Compulsory registration of title – nationwide from 1 June 2011

Compulsory registration of title – nationwide from 1 June 2011

The Registration of Title Act 1964 (Compulsory Registration of Ownership) (Cork and Dublin) Order 2010 (S.I. 516/2010) brings into effect the compulsory registration of title in the Land Registry (now managed and controlled by the Property Registration Authority (the "PRA")) and has been extended to the counties and cities of Dublin and Cork from the 1st of June 2011. Registration of title in the Land Registry is now compulsory in all counties. This development is part of an ongoing departure from the older and more limited system of registration of titles in the Registry of Deeds and it is anticipated that compulsory registration will facilitate the governmental backed initiative to introduce "e-conveyancing".

Registration of title – an overview

When title is registered in the Land Registry, all relevant particulars of the property and its ownership are entered on "folios" which, in conjunction with Land Registry maps, form the register maintained in the Land Registry.

The key advantages of holding a registered title are: (a) proving title is a simpler process as there is no longer a bundle of title deeds needed; and (b) a Land Registry title is guaranteed by the State - if it is subsequently established that there has been an error in registration, any person who suffers a loss due to the erroneous registration is indemnified against such loss by the State. Accordingly the Land Registry subject titles submitted to them for registration to a high level of scrutiny prior to registration.

When does registration become compulsory?

Registration of title is now compulsory where there is a "conveyance on sale" (in the case of freehold land) and/or a "grant or assignment on sale" (in the case of leasehold land).

A "conveyance or assignment on sale" is a document evidencing a sale for money or money’s worth and by which the purchaser gains an interest in land which is capable of being registered (this includes the granting of a long or "sale" lease). It is worth noting that the obligation to register a title does not arise on mortgaging, mortgage refinancing or conveyances or settlements in consideration of marriage, as these transactions do not fall within the definition of ‘conveyance on sale’. However it is possible that financial institutions may now seek to have titles registered as part of a financing or refinancing process.

When must the application be made?

The Land Registry rules provide that all conveyances and assignments on sale must be registered by the purchaser within six months of the date of acquisition (or such later date as the PRA/Court may allow).

How to make an application for first registration

An application for first registration can be by way of proving documentary title or a Solicitor’s Certificate.

Where an application is being made based on documentary title, the purchaser's solicitor prepares a statement of title which details in chronological order how the title has devolved to the applicant listing the various deeds on which the applicant relies to support its claim to having good and marketable title to the property. At least 15 years good and marketable title must be proven as part of the application.

Applications for first registration of title by way of Solicitor's Certificate can be made where the purchase price paid by the applicant does not exceed €1,000,000.00. The Solicitor’s Certificate contains confirmation from the solicitor that the applicant has good and marketable title and such applications are given priority by the Land Registry over applications based on documentary title.

All applications for First Registration must be lodged in conjunction with the relevant Land Registry forms and a Land Registry compliant map, the original Deed of Conveyance/Assignment to the applicant, and (where appropriate) all prior title needed to establish the applicant’s title to the subject property and fully explained searches. The fee for lodging an application for First Registration is currently €85.00.

Impact of compulsory registration in Dublin and Cork

Compulsory registration will not only have an impact on purchasers of unregistered land, it will also directly affect the vendors as when acquiring unregistered land it is now imperative that the purchaser’s solicitor satisfies itself that there are no title or mapping anomalies which would prevent the registration of the purchaser’s title in the Land Registry. It is likely that many future contracts will be made conditional upon the vendor procuring registration prior to the completion date. In addition, there will be greater scrutiny of the identity and boundaries of properties as the vendor will be obliged to produce a Land Registry compliant map on the completion of a sale of property which will add to the cost of selling unregistered land as the map will have to be prepared by a surveyor or architect.

Furthermore, the Law Society has recommended that vendors of unregistered land undertake on closing that they will, within two years of the completion of the sale, provide any additional information which they are reasonably able to supply and to produce any documents in their possession that may be required to effect first registration of the land. While the cost of such assistance will be discharged by the purchaser, the vendor will have an ongoing obligation for at least two years after the sale completes.

Failure to register a title

Failure to comply with the legislation and procure registration will prevent future disposals and financing of the relevant property.

Contact

For further information contact Ronan Egan, Partner.