The memo or sale to the buyer must be endorsed on the Grant of Representation.

• Upon discharge a receipt is endorsed on the mortgage deed – has this been done?

• They may be a separate deed of discharge instead.

Post-completion procedure

• Companies house – usual steps (i.e. register new mortgage within 21 days – Form MG01)

• HMRC – pay any SDLT within 30 days (form SDLT1 and SDLT5 returned)

• Land Registry application;

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