Although most often used to cover property sales or purchases, in fact the term “conveyancing” covers any dealing involving land. Conveyancing also involves its own specialised vocabulary and so we have prepared a note explaining in more detail the most important technical concepts and terms.

At Cutler Buttery Solicitors, we’ll cut through the jargon and red tape, and deal with all your conveyancing requirements, whether buying or selling a house, business property, taking on a lease or mortgage, or where you have a dispute relating to land or buildings….

So please ring Neil Cutler or Mark Buttery to discuss all your conveyancing requirements, where the work will be done efficiently and at a fair price.

Conveyancing - the “nitty gritty”

Land and interests in land are known technically as “realty” or “real property” (hence the similar expression in American law of “real estate”)

“Dealing in land” is the process of:

- transferring an interest in land

- creating an interest in land

- creating an interest in land

- creating or otherwise dealing with rights in land where those interests are something short of a legal interest in land

The transfer of an interest in land is generally by sale, but sometimes by gift

The creation of an interest in land is generally by lease or by mortgage

An interest in land can be freehold or leasehold

An interest in land is described as an “estate”(obviously not to be confused with a housing estate, although of the same nature as a “deceased’s estate”, i.e. the interest in property which the deceased owned at the date of death).

The three types of estate in land known to English law are:

• a freehold interest, i.e. an interest which is perpetual
• a leasehold interest, i.e. an interest for either a specific period of time (known as the “term” of a lease, and gives rise to the expression “term of years” sometimes used to describe a leasehold interest) or which is “periodical” (where the lease runs monthly, yearly or on some other rolling basis)
• a commonhold interest. This is a relatively new “hybrid” form of ownership allowing individual flats and other units (e.g. offices and commercial, but not agricultural) situated in a larger block to be owned on a perpetual basis similar to a freehold estate but with some of the features of a long leasehold interest by which such individual units were almost always previously held

What’s in a title?

The fact of ownership of land by which land is owned (e.g. freehold or leasehold) is known as “title”. To confuse things a little, the type of ownership is also known as “title”.

So:

to say that X has “title” to land is to say that he owns the land, but without explaining what type of title X has;

to say that Y has “freehold title” to land is to say that Y holds the land perpetually;

to say that Z has freehold title to land but subject to “incumbrances” is to say that Z has perpetual title but that others have interests in and/or rights over the land - for example the land may be subject to a mortgage (an interest in land); alternatively the land may be subject to a restrictive covenant (a right to which the land is subject, but not an interest in land)

The right way to a right of way?

Certain rights over land are known as “easements”. Perhaps the best known example of an easement is a right of way over land. In the same way as restrictive covenants, easements are a burden on the land which they affect (that land is known as the “servient tenement”) and a benefit to other (generally adjacent) land (known as the “dominant tenement”). Other examples of easements include rights of passage of water and drainage and rights of light. Easements are noted on registered titles in the Property Register (where the land benefits as a dominant tenement) and the Charges Register (where the land is subject to the easement as a servient tenement)

Mortgages – a quick summary

The grant of a mortgage creates an interest in land in favour of the lender, who is known as the “mortgagee”

That interest is created by the borrower, known as the “mortgagor” when granting the mortgage to the mortgagee

The grant of a mortgage has the effect of giving the mortgagee security for repayment of his loan. That security is over the land mortgaged

The mortgage provides the terms for repayment of the loan and if those terms are not met, then the mortgagee can take possession of the mortgaged land (generally requiring a Court order before he can do so) and then sell it as “mortgagee in possession”

So far as conveyancing is concerned mortgages affect transactions as follows:

If selling a property the seller’s solicitor must generally ensure that any mortgage on the property is repaid before or at the same time as completing the sale

If buying property with funds lent on a mortgage the buyer’s solicitor (or sometimes the mortgagee’s own solicitor) must ensure that the title to the property being bought and standing as security for the mortgage is in order and that the mortgage document is properly completed and signed

A solicitor will therefore have two distinct clients where acting for both the buyer and the mortgagee. The reason one solicitor usually acts for both is that it avoids duplication of effort doing much the same work twice for buyer and mortgagee.

Getting interested in rights?

Examples of rights in land which are short of interests in land include:

In the case of title to land (i.e an estate in land) which is “registered” at the Land Registry, certain entries on one of the three Registers within any registered title (see below)

In the case of “unregistered” land, certain entries on the Land Charges Register (again see below)

The benefit and burden of restrictive covenants, i.e. obligations on the land burdened with the restriction not to do something in favour of other land benefiting from the restriction. A common example is a covenant restricting property from being developed in some way benefiting adjacent land- often landowners selling part of their land will restrict the land sold off in this way

Documentation – a short note

The document recording a sale is known as a “conveyance” if the title is unregistered and a “transfer” if the title is registered

A mortgage is known either as a “mortgage” or as a “legal charge”. For practical purposes they are the same

Save for “contracts” (see below in the section headed “Conveyancing Practice”) the document transferring or creating an interest in land or creating rights over land has to be a “deed” otherwise known as a “deed under seal”

A deed uses formal wording to state that it is a deed and that it has been signed under seal

The importance of this is that

• Transactions involving land where the document is not under seal are not enforceable
• In a Court a deed “proves itself” i.e. it is not necessary to call the parties to the deed to prove its contents
• Signature of a deed is known as “execution” by the parties (to be distinguished from execution of the parties - i.e. the death penalty!)

The Land Registry

Briefly the system of registration of title to land at the Land Registry works as follows:

Registration is by completion of various standard forms (differing dependent on the type of transaction and the extent of registration) and the filing of the form at the Land Registry together with relevant deeds and the sale document (usually a transfer) and together with the prescribed fee

All titles registered at the Land Registry are public and open to inspection on payment of a modest fee

Once registered the State guarantees the title to every registered title. If having relied in good faith on a registered title a purchaser subsequently is victim of a defect in the title, then the State pays compensation to that purchaser equivalent to the reduction in value in the land from what its value would have been apart from the defect

All such titles are given a unique “title number” by which they can be identified

Not all property in the UK is registered. However registration is compulsory if there is a dealing with unregistered land (subject to a few exceptions)

If a purchaser wants to establish whether property is registered it is possible to make an “Index Map Search” at the Land Registry. As with most Land Registry searches this can be done by post or on the Net. The search will reveal the title number if registered

An authorised copy of any registered title can be obtained from the Land Registry. This is accurate at the date of issue and is known as “official copy of register entries” or more usually “office copies”

Title is disclosed by the seller to a purchaser by providing up to date office copies

Each registered title is subdivided into three Registers:

• The Property Register

- sets out details of the property by address and by reference to a plan, known as the “filed plan” prepared by the Land Registry off the Ordnance Survey.

- it also deals with whether the property is freehold, leasehold or commonhold

- it also summarises the rights benefiting the property

• The Proprietorship Register

- sets out details of the “registered proprietor” i.e. the owner(s)

- it also deals with the “quality” of the title, the best being with “title absolute” , the worst being “possessory title”. The quality of the title can affect its saleability and mortgageability

- it also sets out any “notices” or “restrictions” on the registered title. These are formal entries benefiting/protecting third parties by restricting dealings with the property. They are not restrictions such as restrictive covenants which affect the use of the property. Examples of notices/restrictions include the restriction preventing one of two or more co-owners from validly transferring the property and the restriction on dealing in favour of a wife asserting rights of occupation of the matrimonial home under the Matrimonial Homes Act (usually in divorce proceedings)

• The Charges Register

- sets out all registered charges affecting the property, i.e. matters adversely affecting it

- charges are distinguished between “financial charges”, generally mortgages, and other charges such as restrictive covenants

NOTE: that whereas the price (where known) for the property paid by the registered proprietor is noted in the Property Register, the amount of any mortgage debt is treated as confidential and is not recorded

A useful rule of thumb is that entries in the Property Register are beneficial to an owner whereas entries in the Charges Register are restrictive or limiting to an owner

Unregistered Conveyancing

Unregistered conveyancing works on different principles to registered conveyancing and to a different procedure

Title has to be “deduced”(i.e. disclosed) by the seller to a purchaser by reference to the “deeds”

There is likely to be a deed corresponding with every transaction affecting the property often going back for many many years

Logically therefore as the years have gone by and the property has been sold and resold, mortgaged and remortgaged the number of deeds will have increased considerably. If therefore every deed, no matter how old, had to be disclosed to a purchaser the process would become impossibly cumbersome

Fortunately however that is not the case. The reason is that the obligation as to how far back a seller has to go in deducing title to a purchaser has been limited by Act of Parliament. The way this works is that a seller has to deduce title only so far back as to the most recent deed which is a legal “root of title”. A root of title has the following essential characteristics:

It is a deed. Therefore an event such as the death of an owner is no good. Similarly a document such as a death certificate or probate of an owner’s death will not do. These are mentioned because some conveyancers try it on!

The transaction is “for value”. It follows therefore that a Deed of Gift - a.k.a. a “voluntary conveyance” - such as often occurred between a husband to his wife in earlier days is no good. However a mortgage is a good root of title if it has the other required characteristics as it is for value, securing as it does a monetary loan

[MOST IMPORTANTLY] the deed was executed at least 15 years ago . As will be apparent this operates as a cut-off on how far back the seller has to go in deducing title

To deduce title modern practice is to prepare from the original deeds a bundle of photocopies of the title deeds and any intervening searches starting with the root of title. This bundle should be (but often is not) indexed by a schedule on the front, the whole being known as an “Epitome of Title”. Historically, prior to the availability of photocopying, abbreviated summaries of title deeds were used in place of epitomes; these are known as “Abstracts of Title”. It is not uncommon to find that the only copy of certain deeds with the client’s deeds is a “marked abstract”, i.e. an abstract which a previous owner’s solicitor has certified in writing on the abstract as being a true copy of the original. Generally marked abstracts are acceptable to a purchaser, his mortgagee and to the Land Registry on an application for first registration

A bit of history for you as light relief:

Overall unregistered conveyancing is great fun. As one “investigates” a title so as to prepare the epitome and the contract there is a real sense of history and of witnessing how land has changed and been developed over the centuries. Particularly in rural areas, the older deeds are often works of art, having been handwritten by solicitors’ clerks in beautiful but sometimes difficult copperplate script, with hand painted plans and real silver seals. There is definitely a kick to be had in spreading out these old documents, seeing how they interrelate and sorting out what rights and obligations still affect the land and how they arose.

Those clerks did nothing else but write out the deeds. They were known as “engrossers”, the term “engrossment” being the term (still used today) for drawing up the final agreed form of any deed which the parties are to sign. The senior partner of the firm at which Neil Cutler was articled could remember engrossers from when he was articled and told Neil that they were notorious alcoholics because of the monotony and precision required of the job (there are never any amendments in a handwritten deed). Unfortunately as registered land has almost taken over now (Herefordshire and parts of Worcestershire were the last areas in the country to be zoned for compulsory first registration) unregistered conveyancing is very much a dying art.

The Searches

In both registered and unregistered conveyancing there is a gap between the date title is deduced (in registered conveyancing, the date of issue of the office copies; in unregistered, the date of the last transaction affecting the property) and the date of completion of the current transaction. During that gap the title could change and third parties could obtain title to/ rights over the property. To protect against this a person who is acquiring an interest in the property will “search” shortly before completing the transaction.

The type of search depends on whether the land is registered or unregistered:

- If registered the search is at the Land Registry

- If unregistered the search is at the Land Charges Registry

The entries revealed by a Land Registry search are different to those revealed by a Land Charges Registry search:

Land Registry search:

The entries are simply an update of the office copies

Land Charges Registry search:

The entries are under 6 lettered “classes”, i.e. from Class A to Class F.

For interest’ sake perhaps the most important classes are these

Class C(i) - this is a “puisne mortgage”. This rather quaint term means a mortgage created without a deed by the mortgagor simply handing over the title deeds to the mortgagee as security. This often happens where banks take informal/urgent security

Class C(iv) - this is an “estate contract”, i.e. a contract affecting the land. Unfortunately this does not usually cover a contract for sale of the land to another buyer, so if the seller has sold the land twice the buyers are unlikely to be protected. It does however cover rights such as options to buy

Class E - this is the registration protecting restrictive covenants

Class F - this is the registration protecting a wife’s statutory right to occupy the matrimonial home under the Matrimonial Homes Act

The important common feature of both searches is to give the person searching a short period of “priority” against subsequent registration of entries on either register. If the transaction is completed (and in the case of registered land or land subject to first registration, registered) then the position as shown by the search is fixed and the purchaser is not vulnerable to subsequent entries registered by third parties.