Residential property update: rights over commons and special conditions

There has been considerable newspaper coverage of cases where unilateral notices have been registered to protect manorial rights, which are no longer overriding interests after 12 October 2013.

Chancel indemnity and manorial rights continue to be an issue for conveyancers as, although they are no longer an overriding interest since 13 October 2013, rights may still be registered until there is a disposition for value after that date.

The Land Registry has issued an update in issue 38 of Landnet explaining how it will respond to a UN1 application to protect a claim either to manorial rights or chancel repair made after 12 October 2013.

Whereas the registration of manorial rights may well be of concern where land is held for development purposes, it may not be an issue in residential transactions if the reservation of sporting or mineral rights is not considered to affect adversely the property valuation. Where a property owner has already received notice of a claim, by submitting a UN4 application, the owner is quickly able to find out the nature of the evidence affecting the land in question.

If substantive evidence is supplied by the claimant, the owner can withdraw the UN4 application without loss. If the owner wishes to dispute the claim it might well be expensive to counter in the Tribunal, as expert evidence from a researcher experienced in investigating manorial rights would be required.

Special conditions

An example of the protection offered to a seller by an additional special condition to a contract incorporating the Standard Conditons of Sale (4th Edition) appears from the recent Court of Appeal decision in the case of Lloyd and other v Browning and another [2013] EWCA Civ 1637.

In this case it was held that a special condition in the contract that no statement made by the seller or the seller's agent in correspondence or replies to enquiries before the contract had induced the buyer into entering into the contract was effective in a claim for misrepresentation.

The case involved the supply by the seller of plans for a proposed extension which, it later transpired, did not comply with the plans approved by the existing planning consent and were found to be unacceptable to the planning authority.

The Law Society Conveyancing Protocol discourages the use of additional standard form special conditions, but this case illustrates that conveyancers should keep their firms' use of special conditions under review, and include additional conditions where appropriate, to supplement the current 5th Edition.

'T' marks

The Court of Appeal decision in Lanfear and another v Chandler [2013] EWCA Civ 1497 was a dispute between two owners on the same development. The Court had to consider if the judge at first instance had been correct to disregard the estate plan attached to the transfer showing 'T' marks in favour of the evidence on the ground (position of kerb and fence posts to show the intention when the development was first laid out).

It was stated that the use of 'T' marks did not raise any presumption of law as to the ownership of the relevant boundaries.

The Land Registry is running a trial of an Urban Content Improvement programme in the Bristol and Bath area with the aim of increasing the level of detail on filed plans to show new features such as property extensions. This should make conveyancers' lives easier when reviewing plans - although Land Registry practice will not itself change and disputes between neighbours will continue to be a challenge to resolve.

Rights over commons

A recent case in the Administrative Court (Evans v Conservators of Wimbledon and Putney Commons [2013] EWHC 3411 (Admin)) considered an objection from a Putney resident to the decision of the registered owner of the commons to grant easements to the local authority, to be effective on the grant of planning permission, to enable the local authority to construct an access on the common and footpaths to serve a new school and residential development.

The court decided that under the terms of the Wimbledon and Putney Commons Act 1871 the owner had power to grant the easements, provided that the rights of the public to use the common were not impeded. This case is instructive to anyone who may be concerned about the erosion of public open space in our cities.

Enveloped dwellings

Wealthy clients who own residential property through single asset companies may wish to consider 'de-enveloping' those properties in order to avoid the Annual Tax on Enveloped Dwellings introduced in the Finance Act 2013 which is now payable and affects properties worth more than £2m.

The decision to do so should only be made after taking tax advice as it may have adverse consequences for tax planning to mitigate inheritance tax. The de-enveloping exercise itself may give rise to stamp duty land tax, but new HMRC guidance has now been issued as to when there is deemed to be consideration on which the tax would be due.

Property fair

If you haven't heard of 'property fairs' then it is worth reading Rabiu v Marlbray Ltd [2013] EWHC 3272 (Ch). In this case, the buyers instructed their solicitors to attend an event in 2005 to promote the sale of rooms in an apart-hotel to be constructed and to exchange a standard form agreement on their behalf.

The case involved the consideration of the efficacy of the use of single-signed sheets which were then attached to standard contract particulars. It was decided that that, notwithstanding the use of single sheets, a valid contract had been created pursuant to section 2 of the Law of Property (Miscellaneous Provisions) Act 1989.

Lease extension

For those who may only occasionally undertake claims for residential lease extensions it is worth noting that a bill is currently going through parliament on the initiative of the Association of Leasehold Enfranchisement Practitioners (ALEP) in order to amend the terms of section 99 of the Leasehold Reform, Housing and Development Act 1993.

This will allow a notice of claim initiating the process to be signed either by an agent or by an attorney of the tenant rather than by the tenant personally. The inability to commence a claim for a significant number of incapacitated tenants of short leases has been a real headache for those managing their affairs and this short bill will benefit these people greatly when it becomes law.

Mortgage valuation reports

The Council of Mortgage Lenders has just given a cautious welcome to the recent report of the commission set up by the RICS into valuation (response dated 24 January 2014). The report mentions that the pending review of the effectiveness of the Scottish Home Report may lead to further consideration as to how it might be possible to introduce a Home Report in England and Wales.

Home Information Packs were withdrawn when found to be ineffective, but they might yet have a place in residential property sales if agreement could be reached on a form of 'house survey' acceptable to sellers, buyers and lenders.

The report also pointed out the need to educate the public to be aware of the limitations of a lender's valuation report and that it does not take the place of a survey. It has always been considered good conveyancing practice to warn clients of these limitations but it seems that the warning needs to be made to potential buyers at an earlier stage.

Fee note

The Land Registry has published a new fee order effective for applications submitted from 17 March 2014. Some fees are reduced and fees for applications made electronically are halved (see Land Registration Fee Order 2013).