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Transfer deed and deed of assignment

Transfer deed and deed of assignmentLegal title for a property should always be transferred by a deed, irrespective of the fact that transaction is an assignment of lease, or sale of freehold. The following discusses about the provisions related to the transfer of an assignment.

When the transfer relates to an assignment, it is called deed of assignment. It has the same effect and function as that of a transfer deed.

When an existing lease is assigned, irrespective of the years left for the lease to complete its term, the prescribed form under the Land Registration Rules 2003, viz. form TR1 is used. This form is also used for the transfer of a freehold title.

When the transfer is for an unregistered property, assignments of more than seven years have to endure a compulsory first registration. Form TR1 is used for this purpose. An alternative to this is using the deed of assignment. It is used in the case of assignments that are for seven years or less. The assignment of such leases however does not lead to first registration. However, in most cases Form TR1 is used.

Following are the points to be considered when drafting a deed for assignment. These points are in addition to the ones that apply in a transfer deed (the same points apply for both).

Covenants for title

When a seller sells his property with full or limited title guarantee, he has to ensure that all repair works related to the property are undertaken. He is in breach of this covenant when he has not carried out repair works and could also be liable to the buyer after completion. However, there also exists the principle of Caveat Emptor, thereby maintaining that the buyer should examine the physical state of the property. The seller need not make any promises in this regard.

As can be seen here, there is a conflict of interest in this regard. This can be modified by excluding references to the repair. A contractual condition of this type should be shown by an express modification of the covenants in the transfer deed. A suggested form of wording is as follows;

The covenants for title implied by s4 of the Law of Property (Miscellaneous Provisions) Act 1994 shall not be deemed to imply that any of the covenants contained in the lease on the part of the tenant for repair or decoration have been performed.

These wordings can be inserted in the space provided in Box no. 9 or in Box no.11


With respect to leases that were made before 1st of January 1996, an indemnity covenant should be made. This is however not applicable in the case of an unregistered land where value is not provided by the buyer for the transaction. When the value is provided, the indemnity covenant can be inserted as a separate clause.

As for leases made after 1st January 1996 the seller is usually released from future liability on assignment and hence need not sign an indemnity. He however, remains liable if an AGA has been signed, thereby causing an express indemnity covenant to be added in the deed. This is however not implied.

Photo courtesy: Adam Burt



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