Title investigation

Title is normally deduced before exchange of contracts. Contracts now routinely prohibit any objection to or requisition on title after exchange of contracts, unless it relates to a matter revealed by a pre-completion search.

Both the Standard Conditions of Sale and the Standard Commercial Property Conditions of Sale require the seller to provide official copies of the register entries to the buyer. However the parties may agree that the buyer will obtain official copies. The register is open to public inspection and electronic copies can be obtained direct from the Land Registry or through the National Land Information Service within minutes. Since the Land Registration Act 2002 (LRA 2002) came into force on 13 October 2003 land and charge certificates have no purpose or evidential value

Registered title

The buyer’s solicitor must check:

• that the property is correctly described in the Property Register, and shown on the title plan

• for leasehold:

• • the details of the lease as set out in the Property Register match those in the contract and/or the copy lease, and

  • no deeds of variation or other supplemental documents referred to on the Register have been missed in the contract (or, if any are noted on the Register, that the buyer has received a copy of them)

• any other entries in the Property Register, which may include rights benefiting the property, party wall declarations, and similar matters

• the class of title. Generally, the buyer will require absolute title. Where title is qualified, possessory or good leasehold, insurance may be available or the buyer may be prepared to accept a lesser quality of title

• the seller is the sole proprietor of the property. If there are joint registered proprietors, the others will need to join in the contract as seller. If the registered proprietor is somebody other than the seller, then the buyer must be satisfied that the seller can in fact sell the property (eg he has taken a transfer of the property from the registered proprietor, or a transfer on first registration from the previous owner, and that transfer is in the course of registration at the Land Registry)

• there are no restrictions, nor any cautions or inhibitions registered before the LRA 2002 came into force, in the Proprietorship Register (or, if there are, that they will be removed at or before completion)

• any entries in the Charges Register, such as mortgages, notices, restrictive covenants, easements and other matters which the property is subject to (in the case of a mortgage, the contract should provide for this to be removed on or prior to completion

• any entries on the title which the buyer will be required to indemnify the seller against, and any indemnity covenants or other personal covenants given by the seller on completion of his purchase

Unregistered title

The buyer’s solicitor must check:

• that a conveyance on sale from at least 15 years earlier or another good root of title, has been provided

• the epitome of title shows a complete chain of title from the good root of title up to and including the seller

• the seller is the sole owner of the property under the last document in the chain of title (if this document shows the seller acquiring the property jointly with another person or persons, then unless there is evidence of the death of that person or persons, he/they will need to join in the contract)

• any memoranda endorsed on the documents (relating to sales off and other relevant transactions)

• the correct amount of Stamp Duty has been paid on each document in the chain of title and, if appropriate, that a 'Particulars Delivered' stamp has been endorsed on each of them

• any mortgages have been repaid and released

• where there have been sales of part, that an acknowledgement for production of documents relating to the whole title has been given

• any provisions contained in each of the documents in the epitome, in particular restrictive covenants, rights benefiting the property and rights burdening the property

• that any plans attached to the documents in the chain of title show the property correctly (or include the property, where there are sales of part)

• that no transaction has been carried out since the area became one of compulsory registration which would have required the property to be registered at the Land Registry. If any such transaction has been carried out, the seller should be required to register his title before completion

On a sale of part, where the seller will retain the original documents of title, the solicitor should mark each document in the epitome as having been examined against the original, adding the date and the name of the firm doing the examining. An epitome of title which has been examined against the originals, then itself becomes an original document of title and may incorporate a copy of a previously examined abstract or epitome of title.

Dealing with problems

Any problems (or missing items) revealed by the buyer’s investigation of title must be raised by the buyer as requisitions on title or additional enquiries before contract (where the investigations are carried out prior to exchange of contracts). Clearly the buyer must be satisfied on all these points, and any changes that may be required to the contract need to be agreed before contracts can be exchanged.

Where contracts are exchanged before title is deduced, the seller must be extremely careful to ensure that there are no technical difficulties with his title, and that any such are properly reflected in the contract. This is why it is preferable from the seller’s point of view (as well as the buyer’s) for title to be deduced and investigated before exchange of contracts.

Title matters between exchange and completion

Where title has been deduced and fully investigated before exchange of contracts, the only title matters to be dealt with after exchange of contracts are pre-completion searches and, in the case of unregistered land, the checking of the original deeds against the copies provided.

In the rare cases where title is not deduced and investigated before exchange, the seller will deduce title on (or immediately after) exchange and the buyer will then investigate the title, raising requisitions in relation to any matters that are not clear or not satisfactory, in the same way as would have been before exchange (but without the ability to alter the contract where necessary to reflect matters revealed by investigation of the title).