18 / 736
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.
Conveyance to Self Owned Company
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
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