During recent webinars co-hosted by Tailte Eireann (TE) and the Law Society of Ireland, members of the Conveyancing Committee and TE’s Land Registry officials discussed the Registry’s processes where a property is sold whilst an application for compulsory first registration of that property’s title is awaiting registration in the Land Registry.

As first registration applications can sometimes take a considerable time to complete, the Conveyancing Committee often receives queries concerning the appropriate practice to be followed where a sale is to take place prior to completion of first registration and now offers this guidance.

1. Investigation of title

Practitioners are reminded that an unregistered title remains as such until first registration is achieved. To reiterate some of the points made in the Committee’s practice note of 5 December 2014[1], if completion of an application for first registration is pending at the time of completion of a sale:

• 1.1. The purchaser should investigate the title as they would an unregistered title, and to facilitate that investigation the vendor should provide the purchaser with a certified copy of the first registration application lodged by the vendor. It is recommended that solicitors should retain complete copies of all applications lodged, should such a certified copy be required later.
• 1.2. It is reasonable for a purchaser to require copies of rulings on title issued by the Land Registry and the vendor’s solicitor’s response.
• 1.3. It is not appropriate for a purchaser to rely on a Form 3 certificate lodged by the vendor’s solicitor, as the purchaser is owed no duty of care by that solicitor and it is the purchaser’s solicitor’s role to investigate the vendor’s title.
• 1.4. The assurance of the property should be drafted as a conveyance or assignment, as the case may be, and not a transfer.
• 1.5. The vendor should not be described in the assurance as “the person entitled to be the registered owner”.
• 1.6. The property should not be described in the assurance by reference to the dealing number under which first registration is pending.
• 1.7. The assurance should be registered in the Registry of Deeds before being lodged with the purchaser’s first registration application. This ensures that the purchaser maintains their priority until the first registration is completed.

2. Purchaser forms

When the sale of a property completes, the Land Registry will not rely on the vendor’s affidavit in Form 1 or 2, or a Form 3 certificate that was lodged as part of the vendor’s application, as the content will have been superseded by the subsequent sale.

A purchaser’s application will require new forms to be submitted to reflect the completion of the transaction and so a purchaser’s solicitor should anticipate this requirement by having the relevant forms ready for submission.

3. Notification

TE should be promptly notified of the completion of a sale to avoid the vendor’s registration proceeding. A letter from the vendor’s solicitor to this effect should be provided to the purchaser at completion, coupled with a consent to the purchaser taking carriage of the vendor’s dealing. The purchaser’s solicitor should promptly lodge this letter with TE with a confirmation that they are taking carriage of that dealing. Such a notification will trigger a query requiring the purchaser’s application documents to be lodged, and TE have indicated that it will allow 30 days for a response, followed by the usual 10-day reminder.

4. Registration process

TE has indicated that the following procedures are acceptable to the Land Registry where a property is sold whilst an application for compulsory first registration is pending:

4.1 The purchaser lodges their application, coupled with a request that it be associated with the vendor’s application

Note that the purchaser’s application is a new application from TE’s perspective, and requires updated affidavits, statement of title, searches etc. to be lodged.

The Committee’s view is that this should be the preferred treatment in Form 1 and Form 2 cases, as it avoids unnecessary transit of original documents, and retains the benefit of rulings on title that might have raised and dealt with to date.

Note that if this process is being followed the purchaser will not take custody of the title documents at closing – they will remain in the Land Registry – and so the contract for sale should be clear on what documents lodged by the vendor are originals, copies, etc.

Note also that stamping and Registry of Deeds registration tasks will have to be completed and the purchaser’s application documents lodged within the query period set down by TE, and so these tasks should be prioritised to avoid the vendor’s dealing being treated as abandoned.

TE has made it clear that this procedure is not appropriate in Form 3 cases.

4.2 The purchaser withdraws the vendor’s application, and lodges their own application for registration

The Committee’s view is that this approach is appropriate in Form 3 cases, or where the passage of time might mean that a later root of title might be available to the Purchaser that would simplify a Form 1 / Form 2 application.

TE has also indicated that it is possible for the vendor’s solicitor to retain carriage of their dealing, and consent to the purchaser using the documents lodged with the vendor’s application, with the Purchaser lodging their application and the two applications proceeding in parallel. This process carries the obvious risk that if the vendor’s application is rejected, and documents are returned to the vendor, then the purchaser is left with no access to those documents, and as such this approach would generally not be recommended.

5. Vendor’s registration obligation

First registration is compulsory in relevant cases, and Section 25 of the Registration of Title Act 1964 contains a sanction – a failure to pass the relevant estate – if registration is not completed within six months, or such longer period as TE may allow.

Notwithstanding the six month period called up in Section 25, and in light of delays in the registration process within the Land Registry, practitioners will be aware that TE typically accepts applications for first registration outside that period, allows registrations to complete if processed outside that period, and accepts new applications from purchasers where a predecessor’s application was not completed before the completion of the purchase.

However, it is considered that for as long the statutory sanction in Section 25 remains, a solicitor should seek to progress their client’s registration application in accordance with that section, regardless of the likely length of time that registration will take, or whether an onwards sale is contemplated. Practitioners are also reminded that the default position under Condition 24 of the General Conditions of Sale 2023 (Revised) Edition is that a compulsory first registration must be completed before completion of a sale takes place.

References

[1] See this link - Status of unregistered title while first registration is pending