The Gazette 1967/71

Lease Incidence of Costs, Stamp Duty and Regis– tration Fee A member enquired whether the lessor or the lessee is liable for the stamp duty and registration fees on lease executed since the passing of the Landlord and Tenant (Ground Rents) Act, 1967, which relieves the lessee from the obligation to pay the lessor's costs, with a provision against contracting out. The Council stated that in their opinion section 32 of the Act applies only to professional costs and that there is no change in the existing law whereby the lessee must pay the stamp duty and registration fee. A member acted for the owner of property who was forming his business into a limited company to which certain freehold and leasehold properties are to be transferred. There would be no investi– gation of title and member enquired as to the appropriate scale of costs. The Council stated that in their opinion the costs should be charged under schedule 2. RESTRICTIVE CONDITIONS OF SALE The Council have received complaints from a number of members as to the inclusion in agree– ments for sale or conditions of sale of clauses unduly restricting the right of the purchaser to obtain a marketable title. In some cases vendors sought to impose on the purchasers the whole or part of the vendor's costs of deducing title. Stipu– lations by vendors which unduly restrict the right of the purchaser to investigate the title or throw the whole or part of the vendor's costs on the purchaser are not in the interests either of the public or of the profession. A solicitor acting for a purchaser who allows his client to sign such a contract may eventually find himself liable for damages for negligence. Furthermore such prac– tices result in criticism of solicitors' charges. If solicitors acting for vendors are unwilling to undertake the normal work of showing marketable title it is difficult to understand how they can justify charging the commission scale fee. Fur– thermore every solicitor acts at different times for both vendors and purchasers. A solicitor who adopts restrictive practices when acting for a vendor cannot complain if he receives the same treatment when acting for a purchaser on some other occasion and in the end the result is in– jurious to the client and the profession generally. The Council wish particularly to draw the atten– tion of members to the possibility of claims for 14 Conveyance to Self Owned Company

professional negligence where a lessee or pur– chaser takes premises without enquiry as to the existence of restrictive covenants in a superior lease, which is the subject of a note in this issue of the Gazette. PROFESSIONAL NEGLIGENCE FOR TAKING DEFECTIVE LEASES The attention of the Council was drawn to the English case Hill v Harris (1965 2 All E.R. 358) in which the plaintiff was a sub-lessee and the defendant a sub-lessor of premises which were let for a term of thirteen and a half years at the yearly rent of £206 subject to a covenant by the sub-lessee not to carry on in or upon the premises the trade or business of a licenced victualler, publican or any dangerous or noisy trade or business or any business whatsoever other than that of a confectioner or tobacco retailer. During the course of the negotiations with the Estate Agents the plaintiff, Hill, informed them that he wanted the premises for the purposes of a confectionery and tobacco business and was informed in reply that this would be alright. The plaintiff's solicitors informed the defen– dant's solicitors that their client intended to use the premises for a confectionery and tobacco business and that they were instructed that this was a properly permitted use. The sub-lessor's solicitors never gave any speci– fic reply, but in due course they sent the sub– lessee's solicitor a draft sub-lease containing the covenant against user other than that of a con– fectionery and tobacco retailer. In point of fact the lease from the freeholder contained a covenant by the lessee not to use the premises other than for the purpose of boot and shoe makers and dealers, and not to use the upstairs rooms for any purpose other than living accommodation. The sub-lessee brought an action against the sub-lessor for breach of warranty and the action failed. The Court of Appeal in England held that neither the correspondence nor the conversations nor the terms of the sub-lease containing the covenent as to user for confectionery and tobacco business, amounted to a warranty that the user was authorised by the superior lease. There were merely matters of conversation during the pro– gress of negotiations. In the course of his judgment, dismissing the appeal, Russell, L. J., stated, by way of obiter dictum, that he could not see what conceivable defence the solicitors acting for the plaintiff would have to claim for equivalent damages for negli– gence on their part in that they did not take the