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Investigation of title — SQE1 Property question

A worked single-best-answer question on investigation of title, with why each wrong option is wrong — the way SQE1 traps candidates.

Investigation of title

Alan and Beth were registered as joint proprietors of a freehold house. The proprietorship register contains a Form A restriction stating that no disposition by a sole proprietor under which capital money arises is to be registered unless authorised by court order. Beth died last year and Alan is now selling the house to your client, Cerys, for £320,000. Alan's solicitor proposes that Cerys simply pays the purchase price to Alan against a transfer signed by him alone and a copy of Beth's death certificate.

What should Cerys's solicitor require before completion?

  1. AA copy of Beth's death certificate is sufficient, because the survivor of joint proprietors can always give a good receipt alone.
  2. BNothing further, because a registered purchaser for value takes free of any interest that is not protected by a notice.
  3. CPayment of the purchase money to Alan with the written consent of Beth's personal representatives.
  4. DAlan should appoint a second trustee to join in the transfer, so that the purchase money is paid to two trustees and Beth's beneficial interest is overreached.
  5. EPayment of one half of the price to Alan and the other half to Beth's personal representatives.
Show answer and reasoning
D is the best answer. A Form A restriction signals that the proprietors held the beneficial interest as tenants in common, so on the death of one the survivor cannot give a valid receipt for capital money. Overreaching under the Law of Property Act 1925, ss 2 and 27(2), requires payment to at least two trustees (or a trust corporation). Alan should therefore appoint a co-trustee to join in the transfer and receive the purchase money, so the transfer can be registered and Cerys takes free of the beneficial interests.

Rule: Where a Form A restriction is on the register, capital money must be paid to at least two trustees so that beneficial interests are overreached and the restriction is complied with.

  • A The restriction shows they held as tenants in common in equity, so a sole survivor cannot give a valid receipt for capital money; a death certificate alone suffices only where there is no such restriction. (right rule, wrong facts)
  • B The Form A restriction is on the register and the Land Registry will not register the transfer unless it is complied with. (wrong rule)
  • C The personal representatives' consent does not satisfy the restriction; overreaching requires payment to at least two trustees or a trust corporation. (wrong rule)
  • E Splitting the price between the survivor and the estate does not achieve overreaching and does not comply with the restriction. (wrong rule)

Source: Law of Property Act 1925, ss 2(1)(ii), 27(2); Land Registration Act 2002, s 40; Land Registration Rules 2003, Sch 4 (Form A)

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