Property - Errors

What is the process for discharging a mortgage?

1. Determine who mortgage is in favour of

2. Obtain redemption figure from bank

3. Ensure seller is happy to pay redemption figure

4. Pay off mortgage on completion

5. Give mortgage discharge certificate from bank to buyer’s solicitors to apply to discharge the mortgage to the Land Registry

What is the process for obtaining mortgage monies for a new property?

1. Contact Bank with proposal

2. Clarify with Client that we do not provide financial advice and recommend speaking with independent financial advisor

3. Confirm date for transferring funds (usually minimum 5 working days)

4. Explain this info is located on UK Finance website

5. Explain that the solicitor also acts for the lender and must comply with regulations

6. Confirm sufficient notice for mortgage funds to arrive before completion

What must you send as evidence to register a new mortgage?

The signed mortgage deed

What must a letter state where it indicates a person will not obtain an interest in property?

1. Name

2. Address of Property

3. Amount of Gift

4. Confirmation the amount is a gift and there is to be no repayment

5. Confirmation the donor will not gain any interest

Which conveyancing devices may be used to restrict other parties?

1. Restrictive/ positive covenants

2. Grant or reservation of an easement

3. Licences

4. Compulsory renewed covenants

5. Estate rent charge

Do positive covenants bind successors in title?

No and so the beneficiary should obtain an indemnity agreement or a compulsory renewed covenant

What is a compulsory renewed covenant?

When a restriction is placed on the register that the property cannot be transferred or subleased without the new occupant confirming the original positive covenant

What are the two types of easement?

Grant and reservation (both must be created by Transfer Deed)

Where do covenants, easements etc appear on the Official Copies?

In the Charges Register of the burdened land and the Property Register of the benefitting land

What are the requirements for an express easement?

1. Dominant and servient tenement

2. Easement must accommodate the dominant tenement

3. Tenements must be different pieces of land

4. Right must be capable of forming the subject matter of a grant (be definable)

5. Duration must be freehold or leasehold

6. Must be created out of a legal estate

7. Granted by deed

8. Must be completed by registration

How do you make a covenant?

1. By deed

2. Signed by covenantor

3. Registered

What is the key difference between positive and restrictive covenants?

A positive covenant does not bind successors in title

What are the key characteristics of a lease?

1. It is for a determined period

2. It gives the lessee exclusive right of possession

3. Is a legal interest

What does an estate rentcharge permit?

It requires the burdened landowner to pay a sum to the benefitting landowner for the purpose of performing a certain act ie maintaining shared areas. If the benefitting landowner does not carry out their obligation the burdened landowner may enter the land, carry out the works and recover the resulting costs

What does ‘Time if of the Essence’ mean?

It means each party must strictly adhere to the deadlines in the agreement/ statute or their argument/ case may be seriously damaged

Can a property held as joint tenants be gifted in a will?

No, a joint tenant property automatically passes to the other tenant upon death

How can a joint tenant remove the deceased’s name from the Official Copies of a property after death?

They can use Form DJP (Deceased Joint Proprietor)

Is a Transfer Deed (ie Form TR1) contains new covenants as well as the transfer, who must sign the deed?

Both the Transferor and the Transferee

What is the effect of registering a charge over property (ie a mortgage)?

It has the effect of giving the charge priority over any unregistered interests in the property

How may people have interests in property?

1. Legally (ie through a Lease, Transfer Deed or Registered Charge)

2. Equitably (where their right is not registered but acquired through actions/ behaviour)

What may grant someone an equitable interest in property?

1. Contributing to the mortgage payments

2. Significant work to the property with a clear intention that it is for their benefit

3. An imperfect legal interest such as an unregistered 7 year lease

When can someone in actual occupation have a right to the land?

They must also have an equitable interest in the land, they cannot only be in actual occupation

What are the main overriding interests in land?

1. Legal lease granted for term or 7 years of less

2. Equitable interests held by people in actual occupation

3. Legal easements (until property is registered)

What are equitable interests which may be protected by the entry of a notice?

1. Restrictive covenants affecting freehold land

2. Estate contracts

3. Equitable easements

4. Equitable leases

5. Legal leases between 3-7 years

6. Not trust interests

What is an overriding interest?

An interest which binds a new proprietor regardless of whether it was registered

What is the purpose of a Local Search?

Provide information on all Local Land Charges

What is a Listed Building and what are the effects?

A building of historical and/ or cultural significance where the occupier will need special consent for external, and possibly internal, alterations and the Council may control the alterations such as the type, the style, the materials used etc.

What must you first check when dealing with old enforcement notices?

Is the contravention of the permission ongoing? Therefore, is the notice still applicable?

What must you always confirm with consents given to the property?

Has the work related to the consent actually been carried out?

What is the general rule for pollution?

The polluter pays - however often the polluter cannot be found so the landowner pays

What must you consider whenever a search shows a negative result for the property?

How can we find further information? What are the effects (ie insurance or the deal itself)?

What information does a CON29 provide regarding the property?

1. Planning consents and completion notices

2. Building regulations

3. Road and railway scheme proposals

4. Environmental notices

5. Public paths and byways

6. Common land and town and village greens

7. Compulsory purchase orders

8. Tree preservation orders

9. Conservation Area

10. Smoke control area

What does a Drainage and Water Search reveal?

1. Connections to mains, drains and water supply

2. Any arrangements for surface water drainage

3. Whether a public drain is on the property

4. Any additional information regarding water and sewerage

What does an Environmental search reveal?

1. Environmental history and contamination issues

2. Flood risk

3. Mining/ unstable ground risk

What are the recommended property searches for a standard conveyance?

1. Local Authority Search

2. CON29 Search

3. Land Charges Search (K15) - Unregistered only

4. Drainage and Water Search

5. Environmental Search

6. Search of the Index Map

7. Chancel Liability Search

8. Coal Mining and Brine Search

9. Company Search

10. Searches which are potentially highlighted in the other searches ie Tin, Mining, Flooding, Radon

11. A physical search of the property

What is an Index Map Search?

Used to check if the property is registered

What is the purpose of a Chancel Liability Search?

To check whether the property is in a location which has chancel repair liability (parish church repair)

What is the purpose of a Coal Mining and Brine Search?

1. For any property in a coal mining area

2. Whether there is past, present or future coal mining leading to subsidence and structural issues

3. Whether there is a damage notice or claim for compensation (pending or paid)

What is the purpose of a Company Search on property?

To check whether there are any charges or debentures against the property and whether a company selling the property is still active

Why should the client carry out a physical inspection of the property?

1. To check the physical condition of the property

2. To check the boundaries of the property

3. To check for any overriding interests

What are the requirements for an easement through prescription?

1. 20+ years of use

2. Without force

3. Without secrecy

4. Without permission (even if by mistake)

What is the effecting of protecting an interest with a Land Charge over unregistered land?

All subsequent buyers/ leaseholders will be deemed to have actual notice/ knowledge of that interest, regardless of whether they are even aware of a Land Charge or are unable to locate it

What requirements MUST be met for the burden of a Restrictive Covenant to pass at equity?

1. Covenant must be genuinely restrictive in nature

2. Must be registered

3. Must benefit the land of the original covenantee

4. Must be intended to run with the land ie not bind a specific occupant but the land itself

5. There must have been no common ownership of the two pieces of land since the covenant was imposed.

What are the tests for determining whether an object on property is a Fitting or Fixture?

1. Degree of Annexation Test - How is it attached?

2. Purpose of Annexation Test - Why is it attached?

3. What damage would be caused by removing the object?

What is the difference between a Fitting and a Fixture?

1. Fitting - Personal property which does not pass with the land

2. Fixture - Objects affixed/ annexed to land or to a building so as to become part of the land or building

What are the 5 Legal Interests in Land?

1. Easement

2. Rentcharge

3. Legal Mortgage

4. Charge on Land

5. Rights of entry

How do interests bind third parties?

1. Legal Interests - ‘Bind the world’

2. Equitable Interests - ‘Subject to Doctrine of Notice’

What are the requirements for a Deed?

1. Be in writing

2. Be clear it is intended to be a deed

3. Signature of each individual

4. Signatures are witnessed

5. Document must be ‘delivered’ as a deed

What are the requirements for Estate Contracts?

1. Be in writing

2. Contain all terms in one document either expressly or by reference to another document

3. Signed by each party

What are the triggers for updating the register for registered land?

1. Dealings with value

2. Disposition by gift

3. Transfers made on death

4. Transfers under Court order

5. Lease

6. Transfer to trustee

7. When property is mortgaged

What is considered good root of title for a conveyance of unregistered property?

1. At least 15 years old at date of exchange

2. Deals with whole legal and equitable ownership

3. Provides adequate description of the property

4. Contains nothing to case doubt on the title

What must a seller’s solicitor produce as part of the epitome as well as the root of title?

1. Conveyances on sale

2. Legal mortgages affecting the property

3. Receipts on legal mortgages

4. Transfers under a will or intestacy (and grants of probate/ letters of administration)

5. Deeds of gift

6. Trust deeds

7. Leases which still affect the property

8. Court orders which affect ownership

9. Powers of attorney affecting any document

What equitable interests as Land Charges for unregistered land?

1. Second (puisne) mortgage

2. Limited Owner’s Charge

3. General Equitable Charge

4. Estate Contract

5. HMRC charge

6. Restrictive Covenants

7. Equitable Easements

8. Matrimonial Home Rights

What is the rule for equitable interests?

Equitable interests bind everyone except a bona fide purchaser of a legal estate for value without notice

Which rights must be protected by notice in the Charges Register of a Property?

1. Legal Charges (mortgages)

2. Equitable Mortgages

3. Estate contracts

4. Restrictive covenants

5. Charges under Family Law Act 1996

6. Easements other than those implied by grant or acquired by prescription

7. Leases over seven years

8. Bankruptcy petitions and orders

How may a right holder protect their right over a property if they cannot enter make an entry on the Charges Register?

Enter a restriction into the Proprietorship Register

How will the interest of a third party be protected over Registered Land?

1. Notice on the charges register;

2. Restriction in the proprietorship register;

3. Overriding interest (unless overreached); or

4. Registered charge

What are the different classes of title?

1. Absolute Freehold or Leasehold

2. Possessory Freehold or Leasehold Title (adverse possession)

3. Good Leasehold Title

4. Qualified Freehold or Leasehold Title

What are the triggers for first registration for land?

1. Transfer of freehold

2. Transfer of leasehold with more than 7 years left to run

3. Grant of a new lease for more than 7 years

4. Grant of reversionary lease (to take effect more than 3 months into the future)

5. Grants of a lease of discontinuous possession (time share)

6. Creation of first legal mortgage

What is the deadline for compulsory first registration?

Within 2 months of the date of the conveyance

What is the effect of failing to register a new registration?

• The transfer will fail and revert back to the transferor who will hold it on trust; or

• For a new lease or mortgage, it will revert to an estate contract

What is the limit for owners of a property?

There cannot be more than 4 legal owners but they can hold that property on trust for an infinite number of beneficiaries

What are the powers of trustees over land?

1. All powers of absolute owner including sale or mortgage

2. Power to purchase a legal estate for investment or occupation of any beneficiary

3. Power to partition or divide land to convey to beneficiaries to full age and entitlement

4. Power to delegate any of their powers to a beneficiary temporarily or indefinitely

What are the duties of trustees of land?

1. Fiduciary duties

2. Not permitted to benefit from exercise of their powers

3. Act jointly and unanimously in their functions

What are the rights of beneficiaries re property?

1. Right of occupation

2. Right to consult with trustees

3. Remove and appoint trustees (if 18, with capacity and trust instrument does not appoint person to do so)

What a trustee or beneficiary to land do where there is a dispute between owners/ beneficiaries?

Apply to Court to resolve the dispute and the Court may make any order such as:

• Order a sale;

• Refuse a sale;

• Refuse a sale with conditions on the right to occupy the property

• Order a person in occupation to pay rent

• Order a sale but delay it

• Partition the property

What will the Court consider when making an order following a dispute over trust property?

1. Intentions of the settlor

2. Purpose of the trust

3. Welfare of any minors

4. Interests of secured creditors

What can the Court not to when making an order over disputed trust property?

1. Order a beneficiary sell or transfer their interest

2. Adjust the proportions of co-ownership

3. Make any order as to the appointment or removal of trustees

How may a purchaser overreach equitable interests in a property?

Pay (in good faith) the purchase money to at least two trustees or a trust corporation

What are the types of co-ownership in a property?

1. Joint Tenancy

2. Tenancy in Common

What are the requirements for a Joint Tenancy?

1. Unity of Time - Entitled to possession at same time

2. Unity of Title - Must have the same title derived from same document

3. Unity of Interest - Interests must be identical

4. Unity of Possession - Must both be entitled to possession of whole property

What will rebut the presumption of joint tenancy in property?

1. Words of severance ie ‘equally’ or ‘divided between’

2. Unequal contributions

3. Other persons contribute to purchase price

4. Property held by partnership

5. Property is an investment

6. Joint mortgagees

What are the key principles of co-ownership?

1. Legal estate always held as joint tenants and cannot be severed

2. Equitable estate can be severed and held as tenants in common

3. There is no restriction of co-owners in equity

How can a joint tenancy be severed?

1. Notice in writing delivered to other tenants as long as it is properly delivered (it does not have to be read and does not have to be signed)

2. Mutual agreement

3. Act of a party operating on their own share

4. An act of a third party ie bankruptcy

5. Course of dealings that illustrate severance

6. Homicide

Can a deceased person sever a will?

No, nor can notice to sever be given by a deceased person

Does divorce automatically sever a joint tenancy?

No, the Court will consider whether there is sufficient intention to sever

How is a severed joint tenancy (ie a tenancy in common equitable interest) protected?

By entering a restriction on the proprietorship register

Can tenants in common change their ownership to a joint tenancy?

Agreement of all tenants in common must be obtained and all documents filed at Land Registry

Does a Spouse have a right if they are not legal owner to the property?

They have an equitable interest but this interest must be registered at the Registry

What are examples of positive easements?

1. Right of Way

2. Right to extract water

3. Right to air

4. Right to support

5. Right to access

6. Right to run utilities

7. Right to use facilities

8. Right to storage

What are examples of negative easements?

1. Right to Light

2. Right to Air

3. Right to Support

4. Right to prevent the diversion of water

How may easements be created?

1. Creation by statute

2. Express grant or reservation

3. Implied grant or reservation

4. Prescription

What will amount to an express equitable easement?

Where the easement is expressly granted but in the wrong form such as by contract, lease or incorrect deed

What happens where an easement does not include an express covenant to maintain the easement?

1. Neither party is obliged to construct the easement

2. The dominant owner has the right to enter the servient property to construct the easement

3. Either party has the right to enter the servient land when necessary to maintain or repair the easement

4. The parties cannot claim a contribution from the other party for work carried out

How may easements be implied?

1. Easements of necessity

2. Intended easements

3. Easements under the Wheeldon v Burrows Rule

4. Easements under s62 LPA 1925

What is an Intended Easement (type of implied easement)?

1. An easement which is implied because it is ancillary to rights expressly granted; and

2. They are necessary to give effect to the effect to the manner in which the land retained or demised was intended to be used

What are the requirements for an Intended easement?

1. Parties must, at the time of the grant, have shared an intention, either express or implied, that the land demised or retained should be used for a particular purpose; and

2. Easement must be necessary to give effect to that intended use

What are the requirements for an implied easement under the rule in Wheeldon v Burrows?

1. Right must be ‘continuous and apparent (visible)’

2. Right must be necessary to the reasonable enjoyment of the property granted

3. At the grant the quasi-easement was being used by the common owner for the benefit for the part granted

4. Can only provide a grant easement

What are the requirements for an implied easement under s62 LPA 1925?

1. Right must have been exercised over land retained by the grantor

2. Right must have been appurtenant to or enjoyed with the quasi-dominant tenement

3. The right must have been enjoyed at the time of the conveyance’s completion

4. Conveyance must be of a legal estate

5. Can only provide a grant easement

How can easements be extinguished?

1. Express release

2. Implied release by abandonment of dominant owner

3. Expiration of specified period of time or purpose

4. Alteration to render the easement unnecessary

5. Loss (ie through prescription)

6. Statute

7. Merger of properties

What is the position on the transfer of the Burden and Benefit of a Covenant?

1. At Common Law - The burden will always remain with the original covenantor, even if they transfer the land

2. At Common Law - The benefit will pass with the land provided certain conditions are met

When will the benefit of a covenant pass at common law?

1. It must touch and concern the land, not the individual

2. The parties intended for it to run with the land

3. Both the covenantee and successor must hold/ have held the legal estate in the benefitting land

What can a benefitting covenantee do to pass the benefit to a third party?

They may assign the benefit to a third party provided they do so in writing and with express written notice to the covenantor

When will the benefit of a restrictive covenant pass in equity?

It must ‘touch and concern’ the land and be enforceable by the successor through:

• Annexation (ie express words or operation)

• By a chain of equitable assignments

• By building schemes

What protections are available to covenantors transferring the burden of a covenant?

1. Chain of indemnity covenants

2. Compulsory renewed covenants supported with restriction on title

3. Estate rentcharge with a right of entry (Positive only and rare)

4. Indemnity Insurance

What are the usual remedies for breach of covenants?

• Damages

• Injunctions

• Specific Performance

How may covenants be discharged?

1. Express agreement from all those entitled to benefit

2. Implied extinguishment

3. Application to Upper Tribunal (Lands Chamber)

When will the Upper Tribunal (Lands Chamber) likely discharge a covenant?

When it is obsolete or has outlived its use

When can a Covenant be enforced by the Doctrine of Mutual Benefit and Burden?

1. Benefit and burden must be contained within the same transaction

2. There must be a correlation between the imposition of the burden and the enjoyment of the benefit

3. The successor in title must have had the opportunity to take or renounce the benefit

When will a covenant pass when the relevant land is subdivided?

Only when the wording of the covenant for ‘each and every part of the land’