Deeds Issues

General

The buyer’s solicitor prepares the purchase deeds.  The seller’s solicitor approves it.  There may be amendments and discussions.  In the vast majority of cases, no controversy will arise.

The form and nature of the deed will derive from the contract.  The contract might set out the obligations to be undertaken by the seller under the deed.  It will define the extent of property included.  It may deal with such matters, even as on rights to be included or preserved to the seller.

Where the contract is for the grant of a lease of a sale by way of a long lease the form of lease should be set out in detail in the contract.

Nature of Deeds

The law on deeds was reformed and simplified in 2009.  Many of the earlier artificial rules and principles have been removed.  The new legislation provides that a deed is the sole method of conveying and transferring title to land.

A deed is a written document executed in a particular format.  It must be executed as a deed and must be witnessed.

In the case of registered title, the Land Registry rules set out the basic form of transfer.  In most cases, supplemental content is required relative to the circumstances.

In Land Registry cases, the deal itself does not transfer a title.  It must be registered before title vests in the transferee.  An immediate right of possession passes from grantor to grantee.

The 2009 Act removed many of the anomalous older rules that had developed several hundred years ago and continued in force until 2009.  The effect of the statute of use by which we transfer to a grantee other than for value simply re-vested the property in the transferor is removed.

The legal title vests in the transferee, although it is possible that there is a resulting thrust.  This is not, however, relevant to the legal estate.

Deed Not Required

The general requirement for a deed does not apply in certain cases, most of which are self-explanatory.

• An assent by a person representing those vesting the deceased property in the person entitled.
• A surrender, usually of a lease by physical delivery of the property
• Creation and assignment of tenancies not required to be by deed
• Court vesting order
• Such other conveyances as may be prescribed

The Electronic Commerce Act allows for the possibility that deeds may be undertaken in electronic form in the future.  This is unlikely to be provided for until appropriate systems of authentication are agreed and standardised.  It may ultimately form part of a program of e-conveyancing.

Interpretation I

The meaning and effect of the deed are ascertained primarily from its wording.  The courts will seek to give effect to the intention of the parties as expressed in the deed.

External evidence is allowed to explain ambiguities in the wording.  Where however there is a flat contradiction between one part of the deed and the other, the basic principle is that the first statement prevails over the second.  However, it may be possible to show in circumstances that this is not the intention.

Where the deed is fraudulent, evidence may be admitted to admit the true position, where, for example, parties have understated the price with a view to avoiding stamp duty.

There are a number of principles or rules of interpretation applicable to deeds.  They are highlighted in other sections of this work including that on the interpretation of contracts.

Interpretation II

It is presumed that any ambiguity is interpreted against the interests of the grantor and favours the grantee.  This is notwithstanding that the grantee’s solicitor drafts the purchase deed in the first instance. The underlying contract may be helpful in determining the intention of the parties.

Where there are a number of different descriptions in the deed, one of which is clearly correct and the others which are incorrect, the patently incorrect ones may be ignored.  This principle of interpretation may apply where there are inconsistencies between two parts of the deed or wording and of maps.

It is presumed that the deed has been carried out in accordance with the intention of the parties.  There is a presumption that it has been properly executed.

Where for example, words have been written in, it is presumed that the alterations have been made before the deed was made.  The courts will attempt to interpret the deed in a manner that is operative and gives effect to the intentions rather than causes it to fail.

Implied Covenants

The covenants on the title are incorporated by means of the use of certain key phrases.  The most commonly used expression is “as beneficial owner”.  The use of this expression incorporates certain covenants on titles.  Alternative expressions include “as trustee”, “as mortgagee” and “as personal representative”.

The use of the phrases create covenants which are enforceable by successors including mortgagees and persons deriving title from the grantee.  Covenants by two or more persons bind them severally and jointly.  The terms of the implied covenants are set out in the schedule to the 2009 Act.

In the case of a conveyance by a person as a beneficial owner, the following covenants are implied:

• that the grantor has a right to convey the property;
• that the grantee will quietly enjoy the property without disturbance by third-party claimants
• that the property is transferred free from all other claims to demands, estates, encumbrances and interests.
• that the grantor will at his cost take any actions may be necessary to confirm the property further as may be reasonably required.

The other covenants imply similar lesser obligations.

Implied Lease and Assignment Covenants

There are a number of covenants relevant to leases and assignments of leases.

In the case of leases, it is implied that

• the lease is valid and subsisting at the time of its assignment
•  that the rent has been paid up-to-date and
• that the covenants have been performed and observed.

The covenants in respect of leases on the part of both lessor and the lessee are incorporated automatically.  The implied terms may be modified.

In the case of assignments of leasehold property, there are implied obligations on the part of the lessee that the assignee will pay the rent and observe and perform the covenants in leases so far as they relate to the part assigned.  There is also a covenant that the assignee will indemnify the assignor and his estate from all claims and demands arising from failure to pay rent or breach of covenant.

Covenants

A deed may create new covenants and conditions binding the seller and buyer in respect of lands sold or retained.  As mentioned above, special rules which may be reservation of such rights to the seller subject to technical rules have been abolished.

There may, for example, be covenants by the buyer or seller to use adjoining land in a particular way as necessary to give effect to the sale.  See generally the separate sections on covenants on a property.  The covenant in the context of property might be entered by a person on behalf of himself and his successors in title so as to bind the owners of land for the time being.

Generally, the seller or grantor will give covenants on title.  These are covenants which guarantee the title and certain other key matters to give effect to the buyer’s legitimate expectations.  Each of these covenants gives the buyer recourse to the seller either for further deeds of confirmation or in some cases compensation.

If a property is held under a lease and part is being sold, both buyer and seller will require covenants from the other to continue to comply with the lease covenants in so far as they affect the land retained and acquired respectively by them.  Otherwise, the failure to do so may jeopardise the common title.

Sale of Part

The acknowledgement and undertaking has been mentioned above.  This is required where land is physically subdivided.  Where a seller is selling part only of the land, he is generally entitled to retain the original title deeds.

He must, under general conditions, give certified copies of the deeds, i.e. certified to be true copies and give a statutory acknowledgement of the right to the production of the original deeds and undertakes for their safekeeping.  This undertaking, once given, accrues for the benefit of successors.

The acknowledgement and right of production oblige the person giving the undertaking to produce documents in court in support of the title or claim of the buyer/recipient of the undertaking.  It requires delivery of further certified copies of the original deed as necessary.  The costs and expenses of the same are met by the buyer or person requiring the undertaking.

The undertaking promises to keep the deeds safe other than from unavoidable accidents such as fire.

Where a part of a title is sold and the older common deeds are retained by the seller, the buyer may require a note of any condition or which confer rights such as an easement to be endorsed on those retained deeds.  This is to give him comfort that the grantor/seller’s success is called on notice of the same.  This is relevant only to unregistered titles.

Stamping

A deed must be stamped in order to be produced and relied on in court.  Accordingly, a buyer solicitor must vouch that all prior deeds are properly stamped.  If they must be produced in court in order to asset Title EG, evict a third party claiming title, they may not be received unless duly stamped.

Similarly, deeds may not be registered without being duly stamped.  Since 1991, stamping has been a requirement of law.  The obligation generally vests on the grantee/buyer.  In some cases, the grantor, such as in the case of a deed, has stamping obligations.

Failures to properly set out the consideration, either in the deed or in some ancillary document such as to evade stamp duty is an offence.  A deed whose date is altered to avoid stamp duty may technically be voided as a forgery

Stamp Certificates

Until July 2012 deeds were required to contain revenue certificates.  These were to certify the status of the property relative to certain stamp duty requirements.  See generally the sections on stamp duty.  Certificates were required in relation to whether the property was residential or non-residential after the late 1990s when stamp duty provided for differing rates.

Stamp duty certificates were also required to claim the lower rates of stamp duty.  In the absence of a certificate, the default higher rate would apply.

The certificate was to certify that the property transaction was below a certain value.  Moreover, it was required to certify that the deed was not part of a larger series of related transactions below the relevant values. Otherwise, stamp duty at the higher rate would apply to the sum of the value of connected transactions.

Certificates were also required after 1990 in all deeds in relation to whether the deed was linked to a building contract.  This sought to avoid developers selling land in an undeveloped state while entering a connected building arrangement for a house.  The rules effectively sought to apply stamp duty to the whole of the combined land sale and building price.

Certificates Covering Reliefs

In late 1990s distinctions were made in rates between owner-occupiers, first-time buyers and investors.  The rules changed from year to year.  Differing and complex certificates were required to claim the relevant exemption.

Up until the late 1990s, all new houses below a certain size were exempt from stamp duty.  After the late 1990s, the exemption was only available to owner-occupiers. Prior to 2009/2010, a half rate of duty was available for deeds between related parties.

Various other stamp duty reliefs have existed over the years, for example relating to farmland, young trained farmers and a variety of other matters which required certification in the relevant deed.

Ultimately, in 2009 the requirement for physical stamping on the deeds terminated and a system of electronic stamping was introduced.  The certificates continue to be required on the deeds until July 2012.

Reform of Stamp Duty

Initially, the e-stamping was effectively a method of stamping so that the Revenue could in principle inspect the deeds to verify that they have been properly stamped and self-assessed by the grantee solicitor.  The requirements for certificates was removed in July 2012.

As of 2010 stamp duty law was simplified radically.  Rates are now much lower than before.  This is a result of the very weak state of the property market and the demonstrable transient nature of stamp duty revenue.  In broad terms, the rate on residential property is 1% below €1 million and 2% over that.  The commercial rate is 6% (formerly 2%).

Other certificates were required in deeds at various times in the past.  The Land Acts which have been mentioned separately required certification that the buyer was either an Irish citizen or otherwise qualified under the Land Act to purchase.  Where the requisite consent was required, the fact of the consent needed to be certified.

A variety of other minor certificates may be inserted by way of practice for future reference purposes.

References and Sources

Primary Texts

Law society of Ireland: Conveyancing 9th Ed Brennan et al.

Investigating Unregistered Title- Magee 2012

Irish Conveyancing Law- Wylie & Woods 4th Ed 2019

Irish Conveyancing Precedents- Laffoy

Irish Conveyancing Statutes – Wylie 2020 6th Edition:

eConveyancing and Title Registration quantity

Complex Conveyancing Law Society PPG Hession 2nd Edition

 

Registration of Deeds and Title in Ireland – Deeney 2014

UK Textbooks

Conveyaning Handbook 28th Ed. Silverman et. al (annual)

A Guide to Conveyancing Residential Property by Alan Stewart

A Practical Approach to Conveyancing (22nd ED) Robert Abbey and Mark Richards

A Practical Approach to Commercial Conveyancing and Property 5th Ed Robert Abbey