INVESTIGATION OF TITLE (AND PROPERTY)

Investigation of title (and property) is the process through which a Conveyancer determines
whether the client is going to ultimately acquire a good marketable title. The Conveyancer is
obliged by practice to ensure that what is being disposed of and or what is being acquired is a
good marketable title. For three basic reasons title (and property) are investigated.
Firstly the caveat emptor (Buyer beware) rule imposes an obligation on any person intending to
acquire an interest in property to investigate the same. A Seller is under no obligation to
disclose patent defects but he is under an obligation to disclose such latent defects as he may
be aware of [Reflection: What are patent defects? And latent defects? Can you figure out some
examples of either?].
Secondly, the well settled principle of law that a bona fide Purchaser for value without notice
acquires a good title to property unaffected by matters of which he had no notice also dictates
that the title (or property) is investigated in order for a party to have the protection afforded by
the law to such bona fide Purchasers for value without notice: see Oliver V Hinton 1899 2 Ch D
264, Section 3 of the Conveyancing Act 1881, Section 199 of the Law of Property Act 1925.
The third reason for investigating a title (or property) is that prudence and practice demands the
same of a Conveyancer as well as of his client. The client wants to be certain that it is obtaining
a good and marketable title. Failure to do so may result in a successful claim for negligence in
the event of loss on the part of the client. It may thus be said that investigation of the title (or
property) is part of defensive conveyancing. Vendor- deducing of title, disclosure of latent
defects: This is the responsibility of the vendor. Vendor is expected to deliver on the promise
that he has good title to the property. This duty is imposed on the vendor because it is expected
that the devolution of interest in a property is best known to the vendor.
The Vendor deduces the title by submitting an abstract of title. This is a brief history of the
property showing how the interest in the property moved from one person to another, the
encumbrances and any other thing that may affect the property. It is also called an epitome of
title in many jurisdictions- a schedule of documents and other relevant information which
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constitute the title together with copies of these documents. LSK Conditions of Sale- cond. 9
requires the abstract to be presented by the vendor within 14 days of the date of the agreement.
Immediately after receiving the abstract/epitome of title it is the duty of the purchaser to conduct
an investigation of the title. The purchaser is expected to go to the following places:
Land Registry (remember the location of the registries for the various registration Acts)
Company Registry- where the property is/was owned by a company
Probate Registry-where transfer is by succession
Local Authority- to establish planning hindrances, notices, rates payment
Survey Department to establish boundaries.
Physical Inspection of the property- to ensure the measurement, description,
boundaries, improvements etc correspond with what is in the title. Also to establish
patent defects.
Court records- if there has been a dispute over the property.
Ideally, investigation of title (or property) will be conducted prior to the contract being executed.
Post-contract investigations of title may however also serve the purposes. [Reflections: what
dangers would post-contract investigations of title pose to the Conveyancer and or his client?
Distinguish between patent defects and latent defects.]
There are basically three mediums of investigating the title or property. These are searches,
pre- contract inquiries and requisitions.
(a) Searches
Like registration, searches also shield against fraud. Searches are enquiries carried out usually
by the Purchaser‘s or Chargee‘s or Leassee‘s Advocate in the government departments so as
to check ownership of the interest as well as planning, environmental and encumbrances and
other related matters which affect ownership of the interest being transferred or given and which
matters are noted or ought to be noted on the title register.
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It is effectively the purposeful inspection of title records or register at the relevant (Lands)
Registry. The modern Conveyancer is more concerned with the Lands Registry Search though it
is advisable that the other searches are not ignored. Such other searches will include searches
at the Companies Registry to confirm existence of the Vendor or solvency of such Vendor,
search at the Local Authority Registry to ascertain any planning hindrances or notices search at
the Survey Department to reconfirm or identify boundaries.
With regard to the Lands Registry searches, the statutes recognize both official and unofficial or
hand (personal) searches. An official or postal search is one made by an Official of the relevant
lands Registry at the behest of a party upon payment of the requisite search fees and the
results of such official searches are guaranteed by both the registry and the Government as
accurate. A Certificate of Official Search is always issued for such searches. The personal or
unofficial or hand search on the other hand is made by a member of the public by inspecting the
relevant register, parcel or deed file availed by the Lands Registry staff. Currently only Lawyers
and Advocates are allowed to conduct personal or hand searches. The official search may have
the advantage of a government guarantee and indemnity for any loss resulting or sustained by
reason of a defective official search, but is also has its disadvantage in that the Registry staff
may not be able to discern and avail all the relevant information. Such failure to discern and
avail information may not necessarily amount to a ―defective search‖ to qualify for indemnity.
The Official Search on the other hand has one great advantage that one is able to collect the
information required without discrimination.
In conducting a search one ought to get details of ownership, of special conditions, of the
tenure, of the rental, of the user, of encumbrances and quasi-encumbrances (i.e. caveats).
Expect however to meet such hiccups as missing registry deed or parcel files.A third type of
Lands Registry Search ordinarily not conducted is the “historical search”. This refers generally
to a search on the history of the subject parcel of land. Such history will be found in the
correspondence file and not the parcel or deed file. The correspondence file contains all the
details about the origin of each parcel of land from the allotments to any subsequent
subdivisions and indeed to the ―root of the title‖. The correspondence file is comprised of the
internal correspondence between the various sub-departments of the Lands Department. It may
thus be
MATUI L. DANIEL Page 35
ranked confidential and it is important that an official request is made to the Commissioner of
Lands.
The availability of the correspondence file has however helped in discerning good and
marketable titles as was in the cases of Gitwany Investment Limited –vs- Tajmall Limited and 2
Others ( 2006 2 E A 76) and Skyview Properties Limited –vs- Attorney General & 2 Others (NBI
HCCC No. 1622 of 2001 unreported). The Court of Appeal however seems to hold the contrary
as in Pashito Holdings Limited &AnorVs Paul NderituNdungu& Others [1997] eKLRthat one
shouldnotinvestigate a title beyond the register at the lands‘ registry. See also Justice
Kimaru‘sobiterinAttorney General Vs Kenya Commercial bank Limited , Afraha High School
Limited & 2 Others [2004]eKLR that historical searches are unwarranted and unnecessary for
being an affront to the principle and concept of registration.[ Reflection: do the statutory
provisions allowing official searches effectively also allow a historical search to be conducted?
Need one limit himself to statutory searches only? Are you intellectually independent of your
client‘s control as an officer of the court and law and thus the consequences of your client‘s acts
must be viewed by you in the larger probably public‘s interest as well?]
The result of Searches will disclose information in relation to the Vendor/Mortgagor and or the
property. It may be necessary to disclose and discuss such information to the client as this may
impact on the decision to purchase or take the security. Good practice however demands that
you engage the other party or require the other party or his Advocates to confirm position of the
findings i.e. wills the detected encumbrances be discharged?
NB: read- s.39 RDA and s.34 LRA
(b) Pre Contract Inquiries
Pre Contract inquiries are also a medium of investigating the title (or property). They are
preliminary inquiries relating more to the physical condition of and location of the subject
property as well as the proposed contractual document itself. A Purchaser will ordinarily want to
know the physical condition and extent of the property. For this the Purchaser will conduct a
personal inspection of the property or deputize his agent (e.g. a valuer). The inspection is
conducted to help ascertain not only the value of the property but also to detect physical and
patent defects, ascertain those in occupation, ascertain the boundaries and also to check on the
MATUI L. DANIEL Page 36

fixtures and fittings, if any. Naturally these are matters not covered by searches and pre-
contract inquiries will thus be made after such physical inspection to help plug in the gaps.
Pre contract inquiries thus relate to matters touching on the physical condition of the property as
well as other matters not covered by searches. They are as important as searches. The
Purchaser, for example, buys the property as it stands and the Vendor is under no duty to
disclose any physical defects in the property. The Purchaser must be advised by the
Conveyancer of this and must be further advised that in order to protect himself or herself he or
she should have the property fully surveyed and inspected before the contract is signed. Some
of the pre contract matters one will bother himself with include development prospects and
planning permission matters of the property and adjoining property, access to the property,
boundaries of the property, water supply, physical defects detected or suspected, disputes
existing in court over property, tenants in occupation or absent, etc. The full extent of the pre
contract inquiries will depend on each particular transaction and property. When acting for the
Vendor it is important not to presume any answers to pre contract inquiries but to consult with
the client and answer accurately as possible. Answers if unequivocal and relied upon but turn
out to be untrue can lead to a suit in damages both against the client and his Advocate
providing the answers especially where the Advocate decides to step out of his role as
Advocate and accepts direct responsibility towards the third party: Gran Gelato Limited –vs-
Richcliff (Group) Ltd [1992] 1 All ER 865. See also Cross J‘s holding in National Provincial Bank
Ltd Vs Hastings 1965 AC 1175 that ―persons dealing with unregistered land must obtain same
information outside the register in the same manner and from the same sources as people
dealing with unregistered land would obtain it‖.
(c) Requisitions
The purpose of requisitions on title besides aiding the process of investigation of title is to help
give the Purchaser title in accordance with the contract for sale. Requisitions relate to matters
which arise not on the basis of the search or simple physical inspection of property but through
the inspection of the title document or abstract availed. The requisitions are in the form of
forthright questions arising after a perusal and deduction of the title document. Deduction will
relate to tenure or the property, execution of the title document, identity of and description of
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theproperty, underpaid stamp duty, identity of the encumbrances if detected on the face of the
title.
The LSK Conditions of Sale (1989) at Condition 10 provide for the requisitions or objections to
be made after the contract has been executed and in any event not later than fourteen (14) days
after delivery of the abstract, title deed or a copy thereof. However as requisitions do not enable
the Purchaser to have a second bite of the cherry in respect of matters which were overlooked
at the time of execution of the contract, good conveyancing practice would tilt towards
conducting requisitions prior to the execution. A Vendor is however under an obligation to fully
and correctly answer the requisitions.
Additional Notes
Why do searches?
The caveat emptor rule remains a cornerstone of conveyancing. It is prudent that a buyer will
need to find our as much as possible about the subject property before contracts arc
exchanged. The seller to some extent and under common law also has a duty to disclose any
material subsisting encumbrances. .A prudent buyer needs to discover as much as possible
about the property being purchased.
This is the obligation of the buyer's advocate. The buyers advocate must conduct pre-contact
searches and all preliminary enquiries. The advocate must carry out all appropriate searches
and enquiries before advising the buyer to sign any contracts to purchase property. Advocates
must bear in mind that if they fail to carry out every appropriate search, they will be liable in
negligence for any loss suffered by the client as a result of their negligent conveyancing. The
advocate must also advise the buyer of the need for a physical search or inspection of the
subject property prior to the exchange and the signing of any contracts. In Kenya, searches can
be divided into official and unofficial searches. In all searches, nominal fees are paid.
Personal searchesentail an actual examination of the deed files or register. A personal search
may be carried out by anyone. Normally advocates use their conveyancing clerks to do this. A
search will reveal details of all transactions registered against or in respect of the title.
Official searchesconstitute of an application to the registrar of lands to supply the person
applying with certified copies of details of the register (RLA). The registry by accepting to do so,
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takes responsibility of investigation of the title. Certified copies are admissible in court and -
conclusive of the entries in the register of deed file in the event of litigation.
The Significance of Searches
Searches may appear simple and routine, but they are vital for successful conveyancing. An
omission of a search could lead to unpleasant surprises. These include;
a) Discovering that documents lodged for registration cannot be registered because of
restrictive entries such as caveats, caution, prohibitions or restrictions on tide.
b) Discovering that the title is encumbered.(Charges)
c) The proposed vendor may turn out not to be the registered proprietor of the subject
property. The unpleasant surprises may turn out to be a matter of professional negligence
against the advocate. There is also the issue of embarrassment.
Other necessary searches include;
Investigations of the correspondence file to establish if Land Rents have been paid over the
years. Huge outstanding land rent arrears owing to the government by prospective vendor could
affect a sale/purchase transaction. An investigation of the status of payment of rates at local
municipal offices is also essential.
Physical Search or Inspection of the Property
A buyer should always be advised to inspect the subject property prior to exchange or signing of
contracts. The reasons for this are five fold;
Why check the state and condition of the property.
In general the seller is under no obligation to reveal defects in the property. There is normally no
warranty given about the state of the property and consequently all buyers should obtain their
own survey report before contracting to purchase property. The caveat emptor rule (let the
buyer beware), applies to conveyancing transactions. In most cases, sale agreements will
stipulate that the buyers accept the property in the physical state it is in at the exchange of
contracts. A prudent buyer will therefore use the services of professional advisers such as
surveyors or valuers to assist in inspecting all the buildings.
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(ii) To check who is in Actual Occupation of the Property

This is critically important as the seller may not be the person in actual occupation of the
property and others could be entitled to occupy the property not withstanding that they are not
co-selling. It is of most importance to check that there are no undisclosed occupants within the
property who could claim rights of occupation and thereby delay or defeat completion. As well
as physically inspecting the property, a buyer‘s advocate will also raise written enquiries about
who is in occupation (e.g. tenants.)
(iii) To check boundaries
A buyer will want to be sure that the contract correctly describes the property and the
boundaries on the ground are the same as those shown in the title and in the contract.
(iv) To check on rights and easements affecting or benefiting the properly.
A physical inspection of the property will assist the buyer establish the rights of others, such as
path ways and gates. Any easements adversely affecting the property should be referred to the
seller without delay for clarification.
(v) To check fixtures and fittings contracted to be sold are in the subject property just prior to the
exchange
The buyer will want to be sure that items to be sold actually exist and are within the subject
property. (Water tanks, electrical fence, etc)
Advice on Survey
A purchaser / mortgagee/chargee should always be advised to have a survey carried out before
exchange of contracts because of the caveat emptor principle, 'let the buyer be ware.' It is for
the buyer to discover all the physical defects in the property and these may not be apparent
from the clients own inspection. A client may sometimes be reluctant to incur additional
expenses in survey fees. It is however the advocate's responsibility to advise the client that this
is money well spent. Failure on the advocate's part to give this advice could amount to
professional negligence.
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A physically defective property may of course be unsafe to occupy but there are financial
implications for the purchaser as well.
The market value of a property will be reduced if a property is in poor condition and so the
purchaser may be paying more than he/she should. This may also adversely affect the
purchaser's ability to mortgage the property or sell it at a later date. There is also the danger of
non-existent properties. These are all considerations that must be drawn to the client's attention.
Basic valuation by a registered valuer constitutes one of the simplest and cheapest forms of
survey. It constitutes a visit and physical examination of the property to establish the property's
value on the open market and its physical delineation.
A valuation report is important especially if the property is to be charged to secure a loan. A
mortgagee's surveyor/valuer owes a duty of care not only to the lender but also the borrower
who relies on the report. A copy of the valuation report should be made available to the
borrower. Special considerations when valuing include; neighbouring properties, drainage,
infrastructure, location, the zoning and development policy by municipal authorities of the
property area are also key.
[Reflection: What remedies are available to a recipient of inaccurate answers to pre-contract
inquiries or requisitions?]