Restriction on title causing delays

ss2020jd

We have been waiting to exchange since last week.

It has now been flagged that there is the following restriction on title at the property at top of the chain:

RESTRICTION: No disposition by a sole proprietor of the land (not being a trust corporation) under which capital money arises is to be registered except under an order of the registrar or of the court 

Should this have been applied to have been removed at the outset and would it have to be removed for exchange? I’m not sure if there is a trust involved which could further delay if all the signatures are needed on the contract. Best case scenario is it has already been removed but not yet updated. 

I tried to read the practice notes on the land registry site but I am not much clearer. I checked on previous threads here and most relate to deceased proprietors but that wouldn’t apply in this case. 

Any advice gratefully received. 

ss2020jd

Updated - can move to Land Registry thread if that’s a better place. 

badger09

Who has flagged this and have they said its a problem, if so why?

That looks like a 'bog standard' restriction where property is held as TIC. Do you know the ownership position of the property at the top of the chain?  Not really enough info given.

ss2020jd

Thanks for responding @badger09
The information is scarce so I don’t have much to go on. 

The EA mentioned something about it as a possible reason for delay. 

As far as I know it is owned as TIC but I don’t know much more. 

I can’t tell if the TIC restriction would cause a delay, or it’s just standard and shouldn’t be an issue. 

GoogleMeNow

That is the usual Tenants in Common restriction, which should not be a problem when the named people on the title are selling, nor would it cause a delay.  

I'm not a lawyer, but understand that there can be delays if, for example, one of the TIC has died and their share doesn't pass automatically to the survivor.  Alternatively, a restriction could have been placed on the title when a sole proprietor holds the property as a trustee for someone else.

If a sole owner wishes to sell the property and such a restriction is registered, a second trustee must be appointed for the purpose of giving the buyer a valid receipt for the purchase price.  Therefore, if a buyer's solicitor sees such a restriction registered they will require the seller to appoint a second trustee.

The Land Registry will remove such a restriction on application provided that you can show that you are now solely and beneficially entitled to the property and that no-one else is entitled to a share in any proceeds of sale.

Obviously as this is in connection with the property at the top of the chain, I imagine you don't know which of the above scenarios are relevant to this transaction.  

The EA can phone any part of the chain to find out, but the issue will be if the EA doesn't really understand the situation and doesn't relay the information accurately to the buyers or to you.

ss2020jd

GoogleMeNow said:

That is the usual Tenants in Common restriction, which should not be a problem when the named people on the title are selling, nor would it cause a delay.  

Thank you @GoogleMeNow - that is what I couldn’t ascertain. I do believe the sellers are named on the Title Deeds.

I'm not a lawyer, but understand that there can be delays if, for example, one of the TIC has died and their share doesn't pass automatically to the survivor.  Alternatively, a restriction could have been placed on the title when a sole proprietor holds the property as a trustee for someone else.

If a sole owner wishes to sell the property and such a restriction is registered, a second trustee must be appointed for the purpose of giving the buyer a valid receipt for the purchase price.  Therefore, if a buyer's solicitor sees such a restriction registered they will require the seller to appoint a second trustee.

The Land Registry will remove such a restriction on application provided that you can show that you are now solely and beneficially entitled to the property and that no-one else is entitled to a share in any proceeds of sale.

Obviously as this is in connection with the property at the top of the chain, I imagine you don't know which of the above scenarios are relevant to this transaction.  

Yes, this is exactly the case, other than what I have outlined. 

The EA can phone any part of the chain to find out, but the issue will be if the EA doesn't really understand the situation and doesn't relay the information accurately to the buyers or to you.

This is what I am finding. Plus as I’m not the EA’s client, as such, I don’t always get a speedy or clear response. 

Thanks very much for the detailed explanations, that’s very helpful. I’ve added my responses in bold to some of your comments above, 

badger09

Not sure if this is going to help or confuse, but here goes...

Short version: my sister & BIL held their property as TICs. Wills said that on death, survivor had life interest (could remain in property), with deceased's 50% held in trust for their 2 adult children. BIL died 2012, sister died 2018.

As Executor for my sister, I obtained Probate and sold property in 2018. Husband of sister's daughter was co Trustee. We both had to sign sale contract as alluded to by GoogleMeNow. It didn't cause any delays at all. 

ss2020jd

badger09 said:

Not sure if this is going to help or confuse, but here goes...

Short version: my sister & BIL held their property as TICs. Wills said that on death, survivor had life interest (could remain in property), with deceased's 50% held in trust for their 2 adult children. BIL died 2012, sister died 2018.

As Executor for my sister, I obtained Probate and sold property in 2018. Husband of sister's daughter was co Trustee. We both had to sign sale contract as alluded to by GoogleMeNow. It didn't cause any delays at all. 

Thanks @badger09 - I had to read it a few times to digest (my brain, not your writing!) 

That makes sense. Thanks for explaining that and posting about your experience. Much appreciated. 
It must have been hard having to deal with all that at an already difficult enough time. 

Hopefully the EA has just got the wrong end of the stick, or else there’s some mysterious other thing holding everything up, as is par for the course. 

badger09

Thanks.

It was, but theraputic to wind up her estate as it gave me lots to do.

Is it your vendor's EA who has raised this? Is he perhaps just waffling because he hasn't got a clue what's causing the delay?While you are not his client, it is definitely in his interest to establish the correct position with the whole of the chain. I would spell that out to him and ask him to explain exactly what is holding things up.

ss2020jd

badger09 said:

Thanks.

It was, but theraputic to wind up her estate as it gave me lots to do.

Is it your vendor's EA who has raised this? Is he perhaps just waffling because he hasn't got a clue what's causing the delay?While you are not his client, it is definitely in his interest to establish the correct position with the whole of the chain. I would spell that out to him and ask him to explain exactly what is holding things up.

That’s true. I can see how in that way it would be.

Yes, that’s exactly it, and just what I suspected. My solicitor attempted to find out from the vendor’s solicitor and was told that they are still awaiting - one week and counting - the signed contract from the top of the chain (who bizarrely they seem to be acting for as well, but I can’t be completely sure). 

Edited to add: I heard so many different excuses when selling I just don’t know what to believe. 

badger09

@ss2020jd

I see from the Waiting to Exchange thread that you've actually managed to exchange today. Congratulations!

Can you say what the delay supposedly due to the Title restriction was? Or was it, as I suspect, merely EA waffle to cover ignorance of the true situation