Deducing Title To Unregistered Land

Under the Land Registration Act 2002 (which repealed the Land Registration Act 1925) it is compulsory for all land in England and Wales to be registered with the Land Registry. The trigger for registration is a change of ownership, such as a sale, gift or assent, or a mortgage or long lease. Once land is registered it will be added to the Land Registry's electronic register and this will be how the owner proves ownership. Until then, the paper title deeds are required.

Although the Land Registration Act 1925 introduced compulsory registration, it was not brought fully into force immediately. Different areas of the country became compulsory at different times and certain types of transaction, such as assents (a transfer to a beneficiary under a will) and mortgages were not caught. It wasn't until the 1990s that all areas and all transactions were subject to compulsory registration and as a result there is still a lot of unregistered land left.

Importance of Title Deeds

The importance of the title deeds in unregistered land cannot be over stressed. They are the owner's only proof of ownership and without them he will not be able sell or otherwise deal with the property. Whilst it is possible to reconstitute the title following the loss of deeds this is expensive, difficult and without any guarantee of success. At best the owner will acquire possessory title only, which is subject to challenge. The benefit of rights which make be crucial to the enjoyment of the property may be lost. Deeds must therefore be kept in a safe place, preferably with a bank or firm of solicitors. Better still, the land should be registered with the Land Registry. This can be done voluntarily even where no transaction takes place.

A Warning on DIY Conveyancing of Unregistered Land

The purpose of this guide is to explain how to carry out the conveyancing process when dealing with a sale of unregistered land, including deducing title, preparing an epitome, dealing with enquiries etc. Could a non-conveyancer use this guide to do his own conveyancing? In theory yes, but we would strongly advise against it. Unregistered title can be very complex and even experienced professional conveyancers sometimes have difficulty in interpreting it. None of the usual safeguards that exist where the title is registered apply. Whilst we intend to make this guide as comprehensive as possible it would be impossible to cover every single nuance and risk. Remember that if a conveyancer makes a mistake when acting on your behalf and you suffer loss he will be liable to you and has insurance to cover that liability. As an individual you cannot insure against the risk of a mistake. For more information on the risks of DIY Conveyancing take a look at DIY Conveyancing – know the risks.

Obtaining the Title Deeds and Redemption Statement

The first thing to do is to obtain the title deeds. As the land is unregistered it is the paper title deeds which prove ownership and they will be required in order to check the seller's title and prove title to the buyer. If the property is mortgaged, the deeds will be with the mortgage lender and will need to be requested in writing. The lender will expect an undertaking from the recipient to hold them to its order and return them on demand. It is highly unlikely that a lender will release title deeds for unregistered land to someone other than a solicitor or licensed conveyancer, making DIY conveyancing for the sale of mortgaged unregistered land impossible. If the land is not mortgaged then the deeds should be with the property owner or possibly in storage with a solicitor or bank.

A redemption statement should be obtained at this point in respect of any mortgages on the property. It will be for budgeting purposes at this stage, to check whether it is likely that the proceeds of sale will be sufficient to repay the debt secured against the property and the costs of sale (i.e. estate agency fees and legal fees).

Checking the Title and Preparing the Epitome

Establishing the Root of Title

Once you have the deeds, it is time to check the title and prepare the “epitome of title” for the buyer. First, it is necessary to establish the “root of title”. This means identifying a deed (such as a mortgage, transfer or conveyance) to use to commence the chain of ownership which will end with the current owner. The law says that a “good root” should be at least 15 years old. In addition it is a good idea to avoid using a gift or an assent. There are two reasons for this. First, it is likely that the title will not have been fully investigated by the donee/beneficiary (because he is not parting with any money in exchange for the land) and second, as the transfer/assent is for no consideration (no money) certain interests which would have been overreached on a sale will not be overreached where the transfer is not for value.

Unbroken Chain of Ownership

Once the root is established, it is then necessary to show an unbroken chain of ownership from the root to the seller. This means looking at who the transferee was in the root conveyance and if it was not the seller, finding the deed by which the transferee parted with possession. This might be another conveyance or a deed of gift or assent. This process is repeated until the deed under which the sellers acquired the property is reached.

Deceased Proprietors and Former Proprietors

Sometimes, inevitably, one or more of the previous owners will have died whilst they owned the property, for example the sale might be by the personal representatives of the owner or by the survivor of joint owners. Where this happens it is necessary to show how the deceased's legal interest in the title has been dealt with. There are three possible scenarios.

The first scenario is where the property was acquired by one person only and that person dies. Where this is the case the legal title passes to the deceased's personal representatives (i.e. his executors if he left a will or his administrators if he did not). They would have either sold the property or assented it to a beneficiary or beneficiaries therefore as part of the chain of ownership there will a conveyance or assent by the personal representatives of the deceased. In this case, the grant of probate (or letters of administration as the case may be) must be produced as part of the chain of ownership. It is not necessary to see the will and the grant will confirm the death of the proprietor so there is no need to see the death certificate either. Of course, if the most recent owner has died and the property is now being sold by his personal representatives then the chain of ownership will end with the grant of representation.

The second scenario applies where there are joint owners who hold the property as tenants in common and one of them dies. Tenants in common hold the beneficial interest in the property (effectively the net value after payment of secured debts and the right to occupy it and receive any rents and profits) in defined shares, which may or may not be equal, however the legal title must still be held as joint tenants. This is because the under s1(6) Law of Property Act 1925 the law does not recognise a tenancy n common of a legal estate. It will state in the conveyance to the joint owners whether they hold the property as tenants in common or as joint tenants, look for words similar to “to hold the same on trust for each other as beneficial joint tenants in equity” (joint tenants) or “to hold the same as tenants in common”. It specifies the shares but this is not important for this topic.

Where the joint owners held as tenants in common and the first proprietor dies, his beneficial interest passes to his personal representatives however his legal interest passes to the survivor (because the legal estate is always held as joint tenants). This means that the survivor holds the property on trust for himself and the deceased's estate. Since the legal title does not pass to the deceased's personal representatives, it follows that the personal representatives cannot take the place of the deceased by signing the Conveyance when the property is sold. The survivor, being now the sole legal owner, can transfer the property on his own however a buyer should not accept this since overreaching will not operate. The principle of overreaching is that, on a transfer where capital money arises, if the money is paid to two trustees any beneficial interests detach from the property and attach to the capital money. In other words, if the sale is by two or more people a buyer need not worry about the interests behind any trust, such as the interest of the deceased proprietor's estate, because that interest no longer binds the property and instead, if the estate does not receive its share it would claim against the sellers. If a sole surviving joint tenant sells alone however then overreaching does not operate and the buyer will be subject to the interests behind the trust, meaning the personal representatives of the deceased proprietor could claim a share in the property.

To get around the problem the survivor, when selling the property, should appoint another trustee to receive the sale proceeds. That trustee would be appointed in and would sign the Conveyance to the buyer. The trustee then becomes liable together with the survivor for ensuring the appropriate share of the proceeds is paid to the deceased's estate. For this reason it will often be the personal representatives (or one of them if more than one) who are appointed buy it does not need to be.

 Note that if as part of the chain of ownership there has been a sale by a sole surviving tenant in common acting alone, but subsequently there has been a sale by two or more people (including a sale where a second trustee is appointed to effect overreaching) then a future buyer need not worry about the interests that were not overreached on the sole survivor sale as they will have been overreached on the subsequent sale.

If the last surviving tenant in common dies before the property is sold then the sale would need to be by his personal representatives (as the legal title would then pass to them) who would need to appoint another trustee to overreach the interests of the estate of the deceased first proprietor.

 Where tenants in common other than the last surviving tenant in common have died the deceased's death certificate must be produced as part of the chain of ownership. In respect of the last tenant in common to die, the grant of representation will need to be produced as evidence of the right of the personal representatives to sell.

 The final scenario is where the property is hold as joint tenants. This is much simpler. Joint tenants are said to own the whole of the legal and beneficial estates on trust for each other equally in undivided shares, almost as if they were a single legal entity. So, when one dies the whole of the legal title but also the whole of the beneficial title passes to the survivor(s). When only one remains he is solely entitled to the legal and beneficial estates as though he bought the property originally in his sole name. To show the chain of ownership here, the seller need produce the death certificates of all but the last joint tenant to die and the grant of representation for the last joint tenant.

 Mortgages

The deeds need to be checked for any mortgages taken out by the current or former owners (as far back as the purchasers in the root conveyance). Any that are found will need to be produced to the buyer. You will need to check whether they are properly “vacated”. When a mortgage of unregistered land is paid off the lender should add a note to the mortgage deed itself to confirm that the debt has been repaid and it should be signed and/or sealed by the lender. This is known as a “vacating receipt”.

Hopefully all but the seller's current mortgage will be vacated. If any mortgages relating to previous owners are not vacated they may still be binding on the land therefore enquiries must be made of the lender and if it is established that no debt is outstanding, the lender must be asked to seal the deed and return it. This will need to be resolved prior to exchange of contracts.

If a deed relating to a mortgage taken out by the seller is not sealed, check with the lender to see if there is any money outstanding. If not, send it for sealing now, otherwise obtain a redemption statement and ensure the debt is paid from the sale proceeds on completion and that the deed is sent for sealing on completion.

Checking documents are signed, stamped and original

You must check that all of the documents that form the chain of ownership are originals or, as a minimum, examined abstracts. An examined abstract is a copy prepared by a solicitor based on the original deed, whereby the solicitor will have extracted all of the relevant information so as to create a shorter document. Where you are relying on an examined abstract it must be the original examined abstract.

With the exception of any death certificates and grants of representation you must check that each document is properly executed (signed by the parties and witnessed) and unless it is a deed of gift, that it is stamped by the Inland Revenue (the forerunner of HMRC) to say that the appropriate duty has been paid. This stamp will usually appear at the top of the front page. Non-original documents or documents which are not properly executed or stamped may be rejected by the Land Registry and consequently, a buyer will not be willing to accept the title. If you are doing your own conveyancing and find such an issue you should seek the advice of a solicitor rather than attempting to resolve it yourself.

Pre-root Documents

Once you have put together the documents that form the chain of ownership, you should read them to check for references to earlier deeds that are expressed to contain rights, covenants or other obligations. The deeds pack should be checked to find these “pre-root” deeds which will also need to be sent to the purchaser. You may find that when read the pre-root deed itself, it will refer back to an even earlier deed, in which case you should include this also. You will need to repeat this process until you get to a deed which does not refer back to an earlier one.

Where pre-root documents (i.e. documents that do not form part of your chain of ownership because they are earlier that the root document you have chosen) are missing, this will not affect your right to be registered as the owner (or your purchaser's right to be registered) however on registration the Land Registry will be obliged to enter a protective entry in the Charges Register giving notice that the title is subject to any rights or covenants contained in the missing document. This means that if the document can ever be produced the obligations contained in it will be enforceable. As a consequence the buyer is likely to ask for an indemnity insurance policy to be provided at the seller's expense on completion. Indemnity insurance policies can only be arranged by solicitors or licensed conveyancers.

Plan for registration purposes

Although a plan will not always be essential, for example if the property is clearly identifiable on the ordnance survey map and has clearly defined boundaries (an example is a terraced house in a row of terraces), the buyer will usually ask for one. Furthermore, if the property is not clearly identifiable then a plan is essential.

To satisfy Land Registry requirements the plan will need to be to a reasonable scale (usually 1:2500 or 1:5000), contain a north point and be sufficient for the Land Registry to identify the property from the ordnance survey map. There will usually be a suitable plan in one of the conveyances in the deeds. If so you should include the whole conveyance in the pack to send to the buyer. If there is no plan in the deeds you have a couple of options. You can have a plan drawn up professionally by a draughtsman or you may be able to find a nearby property which is registered, in which case you can order a copy of title plan for that property, find your own and outline it.

Obviously any plan used must accurately reflect the position on the ground. Once an application for registration is made the Land Registry may want to inspect the land to check that the plan is accurate.

Land charges searches

The seller should carry out and supply to the buyer the results of searches of the land charges register. They should cover all owners and personal representatives from the purchasers under the root conveyance onward to the current sellers. Each person should be search against for the period in which they owned the property. In the case of a deceased proprietor you should search up to the date on which their personal representatives conveyed their interest (i.e. not just to the date of death). In the case of personal representatives you should search from the date of death of the owner they represented to the date they conveyed the interest. For more information on land charges searches see “land charges searches”.

Index Map Search

In order to ensure that no part of the land you are selling has already been registered with the Land Registry you will need to carry out an index map search. This will also reveal any cautions against first registration, which are lodged by someone who believes he has an interest in the land in order that he is informed by Land Registry when an attempt is made to register it.

The search can be done in two ways. Where the property is clearly identifiable from its address then an address search can be carried out. If it is not however then a plan will need to be supplied outlining the extent of the land you wish to search. An index map search can be ordered from our sister site, Land Registry Documents.co.uk.

Preparing the epitome

Now that you have gathered together all of your title documents, land charges search results and index map search result it is time to prepare the “epitome (pronounced eh-pit-oh-mi) of title”. This is a list of documents which you are sending to the buyer. Starting with the root document, list the documents that form the chain of ownership, including any land charges searches and index map search, in date order up to and including the most recent document. Use the following format:

Date of document       Type           Parties          Original to be handed over on completion?

The parties are, for example, the transferor and the transferee, or borrower and lender. For a death certificate or grant of representation the deceased should be entered here and for the land charges search result just use the search number. For the index map search “parties” can be left blank. A precedent epitome of title can be purchased by clicking the link.

It is necessary to indicate whether the original will be handed over on completion and if not, what will be supplied in its place? Remember that as a minimum the buyer will need a solicitor certified copy of any document or examined abstract. It is not permitted for the seller to retain the title deed after completion where he is not retaining an interest in the land to which they relate.

If you are a seller doing your own conveyancing and the buyer is represented by a solicitor, you will need to send the original deeds to the buyer's solicitor at this stage because the he cannot rely on an undertaking from you to send them on completion. You should either send them by special delivery or courier, or hand deliver them.

Transfers of Part

Sometimes the sale will involve only part of the land in the title. This might happen where, for example, the title includes a plot of land on which an additional house is built so as to be sold off. Where the seller is retaining some of the land in the title he will obviously need to retain the deeds to it. The best way to proceed is probably to register the whole of the land voluntarily in the seller's name and then do the transfer. This will make the conveyancing process much simpler and will mean that the buyer is much more likely to accept the seller's title.

If the seller chooses not to register the land in advance however then rather than handing over the deeds to the whole title, he will need to supply certified copies or examined abstracts on completion and on the original deed out of which the title is granted to the buyer (i.e. the conveyance in favour of the seller) he will need to attach a memorandum of sale off. This is a note to say that part of the land in the title has been sold off and is no longer included in the seller's title. This note should adequately describe the extent of the land sold and should make reference to a plan, or to the transfer to the buyer of the sold land.