Best Practices for Real Estate 2012 Seminar16th March, 2012

ENSURING GOOD TITLE TO PROPERTY ©

Presented by: Ms. Ashrini Beharry

J. D. Sellier + Co.Nos. 129/131 Abercromby Street

Port of SpainWebsite: www.jdsellier.com

©

OVERVIEW

LAND LAW BASICS Old Law & RPA Systems / Estates In Land – Freehold vs. Leasehold /

Co-ownership

TITLE SEARCHES Old Law - 20 years - Computerised searches / General Index / Country

Books RPA - Certificates of Title & Endorsements Companies Judgments / Lis Pendens / Caveats

OTHER LEGAL REQUIREMENTS Lands and Buildings taxes & WASA rates Town & Country Planning Division Restrictions and Approvals vs.

Restrictive Covenants

ENSURING GOOD TITLE - AFTER SEARCHES & INVESTIGATIONS

THE TRANSFER PROCESS

LAND LAW BASICS

OLD (COMMON) LAW / R.P.A.

OLD LAW (OR COMMON LAW) SYSTEM: Governed by Conveyancing and Law of Property Act Ch. 56:01

( formerly Ordinance Ch. 27 No. 12) System of Deeds – which are registered at the Land Registry Searches done to find root Deed and unbroken chain of Deeds for

at least 20 years

REAL PROPERTY ACT ( ‘R.P.A.’ / ‘R.P.O.’) SYSTEM: Governed by Real Property Act Ch. 56:02. ( formerly Ordinance

Ch27 No. 11 ) Duplicate Certificates of Title (‘CT’) issued by Registrar General Transactions endorsed on back of CT Curtain/Mirror/Insurance Principles – CT is conclusive and

guaranteed

FREEHOLD vs. LEASEHOLD ESTATES

Absolute ownership

999/199/99/25 year leases - Rent payable – Covenants entered into by Lessor and Lessee – Rights granted to Lessee / Rights reserved by Lessor – Service charge / Maintenance fee (if townhouse/condo/apartment development) / Management Companies / Share Certificates

CO-OWNERSHIP

Joint Tenancy: 2 or more persons owning the whole title estate or

interest in the property together Right of Survivorship – If one co-owner dies, his interest

automatically passes to the surviving joint co-owner(s)

Tenancy in Common: 2 or more persons owning distinct/undivided shares in

property Right of Inheritance - If one co-owner dies, his interest

passes to the beneficiaries under his Will (if he dies Testate) or to his Estate (if he dies Intestate)

INTESTATE

CATEGORY 1:SPOUSE / COHABITANT OR CHILDREN OR SPOUSE / COHABITANT (1/2) & CHILDREN (1/2 to be split amongst children in equal shares)

CATEGORY 2: PARENTS of the Intestate

CATEGORY 3: BROTHERS and SISTERS of Intestate of the WHOLE blood (in equal shares) ORHALF-BROTHERS and HALF-SISTERS of Intestate (in equal shares) ORGRANDPARENTS of Intestate (in equal shares) ORNEPHEWS and NIECES of the WHOLE blood ORNEPHEWS and NIECES of HALF blood ORUNCLES and AUNTS – being BROTHERS AND SISTERS of WHOLE blood of the Intestate’s parents ORUNCLES and AUNTS – being HALF-BROTHERS and HALF-SISTERS of the Intestate’s parents

CATEGORY 4: STATE

Note: If beneficiary conceived but not born before Intestate’s death, beneficiary inherits as though born in lifetime of Intestate and had survived him.

TITLE SEARCHES

SEARCHES AT REGISTRY

OLD LAW ‘Root’ – Must show commencement of title of at least 20

years – Sections 5 and 6(7) of CLPA

Computerised System (PIMS) / General Index / Country Books

Types of deeds/transactions considered to be ‘good root’:o Conveyance on Sale - for valuable considerationo Mortgageo Specific devise in a Will - must contain a description by which the

property can be clearly identified

RPA Duplicate Original Certificates of Title Endorsements

Must be free from encumbrances!

SEARCHES AT REGISTRY – cont’d

COMPANIES

Manual file vs. Online Companies Search Facility

Charges – Mortgages & Debentures

Memoranda of Satisfaction

Duly Appointed Officers

Annual Returns

By-Laws – not filed at Registry

JUDGMENTS/ LIS PENDENS/ CAVEATSJUDGMENTS Valid for 12 years Must be re-registered at land registry every 3 years in order to maintain

priority Can be enforced by:

• Writ of Execution – Levy on chattels• Summons for Sale (of debtor’s other real property)• Garnishee Order• Judgment Summons – Assessment of Means

LIS PENDENS Registered against property in dispute – pending completion of

proceedings Must be re-registered every 3 years in order to maintain priority Valid for 12 years Caveats - Similar to Lis Pendens, but applicable to RPO property

OTHER LEGAL REQUIREMENT

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RATES & TAXES

Section 18 – Lands and Buildings Taxes Act Ch. 76:04

All taxes shall constitute a debt due to the State and shall be a first charge on such lands and buildings and may be recovered by distress and sale.

Section 74 – Water and Sewerage Act Ch. 54:40 & Section 7 – Rates and Charges Recovery Act Ch. 74:03

T&CPD APPROVALS/ COMPLETION CERTIFICATES

Prior to development of a parcel of land, plans must be submitted to and approval obtained by developer from the Town and Country Planning Division (‘T&CPD’)

T& CPD Approval required for:o Development/ Sub-division / Change of Use

o No approval necessary prior to 1st August, 1969 (when Town & Country Planning Act Ch. 35:01 was passed) --- However, pursuant to s. 16 of the Act, the Minister may within 4 years of breach, enforce planning control if approval not obtained or conditions not complied with

After completion of construction, Completion Certificate issued by relevant Regional Corporation / THA (S.25 Chap 25:03)

ENSURING GOOD TITLE – AFTER SEARCHES &

INVESTIGATIONS

TYPICAL TITLE DEFECTS

No Root of Title Application to bring land under the RPA - Need survey, declarations, proof of payment of lands and buildings taxes

Restrictive Covenants that affects intended Use

Deed of Variation or Waiver from Lessor or Holder of the Covenant - Need to have agreement of Lessor / Holder of Covenant to waive or vary covenant – usually price to be paid for same

Omitted share- Occurs often in cases of where there are multiple co-owners of a property

Conveyance of omitted share to current owner

Lost Certificate of Title Application for Replacement Certificate of Title- Need declarations, ad to be placed in newspaper, wait 2 weeks

TYPICAL TITLE DEFECTS – cont’d

No Right of Way Deed of Rectification / Confirmation

OR Sometimes, confirmation that ‘road reserve’ is now a public road

Consent of Lessor not obtained for previous assignment

Deed of Waiver and Confirmation by Lessor

Judgment found registered against a Vendor

Notice of Cancellation / Discontinuance/ Satisfaction to be filed at High Court Civil Registry & at Registrar General’s Office

Outstanding Mortgages / Debentures

Deed of Release – duly executed by Mortgagee in escrow

THE TRANSFER PROCESS

TRANSFER INSTRUMENTS

OLD LAW Freehold - Deed of Conveyance Leasehold - Deed of Lease / Assignment

RPA Freehold - Memorandum of Transfer Leasehold - Memorandum of Lease / Transfer New Certificate of Title to be issued – if an excision from a larger

parcel of land

GENERAL Gifts, Assents, Mortgages, etc.

ALTERNATIVE METHOD – SALE OF SHARES IN HOLDING COMPANYDOCUMENTS: Share Sale Agreement

Minutes of Meetings & Resolutions

Auditors’ / Accountant’s Valuation Of Shares

Share Transfer Form (to be stamped at B.I.R. – Stamp Duty calculated at 0.5% of value of shares or purchase price, whichever is higher)

Notices of Change of Directors, Secretary and Address of Company

Resignations of outgoing Directors and Secretary

COMPLETION OF TRANSACTION

Attendance at Attorney’s office – Execution of Deed(s)

Vendor must be present – If not, execution abroad before a Notary Public

Powers of Attorney

Companies – Usually 2 Signatories required & Company Seal

Vacant Possession – delivery of keys

Payment of Balance of Purchase Price to Vendor upon execution of Deed

Payment of Fees / Stamp Duty by Purchaser

(see handout for calculation of same)

EVENTS AFTER COMPLETION

Affidavit of Execution – to be sworn before Commissioner of Affidavits

Stamp Duty to be paid at Board of Inland Revenue

Deeds/Instruments to be registered at respective Registry Departments

Certified Copy of Deed to be ordered

Return of Ownership Form to be prepared by Attorneys

New Owner to submit Certified Copy and Return of Ownership Form to relevant District Revenue Office to record change in ownership on Assessment Roll

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