Requisitions II
Tax
Requisition 17 asks the tax residence status of the seller. It also asks whether certain directions have been made by the Revenue under anti-avoidance legislation in respect of the sale. There exist certain tax provisions whereby resident buyers may be obliged to deduct tax in on payments to sellers. They are very rarely encountered.
There exists a little-used power in the context of anti-avoidance legislation on development land by which the Revenue may direct the buyer to deduct tax from the proceeds of the sale and remit it.
This differs from the automatic capital gains tax deduction obligation applicable on sales of real property over €500,000. A 15% deduction must be made and paid to Revenue unless a clearance certificate issues and is produced. The provision is designed to ensure that non-residents are subject to taxation on disposals of land within the state.
Corporates
Requisition 18 deals with a body corporate (usually a company) vendor. It is necessary to establish that the vendor is duly incorporated, in existence and has the powers to undertake sale. It is necessary to establish that the company’s directors have not lost control of the company by reason of an appointment of a receiver, liquidation examinership or winding up. Companies Office searches are necessary to verify the position.
Certain Companies Act provisions place conditions and requirements on transactions between companies, their directors and persons connected to them. It is necessary to verify whether these conditions have been satisfied in the past and in the present transaction.
A company is subject to the laws of the country in which it is incorporated. Where the vendor is a foreign incorporated company it is desirable to obtain an opinion from a lawyer for the relevant jurisdiction confirming the existence and relevant powers of the seller.
Old Land Regulation
Requisition 19 deals with Land Act 1965. The Land Acts were part of the process of transfer of lands of lands to tenant farmers, which commenced in the late 19th century. The act applied from 1965 to 2005. It is still relevant on older transactions.
One part of the Act required the consent of the Land Commission and later the Department of Agriculture, to the subdivision of agricultural land. This reflected the policy of consolidating agricultural holdings. Another aspect of the legislation sought to control the acquisition of land by non-residents and by companies controlled by non-residents.
This legislation was of necessity modified when Ireland joined the EU and was subject to multiple exceptions before being ultimately repealed. It was necessary to include certificates in all deeds as to the application of legislation.
Unregistered Title
Requisition 21 raises certain questions relevant to a unregistered title. It requests details of assents.
Since 1959, a title does not pass directly on death and an assent is required in each case. Formerly, freehold title vested directly in the heir at law and verbal assents were possible in some cases. However, since that date and assent is made by the personal representative in all cases and must be in writing. It must be registered in the registry of deeds in the same way as a deed or in the Land Registry.
An assent by the personal representative is conclusive. It is not usually necessary for the buyer generally to look behind it to the proper administration of the estate. The buyer is not on notice of equitable interests provided the assent is made in the due course of administration of the estate.
A further matter covered is compulsory registration of title. Since 2011, all unregistered title is now compulsorily registrable on a purchase. Both the contract and the requisitions require certain commitments on the seller’s part to assist the buyer in compulsory registration. The seller must produce an appropriate Land Registry map. Under the contract, the seller is to assist the buyer in queries raised by the Land Registry within two years. An undertaking or other commitment of may be sought from the seller’s solicitor to assist.
In the case of a subdivision of unregistered title, it is necessary for one owner of the subdivided property to retain the original deeds while the other obtain a certified copy only. The latter party will require a statutory acknowledgement. The statutory acknowledgement requires the person giving it and his successors, to produce the deeds when required to prove title.
Where for example an owner has to prove his title, it is generally necessary to produce the original title document going back at least 20 years to the court and to produce the original document. Where the land has been subdivided, this may require the production of the original from an adjoining owner who has retained the original deed. The statutory acknowledgement and undertaking create an obligation on that owner to produce it when required. It will require to be demonstrated in future transactions..
The inability of the seller to produce an acknowledgement and right of production is not a grounds of objection where an equitable right to produce the deeds exists.
Acknowledgements and undertakings for safe custody may be required at the buyer’s expense. The seller will bear the expense of perusal and execution on behalf of the seller and on behalf of other parties required.
A seller may retain the document where he retains part of the land or where the document comprises an instrument creating a trust which still exists.
Identity
Requisition 21 deals with the identity of the property. The general conditions limit the extent to which the seller is obliged to prove the conformity of the documents with the physical property. Where however there is a clear discrepancy this will be a legitimate objection and the subject to an appropriate requisition.
A buyer may be entitled under the general conditions to a declaration that the title has been enjoyed in accordance with the physical boundaries in certain cases.
Registered Title
Requisition 22 deals with the registered title. A certified copy of the folio and map is required. This is the basic starting point for proof of registered title. The buyer will wish to see that the seller is registered with absolute freehold title or another sufficient title as provided by the contract.
If the seller is not yet registered it is possible for a sale to be undertaken by him as the person entitled to be registered as owner. In this case, proof will need to be given that the seller’s registration is of the amount or form and complies with all obligations such that it will be completed automatically.
Many agricultural titles are or were subject to a Land Act annuity. These are the vestiges of the original financing acquisition charges in favour of the Land Commission. Many of them had a term of over 60 years. The requisition asks for evidence, that they no longer apply. As of 2005 remaining land purchase annuities below certain sums were automatically discharged.
The requisition requests a “section 72” declaration on closing and a draft upfront where any such burdens affect the property. See the articles in relation to section 72 burdens. They embrace and include most leases of less than 21 years’ duration and the rights of other persons in actual occupation of the property.
The requisition formerly requested copies of the land certificate. This was required to be produced on every sale or transaction. It acted as protection against fraud and forgery. Land certificates have been abolished so that they are now of no effect and are no longer required..
Building
Requisition 23 deals with newly erected property. Evidence is required of the identity of the property within the title shown. Evidence of title to services lines for the properties is likewise required.
The contract or a separate contract will provide for the construction of the dwelling house and give guarantees and assurance in relation to defects. The warranty protection from providers such as Home Bond, Premier Guarantee is in respect of new build developments y. Alternative proof and protection against construction defects may be acceptable for one-off houses.
Family Legislation I
The Family Home Protection Act requires the consent of the non-owning spouse to the sale of the family home. The family home is a dwelling house in which a married couple ordinarily resides. The legislation was extended in 2010 to civil partners and their shared homes.
The legislation requires consent to any transfer of an interest. This includes the creation of a lease and mortgage. It also includes further advances on a mortgage which in any way increase the extent to which the equity is affected.
Where as is now very common, both spouses own, consent is not required. However, proof is required that the parties are married to each other and to nobody else. A judgment mortgage is something over which the owning spouse has no control unless there is collusion.
The requisitions ask the status of the property under the Family Home Protection Act. In the case of unregistered title evidence of compliance with the family home protection legislation will be required in respect of all prior transactions since July 1976. In the case of a registered title, it will be necessary only in respect of the current transaction. It will be applicable both to the purchase and mortgage.
Where the requisite consent is not forthcoming, the conveyance or transfer, mortgage etc. is void.
The legislation provides that if the buyer makes all reasonable inquiries and does not come on notice that there is a party with the Family Home Protection Act rights of consent, then he takes free of those rights.
This necessitates that every buyer follow conveyancing practice in finding proof that the legislation does not apply. A declaration is required to show that the legislation does not affect. Generally, the declaration will either aver that the owner is unmarried or that the owner or owners are married and the particular party identified is the spouse whose consent is required.
Commonly, the spouses have intermarried and they will usually exhibit their marriage certificate to prove their marriage, and aver that it has not been dissolved so that there is no third-party spouse whose consent is required.
More complex situations can arise where the parties have been subject to judicial separation or divorced. Arguments may arise as to when a property ceases to be a family home. The legislation effectively deems a property to be a family home if a spouse has been forced to leave it by fear or duress.
There is relatively well-established practice as to extent of proof which must be given. However, in some cases, there may be circumstances which arouse suspicion which requires further investigation.
Family Legislation II
Requisitions 25 and 26 deal with the risk that the transfer is an attempt to evade the right of the other spouse in judicial separation, divorce or other family law proceedings. The standard forms of family legislation declaration should cover off and explain why the transaction is not and could not be invalidated in family law proceedings.
There is a provision which seeks to put a six-year time limit on challenges to conveyances under the Family Home Protection Act when the spouse is not in occupation of the family home.
The courts have extensive power to transfer assets between spouses on the occasion of a judicial separation or divorce. Transfers with the intent of avoiding this possibility prior to judicial separation or divorce proceedings may be set aside in those proceedings. The requisitions raise certain questions in this context and also seek a declaration vouching and verifying that the circumstances do not apply.