Spring '17 England & Wales

SPRING 2017 ISSUE

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FIRST COMMENT IN THIS ISSUE: • WHO SHOULD FOOT THE BILL FOR CONVEYANCING FRAUD? • MISREPRESENTATION - PAYING MORE THAN IT’S WORTH? • TELEPHONE QUOTES FOR RESIDENTIAL CONVEYANCING FINDING THE MISSING MILLIONS • THE VILLAGE GREEN • PRODUCT CASE STUDY - POPP

Leading Title Insurance

Welcome to the spring edition of our newsletter. We trust that you have had a successful start to 2017.

In this issue we have contributions from our regular writers; Paul Butt discusses the increasingly important issue of fraud, and Kevin Lee examines a recent case of misrepresentation. Our staff contribution this quarter comes from Shobana Bala who looks at how to register land as a town and village green (TVG), and, finally, we have the first of four submissions from business development expert Professor Ian Cooper. In his first article Ian looks at telephone call handling and how a review of this approach may pay significant dividends.

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FIRST COMMENT

Who should foot the bill for conveyancing fraud?

By Paul Butt Consultant Solicitor Rowlinsons

I think it is fair to say that conveyancers – and also perhaps their insurers – have been concerned and confused by recent decisions involving conveyancing fraud – and more particularly, as to which innocent conveyancer should pay compensation for the loss caused by a fraudster.

We have had Purrunsing v A’Court & Co [2016] EWHC 789 (Ch) in which both seller’s and buyer’s conveyancers were held liable. We then had P&P Property Ltd v (1) Owen White &Catlin (2) Crown Vent Ltd t / a Winkworth [2016] EWHC 2276 (Ch) in which the seller’s conveyancers were held not liable. Moreover, now we have Dreamvar (UK) Ltd v Mishcon de Reya [2016] EWHC 3316 (Ch) in which seller’s conveyancers (who had not taken reasonable care to establish that the person instructing them was the registered owner of the property) were not liable for the buyer’s loss, but the buyer’s conveyancers, who had acted honestly and reasonably throughout, were held liable!

It is fair to say that the judges in cases like these are faced with a difficult task in reaching a decision – let alone a decision that will please everyone. And the legal principles being applied are many and diverse and not at all certain in their operation.

We have negligence – does a seller’s conveyancer owe a duty of care to the buyer?

Answer ‘No’. However, as the consequences of not carrying out proper identity checks can easily be foreseen to cause loss to a buyer, why shouldn’t there be such liability if it is not carried out properly?

We then have breach of warranty of authority.

Is a seller’s conveyancer warranting (i.e. guaranteeing) that they act for the real owner of the property being sold or just someone who happens to have the same name as the real owner? The Judge in Dreamvar held that it was just the latter. However, why isn’t the warranty that they are acting for someone with regard to whom they have taken reasonable

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steps to confirm is the real owner of the property being sold? Those conveyancers who do carry out property identity checks would have nothing to fear from this.

And what about a conveyancer’s obligations under the Money Laundering Regulations? It makes a nonsense of these if we are just to check that the client is any Mr Smith, but not necessarily the Mr Smith who owns the property he is purporting to sell.

The Law Society’s Conveyancing Protocol has also been ignored – although it is not clear whether it was being used in the cases cited. Under this (at Step 24), the seller’s conveyancers have to ‘verify’ the identity of the client. What does ‘verify’ mean in this context? Again, does it really mean that we just need to check to see that the client is any Mr Smith but need not take reasonable steps to check that he is the Mr Smith who owns the property that he is purporting to sell?

And then we have breach of trust. Here the decision is consistent with previous court decisions and, initially, follows basic principles. In the Dreamvar case, the buyer’s solicitors were held liable to the buyer client because they were in breach of trust in paying the purchase price over to solicitors acting for a seller who was not the owner of the property, but a fraudster.

It is not new law to hold that a buyer’s conveyancer holds the purchase money on trust; it is not the conveyancer’s money after all. It is not new law 4

to say that the terms of that trust are that it can only be used for the purchase of the property; why else was it given to the conveyancers other than to fund the purchase? It is not new law to hold that if a trustee uses trust funds for an unauthorised purpose, that trustee is liable for the loss irrespective of fault. The origins of that rule are lost in the mists of time.

However, there is protection for the conveyancer – indeed all trustees; the Trustee Act 1925, section 61, states: If it appears to the court that a trustee, is or may be personally liable for any breach of trust, but has acted honestly and reasonably, and ought fairly to be excused for the breach of trust, then the court may relieve him either wholly or partly from personal liability for the same.’

Note the three conditions for relief. Yes, the trustee must have acted honestly and reasonably, but that is not enough; it is also necessary to show that he / she ‘ought fairly to be excused.’ That was the issue in this case.

To quote the Judge:

‘… it is common ground that it is insured for events such as this, and that its insurance cover is sufficient to cover in full the loss suffered, should it not be excused from liability. In terms of balancing the relative effects or consequences of the breach of trust, it is apparent that MdR (with or without insurance) is far better able to meet or absorb it than Dreamvar. While, as I have held, it was not unreasonable for MdR not to have

FIRST COMMENT

advised Dreamvar about the risk of fraud, or to have sought greater protection for Dreamvar against that risk (such as further undertakings), it is also not irrelevant that MdR was necessarily far better placed to consider, and as far as possible achieve (a matter not in the event tested), greater protection for Dreamvar against the risk which in fact occurred….

Do we wish to accept the view that it should be the buyer personally who accepts the risk? Is this practically or commercially possible in an age when everyone seems to think that if things go wrong, it has to be someone else’s fault? Moreover, we also live in an age where lawyers do not have the best of reputations; where we are all money grabbing crooks, just in it for ourselves.

For these reasons, I conclude that MdR ought not fairly to be excused for the breach of trust.’

However, if not the buyer, it either has to be the buyer’s or the seller’s conveyancers. In Dreamvar all claims against the seller’s solicitors failed.

This has been the most controversial aspect of the case – the conveyancer is insured. Therefore, they should carry the can. Why is it ‘fair’ that the conveyancer who is not at fault but insured, should bear the loss, but the buyer, who could have obtained insurance against the risk of fraud, but who did not, should not bear at least some of the loss? Why should conveyancers provide a guarantee against loss from fraud when no other professional or any bank does?

However, the question does have to be asked, who should fairly bear the loss? How would you have decided that very difficult question? In most cases there are four innocent parties: the real owner of the property; the seller’s conveyancers; the buyer’s conveyancers; the buyer himself / herself (and sometimes the buyer’s lender as well).

Which of these innocents should carry the loss?

The seller usually does not as any purported sale will be forged and so invalid. So we are left with the buyer and the two sets of conveyancers. Hobson’s choice, perhaps!

It must be pointed out that in Dreamvar the Judge held that it was not unreasonable for Mishcon’s not to have asked for confirmation from the seller’s solicitors as to the identity of their client. But should we all, when acting for a buyer, start asking for confirmation that the person purporting to sell a property really is the seller?

However, if you were so asked, what would your reply be? Is there any point in asking a question we would not ourselves answer? Because if we do so certify and we get it wrong, then we will be the one that foots the bill if it all goes wrong. And of course, we all act for both buyers and sellers in any case.

As stated, insurance against fraud is also available to buyers – but we all know clients are reluctant to buy any kind of policy. But we could limit our retainer to disclaim liability for fraud, making it clear that an optional policy to cover such risk can be obtained. Indeed, I understand that some firms are already doing this. Certainly, it can do no harm. And it might encourage the use of a policy.

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But unless we start using dedicated policies like this in every case, it seems likely that either seller or buyer’s conveyancers will continue to bear the risk of fraud. Which do you think it should be?

As to which, I can do no better than set out the view of another judge. In Patel v Freddy’s Limited [2017] EWHC 73 (Ch) Tribunal Judge Elizabeth Cooke, sitting as a Deputy High Court Judge set out her view of the position with regard to fraudsters. Her view was:

‘… it is the task of the vendor’s solicitor in a conveyancing transaction to check the identity of his or her client, establishing not only that the vendor’s name is what the vendor says it is but also that the vendor really is the owner of the property. So it was for Mr Cuthbert first to carry out the ‘Know Your Client’ procedure required by the money-laundering legislation; hence the obtaining of the passport and a utility bill to ascertain that this client really was an Ashok Patel who lived in Barnet.

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But it was also for Mr Cuthbert to ascertain that this was the Ashok Patel who was the registered proprietor of Sai Villa… The important point is that this is the vendor’s solicitor’s duty because he is the one with access to the client and his client’s documents… however, it is not for the purchaser’s solicitor to duplicate the actual checking of the vendor’s identity, nor to check that the vendor’s solicitor has done so.’

In the writer’s opinion, there is much force in such views. It sounds a much more commonsense solution than that arrived at in Dreamvar.

Note again the Judge confirming that there is no obligation on a buyer’s conveyancer to check that the seller’s conveyancer has carried out such steps.

We are told that both the Dreamvar and the P & P cases are going to the Court of Appeal; one can only hope that, if nothing else, the Court Appeal can give a degree of certainty in this area to hard pressed conveyancers.

FIRST COMMENT

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Misrepresentation paying more than it’s worth?

By Kevin Lee Hill Dickinson LLP

In this edition, we are looking at misrepresentation which induces a buyer to pay more for a property than it is really worth. What, if by the time the case gets to court, the property has gone up in value due to the market? Does the buyer have to give credit for this rise in value, a result of the market alone?

In Quilter v Hodson Developments Ltd [2016] EWCA Civ 1125 Ms Quilter had bought an apartment from Hodson Developments Ltd. The development comprised 54 flats.

All the dwellings were serviced by the same communal central heating and hot water system. Hodson was sent standard pre-contract enquiries by Ms Quilter’s conveyancers. One asked whether the seller was aware of any past or current dispute which relates in any way to the property, its use, or any other matter connected with the property and, in particular, regarding boundaries, easements, covenants or any planning matters? Hodson replied ‘no’. However, after

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moving in, Ms Quilter discovered that there had been repeated failures in the boiler system leaving the flats without hot water or heating.

The Judge in the County Court found that this ought to have been disclosed, and the answer, therefore, amounted to a misrepresentation.

The Judge had awarded Ms Quilter damages based on the difference between the price she had paid for the property (£240,000) and the actual value of what she had acquired, i.e. with the boiler problems (£225,000). Relying on expert evidence, the Judge held that the true value, with the defects, was £225,000 at the time of the sale. He therefore, gave judgement in Ms Quilter’s favour for the difference of £15,000. He also awarded her 70% of her costs.

Ms Quilter had, by the time of trial, sold the flat for £275,000. However, the Judge found that the Claimant was entitled to take advantage of any increase in the market value when the property was re-sold and should not have

FIRST COMMENT

to account to the defendant for this. The reasoning was that her profit margin would have been greater had she paid the actual value of the property, i.e. £225,000.

The developer appealed on various grounds, namely that:

(1) the documentary evidence showed that there was no dispute in relation to the boiler; (2) the Judge had relied on hearsay evidence in relation to the boiler system; (3) the Judge had relied on two reports which could not be relied upon; (4) the Judge should not have applied the normal measure of damages because Ms Quilter had made £35,000 profit on the sale of the apartment, and its market value had been unaffected by the alleged misrepresentation ; (5) Ms Quilter’s expert could not be relied on to value the apartment because his valuation was premised on the system being out of action for the majority of the time; (6) the Judge was wrong in relation to costs because Ms Quilter had lost in relation to two out of three alleged misrepresentations.

The Court of Appeal dismissed the sellers appeal on all grounds. There was evidence from which the Judge could conclude that there was a dispute about the boiler. Ms Quilter was able to call evidence from two of the other residents about the residents’ dissatisfaction with the heating in the flats and the notification of that dissatisfaction to the developer. Although there was no record of a dispute in the minutes of residents’ meetings, it had plainly been open to the Judge to hold that there were difficult and repeated problems with the boiler system to such an extent that residents took it for granted that it was implicitly on the agenda between them and the developer.

The Judge’s reliance on hearsay evidence from other residents was ‘secondary’. The important evidence was that adduced from the two residents who gave live evidence.

Third, an NHBC report, like the engineers’ report, were capable of supporting the Judge’s conclusion that the boiler system had never worked satisfactorily.

Fourthly, and most importantly, Ms Quilter had not got what she bargained for and had to be compensated accordingly, and Ms Quilter had no obligation to mitigate her losses by re-selling. When the time for selling the property arrived, it arose in the ordinary course of her domestic life rather than being due to the defects in the heating system. The benefit of the rise in the market value of the property was a benefit that she was entitled to retain rather than a benefit for which she should account to the misrepresenting vendor. She should be able to recover loss

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calculated on the traditional basis of the difference between the value of the property as represented and its true value at the date of purchase.

Further, to the extent that the existence of the NHBC guarantee brought a benefit to Ms Quilter, that was in the nature of insurance. On wellestablished principles the fact that a claimant had been able to use an insurance policy to reduce or extinguish her loss was not to be brought into account in calculating damages.

And finally, the Judge’s decision in relation to costs was not a decision which no reasonable judge could have reached.

The important part of this case to me is the fact that any rise in the property market is to be disregarded when assessing damages on the traditional basis. The key is the difference between the price paid and the true value of what was purchased. Also, Ms Quilter had not been under any obligation to mitigate her loss by re-selling the property. She sold it ‘in the ordinary course of her domestic life’, not due to its defects. The market rise in the property’s value was a benefit she was entitled to retain, not one for which she had to account to Hodson.

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FIRST COMMENT

Telephone quotes for residential conveyancing: finding the missing millions

By Professor Ian Cooper Law firm skills trainer / consultant, Author of the Financial Times Guide to Business Development

Every single day most firms with a residential conveyancing department receive telephone calls from prospective clients who ask the question ... ‘Can I have a quote for conveyancing please?’ Every day, most of these firms lose potential new business that they could win, because of the way these calls are handled. How much are you losing?

This article looks at this daily challenge, the potential opportunities being missed and reviews the recent survey / report into this topic ‘Converting Telephone Enquiries: Residential Conveyancing’, which I co-authored. The study is based on reviewing the results of mystery calls for quotes to 387 firms nationwide; interviews with senior management from residential conveyancing departments in over 100 firms and feedback from over 1,000 call handlers.

This first article in my series of four on this topic, is simply meant to make you think and provoke you into looking again at your own ‘quotes’ handling approach, performance and results. It will I hope, challenge you to reexamine whatever you are currently doing and ask yourself … ‘is there anything that we could do differently to get better results?’ The stakes are high!

Let me explain in blunt financial terms why this is the case. From a business development and marketing perspective, though most firms don’t appreciate it, this issue is the number one priority. Why? The answer is simple. Because, what is the point of spending time and money trying to generate enquiries, if the firm then fails to convert them and loses potential new clients to competitors?

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Did you realise for example, that if just one office in your firm receives an average of just three ‘quotes calls’ per day, collectively these enquiries are easily worth around £1 million of potential new business in a year.

Increase your conversion rate by just 10% and your extra success is worth an easy additional £100,000 of revenue, without any further marketing spend!

One firm I went to train ‘in house’ last year, was getting 12 quotes calls per day across its four offices. Their average single transaction quote was around the £675 mark plus VAT. Do the sums on this and believe it or not they were dealing with 3,000 calls per year and a potential of just over between £2 million - £4 million worth of new business, depending on whether the quotes were for single or double transactions.

Their conversion rate before the training was 35% and afterwards around the 70% mark. This additional 40% gave them an extra £800,000 - £1.6 million. Not bad for a couple of days training!

I am not telling you this to impress you with how effective the training was, but to impress upon you what is possible and what you might be losing, in terms of missed business.

So what is the problem? How difficult can it be to give people a price? Well let me share some of the findings in the survey and you will begin to realise what is really going on and why the terrible truth, is that the majority of firms condemn themselves to the inevitability of quotes conversion failure.

Amongst the many findings, the study shows that:

85% 91% 12

or more of firms treat ‘residential conveyancing quotes’ as a purely ‘low level’ administrative task. of firms make no attempt to differentiate themselves from competitors, either during the telephone enquiry, or in any follow up email. Ask yourself this question: If your firm is more expensive than a competitor, why should the caller choose you?

FIRST COMMENT If you do have an answer, how is this communicated to the caller? Most don’t. If call handlers don’t get this message across, then it is hardly surprising that a potential client might choose a cheaper option!

90%

of call handlers admit that they don’t actively like handling quotes, or are not very good at it. Not exactly a recipe for conversion success.

85%

of firms have not given any skills training to call handlers to help them maximise conversion rates.

69%

of firms use email as a way of actually avoiding a proper conversation at all and lose business as a result of it.

These firms are simply taking the basic transactional details in a minute or two and then immediately sending out semi-automated emails. Many of the firms who do this, then pride themselves on their efficiency for speeding up and simplifying the process.

Yes, it might be quicker, but if the results are poor, it is false economy. Many firms are failing to realise that this method limits conversion rate success. If the emails that go out only contain the figures, it forces the caller to choose on price!

When to send out an email quote and what it should contain is a massively important issue. This is part of your sales and business development strategy. I will devote an entire article to this topic later in the year, with many tips.

56% 33%

97%

of call handlers failed to ask if the caller wanted to go ahead, even when the caller had responded positively to the quote.

Conclusion: The truth is, that there is a nationwide ‘equality of inefficiency’ amongst the way the vast majority of firms deal with their requests for residential conveyancing quotes.

The good news however, is that for those firms who recognise the potential and then take steps to improve, there is the opportunity to ‘clean up’ in their marketplace, with results that are transformational.

The really great news is that the strategic changes, skills and techniques needed, are not difficult to understand and master. More of these to come.

The full survey can be downloaded free from this link: http://convertingenquiries.com/ residentialconveyancing/ report-launched/

of call handlers who spoke to a potential client failed to introduce themselves. or more of all calls showed neither party knew who they were talking to, as the caller’s name was not taken and the call handler had not introduced themselves!

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Underwriting Article:

The Village Green

By Shobana Bala Commercial Underwriter

“On the cheerful village green, skirted round with houses small, all the boys and girls are seen, playing there with hoop and ball...�

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FIRST COMMENT

FIRST COMMENT

The opening lines of Jane Taylor’s verse about town and village greens illustrate the very essence of rural England and Wales. It brings to mind story-book images of village greens - an expanse of lush green grass in the centre of a village or carefully-manicured recreation grounds just outside the village to enjoy a game of petanque or where cricket is played long into balmy summer evenings.

What is a Village Green?

Land is capable of being registered as a town and village green (TVG), and a person or group can apply to register land as a TVG where “a significant number of the inhabitants of any locality or of any neighbourhood within the locality have indulged ‘as of right’ in law for sports and pastimes on the land for a period of at least 20 years” (section 15(2) Commons Act 2006 (‘CA 2006’)).

‘As of right’ verse ‘by right’ – What’s the difference?

An application to register a TVG for recreational use must be based on ‘as of right’ use i.e. use that is not authorised. If the use consists merely of walking the dog (or other recreational activity that involves walking or running only), and the land is subject to public rights of way, there is great scope for arguing that the use is not ‘as of right’, but is the ‘by right’ use of the public right of way. It, therefore, suits owners and their developers to assert that any users of the land in question are exercising an existing public right of way (or possibly seeking to assert a new public right of way) rather than using the land for wider recreational purposes. A landowner may be able to accommodate a public right of way within the development, whereas registration of the site as a TVG will frustrate development.

A Council’s dilemma – to be a TVG or not to be?

Many Councils are expected to provide a 5-year housing supply under National Planning Policy Framework, and projected residential development for 2017 and beyond is to focus on the provision of more new affordable homes - the question is should land be warranted protection as a TVG? This issue continues to thwart development and create huge problems for developers.

‘Chilling’ out on Humpty Hill In the recent case of R (on the application of Allaway & Pollock) v Oxfordshire County Council*, the county council successfully defended in the High Court its decision to register 14 acres of land known as Humpty Hill as a TVG under section 15(2) of the CA 2006.

Allaway & Pollock together with Gladman Developments Limited who had an interest in the site to develop 100 homes sought to challenge the registration by way of a judicial review. The Planning inspector Dr Charles Mynors had decided in March 2015 that the field qualified for registration under the CA 2006 because of ‘ample evidence’ that it had been used for at least 20 years by the inhabitants of the parish of Great Faringdon for lawful sports and pastimes. The inspector said activities included walking - with or without a dog - and children playing games such as football. Less strenuous activities included bird watching, nature study, enjoying the view, and generally ‘hanging out’, ‘lounging about’ or ‘chilling’.

The Claimants challenged the Inspector’s decision on the following grounds: 1. That the Inspector applied an inappropriate discount for the use of the perimeter path; and

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2. That the Inspector failed to properly consider and apply the qualifying requirement that the use needed to be by a significant number of those in the locality.

CA 2006, and consequently, this has resulted in a degree of protection to a prospective developer against registration where a planning application has been submitted for land located in England.

The High Court rejected the claimants’ arguments, leaving the registration in place. Mrs Justice Patterson stated that it was clear that the inspector did not accept the submission by the objectors that use of the paths should be excluded altogether

A landowner can show that they have no intention of dedicating a public right of way or challenge recreational use in relation to a TVG if they undertake ‘overt’ actions to make it clear to the public that they have no ‘right’ to cross or be on his / her land.

“For the rest, he was satisfied that it was informal recreation, whether walking round one or other of the paths, whether the circular path or the outer path, whilst their dogs went over the land.

Others who walked and indulged in other forms of recreation elsewhere on the land were using the land for informal recreational use attributable to a village green right.”

The Judge noted that this was “a classic example of recreation and low-level agriculture existing happily side by side”, and noted the inspector’s comment that: “There is no doubt that the owners knew, both by direct observation and from the reports of those working with and for them, that the land was being used by people who were in effect trespassers.”

As regards to the suggestion that users should be from across the locality, there was no requirement for this in the legislation. All that was required were for a significant number of inhabitants from the locality whose use was sufficient to indicate general use by the locality for informal recreation.

Mrs Justice Patterson concluded that having dismissed both grounds of challenge, there was no need to consider the application of section 31(3C) of the Senior Courts Act 1981.

This case demonstrates that the extent and purpose of the user will depend upon the evidence, and how the user (of which evidence is provided) might objectively appear to a reasonable landowner.

Action Steps The Growth and Infrastructure Act 2013 made a number of significant changes to the law with regard to the registration of new TVGs under the 16

An action may be: (i) The erection of carefully worded notices sited in relevant locations; (ii) The locking of a gate at least once a year; (iii) Challenges to users of the way or area, making a note of dates, times and names if possible; (iv) The depositing of a statement and map followed by a subsequent declaration under section 31(6) of the Highways Act 1980 (‘HA 1980’) for public rights of way or a statement under section 15A of the CA 2006.

In England, landowners are able to deposit a declaration statement together with a map showing the development land and the effect of this is to draw a line in the sand to prevent a 20 year period of use occurring. Once deposited with the commons registration authority, in the prescribed form, this will then be advertised on site and recorded in the public register. The effect of such a declaration is to rebut the presumption that the land has been used ‘as of right’ for over 20 years without having to go to the efforts of physically impeding access. The issue for landowners is that if such an application is made and an aggrieved party comes forward, the aggrieved party has one year within which to make an application for a TVG. Therefore the use of a land owner declaration should normally only be made when there is little or no prospect of a TVG application being made.

The provisions of the CA 2006 have been amended with effect that certain trigger events can operate to prevent the registration of a TVG. Trigger

events stay in place until a terminating event occurs when the window to re-apply for a TVG re-opens. Trigger and terminating events are set out in full in Schedule 1A to the CA 2006 Act - see a few examples in table below.

Following amendments to section 31 of the HA 1980 in 2013, landowners in England are able to use a combined procedure of depositing maps and statements under section 31(6) HA 1980 to negate both

dedication of a public right of way, and as of right recreational user of land. Section 52 of the Planning (Wales) Act 2015 will eventually have a similar effect for village green spaces in Wales.

Taylor’s poem ends with quiet reflection and reminds us again that TVGs are more than just a green space to local residents and communities and should not be dismissed lightly when considering development proposals.

TRIGGER EVENT

TERMINATING EVENT

Application for planning consent

• • • •

Draft Development Plan published for consultation

• Development Plan is adopted • Document withdrawn or revoked

Draft Neighbourhood Plan / Neighbourhood Plan published

• Document ceases to have any legal effect

Application is withdrawn Application not validated by the local authority Planning application refused, and all legal remedies are exhausted Planning permission expires before implementation

“...then, contented with my state, where true pleasure may be seen, Please contact First Title if you have concerns with regards to your future development proposals as we may be able to assist with insurance requirements if a terminating event has not occurred.

let me envy not the great, on a cheerful village green.”

*Ref: R (on the application of Allaway & Pollock) v Oxfordshire County Council [2016] EWHC 2677 (Admin).

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FIRST COMMENT

Product Case Study:

Property Owner’s Protection Policy (POPP) Background First Title were approached to assist lawyers acting for a property fund with the acquisition of an entertainment complex consisting of restaurants, bars, cinema and various entertainment areas.

A concern for the property fund was that it wanted to strategically dispose of the asset within the next five years and wanted assurance that it would have no contingent liability.

Challenge

Solution

The property fund was acquiring the property from administrators and was using bank finance to part fund the acquisition. Both the bank and property fund were keen to protect themselves from any unknown issues due to buying from administrators, where information and disclosures were at a minimum and no title guarantee was provided.

First Title was able to structure the policy to cover the unknown risks, the identified known risks and cover an immediate successor to the fund within the next five years, thus enabling a clean exit for the fund in the future.

The lawyers had undertaken some due diligence and requested First Title’s POPP coverage along with various known risks as endorsements to the POPP.

The lawyers completed the acquisition and placed the policy on risk at completion.

Both the property fund and bank were happy that their risk profile was greatly reduced with a bespoke insurance policy.

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To find out more about our products and services email info@firsttitle.co.uk or call +44 (0)20 7160 8100

www.firsttitle.co.uk

First Title Insurance plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. First Title Insurance plc is registered in England under company number 01112603.

Registered office: First Title Insurance plc, ECA Court, 24-26 South Park, Sevenoaks, Kent TN13 1DU.