REAL ESTATE

MOCK EXAM- QUESTION 1

Facts relevant to Questions

You are a trainee solicitor in the Real Estate Department of Gibson & Weldon LLP
(“G&W”). Your supervising solicitor, Teresa McKillop, acts for Lodrel Estates
Limited (“Lodrel”) which is a developer that specialises in the renovation and
conversion of former industrial buildings into offices.

Lodrel has agreed to buy Castlereagh Building, Mason Road, Birmingham, B2 2PF
(“Castlereagh Building”) from the current owner, Castlereagh Holdings Limited
(“the Seller”). Castlereagh Building has been vacant for a number of years and is in a
poor state. The Seller has had it on the market for a while and has had no interest
from anyone other than Lodrel, which is why your client has been able to agree a
good price for it. The purchase price is £300,000 and the Seller has agreed that it will
not be charging VAT in addition to the agreed purchase price under any
circumstances.

QUESTION 1 (26 marks)

a) You have now investigated title to Castlereagh Building using the official
copies and title plan which are the Documents at the back of this Examination
Paper.

Explain any title issues that arise and any action to be taken as a result of your
investigation of title.

Note to Candidates: confine yourself to matters of title in this question as you

have an opportunity to discuss matters relevant to searches and enquiries in part
b).

16 marks

b) Teresa McKillop tells you that she has raised pre-contract enquiries of the
Seller’s solicitor and has ordered a Water and Drainage Search, a commercial
flood search, a chancel liability search, and a Local Search (submitting Form
LLC1 and Forms CON 29 and CON 29O) but has asked you to consider what
additional searches and enquiries she should make on Lodrel’s behalf in respect
of Castlereagh Building.

Explain what additional pre-contract searches and enquiries or other

investigations you would make and give reasons for your choice.

10 marks
 DOCUMENT

Official copy Title number WM235789 Edition date 12.09.2017

of register - This official copy shows the entries subsisting on the register on
14 October 2020 at 11:16:36.

of title
- This date must be quoted as the “search from date” in any official
search application based on this copy.
- The date at the beginning of an entry is the date on which the
entry was made in the register.
- Issued on 14 October 2020.
- Under s.67 of the Land Registration Act 2002 this copy is
admissible in evidence to the same extent as the original.
- For information about the register of title see Land Registry
website www.landregistry.gov.uk or Land Registry Public Guide
1- A guide to the information we keep and how you can obtain it.
- This title is dealt with by Land Registry Coventry

A: Property Register
This register describes the land and the estate comprised in the Title

WEST MIDLANDS : BIRMINGHAM

1. (14 August 1995) The freehold land shown and edged with a thick black
line on the plan of the above title filed at the Registry and being
Castlereagh Building, Mason Road, Birmingham, B2 2PF.

2. (14 August 1995) There is excepted from the registration the mines and
minerals underneath the property together with ancillary powers of
working thereof.

3. (14 August 1995) The Conveyance dated 1 July 1995 referred to in the
Charges Register contains the following provision:-

“IT is hereby agreed and declared that the Purchaser shall not be or
become entitled to any easement or any right of light or air or other
easements or rights which would restrict or interfere with the free use of
the Vendor’s retained property for building or any other purpose.”

B: Proprietorship Register
This register specifies the class of title and identifies the owner. It contains
any entries that affect the right of disposal.

Title Absolute

1. (17 March 2004) PROPRIETOR: CASTLEREAGH HOLDINGS LIMITED

whose registered office is at 11 St Phillip’s Square, Birmingham, B11
2SD.
2. (17 March 2004) The price stated to have been paid on 28 February
2004 was £200,000.

C: Charges Register
This register contains any charges and other matters that affect the land

1. (14 August 1995) A Conveyance of the land in this title dated 1 July
1995 made between (1) Liverpool Metalwork Limited (the Vendor) and
(2) Joseph Darby Limited (the Purchaser) contains the following
covenants:-

“THE Purchaser with the intent and so as to bind (as far as practicable)
the Property into whosoever hands the same may come and to benefit
and protect the adjoining and neighbouring property of the Vendor or
any part thereof HEREBY COVENANTS with the Vendor that he the
Purchaser and his successors in title will at all times hereafter not do or
allow to be done on the Property anything which may be or grow to be a
nuisance or annoyance to the Vendor or his successors in title who are
the owners for the time being of the Vendor’s adjoining and neighbouring
land”.

2. (17 March 2004) REGISTERED CHARGE dated 28 February 2004 to

secure the moneys including the further advances therein mentioned.

3. (17 March 2004) Proprietor: Barclays Bank PLC of 54 Lombard Street,

London EC3P 3AH.

4. (25 November 2012) REGISTERED CHARGE dated 04 November 2012

to secure the moneys including the further advances therein mentioned.

5. (25 November 2012) Proprietor: The Royal Bank of Scotland of

109/109A Castle Street, Edinburgh EH2 4JW.

6. (12 September 2017) UNILATERAL NOTICE in respect of an agreement

dated 28 August 2017 made between (1) Castlereagh Holdings Limited
and (2) Birmingham City Council.

7. (12 September 2017) Beneficiary: Birmingham City Council Baskerville

House, Centenary Square, Birmingham, B1 3PP.

END OF REGISTER
 TITLE NUMBER

WM235789
COUNTY SHEET NATIONAL GRID SECTION
ORDNANCE SURVEY
PLAN REFERENCE WEST MIDLANDS 1 WW 1 C
Scale: 1/1250 © Crown copyright 2006

Worcester and Birmingham Canal M W&B Canal

a
s
o
n

R
o
a
d

Metals Factory Castlereagh Building

Shop Shop

Mason Road

Worcester and Birmingham Canal M W&B

a Canal
s
o
n

R
o
a
d
 Metals Factory Castlereagh Building

Shop Shop

Mason Road

This official copy issued on 14 October 2020 shows the state of this title plan
on 14 October 2020 at 11.16.36.
Admissible in evidence to the same extent as the original (s67 Land Registration
Act 2002)
This title plan shows the general position, not the exact line, of the boundaries. It
may be subject to distortions in scale.
Measurements scaled from this plan may not catch measurements between the
same points on the ground. See Land Registry Public Guide 7 – Title Plans
This title is dealt with by Land Registry Coventry Office

ANSWER:
QUESTION 1

a) You have now investigated title to Castlereagh Building using the official
copies and title plan which are the Documents at the back of this
Examination Paper.

Explain any title issues that arise and any action to be taken as a result of your
investigation of title.

Note to Candidates: confine yourself to matters of title in this question as you

have an opportunity to discuss matters relevant to searches and enquiries in part
b).

16 marks

Investigation of title is one of the most important elements of a conveyancing

transaction; it is title to the land that a seller is actually selling in the transaction.

Entry 2 in the Property Register: This can mean that the registered proprietor does not
own any mines and minerals underneath the surface of the property. The buyer may
be concerned as to who is able to exercise this right and if it has ever been exercised.

Entry 3 on the Property Register: This entry shows that the Building does not enjoy
the right to light over a specific adjoining property. It will be necessary to find out the
precise location and extent of the adjoining land. Many candidates misinterpret this
entry as restricting what the owner of Castlereagh Buildings can do with it/on it.

Entry 1 on the Charges Register: This register shows that there is a covenant affecting
the land preventing the owner from creating a nuisance which, given that the buyer
wishes to carry out substantial building works on the property, may be a problem,
albeit a temporary one.

Entries 2 & 3, 4& 5 in the Charges Register: These entries indicate the presence of 2
mortgages, the first in favour of Barclays Bank and the second mortgage in favour of
the Royal Bank of Scotland. Also, you need to ensure that the contract provides that
the property is sold free from the mortgages. If the mortgage is redeemed an
undertaking should be obtained from the seller’s solicitor.

Entries 6 & 7 on the Charges Register: This shows that there is a unilateral notice in
favour of Birmingham City Council. The first step is to ask the seller’s solicitor to
ascertain to what the unilateral notice relates. Then there are several courses of action
available to the buyer. In any event, a buyer will realistically not want to commit to
the transaction until the matter has been dealt with. This buyer should require the
seller to get the notice withdrawn or cancelled.
If the buyer is keen to bind the seller to a contract, it would be possible to make the
contract conditional upon successful withdrawal or cancellation and you could
suggest this as a possible amendment to the contract.

b) Teresa McKillop tells you that she has raised pre-contract enquiries of the
 Seller’s solicitor and has ordered a Water and Drainage Search, a
commercial flood search, a chancel liability search, and a Local Search
(submitting Form LLC1 and Forms CON 29 and CON 29O) but has asked
you to consider what additional searches and enquiries she should make on
Lodrel’s behalf in respect of Castlereagh Building.

Explain what additional pre-contract searches and enquiries or other

investigations you would make and give reasons for your choice.
10 marks

This question concerns searches and enquiries. Based on the facts, certain search and
enquiries have already been made. The additional searches and enquiries to be
made are:
 The reservation in the title indicates mining may have taken place in the vicinity
in the past. As such, enquiries should be made to The Coal Authority as to past,
present and future mining operations that may affect the property.
 The property is adjacent to a canal. As such, enquiries should have been made
of the Canal & River Trust in order to check on arrangements for the
maintenance of the canal walls and related matters.
 The property is adjacent to a metal factory. Perhaps this is run and regulated in
an exemplary manner now, but it should be remembered that many industrial
uses (of which metalworking is a good example) have the potential to
contaminate land.It is possible that the property could be contaminated and if
so, the buyer could become liable for clean-up both under statute and at
common law.
 The property is stated to be in a poor state of repair and, further, is to be
refurbished. In the light of these two factors, the buyer would be strongly
recommended to commission a survey to assess the structural soundness of the
building. The surveyor should also be instructed to look for signs of subsidence
due to the reservation of mines and minerals. A personal inspection by the
buyer may give the buyer a general idea about the state of the building, but this
will, inevitably, be a lot more superficial than a proper survey. An asbestos
survey might also be appropriate.
 The seller is a company. Therefore a company search to check on the seller’s
solvency and powers to deal with land must be done.
 There is a mines and minerals reservation. Therefor an index map search is
needed to check if title to the mines and minerals has been registered.

You may have mentioned the information about contaminated land that can be found
in Form CON29. Whilst this is not incorrect, the question indicated that this search
had already been carried out and so is not relevant on the facts.