Real Estate Practice Searches PDF

Real Estate Practice Searches Copyright © 2024, Singapore Institute of Legal Education 1 Focus At the end of this lecture, you will be able to: Describe what a title search is Extract relevant information from a title search Explain the significance of a solicitor’s un...

Real Estate Practice Searches Copyright © 2024, Singapore Institute of Legal Education 1 Focus At the end of this lecture, you will be able to: Describe what a title search is Extract relevant information from a title search Explain the significance of a solicitor’s undertaking for title deeds Describe what a good root of title and how to establish a good title Explain how legal requisitions relate to title 2 What is a title search? A title search is a process that is performed primarily to determine the answer to 3 questions: 1. Does the vendor have a saleable interest in the property? 2. Do any encumbrances exist on the property which needs to be paid off at completion? 3. What kind of restrictions or easements pertain to the use of the property? 3 What is a title search? Who can do a title search? Where do you do a title search? Anyone may do a title search. The title search can be done Documents concerning transfers online at INLIS (Integrated Land or conveyances are a matter of Information Service) or manually public record. However, it is often at SLA (Singapore Land Authority) upon payment of the appropriate the case that people choose to fee. contact a solicitor to conduct an exhaustive title search. 4 What is a title search? The solicitor will conduct a title search upon receiving instructions from his client that he has given a booking or option fee for the purchase of a property. He will update the title search just before completion of the purchase of the property. As property transactions take about 8 weeks from start to finish, the updating of the title search is to ensure that there is no new adverse information. 5 What can a title search tell us? 1. Land Tenure (whether it is an estate in fee simple, estate in perpetuity or a leasehold estate) 2. State Title details (in some cases, solicitors will obtain copies of the State Title eg a State Lease or Statutory Land Grant to check for restrictive or special covenants imposed by the State) 3. Title Document Number (e.g., Subsidiary Strata Certificate of Title (SSCT) Volume 1030 Folio 174) 4. Lot Area / Land/floor Area (in square metres) 5. Manner of holding (Joint Tenants / Tenants in Common) 1. This indicates to the world at large each owner’s share in the property. 2. It also affects how a person’s share in the property will pass on his death. 6 What can a title search tell us? 5. Name and details of Registered Proprietor (for example, his identity card number, address and citizenship). Since all this is part of public record – estate agents can track the owners down easily and offer to sell or purchase their properties. 6. Instrument of transfer – what does this tell us? The price at which the vendors purchased the property. What if there was no purchase price but a gift? 7. Caution as to title – the entry will be either Nil or “Subject to any interest that may have affected the land as at the date of the last cancelled conveyance” (or words similar to this effect). 7 What can a title search tell us? 8. There may be Notices, Orders of Court, Orders of collective sale by Strata Titles Board. In such a case, the solicitor will extract copies of such notices, orders of court for further examination. 9. There may be Encumbrances – caveats, restrictive covenants, charges, mortgages. Again, copies of caveats (other than your own clients) and restrictive covenants must be extracted for further examination. 8 What can a title search tell us? 10. Type of development (e.g, “Condominium” or “Strata – Landed Housing”). These are initiatives introduced by SLA. Such endorsements are usually indicated at the top left hand corner of the SSCT. If you see “Strata – Landed Housing” – this is to alert you that such developments are restricted residential property. As such, the Minister of Law’s approval is required under the Residential Property Act. 11. Share value 12. Last contract/option date – to check if the registered proprietor would be liable for seller’s stamp duty 9 What can a Lot Base System (LBS) Search tell us? Lot Particulars Shows particulars and notice of acquisition of land Lot History Shows how lots are derived from parent lots, traces amalgamation and subdivision Useful for developments - one of the parent lots of a new 8-storey development was found to be affected by a gift transfer. As such, all 275 units of this particular development and the buyers of these units were affected by the gift transfer. 10 Why is a title search important? Confirms client is buying from owner/correct person Confirms particulars of property such as tenure and area Alerts client as to encumbrances or encroachment on state land Alerts solicitor as to possible problems with title or need to get approvals from authorities 11 Solicitor’s Undertaking After contract is concluded, title deeds are sent to Purchaser’s solicitor to enable investigation of title Title deeds are sent on solicitors’ undertaking “to return the same to us on demand without any claim or lien thereon whatsoever” How serious is breach of this solicitor’s undertaking? The Legal Profession (Professional Conduct) Rules state that an advocate and solicitor shall honour the terms of a professional undertaking given to another advocate & solicitor. Therefore, breach of undertaking is possible ground for professional misconduct. 12 Investigation of title 1. Title Search first 2. After the title search, you would know if it is registered or unregistered land - if registered land, is it qualified or unqualified, etc. 3. The purpose behind an investigation of title is to look for a good root of title. Copyright © 2024, Singapore Institute of Legal Education 13 Good root of title A ‘good root of title’ has been described as an instrument of disposition -- which must deal with or prove on the face of it, without extrinsic evidence, the ownership of the whole legal and equitable estate in the property sold, contain a description by which the property can be identified, and show nothing to cast any doubt on the title of the disposing parties. (From Williams on Purchaser and Vendor) 14 Examples of good v bad root of title What sort of instrument would be considered What would be considered to be ‘bad roots of ‘good root of title’? title’? Conveyance on sale In the case of a freehold estate, a lease for whatever term cannot be a good root of title Legal Mortgage A voluntary conveyance A will A document exercising a power of appointment 15 Investigating Torrens title –Land Titles Act Under the Torrens system, there are 2 types of title. The first is the Indefeasible Title. An Indefeasible Title is the “mirror” of the title. In other words, the solicitor need not investigate the earlier common law title. This is because the title is unqualified. He can commence investigation from the current Certificate of Title (CT) as there is no caution as to title. 16 Investigating Torrens title – Land Titles Act Is investigation of title confined to examining CT, SSCT or Subsidiary Certificate of Title? Only if it is an Indefeasible Title. What should you do when you check leasehold estates or estates in perpetuity? Check the terms and covenants and determine if they affect the property. Is access part of good title? See Cheng Theresa v Oei Hong Leong 2 SLR(R) 637 17 Legal requisitions See definition of Legal Requisitions (LRs) in Chu Yik Man v Rajagopal 2 MLJ 557 LRs are questions sent to nine (9) government ministries/statutory boards For purchases of strata units, the 10th question is sent to the Management Corporation – S47(1)(c) Building Maintenance and Strata Management Act 18 Legal requisitions Subject to the wording of the Option to Purchase, LRs allow the purchaser to rescind the contract if the replies are unsatisfactory – Soo Nam Thoong v. Phang Song Hua SGHC 159. The Court held that the requisition reply from the Land Transport Authority was declared “unsatisfactory” and the proviso providing for standard words of limitation or exception in the Option to Purchase failed to apply in this case. 19 What do Legal requisitions have to do with Title? Replies to the LRs are important because they may reveal whether the property is affected by charges, fees, assessments or any notices sent to the owner or occupier of the property for the owner or occupier to do certain acts 20 What do Legal Requisitions have to do with title? Non payment of any charges, fees, or assessments and non-compliance with notices may give the authorities a right to impose a charge on the property or it may itself constitute an offence for which there is a penalty. 21 What do Legal Requisitions have to do with title? The property may be affected by changes, alterations or road widening schemes A prospective purchaser is entitled as of right to be fully informed so that his interest can be safeguarded. 22 Recap LRs show up non-compliance with law & regulations. Effect of non-compliance is often a charge on the property with power to sell property Management Corporation has power to lodge a charge against the flat and sell flat to use sale proceeds to pay for arrears in maintenance fees – S43 Building Maintenance and Strata Management Act. 23 Recap Other examples Unpaid property tax. Comptroller does not care who is the proper party responsible for payment. He goes after current owner. A condo encroached on State land. SLA went after current owners and not developers 24 Notice Copyright © 2024, Singapore Institute of Legal Education. All rights reserved. The Course materials are developed by the Singapore Institute of Legal Education, based on the content, syllabus, and guidance provided by the Chief and Principal Examiners and their teams. No direct or indirect reproduction, publication, communication to the public, adaptation or any other use (that is prohibited and/or proscribed by copyright laws) of the Course materials in whole or in part in any form or medium is allowed without the written permission of the Singapore Institute of Legal Education. Part B Candidates should refer to the Code of Conduct for more information, particularly, the sections on conduct and behaviour, and the use of SILE resources.