Useful Transfer Clauses

Useful Transfer Clauses

The transfer deed is the document that is used to transfer legal ownership of land in England and Wales. One of the prescribed forms produced by H M Land Registry must be used. These are:

• TR1 (Transfer of whole of a single title);
• TR2 (Transfer of whole of a single title by a mortgagee in possession);
• TR5 (Transfer of a portfolio of titles)
• TP1 (Transfer of Part of a title); or
• TP2 (Transfer of Part of a title by a mortgagee in possession)

You can find our guide to completing a TR1 here. As well as containing the particulars of the transaction, such as the seller, buyer, property address and price etc the transfer deed can be used to create, impose obligations, appoint trustees etc. The place for that is panel 11 (TR1 and TR5), panel 12 (TP1 and TR2), or panel 13 (TP2). Here are some useful clauses for transfer deed:

Access Easement – Estate Roads

“The Transferor grants to the Transferees together with workmen guests and other lawful visitors for the purpose of access to and egress from the Property at all times of day and night and with or without vehicles a right of way over the Estate Roads until such time as the same are publicly adopted”

Access Easement – Private Road

When granting an easement over a private road you will usually want the grantee to be required to contribute toward the cost of repair and maintenance. Sometimes formal arrangements will be in place with a regular service charge being collected and administered by a management company, in which case the deed granting the easement should contain positive covenants as well as a means for them to be enforced against future owners, such as an estate rentcharge. Otherwise, a simple to create an obligation which can be enforced against future owners (the default position it that positive obligations cannot) is to rely on the rule in Halsall v Brizell, which says that a person cannot take the benefit of a deed (such as a deed creating an easement) without subscribing to the obligations with it. That means making the use of the right conditional on contributing to maintenance:

“The transferor grants to the Transferees and their successors in title workmen guests and other lawful visitors for the purpose of access to and egress from the Property at all times of day and night and with or without vehicles a right of way over the road coloured xxxxx on the plan annexed hereto subject to the Transferee contributing a fair proportion of the cost of maintaining and repairing the same”

Appointing a Trustee

It is sometimes necessary for a seller to appoint an additional “trustee”, for example when all but one joint owner has died and the property is held as tenants in common. For more see here. This can be done in a separate deed of appointment, but it’s usual to deal with it in the transfer deed using the following clause:

“In exercise of his/her statutory powers and in order to give a good receipt for the capital money arising on this transfer the Transferor hereby appoints [name of trustee] to be a trustee of the Property together with himself / herself”

Or if the Transferor is acting by an attorney:

In exercise of his/her statutory powers and in order to give a good receipt for the capital money arising on this transfer the Transferor acting by his/her attorney [name of attorney] hereby appoints [name of trustee] to be a trustee of the Property together with himself / herself

Covenant to Maintain Roads and Sewers Until Adoption

On the construction of a new estate, which involves building new roads and sewers, it’s often the case that the builder will seek to have them adopted by the local authority. Until adoption takes place, which is often some time after completion of the estate the builder should covenant with the property owners to maintain the roads and sewers, so that they are not liable for the cost of any work that might be required. A typical covenant reads:

“The transferor covenants with the transferee to construct the Estate Roads and Estate Sewers to an adoptable standard and to maintain the same until adoption”.

Declaration of Solvency

Where a property is transferred for less than market value there is a risk the transfer could be set aside, if the transferor becomes bankrupt with the 5 year period following the transfer and the trustee in bankruptcy/Official Receiver can show that the purpose of the transfer was to put the asset beyond the reach of the bankrupt’s creditors. In order to help mitigate that risk, the transferor should make a declaration of solvency. This is often done in the transfer deed. There is no prescribed form of words but the following should suffice:

“The Transferor confirms that as at the date hereof [he/she] is not insolvent and will not become so as a result of this transfer”

Easement for Services / Use of Service Media

When selling off part of a larger plot it’s important to ensure that the plot has the necessary rights, including rights to use any service media (sewers, water mains, gas pipes, electricity cables etc which cross under on or over the remainder of the site:

“The Transferor grants to the Transferee a the right to use any Service Media within any part of the Estate which serves the Property”

Leasehold State and Condition

“The covenants set out in section 4 of the Law of Property (Miscellaneous Provisions) Act 1994 do not extend to any breach of the of the tenant’s covenants in the lease relating to the physical state of the Property”

Indemnity Covenant

This is used where the title contains restrictive covenants and either following entry appears in the Proprietorship Register currently “The Transfer to the proprietor contains a covenant to observe and perform the covenants referred to in the Charges Register and of indemnity in respect thereof” or else new covenants were created in the transfer to the seller when they purchased. It is worded as follows:

The Transferee/s hereby covenant/s with the Transferor/s by way of indemnity only to observe and perform the covenants contained or referred to in the registers of title number and to be liable for any future breach or non-observance thereof

Reservation of a Right of Way over a Road to be Adopted

When dividing up a parcel of land into plots (as a builder does when it builds an estate and sells off the individual properties), it is sometimes necessary to reserve rights over sold off parts for the benefit of the remainder of the estate. For example if each plot includes the part of the access road fronting it and plot at the beginning of the access road is sold, the remaining plots will not be able to cross and access the public highway, unless a right is reserved for the remaining plots to do so.

“There is reserved to the Transferor for the benefit of the remainder of the Estate [“Estate” should be defined elsewhere in the deed] a right of way over the road [entering description of road by reference to the transfer plan for example the road coloured brown] on the plan with and without vehicles for the purpose of access to and egress from the Property until such time as the same is adopted.”

Reservation of Right of Way over a Private Road

When dividing up a parcel of land into plots (as a builder does when it builds an estate and sells off the individual properties), it is sometimes necessary to reserve rights over sold off parts for the benefit of the remainder of the estate. For example if each plot includes the part of the access road fronting it and plot at the beginning of the access road is sold, the remaining plots will not be able to cross and access the public highway, unless a right is reserved for the remaining plots to do so. Where the road is private it is a good idea to include an obligation to contribute to repair, as a condition of use of the road.

“There is reserved to the Transferor for the benefit of the remainder of the Estate [“Estate” should be defined elsewhere in the deed] a right of way over the road [entering description of road by reference to the transfer plan for example the road coloured brown] on the plan with and without vehicles for the purpose of access to and egress from the Property subject to the Transferor and successors in title contributing a fair proportion according to user of the cost of maintaining and repairing the same.”

Sale via Attorney – Confirmation Donor has a Beneficial Interest

Where there is more than one registered proprietor, and one or more of them wishes to act via their attorney, they can so long as the donor of the power has a beneficial interest in the land (s1(1) Trustee Delegation Act 1999). As evidence of the beneficial interest, H M Land Registry require a statement from the attorney. It doesn’t have to be contained in the transfer deed but this is usually the most convenient option. HMLR suggest the following wording:

“(Name of attorney) confirms that (donor of the power) has a beneficial interest in the Property as at the date of this transfer”