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Requisitions and Undertakings

Case law suggests that answers to Requisitions on Title can turn into professional undertakings. The old standard form of requisition requested confirmation that a mortgage was to be discharged on completion. If answered too simply, this created a professional undertaking on behalf of the vendor's solicitors to discharge all and any charges on the property. This was often at a stage when the number and extent of such charges was quite unknown.

The 'approved' reaction to this, is to clarify on the form that the answer is, in fact, an undertaking. This response merely asks for trouble. It neither respects good conveyancing practice, nor reflects the reality that such replies must often be given anticipating an exchange. At any time, a charge may be registered without warning to the conveyancer, and this answer invites trouble..

The following seems to be a sensible solution, and it is one we will adopt unless you tell us otherwise.

  1. Our own Requisitions on a purchase, and replies on a sale, will indicate that we do not ask for an undertaking on the requisitions, and nor do we give one. Instead, we will treat replies as indications of the seller's solicitors expectations at the time of completion.
  2. The Land Registry system provides a proper solution which should be used. The seller supplies office copies, and will endeavour, before exchange of contracts to confirm that there will be sufficient funds available from the proceeds of sale to discharge any charges revealed on those office copies. He confirms, but without any promise, that he expects to be able to discharge them on completion.
  3. The buyer carries out the Land Registry search. If a new charge, one not revealed by the office copies, will take precedence to the transfer, he must come back to the seller immediately. Enquiries can be made, and the situation clarified for all involved. At that point the seller's solicitor can check, and ensure and confirm if he can, that the charge can be cleared.
  4. There is always a possibility that a seller will charge a property immediately before completion. It is for th buyer to protect himself with a search. It is wrong to ask a seller's solicitor to turn himself into guarantor and/or banker for the seller. The buyer takes this small risk when he exchanges, and it is a risk he must live with.

If you foresee any particular problem with this practice in this matter please notify us immediately

Important: Please note that our law-bytes are retained for archival purposes only. The law changes, and these notes are often, now, out of date. You must take direct advice on your own personal situation and the law as it currently stands.
All information on this site is in general and summary form only. The content of any page on this site may be out of date and or incomplete, and you should not not rely directly upon it. Take direct professional legal advice which reflects your own particular situation.
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18 October 2013 http://www.swarb.co.uk/lawb/cvrReqUnd.shtml 161 18 October 2013