Overview
There is an obligation on the seller to disclose latent defects in title. Wilful concealment may be fraudulent and have implications in contract and tort. There is no obligation on the seller to disclose other defects. However, he may not misrepresent the position in any way.
The Seller’s solicitor should check title as soon as he has it, to ensure that it is in order. The buyer’s solicitor must ensure that the title is good and marketable and free from incumbrances. He must investigate the title and ensure compliance with covenants and conditions applicable to it.
In principle, investigation of title may take place after the exchange of contracts. In practice, the process usually takes place before the exchange. The title will be deduced at the start of a transaction and sent with draft contract, property information form, fixtures/fittings form, etc.
It is, in practice, easier and more convenient, not to proceed with a contract than to rescind a contract for failure to deduce title. If deduction and investigation of the title are carried out after the exchange of Contracts, ensure that you comply with the tight time limits in the general conditions of the Contract (i.e. 6 days after the date of the contract).
Unregistered Title Investigation
In the case of unregistered title, the deeds are examined so that title is traced from a root of title at least 15 years old. The seller furnishes copy deeds and sometimes an epitome of title. The process is similar to unregistered title conveyancing in Ireland. Deeds should be checked to vouch for execution, stamping, proper descriptions, words of transfer, etc.
The seller will furnish an Epitome of Title (i.e. a schedule of all deeds/documents (to be handed over on completion) with photocopies of same. Ensure all maps are correctly identified and coloured. Sellers must be able to deduce an unbroken chain of ownership beginning with the root of title and ending with the document vesting title in the seller. The definition of a good root of title is a document which:
- deals with the whole legal and equitable interest in the property;
- contains an adequate identifiable description of the property;
- does nothing to cast doubt on the title;
- is at the date of the contract at least 15 years old.
The Buyer’s solicitor must check each deed/document for defects from the root document to the document transferring ownership to the seller. He will be making application for first registration, and his aim should be to obtain Title Absolute from the Land Registry. Check for the following namely
- Changes of name – if parties subsequently married since purchase; procure certified copy marriage certificate.
- Death – if the beneficial joint tenant has died; procure certified copy death certificate.
- Description of property – should be consistent throughout the Epitome of Title. Check all maps and plans that they are properly coloured and marked.
- Check all deeds are properly stamped- a deed, not property stamped is not a good root or chain link. Late stamping should be carried out at seller’s expense.
- Check for valid execution of documents- signatures should be properly witnessed
- Check for the discharge of all mortgages – check the original mortgage deed is discharged by a receipt endorsed on the back.
Searches are made in the Land Charges Register, and an Index search is required in the Land Registry. On completion, first registration is required in HM Land Registry.
Land Charges Search
The Land Charges Register is to some extent, the equivalent of the Registry of Deeds in Ireland. The deed itself is not registered. Certain rights in land, claims and notices are registered by an application made in a prescribed form. This registration of rights constitutes notices to third parties.
The Land Charges Registers include the following registers. The Register consists of 6 categories A-F. The following are the principal categories.
- the register of pending actions relating to interest in land (the equivalent of a lis pendens);
- registers of writs and arrangements including bankruptcy orders;
- second mortgages where the deeds are not held;
- certain equitable charges;
- estate contracts (purchase contracts and options);
- post-1925 restrictive covenants;
- charges for inheritance tax; and
- matrimonial / civil partner home rights.
The search is made in the Central Land Charges Register at the Land Charges Department in Plymouth against the name of the Seller and previous owners to cover their period of ownership. There are 5 Registers consisting of Land Charges, Pending Land Actions, Writs and Orders affecting land, Deeds of Arrangement affecting land and Annuities.
Index Map Search
An index map search has a direct equivalent in Ireland. In effect, it is a search to ascertain whether an apparently unregistered (deeds based) title, has in fact been registered in the Land Registry.
This should be made in all transactions where the property remains unregistered. It is made on form SIM and sent with a fee and plan to the appropriate Land Registry local office. The search will confirm if all or part of the property is already registered at the LR. It will reveal any pending applications for first registration and will give details of all titles (both freehold and leasehold) affecting the property.
Registered Land Title Investigation
In the vast majority of cases, the title is registered, so that investigation is a question of an examination of the official copy title and any deeds referred to in it (the equivalent of instruments in Ireland). The Seller will at his cost finish up to date official copies of the registered title. Under the 2011 Protocol, they should be no more than 6 months old.
The official copy of the title issues with details of the time and date, printed on it. On closing, a search is made to vouch whether there have been any changes. A priority search should be made, which freezes the register for a period.
It is necessary to check that title is absolute and is not qualified in an unacceptable way. The title document (the equivalent of a folio) will set out charges, easements, covenants and other rights / interests which affect the title. Sometimes, the wording of easements or covenants is set out in full. More commonly, it is necessary to obtain certified copies of the deeds / documents from the seller or from the Land Registry. Documents can be ordered from the Land Registry through the search portal. In some cases, they are scanned and e-mailed; in other cases, they are sent by DX or post.
It is necessary to for the buyer’s solicitor to verify with the buyer that the title equates to his or her understanding of what is purchased. Rights, covenants, restrictions and easements affecting the land should be acceptable and in accordance with the contract and the buyer’s expectations. The buyer should be satisfied that the Title Map accords with the physical property in sale.
The Buyers’ solicitor must carefully examine the up to date office copy entries for any discrepancy. Check:
- that they compare with the information given in the draft contract;
- the proprietorship registers for the entry of any restrictions or notices;
The existence of any overriding interests which are not entered on the register but which will bind the buyer irrespective of notice (e.g. rights of occupancy). Appropriate enquiries should be made, and the relevant rights should be discharged or transferred by the rights holder.
In certain cases, the person selling the property may not be the sole legal and beneficial owner. Examples would be a mortgagee in possession, a personal representative of a deceased owner, an Attorney of a seller, a Charity, a Registered Company and a Receiver appointed under the Mental Health Act 1983 S99 where the seller is suffering from a mental disorder.
If PRs are selling land registered in the name of the deceased, all proving PRs must execute the sale deed and hand over a certified copy of the Grant of Representation upon completion. A person buying from an Attorney will want to inspect the Power to ensure that the Attorney is duly authorised within the terms of the power.
