Investigation of Title

Investigation of title will allow the solicitor to discover and anticipate and deal with any likely problems that might be revealed and thus allowing the transaction to go smoothly.

Buyers Investigation

Once the seller has supplied the buyer with evidence of his title, the buyer must do 2 things:

1. Ensure seller has right to sell property.
2. Identify any defects in, or problems raised, by the title.

Anything that’s unclear or unsatisfactory on the face of the documents supplied maybe raised as queries (requisitions) with the seller. Modern practice requires any investigation to be done before exchange of contract and all issues to be resolved before that point. Therefore entering into contract with full knowledge of what title contains.

As after exchange the contract may contain provisions preventing the buyer raising requisition after exchange (SC 4.2.1 & SCPC 6.2.1).

What to look out for on official copies and title plan?

When examining official copies and title plan, look out for the following:

The Property Register

1. Description of land agree with the contract description?
2. Title number matches the one given in the contract?
3. Is it freehold/leasehold? And does this accord with the contract?
4. Any easements enjoyed by the property? Do they match the needs of the client?

The Proprietorship Register

1. Is the class of title correct?
2. Is the seller the registered proprietor? If not, who is?
3. Are there any other entries, and what is their effect?

The Charges register

1. Are there any incumbrances?
2. How do these effect the buyer?
3. Which need to be removed upon completion?
4. Have you agreed In the contract to buys subject to these incumbrances?

The Title plan

1. Is the land being bought included in title?
2. Any colouring indicating rights of way? Possible covenants or land which has been removed from title?

Anything adverse found in the official copies will need to be reported to the buyer and resolved before exchange.

Overriding interests can be discovered through:

• Disclosure by the seller in the contract.
• Pre-contract enquiries where the seller will be asked to reveal details of adverse interest and occupiers rights.
• A local land charges search.
• Inspection of the property before exchange which may reveal evidence of such matters as non-owning occupiers, easements and adverse possession.

The Case of investigating UNREGISTERED land

Firstly a valid root of title must be provided. Once the solicitors have established a good root of title they are prevented from requesting the production of any other document dated prior to the root. The seller must then trace a link in the chain of title from the root document to the document or event by which the the ownership became vested in the seller.

It is then the sellers solicitors duty to provide the buyer with an epitome/abstract of title. Which is essentially a list of deeds and documents with photocopies attached. The abstract must contain all documents and events affecting the ownership of the land from root to present. This includes all mortgages ongoing and discharged e.g. conveyances, mortgages, leases, grants of representation, death certificates, assents, search certificates.

An examination of the documents supplied in the abstract or epitome for:

• The root document is as provided for by the contract. If the wrong one sent, the buyer can insist on the correct document being supplied in its place.
• There’s must be an unbroken chain of ownership, starting with the seller in the root doc and ending with the present seller.
• No defects in title which may adversely affect the buyer’s interest.

You will also have to verify the original deeds as well as checking for evidence of occupiers (done by inspection) as well as completing any pre-completion searches.

While investigating you should also bear in mind whether any transaction in the titles history should have triggered first registration. Compulsory registration occurs when:

• Theres a transfer of freehold
• A grant of a lease for more than 7 years or the right to possession is discontinuous, provided that the periods added together total more than seven years.
• An assignment of a lease which at the time of assignment has more than 7 years unexpired.
• A first legal mortgage of the freehold or of a lease which at the time of the mortgage has more than seven years unexpired.

Stamp Duty: Documents dated prior to 1 December 2003 require a stamp. Unstamped or incorrectly stamped documents are neither good roots of title. Consequently they cant be brought as evidence in civil proceedings nor will the Land Registry accept them on an application for registration.

Conveyance by Trustees to themselves: on the face of it, such a conveyance is in breach of trust and therefore voidable by the beneficiaries. But can be justified if:

• There is proof of a pre-existing contract in favour of the trustee or personal representative.
• The personal rep was a beneficiary under the will or intestacy of the deceased.
• The consent of all the legally competent beneficiaries was obtained to the transaction.
• The conveyance was made under an order by the court.

The transaction was sanctioned by the trust instrument.