Investigation of title - Purpose and process of reporting to...

Learning Outcomes

This article explains the purpose and main steps of investigating title in property transactions, distinguishes between investigating registered and unregistered title, identifies common title defects and encumbrances, and describes the process and objectives of reporting findings to the client. It covers interests that override registration, occupiers’ rights and co-ownership (including overreaching and Form A restrictions); interpretation of official copies, notices and restrictions, and the effect of filed documents and plans on title; searches and pre-completion checks (including OS1/OS2 priority searches and bankruptcy/company checks); solutions to defects (special conditions, statutory declarations, indemnity insurance, and s84 LPA applications) and regulatory constraints on arranging insurance; and the structure of a comprehensive client report, including lender reporting (Certificate of Title), risk at exchange, insurance, and practical recommendations, with application to SQE1-style scenarios and MCQs.

SQE1 Syllabus

For SQE1, you are required to understand the investigation of title and the process of reporting to the client in property transactions, with a focus on the following syllabus points:

• the purpose and main steps of investigating title in both registered and unregistered land
• how to identify and assess encumbrances, defects, and third-party interests
• the process of raising requisitions and resolving issues before exchange
• the structure and objectives of a client report following title investigation
• how to communicate risks and recommendations clearly to the client
• interests that override registration and the significance of occupiers’ rights
• the role of notices and restrictions on the register and their practical implications
• pre-contract and pre-completion searches, priority periods, and final checks
• co-ownership, overreaching, and occupiers’ confirmations
• lender reporting requirements and regulatory considerations for indemnity insurance

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.

1. What is the main objective of investigating title in a property transaction?
2. Name two key differences between investigating registered and unregistered title.
3. What is an encumbrance, and why must it be reported to the client?
4. What are the essential elements that should be included in a report to the client after investigating title?

Introduction

Investigating title is a core step in any property transaction. The solicitor must check that the seller can transfer what they have agreed to sell and that the buyer will not inherit unexpected risks or liabilities. This process is essential for protecting the client’s interests and ensuring compliance with the principle of caveat emptor. It also underpins the drafting and negotiation of the contract: because standard conditions typically preclude raising requisitions on title after exchange, all material issues should be identified and resolved before the parties become bound.

Purpose of Title Investigation

The main purpose of investigating title is to confirm that the seller has the right to sell the property and to identify any issues that could affect the buyer’s use, enjoyment, or value of the property. This includes checking for defects, encumbrances, and third-party interests. Practically, investigation informs:

• how the contract should be drafted (including specified incumbrances and any special conditions)
• what further evidence or documentation is needed (e.g., consents, releases, or statutory declarations)
• what solutions are available if problems cannot be cured (e.g., indemnity insurance or price negotiation)
• what advice and warnings go into the client report, including whether the transaction remains suitable for the client’s intended purpose

Key Term: caveat emptor
The legal principle meaning "let the buyer beware." The buyer is responsible for investigating the property’s title and condition before committing to purchase.

Registered vs Unregistered Title

The approach to investigating title depends on whether the property is registered or unregistered.

Key Term: registered title
Title to land recorded at HM Land Registry, with ownership and most interests shown on the register.

Key Term: unregistered title
Title to land not recorded at HM Land Registry, proved by a chain of title deeds and documents.

Registered Title

For registered land, the seller’s solicitor provides official copies of the register and title plan. The buyer’s solicitor checks these documents for:

• the identity of the registered proprietor
• the class of title (e.g., absolute, possessory, qualified, good leasehold)
• entries in the property, proprietorship, and charges registers (including mortgages, covenants, easements, restrictions, and notices)
• any discrepancies or defects, and the existence of filed documents referred to in the register (which should be obtained and reviewed)

The three registers serve different functions:

• Property register: description of the land (address and plan reference), tenure, and rights benefiting the land (easements and similar rights). Check that ancillary rights are sufficient (e.g., vehicular access “at all times” if the client needs it).
• Proprietorship register: identity and address(es) of the current proprietor(s), class of title, and restrictions affecting dispositions (including co-ownership Form A restrictions and other consent requirements).
• Charges register: adverse matters burdening the title, such as restrictive covenants, leases, easements burdening the land, and charges/mortgages.

Key Term: unilateral notice
An entry protecting the priority of a third-party interest without the registered proprietor’s consent. It alerts buyers to a claimed interest; validity and enforceability of the interest still depend on the law.

Key Term: restriction
An entry that controls how dispositions may be registered (e.g., preventing registration unless conditions are met). Common examples include Form A restrictions for co-owned land and restrictions requiring trustee or lender consent.

Beyond entries, registered land is affected by overriding interests—interests that bind a buyer despite not appearing on the register. The most important categories are:

• legal easements (typically those arising by implication or prescription) which are known to the buyer or obvious on inspection, or have been used recently
• interests of persons in actual occupation (subject to qualifications)

Key Term: overriding interest
Certain interests (e.g., some short legal leases, legal easements, or interests of persons in actual occupation) that bind a buyer even if not listed on the register, provided statutory criteria are met.

A prudent investigation includes inspection and enquiries designed to reveal overriding interests, particularly occupiers and physical indicators of long-standing rights. When investigating registered titles:

• cross-check the plan against the property on the ground (boundary features, access routes, services)
• read any filed plans and documents referred to in the registers (e.g., conveyances imposing covenants)
• consider whether entries need to be complied with, removed, or managed (e.g., obtaining releases, consents, or evidencing compliance)

Pre-completion Land Registry searches are then used to update and protect the position:

• OS1 for transfers of whole, OS2 for transfers of part; both confer a 30 working-day priority period if lodged properly, protecting against adverse later entries before registration

Unregistered Title

For unregistered land, the seller’s solicitor provides an epitome of title—a chronological bundle of deeds and documents starting with a good root of title (usually at least 15 years old). The buyer’s solicitor checks for:

• a clear and unbroken chain of ownership from the root to the seller
• proper execution and stamping of all deeds
• consistent property descriptions (with plans where appropriate)
• evidence of discharge of any mortgages (e.g., receipted mortgage or deed of release)
• registration and enforceability of covenants and easements
• Land Charges searches against all relevant estate owners (form K15), covering correct names (including variations) and correct periods of ownership, in the relevant counties

If the root document refers back to pre-root obligations (e.g., covenants or a plan by reference), the buyer is entitled to see and check the earlier deed. The buyer also should:

• verify that deeds have the required execution formalities (older deeds must have been sealed; modern deeds must be signed and witnessed appropriately)
• identify any chains of indemnity covenants for positive covenants (as positive covenants generally do not run with freehold land)
• check whether any past transactions should have triggered compulsory registration and, if so, ensure the present sale can proceed and registration be achieved

Key Term: good root of title
A document at least 15 years old that deals with the whole legal and equitable interest in the property, contains a clear description, and does not cast doubt on the seller’s title.

Identifying Encumbrances and Defects

A key part of the investigation is to identify any encumbrances—rights or interests that burden the property. These may include:

• restrictive covenants
• easements (e.g., rights of way, rights of light or support, service media rights)
• mortgages or charges
• leases or tenancies
• notices and restrictions
• home rights or statutory rights
• estate rentcharges and similar devices used to enforce estate management obligations

Key Term: encumbrance
A right or interest that burdens land, such as a covenant, easement, mortgage, or lease.

When reviewing covenants:

• restrictive covenants can run with freehold land and bind successors if properly annexed/registered; check wording and effect against the client’s intended use
• positive covenants generally do not bind successors in freehold land; assess whether a chain of indemnity covenants exists
• some restrictions on use may also arise from planning or building controls; title restrictions and public law controls operate independently

Assess practical impact:

• does a covenant or easement constrain the client’s planned alterations, use or development?
• are there costs liabilities (e.g., contributing to maintenance of private roads or drains)?
• are there occupiers whose rights could override registration unless managed (e.g., a non-owning adult in occupation)?

Where estates are co-owned, identify Form A restrictions and whether overreaching will be required (e.g., where one surviving proprietor sells trust land). Also, distinguish between defects that can be cured (e.g., obtaining missing consents or releases) and those that need risk management (e.g., indemnity insurance or contractual allocation of risk).

Raising Requisitions and Resolving Issues

If the investigation reveals unclear, missing, or problematic information, the buyer’s solicitor raises requisitions (formal questions) with the seller’s solicitor. These may relate to:

• unexplained breaks in the chain of title
• missing documents or plans referred to by deeds or register entries
• compliance with covenants or planning and building controls
• discharge of mortgages (evidence of redemption) and consents of lenders for dispositions
• third-party rights or occupiers (including written undertakings that non-owning occupiers will vacate and release rights at completion)

The aim is to resolve all issues before exchange of contracts. Common solutions include:

• production of missing documents or statutory declarations to evidence facts (e.g., long use establishing an easement)
• obtaining consents or releases (e.g., beneficiary or developer releases of covenants)
• contractual special conditions to accept a defect or allocate risk
• indemnity insurance where curing is not practicable and risk is low; note regulatory constraints on arranging insurance

Professional conduct point: advising on or arranging insurance is a regulated activity. Firms typically rely on the professional firms exemption and must comply with SRA Financial Services rules when doing so. If you recommend or arrange indemnity insurance, ensure the firm is permitted to do so and provide appropriate disclosures.

If a defect cannot be remedied, the buyer may seek indemnity insurance or negotiate a price reduction. In rare cases, modification or discharge of restrictive covenants can be sought from the Upper Tribunal (Lands Chamber) under s84 Law of Property Act 1925, but this is often slower and costlier than insurance and requires careful assessment.

Key Term: requisition
A formal question or request for clarification raised by the buyer’s solicitor during the investigation of title.

Searches and Final Checks

In addition to reviewing title documents, the solicitor conducts searches and due diligence, such as:

• local authority search (LLC1 and CON29). LLC1 reveals local land charges (e.g., conservation area, TPOs); CON29 reveals planning history, road adoption status, proposed transport schemes, environmental notices, and radon
• water and drainage search (CON29DW/CommercialDW), confirming adoption of mains and location of public sewers and water supply connections
• environmental and flood risk searches as appropriate to the locality and proposed use
• chancel repair liability search, where relevant
• Land Charges search (for unregistered land) against correct names and periods, in the right counties
• bankruptcy search (K16) and company searches for lender comfort or where parties are corporate
• inspection (or commissioning a surveyor’s report) where physical features may indicate unregistered interests or constraints (e.g., private services crossing land)

Before exchange, final checks should ensure all documents are properly executed and that no new adverse entries have been made since the initial investigation. Immediately before completion, place OS1/OS2 searches to secure the priority period, and check bankruptcy/company status again if required by a lender.

Reporting to the Client: Purpose and Process

After completing the investigation, the solicitor must report clearly and comprehensively to the client. The report should:

• explain the seller’s right to sell and any title defects
• summarise all encumbrances and their practical impact
• highlight any risks or unresolved issues
• summarise the results of searches and enquiries
• advise on any further action required (e.g., indemnity insurance, negotiation, or withdrawal)
• provide clear recommendations and warnings

The report enables the client to make an informed decision about proceeding with the transaction.

Key Term: client report
A written summary provided by the solicitor to the client, outlining the results of the title investigation, key risks, and recommendations.

Effective client reports typically include:

• title summary: who owns, class of title, and the right to sell; identify any lender consents or trustee actions required (e.g., appointment of an additional trustee for overreaching when needed)
• rights benefiting and burdening the property: explain how access, services, and support are secured; assess the sufficiency of easements and obligations to pay toward maintenance
• covenants and restrictions: state what the client can and cannot do; indicate any consents needed for alterations or changes of use
• occupiers and co-ownership: confirm who is in occupation; if there are non-owning adult occupiers, arrange signed statements that they will vacate and release any rights on completion; explain Form A restrictions and overreaching where relevant
• searches and public law controls: summarise local, water, environmental and flood results; flag planning conditions or building control issues and the risk of enforcement, including time limits and possible injunctions for unsafe works
• risk at exchange and insurance arrangements: remind the client that risk commonly passes to the buyer at exchange under standard conditions; ensure buildings insurance starts immediately on exchange unless agreed otherwise
• lender reporting: address any lender requirements, disclose issues relevant to security, and state whether a Certificate of Title will be provided; follow the lender’s handbook instructions

Disclaimers should clarify the scope of advice (e.g., that the solicitor does not advise on structural condition or valuation, and the client should obtain appropriate surveys) and any areas where further evidence is pending before exchange.

Worked Example 1.1

Scenario: You are acting for a buyer of a registered freehold property. The charges register reveals a restrictive covenant prohibiting business use. The client intends to run a business from home.

Question: How should you report this to the client?

Answer:
The report should explain the existence and effect of the restrictive covenant, warn that business use would breach the covenant, and advise on the risks (including possible enforcement). The client should be advised to reconsider their plans or seek a release or indemnity insurance if appropriate.

Worked Example 1.2

Scenario: During investigation of unregistered title, you find a missing link in the chain of ownership between the root of title and the seller.

Question: What is your next step?

Answer:
Raise a requisition with the seller’s solicitor asking for evidence to explain the missing link (e.g., a copy of a missing conveyance or a statutory declaration). If the defect cannot be remedied, advise the client on the risks and possible solutions (such as indemnity insurance).

Worked Example 1.3

Scenario: The proprietorship register shows a Form A restriction. The seller is a sole surviving proprietor selling trust land. There is no additional trustee appointed.

Question: What must you check and advise?

Answer:
Explain that a Form A restriction indicates a trust of land and prevents registration of dispositions by a sole proprietor where capital money arises unless overreaching occurs or a court order is obtained. Advise that either an additional trustee must be appointed to receive the sale proceeds (to overreach beneficiaries’ interests) or a trust corporation must act. Require evidence of appointment before completion and include this in the completion undertakings.

Worked Example 1.4

Scenario: A local search reveals the abutting road is not adopted and is to be made up with costs to be recovered from frontagers. The client is concerned about future liabilities.

Question: How should you report and what actions may be required?

Answer:
Explain the current unadopted status and the consequence that the client may be liable for contributions to bring the road up to adoptable standard. Recommend obtaining information on anticipated timing and costs from the local authority and, where significant, liaise with the client’s surveyor to assess the road condition. Consider whether the contract should include a retention or special condition to deal with contributions if imminent.

Worked Example 1.5

Scenario: A non-owning adult occupier (seller’s partner) is living at the property. There is no entry in the register about home rights.

Question: What steps should you take?

Answer:
Because interests of persons in actual occupation can override registration, obtain a signed occupier’s consent and undertaking to vacate and release any rights on completion. Confirm vacant possession will be given in the contract and ensure the seller’s solicitor provides an appropriate undertaking within the completion information and undertakings.

Revision Tip

When preparing a client report, use clear headings and bullet points. Focus on practical implications and highlight any risks or actions needed before exchange. Where recommending indemnity insurance, ensure the firm is permitted to advise/arrange under financial services rules and record client consent.

Key Point Checklist

This article has covered the following key knowledge points:

• The purpose of investigating title is to confirm the seller’s right to sell and identify any issues affecting the property.
• The process differs for registered and unregistered land, including how to interpret official copies and epitomes of title.
• Encumbrances such as covenants, easements, and mortgages must be identified and assessed for practical impact.
• Interests that override registration, particularly legal easements and interests of persons in actual occupation, require targeted enquiries and inspection.
• Notices and restrictions (including unilateral notices and Form A restrictions) must be understood and managed.
• Requisitions are raised to clarify or resolve defects or unclear matters; solutions may include consents, statutory declarations, special conditions, or indemnity insurance.
• Searches and final checks are essential to uncover hidden risks and secure a priority period before registration.
• The client report must summarise findings, highlight risks, and provide clear recommendations, including lender reporting and insurance arrangements.

Key Terms and Concepts

• caveat emptor
• registered title
• unregistered title
• good root of title
• encumbrance
• requisition
• client report
• unilateral notice
• restriction
• overriding interest