This article discusses the process of investigating a title in the case of an unregistered land. It explains in brief about the events that trigger a first registration, the method of investigating an unregistered title, etc.
An investigation of an unregistered land is done through:
a) An investigation of the Index Map Search at the Land Registry:
This should be made in cases where the land to be purchased is an unregistered land. An application should be made at the Land Registry Office for the area, where the land is located by submitting Form SIM along with a large scale plan of the place and the fee. A search result should reveal if the land is already registered or is subject to a caution against first registration.
b) Documents submitted in the epitome or abstract:
These documents are used to check if the root document provided is as provided by the contract. If the wrong document was supplied, the buyer can insist that the correct document should be provided. The documents should also show an unbroken chain of ownership that begins with the seller in the root document and ends with the present seller, i.e. the documents show that the title has progressed from one person to another without an apparent break. The document proves that there are no defects in the title that may adversely affect the interest of the lender or the buyer’s title.
c) Inspection of the original deeds
d) Checking for evidence of the occupiers, and
e) Pre-completion searches
Events that trigger a first registration:
When investigating the title of an unregistered land, the first thing to check for is whether a transaction has taken place that could have triggered a first registration. When looking into every document it is important to consider an answer for this question.
Method of investigation of an unregistered title
Investigating the title of a registered land is comparatively easy and all that the conveyancing solicitor is required is to study the official copies of the register. But investigating the title of an unregistered land is a different ball game, altogether. This is because a single title may be made up a several documents and records; the person investigating it will find it challenging to manage these documents. While studying the title of an unregistered land it is important that the conveyancing solicitor take a systematic approach and takes notes wherever deemed necessary.
Modern day conveyancing uses a mnemonic RLSDIES or Robert Louis Stevenson DIES. The abbreviation stands for:
a) Root of title
b) Links in the chain
c) Stamp Duties
d) Description
e) Incumbrances
f) Execution, and
g) Searches
The conveyancing solicitor should begin by understanding the history of the property and the issues that affected it over the years. The next step is to look into the title beginning with the root until the present day. After studying the root, the next step is to look into the different documents. A brief explanation of the above mentioned mnemonic is given below:
a) Root of title:
The epitome or abstract should begin with the root title. It should contain documents that form the root title. Although it is not required to produce evidence of title before the root, such an evidence may be required under the following circumstances:
When the document is executed by a solicitor, the buyer can always ask for a copy of the power of attorney irrespective of the date.
When a property is described by a reference to a plan in the pre-root document, the buyer can always ask to see the plan.
When a property is sold subject to or together with matters in a pre-root document, the buyer can ask for a copy of these matters.
b) Links in the Chains
The chain in the ownership of land should be unbroken right from the root to the present day seller. Transfer of ownership from person A to B, from B to C, and so on and so forth should be mentioned. If the legal estate to the property was transferred, there should be some form of documentary evidence (through a deed) to prove this. Change in the name of owners should also be evidenced. This usually occurs due to marriage or a legal change of name by deed or statutory declaration.
c) Stamp duties
Documents that were registered before 1st December 2003 should have complied with the requirements related to stamp duty payment. An incorrect or unstamped document is neither a good root nor does it form a good link. They cannot be produced as evidence in a civil proceeding and will not be accepted by the Land Registry on an application to register the title. The buyer must check if all the documents have been stamped properly. Payment of stamp duty can be evidenced by a stamp embossed on the top margin of the deed. When defects in the stamping are discovered, the buyer can ask the seller to rectify these defects at his expenses. A contract that specifies that the buyer should meet costs of putting stamp duty defects right can be deemed void under the Stamp Act 1891, S117. When stamp duty is not paid on time, interest and penalties are liable. The following are the issues to be discussed when considering stamp duty payment:
- Stamp duty is subject to ad valorem duty. This means that it varies according to the amount of consideration in a particular transaction. The rate of duty has changed over the years, and one should determine the stamp duty payable for a particular transaction by referring to the table of stamp duties. Properties with lower consideration had to either pay a lesser amount as stamp duty or were completely exempt from paying (if the consideration was below a certain threshold). However, such reduced rates could be claimed only by providing a certificate of value in the conveyance. The certificate was worded as under,
“It is hereby certified that the transaction hereby effected does not form part of a larger transaction or of a series of transactions in respect of which the amount or value or the aggregate amount or value of the consideration exceeds………. Pounds.”
A conveyance that does not include a certificate of value and an ad valorem stamp has not been correctly stamped.
- Stamp duty is not required to be paid on mortgages that were executed after 1971
- A gift deed executed after 30th April 1987 does not attract stamp duty, provided that it contains a certificate that the deed falls under one of the exempt categories mentioned in the Stamp Duty (Exempt Instruments) Regulations 1987. The certificates is worded as under,
“The Donor certifies that this deed falls within the category B in the Schedule to the Stamp Duty (Exempt Instruments) Regulations 1987.”
Needless to say, the category would change according to the particulars of the transaction and should be checked with the regulations.
- Power of attorneys are not liable for stamp duties
- Documents such as conveyance on the sale of freehold land, a lease for seven years or more, and documents indicating a transfer on sale of a lease of seven years or more were initially required to be produced to the Inland Revenue (now known as the HMRC) along with a form that mentioned all particulars of the documents and any consideration received. This form was kept with the Inland Revenue and was useful to assess the value of a land. The document thus received was stamped with a PD stamp. This stamp was proof of production of all relevant documents. A document that did not have the PD stamp was considered to be improperly stamped and the person who failed to do this was liable for a fine.
d) Description
The description of the property in the contract is consistent throughout the epitome and corresponds with the actual description. This is particularly important when the deed reveals that a part of the land was sold-off separately. A copy of such plans should be obtained even if it dates back to pre-root days.
e) Incumbrances
It is very important to check for incumbrances. The conveyancing solicitor should check for incumbrances in the deeds other than those disclosed by the epitome. A copy of all easements, covenants and other incumbrances should be attached in the epitome even if they date back to pre-root. They should be checked properly to ensure that no burdens have been breached and that they shall not disturb the buyer’s intended use of property. And if they are likely to affect the intended use of land, the conveyancing solicitor acting on behalf of the buyer should check if these burdens can be influenced by normal land laws. For instance, if a property is restricted by a restrictive covenant, care should be taken to check if it is registered under Class D (land charge). If it is not so, the restrictive covenant may not be binding on the purchaser.
f) Execution
The conveyancing solicitor should make sure that all deeds and documents have been executed properly.
g) Searches
The seller intending to sell his property would have undertaken search of the property when he first purchased the property. This can be attached to the epitome, to make sure that the buyer gets a complete picture of the property he intends to purchase. Although this is not essential, following the Protocol ensures that a search against a seller also must be attached. Another advantage of providing previous searches is that the buyer need not make search enquiries into aspects that have already been investigated upon. But in respect of past searches, it is important that they were done correctly. Here are a few things to look for:
- The solicitor should check that the search was made against the full name of the person and the spelling should be correct( as mentioned in the deed)
- The period of previous person’s ownership can be ascertained from the search documents. They should match with the term provided in the epitome and should be conducted for the full terms of ownership of the person.
- Was there a time lapse between the search period and the transaction? The time after the completion of search is called priority period; this should be compared with the date of the appropriate deed.
- In the case of name changes, is there a search against both old and new versions of the name?
If the above mentioned searches reveal a problem, it is likely that there could be other entries on the register that have not been revealed by the search, but they could be binding on the buyer. Hence, it is very important that the conveyancing solicitor repeats such searches so that there is zero margin of error.
Photo courtesy: Mollenborg
