The new land registration application form includes some new questions. One which has caused a little uncertainty is the question on title examination, which reads: “Has there been any limitation or restriction on the examination of title?”
Understandably, pending guidance from the keeper, some firms have taken a cautious approach since, on a literal reading, even a lack of site visit would be a “restriction” (albeit a usual one). In the interim, many firms have simply answered “usual restrictions”, which has been acceptable.
This article seeks to clarify the intention behind the question and how to answer it. The keeper is also updating guidance accordingly.
1. Why is the question asked?
The purpose of the question is to establish whether or not there has been a normal examination of title, in terms of a reasonable solicitor’s usual standard of care for that type of transaction.
This matters because under s 21(2) of the 2012 Act, the keeper can only register a deed where she is satisfied that at the date of application the general and specific registration application conditions are met. One of the key conditions of registration is that the deed is “valid”.
The keeper does not expect solicitors to underwrite or guarantee good title. However, the keeper’s registration processes are based on the submitting solicitor having completed the usual examination of title for the type of transaction involved. Where a usual examination has not been done (for whatever reason), the keeper needs to know as it will affect the keeper’s judgment of whether the deed is likely to be valid, and what actions the keeper will take on receipt of the application.
2. What do you mean by “usual examination of title... for that type of transaction”?
The concept of a “usual” title examination is flexible. For example, typically a solicitor acting for a seller will do very little, if any, title examination because of the caveat emptor (buyer beware) principle. On the other hand, a solicitor acting for a purchaser (or lender) will undertake an examination of title and will normally seek answers to a number of questions which may vary depending on factors such as the type of transaction or property involved.
It remains a matter for the solicitor to determine the appropriate level of title examination for the type of transaction. Solicitors acting for the purchasers of residential property which is a “transfer of whole” would typically adopt a lower level of due diligence than, say, solicitors acting for the purchasers of an unregistered brownfield site in an urban area for development purposes.
3. When should the answer be qualified?
There is no need to disclose (a) restrictions or limitations which are standard to the type of transaction in the application, or (b) those which could not affect validity of the deed.
Since the question on the form is principally concerned with establishing that the granter should be able to grant the deed, other points which might otherwise be covered by due diligence and be relevant for land registration (such as outstanding heritable securities, title conditions, Register of Inhibitions searches etc) are not relevant to this question, and indeed are largely covered by other specific questions on the form. It is the bigger picture that matters.
For the same reason, the keeper does not need to know that the title examination was actually carried out by another solicitor who then certified title to the applicant. This is because the risk and likelihood of the deed being valid is the same either way. Therefore, while a qualification would be permitted and should not be problematic, there is strictly speaking no need for one.
4. What circumstances might require disclosure?
On the other hand, in some cases clients may give a specific instruction to their solicitor, or agree in the circumstances, to materially limit the examination of title that would otherwise normally be done. Examples include an “execution only” instruction or where a sampling exercise has been carried out in relation to the transfer of a large property portfolio. This is the type of scenario this question is intended to cover, and any limitation or restriction of this nature should be disclosed in response to this question.
5 Will a qualification result in a rejection?
A qualification on the form will not, in itself, lead to an automatic rejection of the application. It will, however, influence how the keeper processes the case, and may indirectly lead to rejection if the keeper discovers something fatal to the validity of the deed which the solicitors would have discovered themselves had they been instructed to carry out a normal examination. The qualification may also impact on the warranty given to the applicant.
6. My clients are instructing me not to examine title. What should I advise them?
If your client instructs you not to examine title, or to carry out such a restricted examination that it is no longer the norm and impacts on the likelihood of the deed being valid, you should advise your client of the legal and commercial risks linked to rejection and/or warranty restriction before qualifying the form and submitting the application.
Getting it right first time
As you may be aware, RoS has introduced a new checklist to accompany applications that have been rejected at the pre-intake stage. You can now see which rejection reasons your application has failed under, as well as other common reasons that you will need to be aware of before you re-submit.
We have also launched a dedicated helpline to help you understand why you’ve received a rejection, and how to avoid it in future. Call 0800 169 9391.Many rejection reasons are simple and easily fixed. Before you send an application, we recommend that you double check that you have:
- signed the form;
- included payment for registration;
- paid any land and buildings transaction
- tax that is due;
- included or provided reference to all the relevant deeds;
- ensured that the application form relates
- to this type of deed;
- included an appropriate plan of the property;
- referenced any servitudes and burdens in the application form.
You can find a more detailed checklist at ros.gov.uk/services/submit-an-application
Law firm performance update
- 397 firms had a less than 5% rejection rate
- 181 firms had a rejection rate between 5 and 10%
- 228 firms had a rejection rate in excess of 10%
- 82% of land register applications were submitted by firms with a rejection rate of 10% or less
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