defective title insurance definition

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Issues to consider when selling agricultural land—checklist

Issues to consider when selling agricultural land—checklist Introduction This checklist highlights issues to consider when acting for the seller of agricultural land, including issues relating to the Basic Payment Scheme (insofar as it continues to apply to land in Wales), taxation, capital allowances and VAT. In relation to some of the matters that are identified, the principal purpose is to ensure that as comprehensive a contract, title and information pack is supplied to the buyer at the earliest possible opportunity so as to reduce the potential for ‘price-chipping’ which might otherwise arise if unexpected ‘blemishes’ only reveal themselves further down the line. Physical extent, boundaries, rights, etc • Does the sale plan correspond with: ◦ the evidence contained in the title deeds, and ◦ the actual boundaries of the property as shown by fences, walls, ditches, rivers, streams, etc or as disclosed by the seller in replies to enquiries? For further guidance, see Practice Note: Property boundaries • Is a new boundary being created as a consequence of the sale?...

Key issues for funder's property lawyers in real estate finance transactions—checklist

Key issues for funder's property lawyers in real estate finance transactions—checklist What are the key issues property lawyers should consider in real estate finance transactions when acting for a funder? It is essential to understand the nature and purpose of the transaction and most importantly whether the transaction is an investment facility or a development facility—this will dictate the key issues for consideration. See further Practice Notes: Introduction to real estate finance—the lending structure, Real estate finance—development facilities—key features and Real estate finance—investment facilities—key features. Due diligence and investigating title Occasionally a funder may require its lawyer to undertake first hand due diligence in which event, see Practice Notes: Property due diligence in corporate transactions, Reporting to a lender in an investment real estate finance transaction and Real estate in corporate transactions—overview. More commonly the funder will rely on a City of London Law Society (CLLS) certificate of title (Certificate) produced by the borrower's solicitor and reviewed by their own solicitor. See Practice Note: Guide to drafting or reviewing a...

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Defective title insurance and auction packs

Defective title insurance policies, or policies covering breach of restrictive covenants, usually contain conditions relating to the disclosure of the policy to potential purchasers. The insured party must carefully abide by these so as not to invalidate the policy. However, when the owner intends to sell the property, it must not only adhere to the conditions but must also ensure that full disclosure is made to the buyer.The safest course is to obtain written confirmation from the insurer that the policy can be disclosed to the prospective buyer. Where there is an identified buyer and/or mortgagee it is usually possible to obtain that consent. However, difficulties arise where the property is to be sold at auction. The seller cannot establish, with certainty, whether a request for the auction pack comes from a bona fide prospective buyer. The request could come from someone who is seeking to take advantage of the fact that the title is defective, or from a person with the benefit of a restrictive covenant that has been,...

Buyer’s contract negotiation guide—title and encumbrances

Buyer’s contract negotiation guide—title and encumbrances Are title clauses just standard ‘boilerplate’? Many commercial property contracts will deal with title matters in a similar way and often there is little scope or need to amend the clauses if the title is straightforward and nothing bespoke is required. However, it is important to be clear on the effect of the clauses, the legal background, how they apply in particular scenarios and their interaction with the buyer’s due diligence. Key legal principles for sellers and buyers of property We consider here the fundamental legal principles of the buyer-seller relationship. Implied obligation selling free from encumbrances There is an implied obligation that the seller is selling a freehold estate free from encumbrances. This can only be rebutted in three ways: • by express contractual provision • if the buyer knows (actual knowledge) that there is an irremovable encumbrance, or • if there is a patent (ie visible) defect in title (although this is overridden if the seller expressly agrees...

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Letter recommending insurance—demands and needs—law firm acting for lender

Letter recommending insurance—demands and needs—law firm acting for lender Dear [insert name], [insert details of property and lender’s reference] We have reached a stage in your matter where we believe it would be in your best interests for [insert name of borrower] (the ‘Borrower’) to buy [insert type of insurance — eg defective title] in relation to [insert description of the property] (the ‘Property’). You will benefit from this policy as [describe how lender benefits—eg under the standard terms, as co-insured etc.]. This is something we have already discussed and you have agreed that the Borrower will arrange the insurance. The Borrower will buy the insurance from [state name of insurance provider] [and you have consented to us disclosing relevant personal data and information to them for this purpose]. [Name of firm acting for lender] is not involved with the arranging of the policy. [Name of firm] are acting for the Borrower (the ‘Borrower’s Solicitors’). Statements in this letter which refer to actions on the part of the Borrower’s...

Land collaboration agreement

Land collaboration agreement date [date] Parties 1 [name of Landowner A] [of OR incorporated in England and Wales with company registration number [number] whose registered office is at] [address] (Landowner A) 2 [name of Landowner B] [of OR incorporated in England and Wales with company registration number [number] whose registered office is at OR [address] (Landowner B) 3 [name of Landowner C] of OR incorporated in England and Wales with company registration number [number] whose registered office is at] [address ] (Landowner C) Background (A) The parties are the owners of land which in aggregate comprises the whole of the Development Site. (B) The parties wish to collaborate, on the terms of this Agreement, in order to achieve the Collaboration Objectives. 1 Definitions In this Agreement, the following definitions apply: Accountant • the independent accountant appointed by the parties under clause 9.2; Appeal • an appeal against a Planning Refusal; Best Price Offer • the highest offer for a Disposal or a Disposal of Part...

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A tenant is taking a lease. The freehold title contains an entry which provides that the land is subject to such easements as may exist by virtue of section 15(1)(b) of the Endowments and Glebe Measure 1976. The landlord (freeholder) purchased the property from the diocesan board some years ago and has confirmed that no easements have been exercised to their knowledge and that they do not have indemnity insurance. Does this entry still apply given the owner of the site is no longer the Diocesan Board? Should the tenant insist that indemnity insurance be put in place?

A tenant is taking a lease. The freehold title contains an entry which provides that the land is subject to such easements as may exist by virtue of section 15(1)(b) of the Endowments and Glebe Measure 1976. The landlord (freeholder) purchased the property from the diocesan board some years ago and has confirmed that no easements have been exercised to their knowledge and that they do not have indemnity insurance. Does this entry still apply given the owner of the site is no longer the Diocesan Board? Should the tenant insist that indemnity insurance be put in place? Section 15(1)(b) of the Endowments and Glebe Measure 1976 vests land in the Diocesan Board subject to such easements as existed on the appointed day (1 April 1979). Section 15(2) provides that the easements take effect as legal easements. We have not seen any suggestion within the statute that they apply to the property only for so long as the Diocesan Board is the owner. See: Transfer and management of glebe land:...

Where a freehold registered title states that mines and minerals are excepted from the title, should a purchaser seek indemnity insurance for compensation?

Where a freehold registered title states that mines and minerals are excepted from the title, should a purchaser seek indemnity insurance for compensation? Mines and minerals are properly the subject of an exception, not a reservation, as the minerals are part of (and so ‘excepted from’) the land being conveyed. If excepted, the minerals are not conveyed. The exception of minerals, which is of no advantage unless a right to work them is added, necessarily implies the existence of a power to recover the minerals and of the right of working. However, certain rights may not be included. In particular, clear words must be used where a right to break open the surface is required (see Borys v Canadian Pacific). An exception only of ‘mines’ (or any mineral occupying a continuous space) is also an exception of the vein/stratum/space occupied unless the conveyance says otherwise. The owner can use the space created by the extraction to convey other minerals through it and may fill it with waste....

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Do you need a consumer credit licence?

Practice Compliance analysis: With the introduction of a new consumer credit regime on the horizon, what do law firms need to know about the activities that will be caught by the new rules and whether they should apply for a licence?