It’s great to see that the Northern Ireland Law Commission is actively looking into various aspects of property law and conveyancing to see what areas require modification or improvement.
Some time ago I was invited to attend one of the initial meetings of the Law Commission to discuss what areas practitioners felt required immediate attention. I was informed that as part of the Law Commission’s task they intend to review all the legislation currently on the statute books that have any relevance to property matters. An estimated figure of the number of instruments involved in this review was tentatively put at six hundred. You can imagine how difficult a task this must be in trawling through the statute books for the last four to five hundred years, trying to identify any legislation that relates to property matters. I am not envious of those that have undertaken this immense task, but I imagine that the vast majority of these Acts and Orders will no longer have any relevance. It is incumbent upon the Law Commission to eradicate the irrelevant legislation and like the current process of defragmentation of a computer, we need to complete a similar process of overhaul and modernise our property law. I am not opposed to such modernisation provided it is carried out in a constructive and measured manner.
This encounter set me thinking about what legislation impacts the most on the average residential conveyance. It has also been interesting to note that there have been a number of recent judgments that have involved judicial interpretation of ancient legislation. Therefore it is important for us to consider what effect the repealing of an Act can have on the workings of residential conveyancing. There are certain ancient Acts, that are so deeply enshrined in our conveyancing process, that it would be extremely dangerous to repeal these Acts, as surprisingly some of the older legislation is far from redundant but is in fact intrinsically linked to the smooth running of our conveyancing process.
One of the oldest and most fundamental Act is the Statute of Frauds 1696. I don’t profess to be a conveyancing academic but in simple terms this Act makes it extremely difficult for either a vendor or purchaser to enforce a contract in respect of land unless the terms of the contract have been committed to writing. There are intricate requirements under this Act but the rationale behind the Act is that a verbal agreement to purchase land is not enforceable. I personally believe that this is a fundamental concept that should not be tampered with. Contracts in connection with land are often extremely complicated and involve considerable sums of money. Because of this it is important that before either a vendor or purchaser commits to any contract, the terms and conditions are clearly expressed in writing so that they can be fully comprehended and properly advised upon. There is also the added complication of title, covenants, easements, etc. Dealing with contracts is in itself difficult, but I couldn’t envisage how difficult it would be if a verbal agreement pertaining to land became enforceable. I therefore believe that the rationale behind the Statute of Frauds still remains very sound.
In the recent decision of Bonner Properties Limited v McGurran Construction Limited’ which all practitioners should read carefully, to familarise themselves, not only with the facts of the case, but also the rationale behind the decision. Since this decision, I feel that if acting for a vendor you need to be extremely careful when you receive a purchaser’s offer with Special Conditions. You would need to advise the vendor that if you enter into correspondence with the purchaser’s solicitors, that this may have the effect of rejecting the purchaser’s offer which can’t suddenly at a later stage then be accepted. The implications of this case are that there may now evolve a practice where all Special Conditions would have to be agreed, between the vendor’s and purchaser’s solicitors, prior to the purchaser signing and forwarding a contract with the purchaser’s proposed Special Conditions. From a risk point of view maybe it should now be standard practice that any Special Conditions are agreed prior to the signing of the contract by the purchaser and the acceptance of the same by the vendor. Although by adopting such a cautious practice, it may have the effect of delaying completing of complicated transactions but to me it is preferable to have Special Conditions agreed before the contract is released by the purchaser rather than negotiating on the Special Conditions if the contract has been signed only by the purchaser.
A long time ago, when I was a student at the Institute of Professional Legal Studies at Queen’s University, I remember being handed by my great mentor James Russell, the then Director of the Institute, a large file which contained photocopies of typed out sections of ancient conveyancing legislation. The file started with the Statute of Frauds and continued on through the centuries. The main bulk of the file contained legislation from the 19th Century and in particular extracts from Deasy’s Act of 1851 and the Law of Property and Conveyancing Act of 1881 At the time this document landed on my lap 1 never felt that I would still regularly be using it, as I assumed, rather naively, that those conveyancers back in the middle to late 19th Century had no real understanding of how conveyancing would operate in the late 20th Century. Now we are a decade into the 21st Century and it never ceases to amaze me how often I still dip in to these photocopied extracts relating tol 9th Century legislation. I now believe that at the time the majority of this legislation was revolutionary forward thinking. In case you think that I have lost my marbles, I will give you a few examples of recent occasions when 1 have had to quote extracts from, in particular, the 1881 legislation.
If I am acting in a short term commercial lease, probably 75% of tenants’ solicitors request evidence of the landlord’s title from me. Not only does this waste considerable time in obtaining the landlord’s title, copying the same, forwarding it to the tenant’s solicitors, them examining the same and raising obscure requisitions on title. It also has a negative impact on the transaction, as the majority of landlord’s titles are voluminous and take considerable time and paper to photocopy and read. The 1881 legislation clearly states that there is an implied covenant that the landlord has good title. Because of this implied covenant a tenant’s solicitor by requesting the production of the title is in fact putting themselves in a risk situation unnecessarily and also unfairly incurring additional expense for their client, .when they can simply rely on the implied covenant of good title from the landlord.
The implied covenants contained in section 7 of the Act are really clever and well thought
out. My particular favourite one is the implied covenant to provide “further assurances”.
Thankfully, it is only on a rare occasion I have had to remind some of the less
experienced solicitors, that there is the implied covenant contained in section 7 of the 1881 Act, that requires their client to sign a further Deed (normally of Rectification) to remedy a minor defect in the previous Deed that was signed by their client, prior to the completion of the transaction. Once I have reminded the solicitor of the implied covenant to provide the further assurance, I have always received the Deed of Rectification, normally by return.
What 1 particularly like about this aspect of this legislation, is that at the time, conveyancing would have been done in a more gentlemanlike way and it would have been felt that if a small error had been made and a Deed required rectification, that one’s fellow colleague would automatically agree to provide their client’s signature, on the Deed of Rectification, without any question of them seeking costs for themselves, or compensation for their client. Conveyancing should always be dealt with compassionately between practitioners, as every practitioner, because of the nature and complexity of the process will make mistakes. Conveyancing lawyers by nature should be facilitators of the process and should veer away from any adversarial or difficult attitudes.
There are lots of little gems contained in the 1881 Act which are still relevant, but there are matters that can be easily overlooked and there are some little quirks in the ancient legislation that can still catch out the inexperienced conveyancer. In particular, in my experience, it is rare that a voluntary conveyance contains the appropriate wording to indicate that the implied covenants contained in section 7 of the 1881 Act apply to the transaction As it is a voluntary conveyance, without this reference these implied covenants do not apply. In practical terms this could be significant and is often overlooked.
I am not for a moment suggesting that the majority of our ancient legislation is still relevant. The contrary is true in that the vast majority of the legislation is completely redundant. The Law Commission should therefore be encouraged to be radical but make sure in their pruning exercise they protect some of the real gems that I have mentioned above.
There is also the task for the Law of Commission to rectify matters that have been overlooked and in particular they should consider rectifying the impact of making a mistake in the addendum of a Conveyance. The impact of a minor mistake in the wording of this part of the Conveyance on the purity of the freehold title, is that it destroys this purity and replaces it with an unmarketable life interest. I must confess, I have never really fully understood why this is the case, and there is such an impact if the correct wording hasn’t been correctly incorporated in the Conveyance. Probably the worst scenario that any conveyancer can be in is if they have made the mistake when they acted for their client on purchasing the property, they have drafted the Deed of Rectification to rectify the typo in the addendum of the Conveyance and they find that the required signature cannot be obtained as the person needed to execute the Deed of Rectification cannot be traced. The effect of such mistakes, in my opinion, is disproportionate to the impact it has on the title and this is an area that has been overlooked for many years.
Moving on through the centuries, we didn’t have the major land law legislation that was
introduced in England and Wales in 1925 and in fact in comparative terms there was little
conveyancing legislation introduced in the first part of the 20th Century. It is from the
1970’s that the rate of change has increased enormously and continues to increase and evolve at an alarming rate. Some of the new legislation has not been successful and is under review by the Law Commission. We need to embrace this wide ranging review, to feed back to the Law Commission the practical problems that have been experienced by conveyancers over the years. I hope this process will be a success and some of the old legislation remains intact, if it still remains relevant.