How safe are your titles?

Most firms hold titles on behalf of their clients, but I wonder how many firms ever check them to ensure that all deeds have been properly recorded or registered? It might be an idea for firms to do so now, in light of my experience recently.

I was instructed by Mrs H in relation to the sale of a second floor flat in Glasgow. Mrs H had inherited the property from her mother, Mrs M. The titles were held by a firm in Glasgow (firm A) who had acted for Mrs H and, before her, for Mrs M also. I had my client complete a mandate authorising firm A to send me the titles and Mrs H’s will. When I examined the titles I noted that when Mrs M died in 1997, firm A obtained confirmation to Mrs M’s estate and there was with the titles a certificate of confirmation with docquet endorsed thereon by Mrs H as executrix-nominate in favour of herself as the beneficiary in terms of Mrs M’s will. Something was not right, however. With the titles was an unrecorded disposition in favour of Mrs M dated 13 February 1970. I checked with firm A as to whether they held any other titles, in particular a land certificate. I was advised there were no other titles.

I decided to obtain a form 10A report to trace the last recorded title for the property. That disclosed that the last recorded title was a disposition in favour of Mr and Mrs B recorded on 25 June 1964. The 1970 disposition in favour of Mrs M had never been recorded.

On further investigation, it appeared that the 1970 disposition in favour of Mrs M correctly described the property as being the southmost flat on the second floor. I obtained a copy of the 1964 disposition in favour of Mr and Mrs B and was horrified to see that the description of the property was the southmost flat on the first floor. When Mrs B sold the property to Mrs M in 1970 (Mr B having died shortly after the purchase in 1964 without having evacuated a survivorship destination in favour of himself and Mrs B), she was selling a property to which she had no title.

After further investigations I eventually managed to piece together what had happened. Originally the entire tenement of 13 flats was owned by Mrs D. Over the years Mrs D sold off the flats one by one. However, she sold the southmost flat on the first floor twice. She had no doubt meant to convey the southmost flat on the first floor to one party and the southmost flat on the second floor to another, but she had not done so. When Mrs M’s solicitors dealt with the purchase in 1970 they had noted that the property was incorrectly described. The titles sent to me by firm A included a draft disposition by Mrs D in favour of Mrs B of the southmost flat on the second floor, which would then enable Mrs B in turn to convey the property which she occupied to Mrs M. There was a draft counter-disposition by Mrs B in favour of Mrs D transferring back the wrongly conveyed southmost first floor flat. For some reason, these dispositions were never completed. There were, therefore, three unrecorded dispositions with the titles received from Firm A: two unsigned drafts and one signed engrossment.

I had the unenviable task of informing Mrs H that she did not own the property which she was trying to sell and in which she had lived for 35 years, nor did Mrs M, and nor did Mrs B who purportedly sold it to Mrs M in 1970.

I eventually managed to ascertain that Mrs D sold her remaining interest in the tenement to a company, company G, in 1977. The description in the disposition in favour of company G was a description of the entire tenement under exception of the 12 flats already disponed by Mrs D. Two of those dispositions, however, related to the southmost flat on the first floor. Company G, therefore, obtained title to the remaining flat which Mrs D knew she still owned but also to the flat occupied by Mrs M and subsequently my client, Mrs H, which Mrs D thought she had sold in 1964.

If that was not bad enough, on checking with Companies House, I discovered that company G had been dissolved in 1993. It appeared to me that I might have to reinstate company G to the Companies Register and then try to obtain a disposition from company G in favour of Mrs H. I was unsure, and remain unsure, how I would manage to persuade the former directors of the reinstated company G to grant such a disposition. There was never a contractual relationship between Mrs M and company G and I could not see how company G could be forced to grant a disposition. Whether the courts could be persuaded somehow to grant a disposition on behalf of company G was a matter I had to consider.

I decided to write to the Keeper explaining the position and asking whether he would be prepared in all the circumstances to take a pragmatic view and to allow me to proceed with a voluntary first registration in the Land Register on behalf of Mrs H. This would take the form of a disposition by Mrs H in favour of herself, deducing title through the unrecorded 1970 disposition and the confirmation in favour of Mrs H with docquet in favour of herself endorsed thereon. It was with great relief that I received a letter from the Keeper confirming that he was prepared to take a pragmatic approach and would allow me to proceed with a voluntary first registration of the property and that without remedial conveyancing. I am now one of the Keeper’s greatest fans and must praise the very sensible stance which he took in this case. This saved my client from having to pursue a claim against firm A for their negligence, and saved her from a probable nervous breakdown!

I managed to proceed with the voluntary first registration in favour of Mrs H and she sold the property shortly thereafter, obtaining a much higher price than she had originally anticipated.

I think it might be worthwhile for all firms to check the titles which they hold to ensure that there are no similar horrors lurking in their safes.

One final point: I would be interested to know whether the gap of 35 years (almost to the day) between Mrs M purchasing the property and the title being registered is a record. I have certainly never come across any other instance with such a gap between a purchase being completed and the recording or registration of the title.

Dmitri Ross, Hamilton Ross, Airdrie