Global menu

Our global pages

Close

Perfecting an “Imperfectly Executed” Deed

  • Ireland
  • General

04-06-2020

Something as (seemingly) simple as a deed which has not been duly executed, can take significant time and bargaining power to remedy.

Regardless of the appetite of a purchaser or investor to push on and complete a real estate acquisition or investment and to rectify any such title defect post completion, a purchaser or investor must be cognisant of how any such defect may adversely affect the marketability of that asset going forward. Post completion remediation could prove difficult without the invested involvement of a vendor.

Since the introduction of compulsory registration of title, due execution of deeds must be considered in the context of whether title can be registered in the Property Registration Authority (“PRA”). Completion of registration in the PRA means that the State has guaranteed the title, consequently the PRA do not deviate from their requirements in relation to the execution of deeds.

For these reasons, it is important to try to address any issues as to the execution of a deed with a vendor before completing a real estate acquisition or investment.

What Does Due Execution Look Like?

Where a deed is to be executed by a company, the default position under statute (unless the Constitution of a company provides otherwise) is that the company seal is to be affixed to the deed in the presence of and attested by either (i) two members of the board of directors of the company or (ii) the secretary and one member of the board of directors of the company.

Since 2009, where a deed is to be executed by an individual, it is to be signed by the individual in the presence of a witness who is to attest the individual’s signature.

Execution by Authorised Signatories

Some entities such as certain lending institutions, tend to have authorised signatories execute deeds as a matter of logistical preference. Alternatively, it may be that a director or the secretary is not available to witness the affixing of a seal. In such cases, a purchaser or investor will require appropriate evidence showing how the authorised signatory was entitled to witness the affixing of the seal and a specific PRA form certificate to come from the solicitor for the company confirming this fact.

Execution by Attorneys

Alternatively, if signatories are not available to execute a deed, a power of attorney (“POA”) can be granted to one or more individuals to execute a deed on behalf of the donor of that power. This execution mechanic also operates as a work-around if a company seal is not available. Where a deed is executed under a POA, a purchaser/investor will require, as completion deliverables, a certified copy of the POA and a specific PRA form certificate to come from the solicitor for the attorney certifying certain items in respect of the POA.

Foreign Legal Opinion

Where a deed is executed by a foreign incorporated entity, a legal opinion (as to due incorporation and capacity of that entity to enter into the deed in question and due execution of that deed) will be required from a lawyer qualified in the jurisdiction in which the entity is incorporated. The PRA also requires a specific form of legal opinion.

Deed of Confirmation

If a deed has not been duly executed, a deed of confirmation, to be entered into by each of the original parties to the improperly executed deed, may remediate the execution defect. This type of deed should be drafted in such a way that the original parties go on record to confirm their intentions with respect to the original deed so that no interest or right which was to be assured or granted by way of the initial deed is “left behind”. A deed of confirmation should be stated to be supplemental to the original deed.

Deed of Confirmation Executed as a Deed Poll

Some parties to an improperly executed deed may not be available and/or agreeable to executing a deed of confirmation; party relationships may have broken down, entities may have been dissolved, etc. In such circumstances, as a next best alternative, it may be possible for a deed of confirmation to be executed as a deed poll which means that it is executed by one party only. It is important that the party executing such a deed is the party who purported to grant an interest or a right under the improperly executed deed (a deed need not be executed by a party who is taking a benefit only (and no burden)).

Title Insurance

In addition to procuring a deed of confirmation, it would be prudent as a purchaser or investor, to consider procuring title insurance to protect against any future claims which may be made by a predecessor on title or any third party. Our experience is that title insurers will only issue insurance subject to a deed of confirmation being executed in a form pre-approved by them. For the purpose of registering title, any such insurance should include the PRA as a beneficiary under the policy. It is worth noting that title insurers will not insure against the risk of title not being registered by the PRA.

Conclusion

Errors in execution are not fatal and can generally be remedied by way of a supplemental deed. As a last resort, passage of time may improve any such title defect where recitals have the advantage of being presumed true after 15 years. However, if any such period of time is yet to pass, that waiting period may conflict with statutory compulsory registration obligations.

For more information contact

Marie O’Riordan, Partner in our Real Estate department - MarieORiordan@eversheds-sutherland.ie

Aoife Uí Mhaoilmhichíl, Senior Associate in our Real Estate department - AoifeUiMhaoilmhichil@eversheds-sutherland.ie

This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

< Go back