Learning Outcomes
After studying this article, you will be able to identify and explain the main types of notices affecting title to land, distinguish between registered and unregistered land in the context of title investigation, and apply the rules for protecting and discovering third-party interests. You will also understand the implications of notices, restrictive covenants, and entries on the register for buyers and lenders in property transactions.
SQE1 Syllabus
For SQE1, you are required to understand the investigation of title and the legal implications of notices in both registered and unregistered land. Focus your revision on:
- the process of investigating title in registered and unregistered land
- the function and effect of notices, cautions, and restrictions on the register
- how third-party interests are protected and discovered
- the implications of restrictive covenants and indemnity covenants
- the consequences of failing to identify or address notices during conveyancing
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
- What is the purpose of a unilateral notice on the register of title?
- How does a restrictive covenant bind a buyer in registered land?
- What is the effect of a caution against first registration in unregistered land?
- Why is it important to identify indemnity covenants during title investigation?
Introduction
When acting in a property transaction, you must ensure that your client receives a good and marketable title. This requires a thorough investigation of title, which includes identifying any notices, restrictions, or entries that may affect the property. Notices are a key mechanism for protecting third-party interests and can have significant legal and practical consequences for buyers, sellers, and lenders.
Investigating Title: Registered and Unregistered Land
The approach to investigating title depends on whether the land is registered or unregistered.
Registered Land
For registered land, the Land Registry maintains a central register divided into three main parts:
- Property Register: Describes the property and any rights benefiting it.
- Proprietorship Register: Identifies the registered owner and any restrictions on their power to deal with the land.
- Charges Register: Lists burdens affecting the land, such as mortgages, restrictive covenants, and notices of third-party interests.
You must review all three registers to identify any entries that could affect your client’s intended use or enjoyment of the property.
Key Term: notice (registered land)
An entry on the register protecting the priority of a third-party interest affecting the land, such as a lease, option, or restrictive covenant.
Unregistered Land
For unregistered land, title is proved by a chain of deeds (the epitome of title) going back at least 15 years to a good root of title. You must check for:
- An unbroken chain of ownership
- Proper execution and stamping of deeds
- Registration of any land charges (such as restrictive covenants or estate contracts) against the correct names at the Land Charges Department
- Any cautions against first registration
Key Term: caution against first registration
An entry made by someone claiming an interest in unregistered land, requiring the Land Registry to notify them if an application for first registration is made.
Types of Notices and Their Implications
Notices are used to protect a wide range of interests in land. Understanding their function and effect is essential for SQE1.
Agreed and Unilateral Notices
There are two main types of notice in registered land:
Key Term: agreed notice
A notice entered on the register with the consent of the registered proprietor or where the Land Registry is satisfied as to the validity of the interest.Key Term: unilateral notice
A notice entered on the register without the proprietor’s consent, usually by a third party claiming an interest. The registered proprietor can apply to cancel it, requiring the claimant to prove their interest.
Cautions
Cautions are relevant in unregistered land and in the context of first registration.
- A caution against first registration protects a third party’s claimed interest in unregistered land.
- The cautioner is notified if an application for first registration is made, giving them an opportunity to object.
Restrictions
Key Term: restriction
An entry in the proprietorship register limiting the registered proprietor’s ability to deal with the land, often to protect the interests of beneficiaries, lenders, or co-owners.
Restrictive Covenants
Key Term: restrictive covenant
A promise restricting the use of land, enforceable against successors in title if properly protected (e.g., by notice in registered land or as a land charge in unregistered land).
Indemnity Covenants
Key Term: indemnity covenant
A promise by the buyer to indemnify the seller against liability for breaches of covenants affecting the property, especially positive covenants that do not automatically bind successors.
Practical Steps in Title Investigation
When investigating title, you must:
- Obtain and review official copies of the register (registered land) or the epitome of title (unregistered land).
- Identify all notices, restrictions, and entries affecting the property.
- Check for any restrictive covenants, easements, or third-party rights.
- Ensure that any positive covenants are backed by an indemnity covenant if required.
- Advise your client on the implications of any entries found.
Worked Example 1.1
A buyer’s solicitor reviews the charges register and finds a unilateral notice protecting an option to purchase in favour of a third party. What should the solicitor do?
Answer: The solicitor should ask the seller’s solicitor for details of the interest protected by the notice. If the interest is still valid, the buyer will take subject to it. If not, the seller should arrange for the notice to be cancelled before exchange.
Worked Example 1.2
You are acting for a buyer of unregistered land. The epitome of title refers to a restrictive covenant imposed in 1980 but there is no evidence of registration as a land charge. Will the buyer be bound?
Answer: No. In unregistered land, a post-1925 restrictive covenant must be registered as a Class D(ii) land charge against the correct name. If it is not registered, it will not bind a purchaser for value.
Consequences of Overlooking Notices
Failing to identify or address notices can result in:
- The buyer being bound by third-party rights (e.g., leases, options, covenants)
- Title defects affecting marketability and value
- Lender refusing to advance funds
- Potential litigation or enforcement action
Exam Warning
Failing to check the details of a unilateral notice or restrictive covenant can leave your client exposed to enforcement or loss of value. Always raise enquiries and ensure problematic entries are dealt with before exchange.
Pre-Contract Enquiries and Searches
In addition to reviewing the register or deeds, you must raise pre-contract enquiries and conduct relevant searches to discover:
- Undisclosed occupiers or rights
- Planning permissions or enforcement notices
- Environmental risks
- Local land charges
Accurate replies to enquiries are essential. Misleading answers can result in claims for misrepresentation.
Revision Tip
Always check that all notices and restrictions have been properly dealt with before advising your client to exchange contracts.
Key Point Checklist
This article has covered the following key knowledge points:
- The process of investigating title in registered and unregistered land.
- The function and effect of notices, cautions, and restrictions on the register.
- How restrictive covenants and indemnity covenants affect buyers.
- The consequences of failing to address notices during conveyancing.
- The importance of raising pre-contract enquiries and conducting searches.
Key Terms and Concepts
- notice (registered land)
- caution against first registration
- agreed notice
- unilateral notice
- restriction
- restrictive covenant
- indemnity covenant