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Investigation Of An Unregistered Title Notes

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Investigation of an Unregistered Title ¿Why Investigate?

Seller's Investigation

Buyer's Investigation

 S's solicitor must draft the contract  Ensure the seller is able to transfer

of sale

 Allows sol to embody the detail of

the title (owns and can sell)

 To identify any defects or problems

Lender's Investigation
 Ensure the property is worth the

money advanced

 Ensure no defects will devalue

the title

in the title (restrictive covenants, the property
 Sol may act for buyer and lender easements) with any problems that may arise  The buyer could then raise them as  In commercial, borrower's sol
 Save money, time, guarantee may be required to give lender requisitions smooth transaction, win a client  Issues shall be resolved before a 'Cert of Title'
 Act in the client's best interest exchange
 Solicitor can anticipate and deal

Investigation of an Unregistered Title

1. Index Map search at Land Registry under Form SIM + plan of property + fee (search will show if land is registered or is subject to a pending application or Investiga caution against first registration P 35) tion of

2. Examination of documents in epitome title to I. Root is as provided for by the contract (if wrong doc provided ask for the unregist correct one) ered land II. Unbroken chain of ownership comprise III. There are no defects in the title which will adversely affect the buyer/lender s:

3. Verification, i.e. inspection of the original deeds (generally done at completion) P 130

4. Checking for evidence of occupiers (inspection of the property)

5. Pre-completion searches (same as registered land)

DT = seller's obligation to prove to buyer his ownership of the interest which he is purporting to sell

Title to unregister land (i.e. ownership) us proved by the title deeds held by: Deductio
- The Seller Client (if there is no mortgage on the land), or n of title
- The Mortgage Lender (if there is a mortgage on the land)

Seller will prepare an epitome (i.e. schedule of documents comprising the title) ("DT") for buyer P 123

Title of unregistered land begins with what is called a good roof title.

At Common Law a good root of title commences with a good roof of at least 15 years s.44LPA 1925.

1. Find

s.44 LPA 1925 = Root of title found in the most recent documents that have the Root dealt with the property. The root of title must: 1) It must be at least 15 years old (i.e. going back 15 years) of Title 2) It must show ownership of the whole of the legal or equitable interest P 124 that is being sold "A good 3) It must contain a recognisable description of the property root of title 4) It should not contain anything that casts doubt on the legitimacy of the satisfies title s.44"

A short root of title (which is less than 15 years) may be mutually agreed upon; however the buyer will be bound as if he'd been given a 15 year root. Consider defective title insurance

Documents that could be included in the 'root': i. Conveyance on sale (i.e. this deed transfers ownership of legal & equitable interests in land) ii. Legal mortgage (i.e. may satisfy s.44 LPA 1925 but is rarely used as root of title) iii. Deed of gift and assent of land will suffice (but not ideal, it is unlikely that donee did a 15 year search of the title to confirm ownership thus cannot add a 15 year search of good title)

The most recent document that satisfies the 4 requirements of root of title will usually be selected as the root of title for that particular sale.

P 131 Buyer bound by matters revealed by root of title, not by pre-root matter, but , buyer may : a. When a doc is executed by an attorney, buyer is entitled to a certified copy of

2. Prepare an Epitome (ET) of Title includes: P 125

Power of Attorney b. When property is described by reference to a plan in a pre-root doc, buyer can request m c. When property sold SUBJECT TO matters contained in a pre-root doc (e.g. covenants/maps) buyer is entitled to a copy of those matters (i.e. entitled to get the covenants even if pre-root) An ET is a chronological list of all documents dealing with ownership up to the present day. It usually (but not always) ends with the document that vested ownership to the current seller. ET includes:

Copies of the relevant documents should be attached

An unbroken chain of ownership must be shown (see below)(including Powers of Att and Probates)

Documents that need not be included: i. Marriage certificates ii. LCD search certificates (but it is good practice to include them) iii. Expired leases iv. Documents that pre-date the good root (s.45 LPA)

Ensure the description of the land in the plan matches the property being sold The epitome must be provided to B's Solicitor at an early stage of the transaction. At this stage the BSol will receive photocopies and at completion the BSol's will receive the originals in order for the Buyer to send to the Land Register to register the buyer as the new owner SCPC 6.1.3. (Does not apply if the seller is selling part (A notarised copy of the deeds will be provided instead of the original deeds))

After identifying the root, trawl through the documents and think of the following matters i.e.chain of ownership:

1. Links in the chain P 131
 Is there documentary evidence of an unbroken chain of ownership up to the present seller from A to B, from B to C (e.g. transfer deeds for every transaction)? If not, it is a defective title
 Check that all mortgages have been discharged (except the current one)

2. Stamp duties P 132
 If epitome contains pre-01/12/03 documents of ownership transfer (not assents or powers), check that they've been stamped correctly with the stamp duty (if it's a conveyance, also check that the Inland Revenue has stamped it, too)
 If it's not done, ensure that the seller rectifies the problem (at seller's expense). Contractual provision Requiring the buyer to meet the costs of putting the defect right will be void (s.177 Stamp Act 1891)

3. Description of the land
 Ensure the documents in the epitome relate to the land being sold (important where a Sale of Part)

4. Incumbrances
 The seller should disclose incumbrances that burden the land (i.e. covenants and easements)
 These should have been set out in the contract - do they match up?
 All incumbrances should have been deduced (even if a pre-root)
 "excepting and reserving…"  indicates an incumbrance or reservation on the land
 "subject to…"  indicates that the land was already bound and that subsequent buyers may be bound as well.

5. Searches
 Must search against the names of all the legal owners (not lenders) who appear in the epitome
 For the period that they owned the land (even if their period of ownership predates the root of title)
 You can rely on previous searches made on previous conveyances

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